Alberto Negri

The True Risk Is Politics

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Alberto Negri

America24, 27 gennaio 2014, 04:42

Politics represents the true risk that can radically change the image of a country. Even with some paradox at a moment when emerging markets are entering a crisis for different reasons, from the U.S. monetary tapering to the slowdown in China, but especially for the mistakes of their political leaders, who, when they find themselves with their backs against the wall, evoke theories about international plots. The Turk model was all the rage one year ago on the Bosphorus, after a boom under the decade-long rule of the moderate Islamic party of Prime Minister Tayyip Erdogan. As soon as Erdogan lost ground, amid street protests, corruption scandals and frictionswith the judiciary, the economy stalled, the Turkish lira came under attack and investors, both domestic and foreign, started to fret about the future. As a result, the prime minister, justifying his actions with suggestions of a political plot, intends to stop the judges who are investigating into his family. Meanwhile, his party wants to silence the press and the Internet. Accusations have been made against Fetullah Gulen, a former imam who lives in the United States, of planning to kill him and the plutocratic forces of the market.

By contrast, neighboring Iran, which until the nuclear agreement of last November was literally a target of Israeli fighter jets and U.S. Congress, is the new hot destination for business, despite sanctions and oil embargoes having only recently been eased.

There the political risk is evident, but it does not stop the run to Tehran. After Italy, France is preparing its countermove and will send a high-profile delegation from MEDEF, the French business association, preceded by Sweden, Austria, Lufthansa, which sells aircraft and services, and even Swiss banks such as Julius Baer. It sufficed that from last June’s elections and from the ayatollah’s front emerged the pragmatic president, Hassan Rohani, backed by the supreme leader, Khamenei, and the face of Iran suddenly appeared less threatening and more friendly, after the dark years of temperamental Ahmadinejad and the Green Wave repression.

We live off rational calculations, like economic data indeed are, but also off sensations and images, in part real and in part virtual, which rapidly turn into political slogans. Three years ago, when the uprising against Arab rulers started in Tunisia and Egypt, the term “Arab Spring” was everywhere, while today nobody, not even the most optimistic, dare to utter it. A little memory exercise, maybe going back to the tragic developments of the Balkans in the 1990s, could suggest the situation in Ukraine: Europe too often hails unconditionally the popular uprisings of libertarian and democratic inspiration, then becoming a mute and useless spectator before their bloody evolution. Wasn’t this maybe the case with Syria?

The risk is always present,and when we rush to conclusions another embarrassing companion surfaces: the wrong political calculation, which can be even more ruthless than economic statistics. This is what happened in Egypt to those Americans, Europeans and Turks who supported the Muslim Brotherhood and pPesident Mohammed Morsi, voted in during the first free elections in the country’s history. To destroy everything came the shiny boots of General Abdullah Fattah Al Sisi, with the generous billion-dollar help of the Gulf monarchies, always ready to export far from home the ferocious infighting that has divided the Sunni world for years.

Then the same old stories cruelly returned to hurt the South American population, from Argentina to Brazil. These are about the short-lived booms, a result of the illusions of an ephemeral well-being that, when it goes away, only leaves ruins, resentment and instability.

In Buenos Aires, the central bank has refused to defend the local currency, and the peso has fallen to historic lows against the dollar, under the psychological threshold of eight pesos, evoking capital flight, inflation and spreading social malaise—the ghosts of the revolts of a decade ago, when, after the default on public debt and the end of the parity between pesos and dollars, the streets were crowded with cartoneros: the trash paper pickers.

But even in the case of Argentina, politics has a crucial role: after a government shakeup last year, followed by the peso falling by 25 percent, President Cristina Kirchner has been absent from the political scene for three months due to brain surgery. Her reappearance in these hours was even more damaging than the rumors and the gossip that for months surrounded the Casa Rosada. She looked tired, almost exhausted. “A country cannot make it alone. No government can make it alone, let alone a president,” whispered the leader who, until recently, growled at and warmed up the crowds. The country has no leadership and it knows it, as the markets do. It’s an almost tragic sunset for a peronist who for a moment overshadowed the memory of Evita.

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