With a surprising and inconclusive election result and no clear route to a government almost two weeks later, Italian politics appear to have returned to what passes for normalcy there. Despite the near-term uncertainty, three things do seem clear. First, new elections are likely to take place between six months and a year from now. Second, voters are fed up with tax-heavy fiscal consolidation and structural reforms. Third, Italians have had their fill of a corrupt and gerontocratic political class, as demonstrated by the success of comedian Beppe Grillo's anti-party, anti-corruption Five Star Movement (M5S).
Despite the movement's negative portrayal in the media, Grillo's M5S could be the breath of fresh air that Italian politics badly needs if -- and it's a big if -- it can make a constructive contribution to dialog in the parliament. It is true that M5S's feud with the domestic media, crude skewering of established politicians, and potentially disastrous economic views have raised concerns from foreign policymakers and market participants. For example, Grillo personally supports a referendum on euro membership and has discussed restructuring the public debt or delaying interest payments. Officially, the Five Star Movement also hopes to roll-back the Biagi law, a liberalizing labor market reform, and renationalize the telephone network, among other economically questionable proposals.
But the movement has also been treated unfairly by international commentators. Comparisons to populist, far-right groups are just wrong. The M5S is not racist, violent, nationalist, or anti-democratic. Moreover, some of its economic proposals, especially where competition policy and reducing the state bureaucracy are concerned, are sensible. And while M5S's newly-elected parliamentarians may be inexperienced, they are also younger, more educated, and include more women than most other parties. These qualities make the movement more representative of modern Italy than many of their opponents.
But in the near-term, Italian politics will be dominated by efforts to form a government. Pier Luigi Bersani, the leader of the "Italy Common Good" coalition, gets the first crack at forming a cabinet thanks to his coalition's majority in the lower house (it failed to secure a senate majority, though). Bersani hopes to persuade the "Grillini" to support an eight point legislative plan, though Grillo has only agreed to evaluate each bill independently. The markets and the Italian public seem to understand that economic reforms are on hold for now, but both are hoping for political reforms.
Should Grillo allow political reform to move forward -- especially to the flawed electoral system -- the public will likely reward the Five Star Movement when Italy returns to the polls. (A new president must first be chosen, while electoral reform and cutting the number of parliamentarians and their salaries, as Bersani has proposed, would take several months.) A more cynical electoral strategy would be to hamstring any attempt at change, perhaps forcing Bersani to turn to Berlusconi and the center-right for a grand coalition. That strategy may allow the Grillini to capitalize on public disgust when new elections are called, but it is unclear how voters will respond if M5S adopts such an intransigent approach.
Whatever M5S does, even greater uncertainty will probably surround the next elections. Inaccurate polling, and perhaps a new voting system, will again make seat counts difficult to predict. And because markets will demand more than just political housekeeping, the stakes are almost certain to be higher. But the election could also provide an opportunity to finally move on from the dysfunctional, bipolar politics of the Second Republic, and that would be no small achievement.
Peter Ceretti is a researcher with Eurasia Group's Europe practice
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By Mark Rosenberg
South African politics is broiling. The exceptional violence surrounding the wildcat strike at Lonmin's Marikana platinum mine -- where police killed 34 strikers and 10 people died in an inter-union clash -- reflects poorly on the leadership of President Jacob Zuma, who is up for re-election as head of the ruling African National Congress (ANC). By weakening Zuma's allies and strengthening his foes, the Marikana incident and its aftermath make Zuma's hold on the ANC presidency-and thus the presidency of South Africa-extremely tenuous.
The most immediate political victim of Marikana is the National Union of Mineworkers (NUM), the largest affiliate of the powerful Congress of South African Trade Unions (COSATU). The violence at Marikana began with clashes between members of the NUM and the splinter Association of Mineworkers and Construction Union (AMCU), which has exploited discontent over NUM-negotiated wages and its perceived coziness with management to make significant inroads into the NUM's membership rolls throughout the platinum industry. Meanwhile, the NUM has faced similar criticisms from COSATU's acerbic Secretary General Zwelinzima Vavi, who has accused the union of favoring management and higher-skilled workers over its rank-and-file. The NUM, for its part, has accused Vavi of sowing dissension in its ranks, and its leaders have been at the forefront of a politically-driven effort to replace Vavi at COSATU's upcoming elective conference in September. Given Marikana -- where the NUM was utterly unable to contain the situation -- Vavi's criticisms will reverberate within COSATU, whose leaders are freshly focused on preventing the kind of union splintering which has struck the NUM. As a result, the NUM's influence in the federation -- and thus its challenge to Vavi's leadership -- will be weakened.
This damages Zuma, who is close to the NUM and has actively pushed for Vavi -- a former ally and now vocal Zuma critic -- to be replaced. Vavi's likely re-election will probably deprive Zuma of COSATU's endorsement heading into the ANC's December elective conference in Mangaung. COSATU is in a "governing alliance" with the ANC, and many of its 1.8 million members are also members of the ruling party: Its rejection of Zuma (whom the labor federation forcefully endorsed in 2007) will not only cost the incumbent votes, but it will also highlight Zuma's weakness among his erstwhile base. Indeed, the COSATU conference may well spur anti-Zuma factions to push Deputy President Kgalema Motlanthe into a more explicit challenge to the party's leadership. Motlanthe -- who is closer to Vavi and favored by the ANC's more statist elements -- is Zuma's most viable challenger, though he has thus far been reluctant to take on Zuma directly.
Zuma's hold on the ANC presidency is also threatened by direct political fallout from Marikana. The fact that Zuma ordered police to bring the Lonmin strike under control has exposed him to accusations of being aligned with (mostly white-owned) mining companies and of complicity in the miners' deaths. Leading the anti-Zuma charge is Julius Malema, the expelled ANC Youth League leader and populist demagogue. While Malema has no official influence in the ANC election, he is still viewed sympathetically by the party's "nationalist" faction and its youth wing. More broadly, the incident reinforces the impression that Zuma is a leader who is not in control of his government or his party. His consensus style of leadership is not suitable for containing ANC factionalism or the rise in popular discontent among many of the ANC's core supporters, opening a window to potential challengers such as Motlanthe at Manguang in December.
Mark Rosenberg is an analyst in Eurasia Group’s Africa practice.
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in many parts of China have made international headlines in recent weeks by
demanding higher wages -- and getting them. As more of them get what they want,
others will be encouraged to go the same route. Is the world's factory about to
go out of business? Not quite yet, but China's government has a
complicated new management problem.
The surge in worker anger and a wave of wage hikes in companies ranging from
electronics giant Foxconn to fast-food icon Kentucky Fried Chicken have generated talk about the end of cheap labor in China and the birth of an independent labor movement. That's overstated-or at least premature. Higher labor costs are an inevitable result of rising living standards and expectations, a long-term trend that can't be blamed on one Honda plant. An ageing population (in part the result of the one-child policy), the urbanization of huge numbers of workers, as well as Beijing's long-term policy plans to boost the declining share of income in China's GDP had set the stage for a gradual rise in labor costs long before the recent wave of strikes. With wages stagnant for most of the economic crisis, many local governments have introduced minimum wage hikes ranging from 5 percent to 20 percent in recent months. But the trend toward country-wide wage increases will be gradual. For now, there are still enough workers looking for jobs along the coast and in the countryside to keep labor costs manageable for many producers.
The more interesting part of the labor dispute story comes from the changing
nature of China's workforce. The country's economic boom has gradually raised expectations among Chinese workers for a better life. Opportunities to get an education (or provide one for their children), to buy a home, and to afford once unobtainable consumer goods have changed the way that millions of Chinese workers imagine their future. On an unprecedented scale, savvy workers are using the Internet and cell phones to find out what's happening in other factories and towns. They are increasingly aware of their rights and of the existing legislation designed to protect them. They're becoming much more assertive in demanding that their rights be protected.
So far, Beijing has tolerated these worker movements. Premier Wen Jiabao, known to many as "Grandpa Wen," recently spoke in support of the migrant workers who make up the bulk of China's unskilled labor. He insisted that they deserved to be "cared for, protected and respected." As long as labor disputes don't take on an overtly political tone, Beijing will leave it to local governments to deal with them. But one of the Honda strikes came dangerously close to testing the limits when, according to some accounts, workers demanded the right to form independent labor unions.
Here's where things could become more confrontational. China's formal trade union, the All China Federation of Trade Unions (ACFTU), is the only union that the government tolerates. But ACFTU doesn't inspire much confidence in the workers it was created to represent. Its main goal is to unionize most, if not all, of China's foreign-invested firms, and it tends to limit its role to mediating disputes between management and workers. Since its operation are approved by management -- and often staffed with managers -- workers tend to stake their claims independently of it. Some workers are even looking for something a bit more genuinely independent to represent their interests and protect their rights.
How will Beijing respond to these new pressures? First, it will likely keep the pressure on local governments to manage labor problems effectively, whether by brokering concessions, intimidating those who make the most aggressive demands, or both. Second, it could seek to empower ACFTU to play a more assertive role in representing workers interests, a goal that some ACFTU
representatives share. Beijing would rather ensure that its trade union can play its role more effectively than to allow for the creation of labor unions it can't completely control.
For the moment, the world's factory will continue humming along, though with
a few more jolts and bursts. But this is a story worth following as the Chinese leadership adapts to the challenges of navigating an increasingly complex political landscape.
Michal Meidan is an analyst in Eurasia Group's Asia practice.
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The Call, from Ian Bremmer, uses cutting-edge political science to predict the political future -- and how it will shape the global economy.