ASEAN breaks deadlock over South China Sea

Lesley Wroughton and Martin Petty

          Lesley Wroughton and Martin Petty

Southeast Asian nations overcame days of deadlock on Monday when the Philippines dropped a request for their joint statement to mention a landmark legal ruling on the South China Sea, officials said, after objections from Cambodia.

China publicly thanked Cambodia for supporting its stance on maritime disputes, a position which threw the regional block’s weekend meeting in the Laos capital of Vientiane into disarray.

Competing claims with China in the vital shipping lane are among the most contentious issues for the Association of Southeast Asian Nations, with its 10 members pulled between their desire to assert their sovereignty while finding common ground and fostering ties with Beijing.

In a ruling by the U.N.-backed Permanent Court of Arbitration on July 12, the Philippines won an emphatic legal victory over China on the dispute.

The Philippines and Vietnam both wanted the ruling, which denied China’s sweeping claims in the strategic seaway that channels more than $5 trillion in global trade each year, and a call to respect international maritime law to feature in the communique.

Backing China’s call for bilateral discussions, Cambodia opposed the wording on the ruling, diplomats said.

Manila agreed to drop the reference to the ruling in the communique, one ASEAN diplomat said on Monday, in an effort to prevent the disagreement leading to the group failing to issue a statement.

The communique referred instead to the need to find peaceful resolutions to disputes in the South China Sea in accordance with international law, including the United Nations’ law of the sea, to which the court ruling referred.

“We remain seriously concerned about recent and ongoing developments and took note of the concerns expressed by some ministers on the land reclamations and escalation of activities in the area, which have eroded trust and confidence, increased tensions and may undermine peace, security and stability in the region,” the ASEAN communique said.

In a separate statement, China and ASEAN reaffirmed a commitment to freedom of navigation and overflight in the South China Sea and said they would refrain from activities that would complicate or escalate disputes. That included inhabiting any presently uninhabited islands or reefs, it added.

China’s Foreign Minister Wang Yi said a page had been turned after the “deeply flawed” ruling and it was time to lower the temperature in the dispute.

“It seems like certain countries from outside the region have got all worked up keeping the fever high,” Wang told reporters.

China frequently blames the United States for raising tensions in the region and has warned regional rival Japan to steer clear of the dispute.


The United States, allied with the Philippines and cultivating closer relations with Vietnam, has called on China to respect the court’s ruling.

It has criticized China’s building of artificial islands and facilities in the sea and has sailed warships close to the disputed territory to assert freedom of navigation rights.

Meeting U.S. National Security Adviser Susan Rice in Beijing, Chinese State Councillor Yang Jiechi said both countries need to make concerted efforts to ensure stable and good relations between the two major powers.

“So far this year, relations between China and the United States have generally been stable, maintaining coordination and cooperation on bilateral, regional and international level. Meanwhile, both sides face challenging differences that need to be carefully handled,” said Yang, who outranks the foreign minister.

U.S. Secretary of State John Kerry arrived in Laos’ capital on Monday for the ASEAN regional forum and East Asia summits. He is expected to discuss maritime issues in a meeting with Wang, as well as in meetings with ASEAN members.

Kerry will urge ASEAN nations to explore diplomatic ways to ease tension over Asia’s biggest potential military flashpoint, a senior U.S. official said ahead of his trip.

Think the Brexit shock is over? Think again.

Vicky Pryce

It is just four weeks after the shock referendum vote and many analysts are arguing that it is too soon to tell what the impact of Brexit has been. But is it? It is true that some of the official statistics for the current quarter won’t be fully known until the early autumn. The new chancellor, Philip Hammond, has ruled out an emergency budget and will spend the summer looking at the evidence before deciding what to do. He expects to deliver a November autumn statement to “reset” the economy, whatever that may mean.

But there isn’t much time to wait. Prime Minister Theresa May’s phrase: “Brexit means Brexit,” rather than removing uncertainty, in fact makes things worse. No-one knows what it means—and clearly Boris Johnson, David Davis and Liam Fox, who run the government departments that will make it happen appear to disagree about the way forward. Everyone that may have worked in trade before or has some vague knowledge of Europe is being drafted back in to assist as Whitehall seems to be desperately short of “experts,” now once again considered worth listening to. Business organisations have been summoned in to give their views but there is no clarity about the government’s intentions, particularly with regard to access to the EU single market.

So far the only game in town has been the Bank of England with its much-maligned governor, Mark Carney, stepping in to calm markets on the morning of the referendum result. He has given access to £250 billion ($327 billion) of extra liquidity to the banking system, hinted at even lower interest rates and has also now cancelled the countercyclical capital buffer the banks would have needed to raise next year. Another £150 billion ($196 billion) is therefore in theory available for loans to businesses. All this helped the equity markets recover. Big international firms with foreign earnings will also benefit from sterling’s sharp fall, now at a 30-year low against the dollar.

That does not seem to be happening since the vote to leave. Surveys after the referendum suggest a further loss of confidence because of the Brexit vote. The uncertainty matters but businesses also fear that whatever deal is struck, it will be worse than the one that Britain had before and will take time.

Yes, of course, other trade deals can be concluded but geographical proximity matters a lot in trade decisions. Currency swings, especially violent ones, are destabilising for big business. Rolls Royce has just announced that the sterling fall has contributed to a £2 billion ($2.6 billion) loss in the first half of the year, partly through losses in foreign exchange hedging contracts—and Ryanair has  hinted that its growth in the future will be centred in expanding European hubs rather than the current U.K. locations because of Brexit.

Moreover the pound’s fall brings other problems with it.  The U.K. tends to import many of the parts it uses in its manufacturing production processes, so costs will rise. It also imports many of its consumer goods. Prices are beginning to rise as a result—holidays, petrol, food, soon clothing also if the cost is passed to consumers by retailers who are already facing very tight profit margins.

Retail sales, though some 4 percent up year-on-year, fell by 0.9 percent month to month in June.  New house sales, already down 34 percent in the second quarter are under threat. Not surprisingly housebuilders’ shares have been under pressure since the vote. London house prices are forecast to fall by 5 percent in 2016 Q3 from Q2 and continue to decline through to 2017.

The flash Markit/CIPS Purchasing Managers’ survey for July suggested activity in the economy declined to a level not seen in the U.K. since the spring of 2009, indicating a recession, particularly felt in services. Economists are predicting a technical recession—possibly zero or negative growth for at least the two quarters. Consensus forecast for 2017 are down from 2.1 percent to just 0.4 percent. The City is nervous, worrying about continuation of current “passporting” arrangements that allow UK registered financial firms to sell freely across the EU.

The people warning of a short-term shock to the economy were right. But the medium to long term looks worrying too. The consultancy EY expects unemployment to go up to over 7 percent over the next three years from 4.9 percent now.  Disposable incomes will be hit.  The government will need to act now and to combine fiscal and monetary stimulus, as was done in 2008. This, though, is not a get-out-of-jail-free card. There are costs, in terms of lower bank profitability, lower incomes for pensioners and savers and tougher measures that will be needed in the future to tackle a rising deficit and debt. Welcome to Brexit Britain.

The West’s Crisis of Leadership

Sylvie Kauffmann

Sylvie Kauffmann

PARIS — A few days before the Bastille Day terrorist attack in Nice, President Obama was in Poland for the NATO summit meeting, his mind obviously as much in Dallas as in Warsaw. As I listened to him during his closing news conference, on July 9, I was struck by the sad, tired, almost defeatist tone in the way the leader of the most powerful nation on earth addressed the divisions within American society, after that week’s killings. “This is not who we are,” he insisted, as if trying to convince himself.

By the time he spoke in Dallas three days later, at the memorial service for the police officers shot dead there, President Obama seemed to have regained his confidence. But two days later, on July 14, I was reminded of that brief moment when he let his guard down as I listened to another president, François Hollande, speaking during an interview on French television. Mr. Hollande said that the state of emergency in force since the Nov. 13 terrorist attacks would soon be lifted. But as much as he wanted to sound optimistic, with a presidential election 10 months away, he still looked somber toward the end. “To be president,” he said, “means to have to face death, tragedy.”

That was lunch time on Bastille Day. At 3 the next morning, the French president was back on television, after the carnage that killed 84 people on the enchanting Promenade des Anglais in Nice, to announce that the state of emergency would be extended, for the third time. “France is strong, stronger than the fanatics that want to strike her,” he said. His opponents were quick to ridicule him either for having suggested that the state of emergency would be lifted, or for keeping it in force even though it had proved useless to prevent the attack in Nice.

Today, France and the United States are probably the West’s two main targets of Islamist terrorism. In France, our government warns that we must “learn to live with terrorism.” Yet just when they need to be stronger, our societies seem fragile, tense, stirred by powerful winds of revolt against their elites and an economic order that has increased inequalities. Can they withstand the shock?

Defying the odds through the last 18 difficult months — three bloody waves of terrorist attacks and sporadic terrorist incidents, strikes, violent protests against a reform of labor laws, high unemployment and floods — the French have proved surprisingly resilient. The annual survey of the National Consultative Human Rights Commission, carried out in January, even showed tolerance on the rise “despite the posture of some public figures.” While the 2008 economic crisis reduced tolerance, the 2015 attacks produced the opposite effect, “leading to soul-searching and civic mobilization” against extremists, the commission said.

Similarly, the Pew Research Center’s 2016 Global Attitudes Survey found that France (the European Union country with the biggest Muslim and Jewish populations) was the European nation second only to Spain in valuing diversity. The monthlong Euro soccer competition, hosted by France just before the Nice attack, also inspired intense fervor from the French public for its very diverse national team; it was supported throughout by enthusiastic singing of “The Marseillaise,” even after it lost the final game.

Some statistics from the Ministry of Interior, though, show a different picture: The number of racist criminal acts went up 22.4 percent in 2015. The reason for this contradiction, the Human Rights Commission’s experts suggest, is that while individuals who carry out such acts are becoming more radicalized, the society at large is more aware of the dangers of polarization. This attitude shows in an increasing number of civic initiatives, and in the results of the regional election last December: After the far-right National Front did very well in the first round, voters rallied against it and prevented it from winning a single region in the second round.

 Whether such healthy reactions will prevail after the Nice massacre — and any future one — is an open question. With a big immigrant population from North Africa and a very strong National Front locally, Nice itself is particularly vulnerable.
 The sad reality is that people of good will are not helped by a significantly mediocre political establishment. There could be national unity at the bottom — if only there were at the top.

This was illustrated again immediately after the Bastille Day attack. While citizens of all backgrounds and colors joined to pay their respects to the victims on the Promenade des Anglais, while the florists of Nice united to cover the bloodied avenue with flowers, while the nation was in shock, our politicians bickered over whether the government could have prevented this new atrocity. With the 2017 presidential election flashing big on his radar screen, Mr. Hollande’s rival and predecessor, Nicolas Sarkozy, did not even wait for the end of three days of national mourning before mounting a ferocious attack on what he saw as the government’s passivity.

The political debate in France has not quite reached the abyss of the campaign for the June 23 referendum on Brexit in Britain yet, nor of Donald J. Trump’s surreal pronouncements, but it is going in that direction. Le Monde’s longtime cartoonist Plantu feels that politicians, media and social networks have stolen his job: “They are now more caricatural than my own caricatures,” he said. In an interview with the Journal du Dimanche on Sunday, Prime Minister Manuel Valls openly worried about a trend that he describes as “the Trumpization of minds.” This, he said, “cannot be our response to the Islamic State.”

When citizens behave more wisely than the men and women who compete to represent them, the time has come to take a hard look at the state of our political systems and its impact on our societies further down the road — particularly when modern democracies are under threat from outside forces that have declared war on them.

A journey into the heart of Kashmir’s crisis


Zahid Rafiq

Bumdoor/Anantnag, Indian-administered Kashmir – Aside from the black ravens that kraaw from every tin roof in Kawpoor, there is complete silence.

It is early morning on Wednesday and for a while it seems that no one lives here. Doors and windows are closed. There are only the ravens, dozens and dozens of them, and the silence.

It is in this Kawpoor neighbourhood, whose name literally means the abode of crows, of Bumdoor village – where clusters of small houses lie imposingly between orchards, streams and vast paddy fields – that the rebellion that has overtaken the whole of Kashmir in the past week started last Friday night.

On a narrow path that leads from the main road to the houses, a rectangle of stones, sticks and yarn, with black and green flags at the corners, marks the spot where the 22-year-old Kashmiri rebel fighter Burhan Wani was killed. It has become a place of pilgrimage.

“No one ever visited here till last week. Nothing ever happened in this village,” says Showkat Ahmad, a 24-year-old engineering student. “But for the last five days, more than a thousand people from all over visit here every day to see where Burhan was martyred.”

Ahmad says the gun battle in which Burhan was killed was the first he had ever witnessed in this quiet village. Everyone seems surprised by it, and among the villagers there is an uncomfortable silence. They see accusations in the eyes of those who visit.

“They think we didn’t try to save them … that we didn’t throw stones at the soldiers and give cover to Burhan and the two other martyrs,” says Ahmad. “But we had no idea they were here and by the time we knew it, it was very late.”

READ MORE: Rage in Kashmir over killing of youth by Indian army 

The villagers say that the Indian soldiers and the police started arriving in the village at around noon on Friday, but they behaved in such a way that no one suspected something was amiss.

Abdul Gani Dar lives just across from the house where the three fighters had spent the night on Thursday and the day on Friday. It is a large house, a section of which belonged to an uncle of one of the fighters killed in the gun battle, Sartaj Ahmad Sheikh.

“The soldiers told us that Mehbooba Mufti [the chief minister of Indian-administered Kashmir] was coming to the nearby orchard to inaugurate something. And we went on with our day at the fields and in the orchards,” he says.

By 4pm, more than a hundred Indian soldiers and police had cordoned off the Kawpoor neighbourhood. Some had taken positions in the partially built houses, some in empty cement drains, others in public bathrooms or behind trees.

“At around 5.30pm, Sheikh was the first to walk out of the gates of the house. He was shot dead right there,” says a neighbour who asked not to be named. “A few moments later, Burhan and Parvez – the two other militants – emerged from the house and they ran for around 25 metres and then they too were shot dead.”

Soon after the three were killed, hundreds of villagers came out and clashed with the police. Scores were wounded.

By evening, when the news had spread that one of those killed was Burhan Wani, the Hizb-ul Mujahideen commander who had been widely credited with reviving armed resistance to Indian control of the disputed region, people began to come out on to the streets across Indian-administered Kashmir.

The face of the armed rebellion

Wani had picked up a gun in 2010 as a 15-year-old boy. But unlike other fighters, he did not choose an alias or conceal his identity. Instead, he posted pictures and videos of himself on social media platforms such as Facebook and, in so doing, appealed to a new generation of Kashmiris, bringing the armed resistance back into the public imagination. Wani became a household name.

On Saturday morning, an estimated 200,000 people attended his funeral prayers in Tral. By the time he was buried, Indian-administered Kashmir was in the throes of yet another rebellion.

On Saturday, the first day of the uprising, at least 15 civilian protesters were killed and more than 200 wounded in firing by the Indian armed forces.

According to Indian police, police stations, posts and military camps were attacked, with many set ablaze.

A curfew was imposed in all four districts of the southern part of the region, the phone network and the internet was shut down.

 Indian government forces guard the deserted main road during a curfew following violence [Yawar Nazir/Getty Images]

Into the darkness

A kind of darkness has descended on Indian-administered Kashmir, punctuated by the sounds of gunshots and ambulance sirens. The south of the region has been at the heart of that darkness.

For five days no journalists could make it here: afraid not only of the Indian forces but also of angry residents who believe the Indian media has distorted their stories.

Myself and a colleague, working with an Indian newspaper, became the first journalists to travel through the southern part of the region, along stretches of highway and interior roads controlled by young civilian protesters and through major towns under a curfew imposed by hundreds of Indian troops.

Along our route, house windows are shattered. Stones, tree trunks and rocks litter roads smeared orange by the bricks young boys throw at the Indian forces.

READ MORE: Protests in Kashmir despite curfew

At midday on Wednesday, a strict curfew is in place. Indian forces stand in small groups along the roads or sit on the pavements, making sure that nothing moves. An elderly couple trudge along the road, each carrying a sack.

“Were you throwing stones yesterday?” an Indian soldier asks the old man.

“No, I have to take my wife to hospital. She has fever and urine infection,” he replies.

“I think I saw you throwing stones yesterday. Now you try to appear all old and feeble but yesterday there were dozens of old men with white beards throwing stones,” the soldier tells him.

A district administration officer in Anantnag, speaking on condition of anonymity, told Al Jazeera that such a curfew is intended to pressure people into pleading with those protesting to stop so that the curfew might be lifted.

“That is the way that has been decided. Starve them. Let the parents beg their young sons to give up and we could return to normality,” the officer said.

Kashmiri protesters throw stones at police during clashes in Srinagar, the summer capital of Indian-administered Kashmir [Waseem Andrabi/Hindustan Times via Getty Images]

‘I was bleeding and crying and they beat me with sticks’

In the post-operation ward of the Anantnag District Hospital, 17-year-old Mohammad Saeem’s cries pierce the stale air. He is pleading with his brother to cut the plaster on his leg.

“I am in pain. I am in pain,” he sobs.

Saeem was shot by the police on Monday. Three bullets hit his left leg, shattering the bones in his foot and shin.

On another bed, across the aisle from Saeem is 46-year-old Masooda, a mother of four daughters, the youngest of whom is seven.

She endures her pain quietly. Her hip hurts, she says, and so does her back and her shoulders.

“I was walking in our lane in Ashajipora when the police and the CRP [the Central Reserve Police Force] came and I tried to run but I fell down in pain,” Masooda says.

A bullet pierced her upper thigh and then, she says, police came and beat her, her husband and two of her daughters.

“I was bleeding and crying and many of them came and put me in a cart that was there and then they beat me with sticks from all sides. Then they overturned the cart and tried to drag me into one of the houses while they kept beating me,” she says.

Her two daughters and husband were beaten as they tried to protect her, she adds.

She doesn’t remember how she got to the hospital.

Of the roughly 30 patients in the ward, eight are women and the oldest among them is 79-year-old Sara Begum.

She says that she was beaten by local police officers who came to her home in the Goriwan neighbourhood looking for her youngest son, a known protester.

Her right leg is swollen and bruised from the ankle to the knee. Her other leg has 13 stitches.

“They beat me up as if they couldn’t see that I was a sick old woman. One of them spread me on the floor and climbed on my chest,” she murmurs.

Her grandson, Mohammad Asif, says the policemen beat her with a wooden meat-tenderiser that they found lying around.

“They beat up all the women in the house. They stripped my 12-year-old sister completely naked,” says another grandson, 15-year-old Umar. “I wish I was in the house, I only wish. For three nights, I have not slept. The image of my sister naked haunts me. It won’t let me sleep. For the last three days, I have only thought of murdering the policemen who stripped my sister.”

With each story like this, along with the well known protesters who the police lock up every time an uprising seems imminent, hundreds such as Umar are moved to join the protests for the first time in their lives.

Outside the hospital I meet Zubair, a volunteer at a free medical camp. In the middle of our conversation about the differences in the protests this time, he absent-mindedly lifts his blue T-shirt to scratch at the small holes made by the pellet guns the Indian forces use to contain the protests.

“This time,” he says, “people had no demands. Nothing … they did not seek a reform in a law, a probe in a case, nothing at all. It was a mourning of Burhan’s death or rather a celebration of Burhan’s life. But more than that,” he says, “it was the time we repeated the word Azadi [freedom] again.”

But the question remains whether, as in 2008 and 2010, a fragile normalcy will again settle upon this restive region or if, this time, things will be any different.

As of now, with no other response to the people’s rebellion from the Indian government other than force and with a lack of ideas among the region’s resistance leadership, the past week – with at least 35 civilians killed and more than 1,600 seriously wounded – appears to be yet another dark chapter in the book of Kashmir’s recent history.

Venezuela: Latin America’s Next Coup

Kenneth Rapoza


New York’s biggest Venezuela ‘death watch’ specialist, Siobhan Morden of Nomura Securities, says that the crisis-wracked country is at a cross roads. Here’s where it can go, in the simplest of terms: towards a Cuban style autocracy led by Socialist Party leader and current president Nicolas Maduro, or a military coup of ‘moderates’ who team up with the opposition to kick Maduro to the curb. For now, the Cuban-road is looking like the road Maduro will travel.

Barron’s and others reported on the military take over of certain sectors of the economy on Friday.  Bond prices for Venezuela’s one year debt fell 1.3% to 48.24. The country is being held together by polygrip, but the government continues to bite off more than it can chew.

Wall Street has been banking on cooler heads to prevail. As the economic crisis worsens, the camp that suggests Venezuela’s biggest problem is that it’s not Socialist enough is being vacated by the day. The opposition, meanwhile, remains mired in bureaucratic red tape to get a recall vote on Maduro.  It’s definitely not happening this year.

For the market, if cooler heads do ultimately prevail, an unlikely scenario, Venezuela’s bonds will be the best buy in Latin America. Similar trades were made in Argentina last year, and in Russia in 2014.

Current yield on Venezuela’s debt is over 22% on average. Fitch says a sovereign default is imminent. Venezuela, an economy dependent on oil revenue, is now one that requires its government to work as a grocery store, handing out rations. It’s practically war time.

As a result of this disarray, Friday’s 50-50 chance that Venezuela heads towards autocracy, with Maduro in role as dictator, seems more like a 60-40 chance today.

“The superpowers for the military heighten the debate about autocracy and democracy with significant implications on bond prices,” Morden wrote in a note to clients on Friday.

That superpower ministry position for Defense Minister Padrino Lopez raises concerns as to what type of political transition will occur. There are risks of either a Maduro orchestrated coup, whereas allies in the military take control and install him as defacto dictator, or opposition within the Socialist Party out-maneuver him and throw him out of office. This would require Chavistas to work with the opposition. The opposition represents the private sector, the sworn enemies of Chavez and therefore strange bedfellows.

It is unclear just how strong popular support is for Maduro and whether, given the economic crisis, he could summons popular support to back him up in the event of an anti-Maduro coup détat.

One poll from May that was reported on this month by the Christian Science Monitor suggests 25% support for Maduro’s government, a dismal rating.  One of the only reasons it is that high is thanks to the residual goodwill of voters who benefited from the Hugo Chavez years, when high oil prices and income distribution made Venezuela one of the three richest in Latin America.  As of 2013, Venezuela’s per capita GDP was higher than Chile’s, Brazil’s and Mexico’s, and trailed Argentina with around $14,400 per capita, based on World Bank figures. 

A truck loaded with groceries from the government sits in the Catia neighborhood on the outskirts of Caracas, Venezuela, on Saturday, July 2, 2016. In an attempt to regain control, President Nicolas Maduro tapped party loyalists called the Local Committees for Supply and Production (CLAPs), and put them in charge of distributing as much as 70% of the nation’s food. Now, that distribution is in the hands of the military. (Photo by Manaure Quintero/Bloomberg)

If Chavista moderates even exist, they will have to fight among themselves if they are to do anything about Maduro’s tilt to a closed economy. Some Chavista lawmakers have even suggested the legislative branch should be abandoned. Democracy in Venezuela is on the wane.

Maduro’s claim that the country’s economic woes are due to an “economic war” waged by the opposition and the private sector can rally his base. This is especially true if he brings up Washington involvement. Chavez loyalists hate the U.S. for its role in backing a failed coup against Chavez in 2002. 

Nomura’s strategist Morden thinks the main thing to watch now is Lopez. How does the military manage to control food distribution and what will it do with trade at the ports, which is now under its command. The market has no faith this will succeed.

“The centralization or maybe efficient control of bad policies will not resolve the economic crisis,” Morden wrote.

Venezuela’s opposition leader Henri Falcon supposedly endorsed Lopez,saying he represents more of the institutional faction of the military and this may allow him more power over the repressive military leaders backing Maduro.

Lopez could be a straw man. There has been no mainstream reports of dissent from the military and the ‘Chavistas’ that have criticized the Maduro Administration’s handling of the crisis. There are regional elections this fall. That will tell a lot about the future of the Socialist Party, and the grip it has, if any, on the collective imagination.

“It is still our base case scenario that the intensity of economic stress forces a political transition,” says Morden. “However, we cannot ignore the recent autocratic trend.”

Meanwhile, the recall referendum faces impossible administrative hurdles thanks to a biased election authority that is likely to derail the process. Last month, Maduro said there would be no recall vote until next year. That’s like Bill Clinton saying the House of Representatives cannot vote on his impeachment until he says so.

Political risk could pull the rug out from under junk bond traders hoping for a repeat of Argentina.

Venezuela’s 10 year bond traded at 11.73% yield on Thursday July 14, rising 16.2% in just four days and is now up over 11% in four weeks as the market prices in the ‘Cubanization’ of the country.

Investors are hoping to double their money like they did in Argentina, but to do that, Venezuela will have to take the road less traveled — one that gives the private sector more say over the country. Despite the economic crisis in Argentina, the exit of Cristina Kirchner now has three year Argentina bonds at negative yieldBond prices are up 100.24% in the last 12 months.

Erdogan’s real opportunity after the failed coup in Turkey

Kemal Kirisci

Kemal Kirisci

The history of Turkish politics is littered with coups and coup attempts that have occurred in roughly ten-year intervals. It is almost a genetic defect.

  • The nascent Turkish democracy experienced its first coup in 1960 when it was barely into its tenth year—led by a group of left-wing “young officers,” who had also forced the General Staff into its ranks. Administrative authority was returned to civilians in October 1961, after having cost the lives of the then-Prime Minister, Adnan Menderes, the Minister of Foreign Affairs, Fatin Rüştü Zorlu, and the Minister of Finance, Hasan Polatkan.
  • The second military intervention took place in 1971 against the government of Süleyman Demirel—this time around, though, through a “coup by memorandum.” The military issued to the prime minister an ultimatum—to step aside and be replaced by a technocratic cabinet.
  • Less than ten years later, in the midst of endemic violence between left- and right-wing radical groups, the military’s top brass carried out another intervention. This was bloodier than the previous two interventions, costing hundreds of lives and leading to massive human-rights violations. After rubberstamping a suffocating constitution on the country, the military handed the government over to a semblance of a democratically-elected government in 1983.
  • Surprisingly, Turkey broke this pattern of ten-yearly military interventions, and civilian authority continued until 1997, when there was what was termed a “post-modern coup.” The army rolled out a convoy of tanks into the streets of Ankara, and in a repeat of the coup of 1971, demanded the resignation of the coalition government led by Necmettin Erbakan.
  • The next coup occurred a decade later (almost to the day) in April 2007, when the Chief of Staff staged an “e-coup” by posting a set of demands on its website. The coup was a reaction against a long list of democratic reforms that were introduced as a part of the leadership’s pro-EU agenda and were seen as a departure from the staunchly secularist, restrictive mode of governance. Bolstered by the public support for these reforms, however, the incumbent Justice and Development Party (AKP) led by Recep Tayyip Erdoğan, now the current president of Turkey, successfully withstood the “e-coup,” and for the first time, pushed the military back “into the barracks”.

The latest coup attempt—which took place on Friday, July 15—has widely been attributed to a large Gülenist faction within the military and the judiciary that circumvented the established chain of command and held the high command hostage. Gülenists are the followers of the Islamic scholar Fethullah Gülen, who leads a worldwide movement that claims to advocate a moderate form of Sunni Islam with an emphasis on tolerance and interfaith dialogue. Formerly allies with Erdoğan, the Gülenists were blamed for spearheading the corruption scandal in December 2013 that engulfed several government officials, ministers and people in Erdoğan’s intimate circle. Since then, Gülen and Erdoğan have been locked in a power struggle.

Back from the brink

Turkish democracy survived a major test, and Turkey turned from the edge of a precipice. The credit for the coup’s defeat goes to the Turkish people, who heeded Erdoğan’s call to resist this intervention “by any means possible and necessary” and filled the squares. TV reports were filled with eye-to-eye, tense, agitated confrontations between civilians and armed soldiers on the two bridges that connect the Asian and European sides of Istanbul. Public restraint and sobriety helped to prevent escalation of violence. There were nevertheless senseless causalities resulting from fire opened by the mutineers and especially attacks mounted on the parliament building as well as the Headquarters of the General Staff. It could have been a lot worse.

Erdoğan needs to rise above a majoritarian understanding of democracy and do justice to the aspirations of a public that heeded his call by pouring into the streets and squares to defeat the coup attempt.

Clearly, Turkey’s democracy has taken a severe blow—cushioned only by the unequivocal stance of the opposition leaders and the media against the coup. Once again, the nation managed to break this pattern of ten-year coups. This offers the country a matchless opportunity for reconciliation. Granted, Erdoğan has had an exceptionally rough weekend and his frustration with those responsible for or implicated in the coup is understandable. He is correct in calling “for their punishment under the full force of the law of the land.” It will, however, now be critical that he ensure that the rule of law is upheld and rises to the challenge of winning the hearts and minds across a deeply polarized nation. He has the tools for it in his repertoire and had successfully wielded them in the past—especially between 2003 and 2011, when he served as prime minister. In hindsight, this period is often referred to as AKP’s “golden age,” when the economy boomed, democracy excelled, and Turkey was touted as a model for those Muslim-majority countries aspiring to transform themselves into liberal democracies.

As he steers the country from the brink of civil war, Erdoğan needs to rise above a majoritarian understanding of democracy and do justice to the aspirations of a public that heeded his call by pouring into the streets and squares to defeat the coup attempt. This is the least that the Turkish public deserves. This would also be a move in the right direction for Turkey’s neighborhood, which desperately needs a respite from the turmoil resulting from the war in Syria, the instability in Iraq, Russia’s territorial ambitions and now Brexit. This is the moment when a stable, democratic, transparent, accountable and prosperous Turkey needs to come to the fore on the world-stage. The United States needs it too. As much as the White House declared its faith in the strength of Turkey’s democracy and its support for the elected leadership, there is a clear chance for forging closer cooperation between the two countries. The first step in cooperation should be in bringing to justice the perpetrators of this coup, followed by measures to enhance Turkey’s capacity to address and manage the many challenges facing Turkey and its neighborhood.

The fight against the Taliban is going far better than expected

Washington Post

Tim Craig

 U.S. and Afghan forces are accelerating plans to decapitate the Taliban insurgency, expanding a new offensive strategy that appears to be stumping the group’s efforts to make dramatic gains on the battlefield.

After 15 years of war and several failed attempts to reach a negotiated peace deal, the dynamics of the conflict changed in the spring, when President Obama for the first time ordered a U.S. airstrike to kill the Taliban leader in Pakistan. Over the past four months, Afghan special forces have also killed more than three dozen senior and mid-level Taliban commanders in targeted airstrikes or raids, according to an Afghan security document obtained by The Washington Post.

The operations are part of a broader effort by Afghan forces, backed by increasing U.S airstrikes, to treat the Taliban more as a foreign enemy than as a domestic insurgent group worthy of some military restraint, according to Afghan officials and analysts. As a result, they say, there are signs the Taliban is under strain this summer while Afghan security forces, at least the elite ones, are finally becoming a battle-ready force.

“Last year, we did not have the same achievements, and we did not do this,” said Sediq Sediqqi, chief spokesman for the Afghan Interior Ministry, referring to Afghan commandos and special operations forces in action against Taliban targets. “This year, they had a mission, they had intelligence, they were trained, and [Taliban leaders] were targeted.”

“It’s not that they were killed by accident,” Sediqqi added. “They were targets.”

The raids were carried out by both Afghan police and army special forces units relying on a target list developed by the country’s intelligence agency, the National Directorate of Security, Sediqqi said.

Brig. Gen. Besmellah Waziri, commander of the Afghan army’s special operations division, referred to the operations as an “outright change in strategy” aimed at “ringleaders,” regardless of

Voices from Turkey: Turkey-Iran Relations

Bülent Aras and Emirhan Yorulmazlar

Simplistic binary readings generally fail to explain the trajectory of Turkish-Iranian relations. The geostrategic rivalry between these two regional powers has deep historical roots, is subject to long-term patterns, and is amenable to realignments as a result of shifts in regional and international balances of power. For these reasons, assessing Turkish-Iranian relations requires a broader understanding than the prevalent narrow topical analysis provides.

Historical patterns in Turkish-Iranian relations

Historically, Turkey and Iran have been mirror images of one another, rarely seeing eye to eye but unable to part ways due to their geographical proximity. Turks were exposed to Persian culture on their move westward and inherited indelible political and religious legacies. Iran is home to a large Turkic minority, and historically, Persia was ruled by Turkish royal families such as the Safavids and the Qajars from the early 16th century, when they accepted Twelver Shiism, until the Pahlavi era in the 20th century.

The Ottoman-Safavi split was essentially a rivalry of two Turkic dynasties, which respectively carried the banners of orthodox Sunni Islam and Shia Sufism. The modern histories of Turkey and Iran have followed a similar path: Their early attempts at Westernization sowed the seeds of later estrangement from that process because of both countries’ inability to fulfill their national ambitions in purely Western terms. Turkey’s break with Westernization took the distinct form of Turkish conservatism, which allowed for pragmatic cooperation with the West, while Iran embraced revolutionary zeal with a strong anti-Western tone.

After the 1979 Iranian Revolution, Iran attempted to use an Islamic approach to overcome its traditional Shia isolation in the wider Muslim world. Without organic links with the Sunni world, Iran’s initial civilizational call for Islamic revolution failed to resonate in the wider region. Iran was left to pursue revolution in one country, which nonetheless set the stage for limited Iranian leadership in much of the Shia world. Similarly, Turkey responded to its post-Cold War identity crisis with a multidimensional approach that focused on opening up to and building ties with traditional zones of influence from the Balkans to the Caucasus. Thus, in broad terms, pro-Western Turkey and anti-Western Iran competed in the post-Cold War era not only in the Middle East but also in the Caucasus and Central Asia, the Gulf, and even the Afghanistan-Pakistan theater.

The shadow of the Iraq War

The 2003 American invasion of Iraq provided a watershed moment through which to assess Ankara’s and Tehran’s regional policies. First, both countries opposed the American invasion and occupation, which they feared could restrict their room for maneuver in their historical sphere of influence. Second, they were suspicious that America would support Kurdish nationalism in northern Iraq and were wary of the invasion’s broader impact on the Sunni-Shia balance in the region.

Despite its initial opposition to the invasion, Ankara stood closer to Washington in pursuit of Turkey’s regional goals. This was largely because, first, Turkey did not want to see Iraq collapse into disunity—with possible domestic and regional spillover effects—and, second, its national interests would have been broadly undermined if the United States had been humiliated and had withdrawn from Iraq without putting into place a new political order that could ensure a sustainable Shia, Sunni, and Kurdish coexistence. In removing Iraqi President Saddam Hussein, however, Washington had put itself in a paradoxical situation in which it required Iran’s cooperation to stabilize Iraq, given Iran’s close bonds with the Shia majority, while simultaneously, pro-Iranian Shia militias were increasingly targeting U.S. troops in Iraq.

Thus, aiming to contain the chaos in Iraq, boost its regional and international clout, and prevent any escalation in the U.S.-Iranian conflict, Turkey positioned itself as a possible mediator between Iran and the United States. The most famous Turkish attempt to bridge the U.S.-Iranian gap came in May 2010 when, hoping to head off a new round of international sanctions on Iran’s nuclear program, Turkey and Brazil persuaded the Iranian administration to sign a declaration agreeing to limits on its nuclear program. While the deal was rejected by the United States and never implemented, Turkey’s mediatory role fit its policy of minimizing the prospects of escalation between the United States and Iran. It also fit Iran’s conventional approach of seeking Turkey’s cooperation and minimizing competition at times of international isolation. While Turkey and Iran continued to compete from Iraq to Syria and Lebanon and from the Gulf to Afghanistan, the two countries were able to compartmentalize their growing energy and commercial relations, which increased to historical highs due to the international sanctions on Iran that cut it off from many other markets. Ankara and Tehran also appeared to reach a tacit understanding on the common fight against the Kurdistan Workers’ Party, or PKK, and its Iranian arm, the Party of Free Life of Kurdistan.

The Arab uprisings ended this semblance of harmony. The Syrian conflict and Turkey and Iran’s divergent policy choices became deal-breakers for the two rival regional powers. While Turkey framed the growing conflict as a humanitarian issue and an opportunity to enhance its regional clout, Iran saw the rebellion against President Bashar al-Assad’s regime as a critical threat. This was because the Iranian establishment considered Syria to be a firewall that would block the disruptive impact of the Arab Spring from toppling regimes friendly to Iran or from reaching its own borders. Turkey worked through proxies but refrained from directly embroiling itself militarily, while Iran employed more direct proxies such as Hezbollah and later deployed its own paramilitary assets to prevent the fall of Damascus. Iran did not hesitate to use the sectarian card in the conflict, employing Shia militias in Syria and Iraq against what it called the forces of extremism, which included not only Al Qaeda and its offshoots—including the Islamic State—but also almost all Sunni rebel groups fighting the Assad regime in Syria.

On the Turkish side, the initial thought was that Assad’s days were numbered and that the war would therefore cause minimal damage to Turkish interests. Ankara also believed that Tehran could be convinced of the need for a political transition that would remove Assad but co-opt elements of the regime to avoid total disintegration.

Despite occasional outbursts against Turkish policy in Syria from leading figures in the Iranian establishment, Iran generally chose to limit tensions with Ankara until the summer of 2013 due to the crippling economic effects of international sanctions and the lame duck administration of President Mahmoud Ahmadinejad. This approach also fit Turkish interests but proved unsustainable, as Ankara was unable to decisively turn the tide in Syria without greater support from its Western partners, nor was it able to persuade Iran to support a negotiated end to the Syrian crisis. Therefore, following the election of President Hassan Rouhani and the disclosure of direct talks between the United States and Iran, Tehran felt it had a freer hand to pursue its interests in Syria—and thereby undermine Turkish interests—thanks to the diplomatic cover provided by the talks. It became evident that the United States would not decisively counter Iranian interests in Syria and Iraq, particularly after the rise of the Islamic State in 2014 emphasized long-standing fears among U.S. policymakers that the terrorist group or other radical groups could take over Syria if the Assad regime collapsed.

While Iran aggressively pursued its goals—emphasizing the fight against what it regarded as Sunni extremism—the marginalization of Sunni interests drove Turkey and Saudi Arabia to set aside their ideological differences to stand together against Iranian expansionism. Alienated by the United States’ unwillingness to intervene decisively in Syria, Ankara and Riyadh together escalated their military support for the anti-Assad rebels in Syria—support which accelerated after Saudi King Salman ascended to the throne in January 2015 and brought a new activism to Saudi foreign affairs. But the ensuing Turkish- and Saudi-backed rebel offensives, in turn, precipitated Russian military intervention in Syria to rescue the Assad regime beginning in September 2015 and put Turkey and Russia on a collision course over their competing agendas in Syria, which culminated in Turkish fighters downing a Russian jet after it strayed into Turkish airspace. Iran’s approach to Syria has therefore hurt Turkey’s interests but has also prevented Tehran from capitalizing on the diplomatic opportunities presented by the historic 2015 nuclear accord that it concluded with Western powers, China, and Russia.

The prospective panorama of relations

The interaction between the sectarianism stoked by both the Sunni and Shia elements involved in the Syrian civil war and escalating Iranian-Arab and Turkish-Kurdish confrontations is shaking the foundations of the regional order and undermining security and stability. Iran has successfully employed the sectarian card as part of its outer defense in the Levant, particularly in Syria, Lebanon, Iraq, and Yemen. But Iran is surrounded by Sunni-majority countries and can only hope to realize its domestic and regional goals in cooperation—or at least coexistence—with the rest of the neighborhood. For Turkey, its official discourse against sectarianism does not change the fact that it is now seen as a pro-Sunni power and, in general, has alienated Shia actors in the region. This does not bode well for Turkey’s broader aims of regional integration nor its internal dynamics given its large Alawite and Kurdish populations, who feel threatened by the Islamic State and remain suspicious of the growing Turkish affinity with Sunni causes.

Obviously, neither Iran nor Turkey can eliminate the sectarian tensions unleashed over the past five years; nobody can put the genie back in the bottle. The Gulf monarchies are apprehensive about Iranian encroachment in Iraq, Syria, Yemen, and beyond. In response, they are relying on a military buildup and the power of religious orthodoxy to help deter and roll back Iranian intrusion into what they regard as a rightfully Sunni Arab sphere of influence. This combination of geostrategic rivalry with sectarianism and ethnic solidarity, whereby the Arab powers aim to crowd out non-Arab claimants—Turkey and Iran—for regional leadership, creates a volatile regional setting that is not conducive to stabilization efforts. Even worse, Ankara and Tehran do not seem interested in finding a middle ground or stopping the current cycle of conflict—the necessary first step to stabilizing the region and shaping a new, sustainable regional order in accordance with their national interests.

Despite these difficulties, against the convenient backdrop of American retrenchment, there are strong reasons for both Ankara and Tehran to explore opportunities for détente and seek possible avenues for cooperation. The Syrian crisis has pitted Iran and Turkey against one another, but whether through the current stalemate or after some future settlement, the two countries share and will continue to share common challenges. Looking several moves ahead, it will be important to set the parameters for cooperation now in order to address three main challenges.

First, Kurdish separatism is a real possibility in both Syria and Iraq and is a more distant—if just as divisive—threat in Turkey and Iran. The Kurdistan Regional Government in Iraq enjoys strong U.S. support and continues to flirt with the idea of independence. Syrian Kurdish fighters are building de facto autonomy on the ground and enjoy military support from both the United States and Russia, though this is likely to dry up once the Islamic State is defeated. In Turkey, the PKK has resumed its terror campaign against the Turkish state. Iran will be watching these developments closely, nervous about its own Kurdish minority and well aware that the PKK seeks to overturn the existing state order in both Turkey and Iran. Indeed, the PKK and its offshoots’ continued threat to Iran’s national unity was again demonstrated by the recent clashes in northwestern Iran.

Second, the Russian attempts to fill American shoes through military activism in Syria and to a lesser extent in Iraq are a medium- to long-term threat to both Turkey’s and Iran’s regional objectives. Russia has previously worked to counter Turkish and Iranian efforts to build influence in the Caucasus and Central Asia, and Moscow has now carried its destabilizing influence right into Syria and Iraq—the traditional spheres of influence for Turkey and Iran. Moreover, the recent flare-up in the Azeri-Armenian conflict carries the risk of undoing Turkish regional designs, including energy pipelines, as well as Iran’s internal balances with its large Azeri minority. Thus, beyond short-term concerns about the future of Damascus, Iran is likely to find itself in a similar position to Turkey, with its regional interests undermined by Russia and eventually forced to confront Moscow’s meddling.

Third, extremism is a common threat that requires a joint response. Iran has been willing to instrumentalize the Islamic State to legitimize its regional claims, pointing to Arab promotion of religious orthodoxy as vindication of Iran’s association of Sunnism with terrorism. Turkey, on the other hand, faces a multifaceted dilemma in that it feels the need to confront the Islamic State as a security threat but has broader qualms about the transition to a post-Islamic State order that could maximize Iranian clout, bring Kurdish autonomy or independence to its southern border, and further tip the Sunni-Shia balances in both Iraq and Syria in Iran’s favor.

The more responsible course for Iran and Turkey would be to fight terrorism—separate from its sectarian alignment—as a broader strategy and try to respect traditional Sunni-Shia balances in the region. This might help to stabilize a disintegrating region. Yet both countries are far from abandoning their claims in the broader geostrategic competition. Indeed, Turkish moves to deepen ties with Saudi Arabia and its recent rapprochement with Israel might remove any remaining ground for cooperation with Iran.

Both Turkey and Iran, for different reasons, have recently sought Europe as a partner in overcoming their specific problems—the influx of refugees in Turkey’s case and economic isolation in Iran’s case. Progress in these areas might pave the way for further cooperation, provided that the European Union comes out with a strategic vision to enlist both countries against what it perceives as the twin threats of terrorism and immigration. In this vein, a Turkey-EU deal backed up by Turkish-Iranian cooperation in Syria could have positive humanitarian effects while also addressing the European Union’s perceived threats, essentially serving to keep the Syrian people in Syria.

Iran is also well situated to emerge as an alternative energy supplier for both the European Union and Turkey and is desperate for European investments to start accruing the economic benefits of the nuclear deal. Turkey has been willing to facilitate the transfer of Iranian gas to the Western markets and sees a commercial opportunity in helping Iran to overcome the adverse effects of international sanctions, given that both Turkey and Iran need alternative modalities for economic growth.


This complex background defines both countries’ geostrategic options. It will take political leadership to define areas of cooperation and to limit the destructive effects of confrontation in today’s highly charged and competitive regional context. Only by finding common ground can Turkey and Iran contribute to a mutual goal of secure and stable regional order. Events since 2011 have proven that the alternative is disorder, humanitarian suffering, and spillover effects that threaten both nations’ respective domestic balances.

Making peace with the West, country by country


Maxim Trudolyubov

Maxim Trudolyubov

Russia has taken a number of cautious steps aimed at normalizing its relationship with the West; both Moscow and Washington seem to be ready for  military cooperation in Syria; Moscow and Ankara are busy patching up their relationship; and Moscow and Helsinki have just discussed mutual security. One important feature of these recent hints at normalization in Russia-West relations is that Russia is emphasizing its dialogue with specific countries, not with blocs like the European Union or NATO.

Ahead of the NATO summit that opened in Warsaw on Friday, Russia intensified its contacts with specific capitals rather than collective bodies. Moscow put forth a set of proposals for Washington aimed at preventing confrontation in the case of a close encounter at sea or in the sky, according to Russia’s permanent representative to NATO Alexander Grushko. “We are talking about minimal distances between ships and aircraft, about what frequencies to use to establish contact, and other measures that help us understand each other’s maneuvers,” Grushko said.

Media reports suggest that the U.S. and Russia are discussing the possible coordination of military efforts in Syria. The U.S. would help Moscow with its targeting of militant jihadist groups as long as Moscow makes sure the Assad regime grounds its air force. Washington put forth this proposal last week and is waiting for a response. However, Russia is expecting the Syrian army to take Aleppo and the proposal is thus unlikely to yield an immediate result or a substantive response for many days or even weeks, a U.S. official told The Wall Street Journal.

In another bilateral story, Russian president Vladimir Putin and his Finnish counterpart Sauli Niinisto discussed mutual security during Putin’s recent visit to Finland. Following up on a debate in Finland and Sweden about the prospects of both countries joining NATO, Putin noted that Russia would respond forcefully to such a development. If Finnish armed forces become part of NATO’s military infrastructure, Putin said, “NATO would be at the borders of the Russian Federation. Do you think we will keep it as it is: our troops at 1,500 (kilometers, 900 miles) away?”

On the other hand, Putin agreed to work to build trust in the region and specifically promised to address the issue of military planes flying over the Baltic with identification devices switched off. The next day, Russian Defense Minister Sergey Shoygu gave an order to develop a system of trust-building measures to make flying over the Baltic safer, the defense ministry said last Saturday.

Russian-Turkish relations are changing from freezing cold to moderately warm at breakneck speed. As soon as Turkish President Recep Tayyip Erdogan expressed his regrets over the downing of a Russian warplane, his Russian counterpart rushed to rebuild broken ties. Russian and Turkish Foreign Ministers met early this week to discuss the coordination of each country’s anti-terrorist operations in Syria. Russia and Turkey are far from agreeing on which specific groups to call terrorists, but Russia does need Turkish support to ensure the success of the expected assault on Aleppo by Assad’s forces. And there is no question that Russia and Turkey both need each other’s business. Russian tourists are eagerly waiting for charter flights to Turkey to resume and Turkish farmers and exporters are expecting their fruits and vegetables to return to Russian supermarket shelves.

Moscow seems to be working hard to rebuild its ties with its immediate neighbors and the U.S., but the main direction is bilateral, not multilateral.

Underlying these reassuring stories is the reality of Russia’s deepening economic crisis. As we pointed out earlier in this blog, Russia’s defense spending, which had been increasing for the past 15 years, will not grow. It remains at 3.8 percent of the gross domestic product this year, just like in 2015, but it is declining in real terms.  Early this week, the Russian government proposed to freeze the overall federal public expenditure, in nominal terms, at the level of 15.78 trillion rubles a year (246 billion U.S. dollars). A spending freeze that could not have happened without a Kremlin go-ahead will mean that 36 of 43 state programs, (roughly half of the budget) will decline in nominal value. The Kremlin prioritizes retirement costs, management of public finances, and other social expenditure over any further military expansion.

Moscow seems to be working hard to rebuild its ties with its immediate neighbors and the U.S., but the main direction is bilateral, not multilateral. The European Union is seen in Moscow as a bloc in decline, an entity permanently weakened by Brexit and previous acts of defiance by separate members. The relationship with NATO is yet to be redefined and currently stands at a freezing point. “We do not see NATO as a partner in solving the problems that concern both us and Europeans. We use other formats, like the Normandy Four or the International Syria Support Group, for resolving conflicts and countering mutually relevant challenges,” Ambassador Grushko said in the interview cited above.

Russia is economically weak and there is no sign of any new sources of growth emerging. Russia is militarily weak in relation to NATO and there is no way this disparity will be bridged any time soon. But Russia has clear strengths on each of the bilateral vectors it emphasizes. Russia is now aiming to demonstrate to the West that it can be a partner in building mutual trust, but with an important caveat: separate deals are welcome with specific countries, rather than with the Transatlantic Alliance as a whole.

The opinions expressed here are solely those of the author.

Hung Parliament in Australia

Economist 2

MALCOLM TURNBULL, the fifth Australian prime minister in a decade, urged voters to help end the country’s political churn by delivering “strong, stable majority government” when they cast their ballots in the general election on July 2nd. Australians seem resolutely to have ignored him.

With almost three-quarters of the vote counted, the opposition Labor party was slightly ahead of Mr Turnbull’s conservative Liberal-National coalition. Australia faces the likelihood of a hung parliament, with various independents holding the balance of power.

It was hardly the triumphant occasion Mr Turnbull had anticipated. Nonetheless, he told party loyalists in a boisterous speech in the early hours of Sunday morning that they could have “every confidence that we will form a coalition majority government in the next parliament”.

But the results so far paint a more complicated picture. The government entered the campaign with 89 seats, giving it a 14-seat majority in the 150-seat lower house, the House of Representatives. When counting was adjourned at the weekend, it had won just 67 lower house seats, nine short of a majority, according to the Australian Electoral Commission. The Labor party rose from 57 seats to 71 so far. Independents and small parties won another six seats, leaving six to be decided. Counting is due to resume on July 5th.

Mr Turnbull had much riding on the election. A progressive, he unseated the divisive Tony Abbott as leader of the conservative Liberal Party last September, promising a “different style of leadership”. Initially, the government’s opinion polls soared, having been woeful under Mr Abbott. The economy has been performing well, with growth at 3.1% and unemployment under 6%. But Mr Turnbull then made several miscalculations that sent his campaign off the rails.

His liberal views on gay marriage, professed desire to do something about climate change and preference for making Australia a republic had won him widespread support. After he became prime minister, though, he disappointed many supporters by playing down such issues, Many saw this as the price he paid to appease the coalition’s conservative wing in deals that installed him as leader. In his campaign, he focused instead on the Liberals’ traditional strength of economic management. He offered as his core policy proposed company tax cuts over ten years, arguing they would stimulate jobs and growth. But voters seemed unconvinced.

Bill Shorten, the opposition leader, turned out to be a stronger campaigner than either the government, or most commentators, had anticipated. He pushed Labor’s old strengths: supporting public health and education. Mr Shorten also ran a scare campaign, claiming the government wanted to privatise Australia’s public health insurance scheme (Mr Turnbull labelled this an “extraordinary act of dishonesty”). But the eight-week campaign that Mr Turnbull launched in May, one of the longest in Australia’s history, gave his opponents plenty of time to sell their message. Labor’s gains included three Liberal-held seats that cover much of the island state of Tasmania. Linda Burney, a Labor candidate who won a Sydney suburban constituency, will become Australia’s first indigenous woman to sit in the lower house. “Labor is back,” declared Mr Shorten.

Independents and small parties between them won 23% of first votes, one of the strongest showings for such groups in a federal election; how candidates’ second preference votes are distributed, under Australia’s preferential voting system, could determine the lower house’s eventual make-up. Mr Turnbull has started talking with some independents to secure their support in parliament.

One of the strongest newcomers has been a party founded by Nick Xenophon, an independent senator from South Australia. He is a centrist with a populist policy mix that resonates among many voters in his state, hit hard by the loss of thousands of manufacturing jobs in carmaking and shipbuilding. He criticises free-trade agreements, blaming them for job losses, and supports more immigration, arguing it will stimulate growth. Rebekha Sharkie, a Nick Xenophon Team candidate, snared the prized Liberal seat of Mayo near Adelaide, the state capital.

Mr Turnbull declared before the election that votes for independents and small parties would be a “roll of the dice” that would leave Australians with “no clarity about their future”. Yet the big parties’ infighting and frequent leadership changes in recent times have turned many voters off, prompting many to seek alternatives. Mr Xenophon reckons voters are “disillusioned with tribal politics”. The outcome in the Senate, the upper house, will take longer to emerge. But early indications suggest small parties could hold the balance of power there, too. Australia’s era of churning political leaders is far from over.