Monthly Archives: March 2011

The Politics of Parliamentary Systems

Canadian Prime Minister Stephen Harper

Canadian Prime Minister Stephen Harper

Two parties fell from power last week, trigging election. In Portugal, the government of Prime Minister José Sócrates fell after a no-confidence motion was passed by the five opposition parties over spending cuts and tax increases intended to address the ongoing economic crisis in the country. A general election looks likely to take place in May or June. Meanwhile, in Canada, Stephen Harper’s minority Conservative government fell after three opposition parties passed a no-confidence motion in response to a finding in the House of Commons that found Harper’s government in contempt of parliament. Harper’s government was found to have provided falls information to parliament on at least three separate occasions. New elections are scheduled to take place on May 2.

The collapse of Sócrates’ government in Portugal and Harper’s government in Canada highlight both the strengths and weaknesses of parliamentary systems. Unlike presidential systems, where legislative terms are fixed and elections are set according to a regular schedule, parliamentary systems usually only have a maximum length of time between elections, normally five years. Elections can—and indeed, often do—come earlier. The government may call an early election if it feels that doing so can give it a larger majority in parliament. And opposition parties may force an early election by passing a no-confidence motion.

Both country’s upcoming elections should provide interesting political theatre. In Canada, public opinion polling is suggesting that Harper’s Conservative Party will likely win a plurality of seats but be denied an absolute majority in the House of Commons, the country’s parliament. If this happens, it will either be forced to seek coalition partners to establish a government, or (more likely) it will try to rule as a minority government again. The problem is that minority governments are inherently unstable, as the government is forced to cobble together a majority vote on every issue from an unstable and often shifting group of Members of Parliament from other parties.

In Portugal, the stakes are perhaps even larger. There, the collapse of Sócrates’ government came just days before the European Union was scheduled to decide on a rescue package for the Portuguese economy. That package, which was conditioned on the government of Portugal enacting strict (and widely unpopular) austerity measures, now appears to be in jeopardy. But the ability of the E.U. to discipline the government of Portugal may be limited, as any spillover of the economic crisis from Portugal could endanger the stability of the euro, the common currency used in fifteen E.U. economies, including Spain, France, and Germany.

The G7 and Japanese Currency Markets

Japanese yenThe G7, a loose association of the world’s seven wealthiest countries, took the unusual step yesterday of backing intervention in Japanese currency markets. In the aftermath of the devastating earthquake and tsunami, the value of the Japanese yen had been pushed to record highs by markets (and currency speculators) anticipating Japanese companies repatriating funds to help rebuild lost production capacity. In hopes of keeping its currency value stable, the Japanese government injected 60 trillion yen (more than $740 billion) into the economy over a four day period following the crisis. But despite these efforts the yen climbed to its highest levels since World War II last week, peaking at 77 yen per dollar last week.

So what’s the worry? Currency values are important in determining exports, imports, and balance of trade. In general, a weaker currency means more competitive exports. This is why countries sometimes risk the specter of competitive devaluation, as the United States has accused China in recent years. But in the case of the Japanese yen, the challenge is much greater. An increase in the value of the yen could weaken the Japanese economic recovery. But more importantly, there was concern that it could also hamper the rebuilding effort by sapping much needed wealth from the market.

Historically, the G7 (as well as its individual member states) have been hesitant to intervene in foreign exchange markets, guided by the perception that it simply doesn’t work, or that the dangers outweigh the possible benefits. This is why the G7 maneuver is so unusual.

Globalization and the Japanese Crisis

Japanese disaster workers search for survivors.

Japanese disaster workers search for survivors.

The devastation wrought on Japan by the recent earthquake and tsunami is now being compounded by the threat of a meltdown at the Fukushima nuclear reactors. The humanitarian impact is overwhelming—by some estimates, as many as 10,000 people have likely already perished, and some half a million have been rendered homeless. The Japanese government is struggling to get the situation under control, and international humanitarian assistance is being mobilized in support.

The crisis in Japan also serves to illustrate the extent to which the world is increasingly globalized. According to a post at the Financial Times’ Brussels Blog, the European Union is screening Japanese food imports for radiation. While Japanese food exports to Europe are not particularly large—amounting to an estimated 64.8 million euros in 2010—European regulators assert they are acting out of precaution to prevent food contaminated by radioactivity from entering European markets.

Then there’s this post by Amy Lee at the Huffington Post. According to Lee, we should expect severe disruptions in global supply chains, particularly for consumer electronics, as a result of the Japanese crisis. Lee notes that Japan is responsible for 14 percent of global production in computers and other consumer electronics. Further, Japan is responsible for the production of approximately 60 percent of the silicon wafers used in the production of the semiconductor chips in nearly every electronic device. Widespread damage to production facilities have already forced many leading producers, including Sony, Toshiba, Panasonic, and Texas Instruments. Damage to Japanese infrastructure may affect exports even after the plants are brought back online.

The use of global commodity chains, in which complex products like automobiles or computers are assembled from components produced around the world, has created a system of global production that may be more efficient, but is also more susceptible to disruption. Compounding this, Japan’s perfection of the just-in-time manufacturing method, which reduces costs by keeping inventories low, means that there is little slack in the system. According to Lee, the global consumer electronics supply chain has about two week’s worth of excess stock that will offset disruptions caused by the Japanese crisis. After that, it could take six months for the supply chain to reintegrate. Until then, we can expect to see price increases and shortages for many consumer electronics.

International Women’s Day at the Status of Female Politicians

Marine LePen, Leader of the French National Front.

Marine LePen, Leader of the French National Front.

Yesterday marked the 100th annual International Women’s Day. There was much coverage of the importance of the day in the blogosphere, including some very good coverage by the GuardianOxfam’s Duncan Green  and lots of discussion of the ongoing pay gap between men and women globally.

But two sites really stood out to me. First, the Women in World Parliaments website (maintained by the Inter-Parliamentary Union) offered some updated data on the status of female representation globally. It notes that regionally, the Nordic countries lead the world in equality of representation for women, with the national parliaments comprised of 41.6 percent women, nearly twice the average the next closest region (the Americas at 22.6%), and nearly four times as high as the last-placed region (Arab States, at 11.7%). The comparative data at the national level is also very interesting. Looking only at the lower houses, we find that women are best-represented in Rwanda, with 56.3 percent of the lower house comprised of women. The top ten (with some interesting surprises) are as follows:

  1. Rwanda (56.3%)
  2. Sweden (45.0%)
  3. South Africa (44.5%)
  4. Cuba (43.2%)
  5. Iceland (42.9%)
  6. The Netherlands (40.7%)
  7. Finland (40.0%)
  8. Norway (39.6%)
  9. Belgium (39.3%)
  10. Mozambique (39.2%) 

Rounding out the bottom, ten states tied for last place, with no women in the national parliaments: Belize, Micronesia, Nauru, Oman, Palau, Qatar, Saudi Arabia, the Solomon Islands, Tonga, and Tuvalu.

The second very interesting coverage was offered by Gideon Rachman, blogging at the Financial Times. Exploring the most recent polling data from France, he notes that Marine LePen, the daughter of Jean-Marie LePen and head of the far-right National Party, appears to be polling at the top of preferred presidential candidates. In 2002, Marine LePen’s father, Jean-Marie LePen, won the first round of the French presidential ballot, only to be soundly defeated by Jacques Chirac. France’s presidential election system requires that the winner be elected with a majority of votes cast. Because multiple parties contest the election, a runoff election between the top two vote getters in the first round is the norm.

In the 2002 elections, Le Pen’s radical views placed him far outside the mainstream of the French electorate. LePen had been accused of xenophobia and anti-Semitism. During the 2002 campaign, he was dogged by statements he had previously made, including advocating the forced isolation of people infected with HIV and accusing his rival, Jacques Chirac, of being on the payroll of Jewish organizations.

As the According to Rachman, Marine LePen presents a similar far-right worldview but lacks the divisive baggage of her father. A victory in round one of the Frecnch presidential elections appears possible. However, a round two defeat to whoever is chosen to run against LePen appears equally probable, and given the current state of the French economy, it could be Socialist Martine Aubry that wins the national election. Either way, it’s a female president for France in 2012.

Measuring Progress: The Failure of the United States?

Blogging at the Global Dashboard, Alex Evans posted an interesting graph comparing the International Monetary Fund’s “advanced economy” countries across a number of measures. The graphic is reposed here:

As Evans notes, the graphic paints a pretty sad picture about the standing of the United States in several key measures of development, including income inequality, food insecurity, life expectancy, prison population, and student performance in math and science. In all of these categories, the United States ranks at or near the bottom of the 33 countries included in the study. Despite having the largest economy in the world, the United States has not been able to translate its economic prowess into social development as effectively as many of our fellow developed countries have.

It’s enough to make one rethink the whole development project.