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Democracy Notes
Published: 20/05/2022
Lebanon's Election: A new beginning or further fragmentation?
The Lebanese electorate went to the polls on 15 May for the first time since its financial collapse and 2019 uprisings. In a breakthrough reflecting the popular will for a new start in governance, reformist candidates have scored major victories and the Iran-backed Hezbollah bloc has been stripped of a parliamentary majority. The vote marked the first time the public had the opportunity to assess their leaders’ performance in the aftermath of the economic crisis and the devastating Beirut explosion that claimed more than 200 lives. The people clearly want a new political class that can enact reforms to counter rampant corruption, establish an independent judiciary and unlock international aid. Official results confirm that at least 10 per cent of seats will be taken by reformists—candidates campaigning for change on anti-establishment platforms and not affiliated with any sectarian parties. While Hezbollah and Amal Movement kept their seats, Hezbollah's Christian allies the Free Patriotic Movement obtained only 18 seats and the bloc fell below the threshold required for a majority (65 seats). By contrast, its rival the Lebanese Forces (backed by United States and Saudi Arabia) secured 20 seats. The new parliament members will now have to form a new government and elect a new head of state. Without an outright winner, months of haggling over the next government line-up and more political paralysis are expected. While the opposition may be sizable, it is not united. The reformists lack the seats to change the political landscape alone. Whether the anti-Hezbollah opposition camp will manage to form a united front and work together for the much-needed economic and political stability remains uncertain. A polarized parliament and divided people remain. Political loyalties in Lebanon have traditionally followed sectarian lines, foreign allegiance, and heredity. Decades of a rigid power-sharing agreement between the different religious communities have led to entrenched corruption and political dynasties passing on parliamentary seats over generations. This eventually resulted in Lebanon’s financial meltdown in 2019, with more than three-quarters of its six million population pushed into poverty. International IDEA’s Global State of Democracy indices show that democracy in Lebanon has been in decline in the past years and is one of the most corrupt countries. In response to the increasingly dire conditions, mass protests broke out against the political elite across Lebanon in 2019, eventually causing the resignation of the government. As a result of the uprisings, several movements were born, including alternative political parties and anti-establishment independents. A large part of the electorate, however, is skeptical as to whether the new political groups can bring about meaningful change. Lebanon’s confidence crisis between the ruling class and the people suggests confronting the status quo will not be easy. Clean Elections and Electoral Participation in Lebanon have witnessed a steep decline in the past several years. Institutional failures have allowed vote-buying, eroding public trust. Indeed, there was widespread voter apathy and the national turnout was only 49 per cent. Skepticism ran particularly high before election day among the Sunni Muslim community following the withdrawal of the dominant leader and former Prime Minister Saad al-Hariri. The Sunni vote, however, benefited the reformists and in tandem with the Lebanese diaspora's vote (60 per cent turnout) sanctioned the classical forces. Even if mainstream political parties and politicians remain strong, Lebanon’s new parliament will have many new faces as new opposition candidates and anti-establishment movements made significant gains. In a system designed to maintain the status quo, the horse-trading between political elites that dominated Lebanese politics has been disrupted. And for the first time in the country’s history, reformists will have influential positions to push for change within parliament, not just as outsiders, and translate the mass protests into long-term policy. But anti-sectarian groups face an uphill challenge to regain the public’s trust in the political process and institutions, and generate the legitimacy needed to impose reforms that can bring Lebanon out of its adversity.  
Democracy Notes
Published: 19/05/2022
Building Global Support for Ukraine: Debt and Democracy
The Russian invasion has done historic damage to the Ukrainian economy, and it  has become conventional wisdom that the scale of devastation necessitates a concerted, international rebuilding effort on par with the Marshall Plan.  But as Adam Tooze argues, what made the Plan so effective was not the amount of financing involved, but a long-term political commitment which prevented it from descending into “a free-for-all for ‘disaster capitalism’, something to be exploited by Western contractors and local oligarchs.” Unspooling precisely what this commitment entails can be tricky, but a useful way to begin is through debt. Ukraine’s external public debt stands at $57 billion, $22.7 billion of which is held by private borrowers in the form of Eurobonds. In efforts to stay in good standing with its creditors, Ukraine has continued to make bond payments throughout Russia’s full-scale invasion; as these payments are financial resources that could be going to Ukraine’s military defense or social spending, activists have responded with calls for the World Bank and IMF to cancel Ukraine’s debt outright, while more moderate academics have laid out plans for a carving out an exception for Ukraine to enable a wholesale debt restructuring. Any such effort would require significant coordination between governments (primarily the US and UK) who regulate financial centres, including pressuring private creditors to ensure their cooperation. The Covid-19 pandemic and accompanying global recession recently provided a test case of the latter approach. The sudden stop to economic activity in early 2020 meant that dozens of countries in the Global South suddenly, and through no fault of their own, were faced with a choice between funding a proper public health response to the pandemic and making bond payments to international creditors. Unfortunately,  the Debt Service Suspension Initiative (DSSI), an agreement to suspend payments on publicly-held debt and call on private bondholders to do the same, lacked the required legal or political leverage to compel private creditors to participate, and a lobby group representing private creditors responded by threatening to lock debtor countries who chose to participate out of capital markets. Ratings agencies doubled down, warning that participation in the DSSI would result in a credit downgrade. Lacking the requisite political support from western governments to make participation feasible, nearly all eligible countries declined to join the DSSI and the program ended a . Indeed, “by continuing to service the debt held by private finance ‘partners’, poor countries chose to prioritize social pain at the height of a pandemic for the elusive promise of future SDG-related inflows.” A political commitment to protect the seventy DSSI eligible countries was there, but dissipated in the face of a stronger commitment to protect the legal status quo  - or more crassly, profit margins - in western financial centers. For Ukrainians, this has echoes of 2014, when a previous wave of western commitments to deal with corruption and cronyism in the country crashed against a wall of offshore bank accounts, shell companies, and London post office boxes. President Zelenskyy’s and thirty-seven other Ukrainian politicians’ names appeared in the Panama Papers, but the phenomenon of offshore wealth and financial secrecy are global problems necessitating a global solution. To focus on the role of individual Ukrainians is to lose the forest for the trees. For a Marshall Plan for Ukraine to succeed, it must include efforts to rein in the ability of private bondholders to use western legal systems to squeeze much-needed capital and assets out of Ukraine, or any other poor or developing country. Addressing the role of western financial services firms in facilitating the swift and secretive movement of assets and capital around the world is equally vital, and in a warming world of renewed great power competition that will require more responsive and democratic governments worldwide, for many countries beyond Ukraine.
Democracy Notes
Published: 17/05/2022
Slovenian Elections: A Win for Democracy, a Loss for Populism in Europe
 Political newcomer Robert Golob’s victory in Slovenia’s April 24th general election may be both a step forward for its own democracy as well as a setback for populist strongmen in Europe.   The triumph of Golob and his Freedom Movement, just formed in January, is a reversal for neighboring Hungary’s rightwing populist leader, Viktor Orbán, who just won his fourth term in office but can no longer count Slovenia amongst his ideological allies. Brussels will be relieved in view of Slovenia’s turbulent EU rotating presidency last year and as the Commission clashes with Hungary over the rule of law.  Slovenia’s outgoing Prime Minister Janez Janša has been criticised for undermining a range of rights, including press freedoms. He has also been accused of corruption. In a strange twist, Janša’s leadership has eroded the democracy he had worked to build during the Slovene Spring. In his youth, Janša was a leftist before traversing the political spectrum; what started as anti-communism in his rejection of the Yugoslav regime veered into rightwing populism. After significant declines in media integrity and civil liberties, Slovenia was named a backsliding democracy in the Global State of Democracy’s 2021 report.    Golob, who envisages the creation of a modern welfare state based on a green transition, inclusive society, and the rule of law, had framed the election as a “referendum on democracy.”    In 2020, civil liberties for the first time sunk below East-Central European averages, with indicators on freedom of expression, freedom of association, freedom of movement and social group equality each downgraded to mid-range performance. Weakened checks on Janša’s regime have served to hasten backsliding. Judicial independence fell in tandem with government delays in appointing prosecutors and complying with judicial rulings; media integrity has been tested by Janša’s “war with the media.”    In spite of its small population, Slovenia has played an outsized and influential role in its neighborhood, and advocated for EU enlargement to include the Western Balkans during its 2021 EU presidency.    Signs of hope   The election also stood out for a number of historic breakthroughs. Of the 90 seats up for grabs in the National Assembly, the Freedom Movement won 41 of them, higher than any single party in the history of Slovenian parliamentary democracy.   In addition, electoral participation shot up, lending the result legitimacy and signaling representative and broad-based support. Slovenian electoral participation, which was high in the early years of democracy, has largely remained below the global average since 2012. The recent elections reverse this long-standing trend. Last month, 70 percent of 1.7 million eligible voters went to the polls, compared to 52 percent in the 2018 parliamentary elections.   Golob was able to tap into growing public discontent manifest in anti-government protests which he successfully galvanized into the ballot box. Further, civil society organizations played a critical role through promoting voter participation, providing resources and practical information on how to vote, and even organizing free transport to polling stations. Finally, the Freedom Movement was able to offer a new party appeal, creating a bandwagon effect that drew votes from other established parties. New parties can improve responsiveness of government and can often innovate to capture emerging social issues and reflect public sentiment.  With a clear mandate for his agenda, Golob is unlikely to encounter problems with the types of inertia that brought down the last governing center-left coalition at the beginning of 2020. The new administration will need to focus on restoring waning fundamental rights and impartial administration and shoring up media integrity. The experience of Slovenia can provide important lessons for recovering from backsliding and will be a country to watch carefully as the new parliament convenes its first session.