Democracy takes a step back in 2010

By bne IntelliNews January 31, 2011

Ben Aris in Moscow -

To paraphrase Tolstoy: All prosperous countries find democracy easy, but each crisis-ridden country oppresses its people in its own way.

It is easy to be liberal when things are going well, but the natural reaction of governments coping with a crisis is to tighten controls. This economic and financial crisis dealt a nasty blow to almost all of Central and Eastern Europe and many of the governments in these countries have not comported themselves well in response. Democracy took a big step backwards across the region in 2010.

Freedom House released its annual "Freedom in the World" report in December and expressed concern over the worsening of human rights across the region: the situation, it claims, deteriorated in 25 countries.

There were riots in Belarus in December following the obviously rigged presidential election that returned incumbent Alexander Lukashenko to office for yet another term. More than 20 protesters were jailed on extremist charges and many opposition leaders have disappeared into KGB-run jails. Those leaders not under arrest have fled the country and set up shop in Poland, and are now touring Europe calling for the imposition of a travel ban on senior members of the Belarusian government as well as for other sanctions.

Hungarian Prime Minister Viktor Orban has caused a storm of protest with a new media law that will curb the freedom of the press - not something EU member states are supposed (or allowed) to do. He also raided the state-run pension system for funds to plug the hole in the country's dire finances, as well launched an attack on the independence of the central bank, both anathema to free-market thinking. "The weaker the economy, the more politicians play a role," Andreas Treichl, CEO of Erste Bank Group, told a group of reporters at a dinner in January, before adding more optimistically that, "No matter what you see happening in Estonia or Hungary, it does not really change the [EU convergence] path they are on."

The "Putinisation" of Ukraine continues apace as President Viktor Yanukovych, who was elected in February last year, further consolidates his hold on power, rolls back freedom of expression and persecutes the former prime minister and Ukrainian opposition leader Yulia Tymoshenko. Freedom House punished Ukraine by downgrading it from "free" to "partially free."

And the "benign dictator" of Central Asia, President Nursultan Nazarbayev, feebly protested when the Kazakh parliament voted to cancel the next presidential election in 2012 and effectively extend his term of office to 2020. Europe and the US made a few perfunctory harrumphs, but Kazakhstan's abundant oil reserves will make any further action unlikely.

Despite taking a few baby steps towards political pluralism by allowing opposition groups to hold demonstrations in central Moscow in October, the Kremlin rounded off the year by jailing opposition leader Boris Nemtsov on New Year's Eve (albeit only for 15 days). Far more damaging was the harsh 13.5-year sentence handed down to jailed tycoon Mikhail Khodorkovsky on December 27. Commentators had been expecting a milder six to eight years on what are clearly trumped-up charges. The outrage over the sentence was universal.

Expect more theatrics this year in Russia due the crucial parliamentary elections in December. While most of the commentary has focused on Vladimir Putin's possible return as president in the 2012 elections, the parliamentary elections are far more important. bne believes that Putin wants to stay at the helm of government where he has day-to-day control over the economy and will leave Medvedev as president to continue institution building. However, in order to balance the power of the two posts, Putin needs the ruling United Russia party to win a constitutional majority of over 66%; with this, even though the president can sack the prime minister, the prime minister could then change the constitution to turn Russia into a parliamentary democracy. While there is no doubt that United Russia will easily win a majority in this year's elections, to get to the constitutional majority the Kremlin will have to better its performance by a few percentage points from the last elections. No effort will be spared to get to this magic number "honestly" this time round (but it is fairly sure the Kremlin will get there what ever the voters think).

Elsewhere, Moldova is still locked in a constitutional crisis. On January 15, the parliament approved a new West-leaning government with a programme that endorsed integration into the European mainstream as a main goal. However, the vote was only supported by the 59 members of parliament of the Alliance for European Integration coalition, which defeated the powerful opposition Communists in an election last November, while the Communists refused to take part in the parliamentary vote. This doesn't bode well for the new parliament's main objective - to finally elect a president and end a political stalemate that has blocked reform. The election of a president is carried out by parliament and – unlike approval of the new government – requires at least 61 votes in the 101-seat assembly. The Communists were able to twice block the Alliance's candidate for president in 2009.

In fact, Freedom House found the only country in the region to have improved its standing was Kyrgyzstan, which won some brownie points for holding a relatively free election after ousting its corrupt president in 2010. However, the new regime is weak and the country remains unstable.

All in all, a pretty poor showing for the countries in transition that are supposed to play an important part in the global growth story over the next few years.

Back to the future

The retrenchment is not a CEE-isolated thing, but worldwide. The Freedom House survey of 194 countries and 14 territories named China, Egypt, Iran, Russia and Venezuela as amongst the worst offenders (note: two of BRIC countries are given black marks), while the number of electoral democracies dropped to 115, the lowest level since 1995, after reaching a high of 123 in 2005. "The world's most powerful authoritarian regimes acted with increased brazenness in 2010," the report's authors say, highlighting Chinese pressure to boycott the Nobel Peace Prize award ceremony honouring jailed democracy advocate Liu Xiaobo and Khodorkovsky's sentence as two of most egregious examples.

Why have things got worse? The slippage shows how delicate most of the new proto-democracies remain and how their progress towards a more liberal democratic system is linked to economic progress.

Crises put governments under enormous pressure as they traditionally get the blame for the mess. This manifested itself in the West with the riots that swept Europe last year, but thanks to the strength of these more mature democracies, the worst a western politician faces is losing his job - as Irish PM Brian Cowen will probably find out in March.

In the less-stable countries further east, popular dissent is a lot more dangerous and can quickly escalate into coups or coloured revolutions like that seen in Kyrgyzstan last year and Tunisia this year. As Eurasia Group founder Ian Bremmer points out in his book, "The J Curve", the knee-jerk reaction of an authoritarian government is to increase control in hard times, which produces more stability that leads to an economic recovery faster than in the free-wheeling open democracies. Consensus politics works well in the good times, but is bad at dealing with crises because it leads to dithering; authoritarian regimes hamper growth, but can act decisively in a crunch. Looking at it from this perspective, the problems in Budapest should be far more worrying than those in Minsk to the other members of the EU.

Still, cracking down on a population already made miserable by a big economic shock won't do any good unless the government then follows through with reforms to prevent a repeat of the crisis happening.

The same week that Freedom House released its report, the conservative US think-tank The Heritage Foundation put out its annual economic freedom rating. The tail and top remained the same, with Hong Kong ranked first for the 17th year in a row and North Korea bring up the rear. Within those two extremes, The Heritage Foundation said that Russia moved up three spots from last year to 143 out of 183 countries, because of minor improvements in fiscal policy, monetary freedom, corruption and labour practices, but concluded that freedoms remain "severely challenged." Among the many problems, corruption is "rampant" and President Dmitry Medvedev's anti-corruption programme has failed to make a difference. Russia's overall score of 50.5 is below the world average of 59.7 and the CEE regional average of 66.8.

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