A devastating hit Brussels was clear the n’s capital had of �Carol Matlack
Poised for Growth
governance. With a population of 1.2 million, Brussels has “six police departments and 19 different municipalities,” Belgian Interior Minister Jan Jambon said in a speech last year. He then compared Brussels to huge New York. “How many police departments do they have? One.”
Squabbles between Flemish- and French-speaking regions have led national authorities to hand over more power and tax revenue to their regional counterparts. One result is a shortage of law enforcement personnel at the national level: The government admitted last year that its 750-person security service had 150 slots unfilled because of budget constraints.
The country’s leaders, distracted by linguistic and cultural quarrels, “were unable to develop an intelligent policy” to draw immigrant families into mainstream society, says Leo Neels, director of the Itinera Institute, a Brussels-based think tank focusing on social issues. Neels and others have long argued that Brussels, a bilingual city that’s home to the country’s biggest immigrant population, should be designated as a federal district similar to Washington, D.C., with a unified government. Politicians have rejected the idea, he says.
Under Belgium’s constitution, organized religions deemed to offer “social value” are officially recognized by the government, which pays clerics’ salaries and pensions. But when Islam was granted official status in the 1970s, Belgium accepted Saudi Arabia’s offer to finance new mosques and send Saudi-trained imams to officiate. Unlike in other European nations where homegrown Muslim institutions have taken root, “no effort was made to pay for infrastructure and clergy linked to Belgian society,” sociologist Jacobs says. Many Belgian mosques today operate outside the state-authorized system and are run by foreign-trained followers of the radical Salafist sect, he says. In an effort to bring more mosques into the state system, the government announced plans to spend more than €3 million to pay 80 new imams.
Religious fervor alone doesn’t drive young men from Brussels to join the terrorists, according to Rik Coolsaet, a professor of international relations at Ghent University who has studied jihadist recruitment. Many recruits, including the leaders of the Paris attacks and the two Brussels suicide bombers, were petty criminals, he says.
Strict Muslims shun alcohol—yet Paris suspect Salah Abdeslam, captured in Brussels on March 18, had owned a bar in Molenbeek with his brother, who blew himself up in Paris. “Joining [Islamic State] is merely a shift to another form of deviant behavior,” Coolsaet wrote in a paper earlier in March. “It adds a thrilling, largerthan-life dimension to their way of life— transforming them from delinquents without a future into mujahedeen with a cause.”
Is South Africa’s president about to lose his grip?
Jam, jam, jam on the Autobahn The bottom line Brussels’ fractured municipal government, as well as the weakness of Belgium’s central authorities, gave terrorists an opening.
a currency fraud charge that was eventually dropped. He was a focus of a U.S. money-laundering investigation, according to a 2010 classified memo published by Wikileaks, but was never charged in the probe. The company he co-founded and still partly owns, Tabacalera del Este, makes the popular brand of cigarette called Eight. Large quantities of Tabacalera cigarettes are smuggled into Brazil and beyond, according to a study commissioned by British American Tobacco.
The company insists it sells cigarettes legally and that Brazil’s steep taxes entice others to smuggle them across the border. Cartes has come under fire for benefiting from illegal commerce. “How is it possible that packs of the brand of thehe president are found in Brazil, in Colombia,mbia, in Argentina, in Mexico, in Australia,alia, everywhere?” asks Senator Desiree siree Masi of the opposition Democraticic Progressive Party. “The Paraguayann customs code speaks clearly aboutbout smuggling, saying ng that companies wouldld be responsible for their actions and omissions.”ssions.” The president has as dismissed such allegaegations as politically lly motivated.
Cartes has beenen trying to pull off one off the hemisphere’s more remarkableemarkable transformationss for himself and his country by promising a government that’shat’s efficient, fiscally robust, and transparent. The aim is for the fragile democracy to overcomevercome decades of despotism, poverty, andd corruption.i
His reforms include a cap on the budget deficit of 1.5 percent of gross domestic product and a public-private partnership to invest in infrastructure. He passed over loyalists of his Colorado Party to put technocrats in his cabinet. Finance Minister Santiago Peña, who holds a master’s in economics from Columbia University and aligns himself with the Liberal Party, says he decided to work for Cartes despite the president’s past. “It was clear from the very beginning that he had a vision,” he says.
Cartes, who declined to comment for this story, has supported legislation requiring that salaries of public employees be made public. The move undermines the political elite, which has long used patronage jobs to reward supporters and family members. His efforts have won Cartes praise from the World Bank and Harvard management professor Michael Porter. On Porter’s Social Progress Index, Paraguay ranked 56th out of 133 countries in 2015, 16 spots higher than in 2014.
Paraguay’s economy remains a standout in a region hurt by corruption and a commodities bust. Construction cranes loom over Asunción, the capital. Foreign investors are buying land to raise livestock or cultivate crops. GDP should grow more than 3 percent this year, second-best in South America after Guyana, according to the World Bank. The International Monetary Fund recently said growth should continue at that rate through 2017. Even so, critics say Cartes hasn’t been able to createcreat enough jobs, build enough new roads, or improve mass tran transit because of an inert burea bureaucracy and the inability of hish staff to adapt their businessbusin acumen to the compro compromises and coalition-buildi tion-building of politics. Claudia Po Pompa, an independent politi political analyst, says Cartes mis mistakenly thought he could p push things through w without the party. “Business is not government,” she says. “He had to learn that the hard way.”
Even the new transparency laws, w which won raves abroad, have bo boomeranged at home. They revealed widespread padding of public pay payrolls that ignited studentd protests and d stoked voter discontent. In one case, a senior official of the National University of Asunción allegedly paid inflated salaries to himself, his secretary, and her family. Cartes’s “biggest failure is to not use that information to punish some close collaborators of the executive branch,” says Sebastián Acha, a former congressman who runs an Asunción think tank.
In January, Cartes demanded that public agencies divulge data on workers’ qualifications and levels of training, in an effort to rid state payrolls of unqualified and no-show employees. Union leaders labeled his plan a ploy to hurt workers’ rights.
Soon after, Cartes’s minister of industry and commerce, Gustavo Leite, defended his boss, telling reporters it was important that Paraguayans learn who abused the public trust. “I am proud to work for a president who doesn’t steal,” he said. �Andrew Martin and Juan Pablo Spinetto
Projected 2016 change in GDP in South America
Guyana +3.8% Paraguay +3.6% Bolivia +3.5%
Peru +3.3% Colombia +3.0%
Chile +2.4% Uruguay +1.9% Argentina +0.7% Ecuador -2.0% Brazil -2.5% Venezuela -4.8% The bottom line Paraguayan President Horacio Cartes has stirred opposition with financial reforms and a crackdown on patronage.
finance minister that led to a sudden 10 percent decline in the rand, the country’s currency. The tension peaked on March 16, when Deputy Finance Minister Mcebisi Jonas claimed that three brothers who are Zuma’s personal friends had offered him a promotion to finance minister. The Gupta brothers, who have built mining, engineering, and media businesses since arriving from India in the 1990s, denied the allegation. They’ve been connected with Zuma since 2000, and Zuma’s son Duduzane is a shareholder in several of their businesses. Zuma recently thanked the Guptas for working with his son but said there was nothing untoward about their relationship and that he alone appoints the country’s ministers.
Some senior ANC officials say they’ve had enough of the litany of scandals tarnishing the party’s name. ANC Secretary General Gwede Mantashe, who masterminded Zuma’s party election victories in 2007 and 2012, recently warned that South Africa was at risk of becoming a “mafia state.”
“This is the most difficult situation we’ve had to manage in the last 20 years,” says Abdul Waheed Patel, a Cape Town-based political analyst with Ethicore, a political advisory service. “Given the political situation and the balance of forces in the ANC, I don’t see any resolution of this in the short term.”
The political strife comes as South Africa faces its worst economic crisis since apartheid ended in 1994. In December, Standard & Poor’s cut its outlook on the country’s credit rating to negative. The next step is junk, which would raise South Africa’s already high borrowing costs and worsen the blow that low commodity prices have dealt to Africa’s most industrialized country. Last month, the World Bank said that South Africa’s economy is “flirting with stagnation, if not recession.”
Under the latest budget, presented by Gordhan in February, government debt will rise to more than half of gross domestic product this year, nearly double the ratio when Zuma took office in 2009. A much-vaunted plan to boost growth by cutting regulation and raising infrastructure spending has had little impact since it was conceived in 2011. Economic growth has not exceeded 1.5 percent for the past two years.
The government has even had trouble keeping the lights on: The country had daily power outages in the first half of 2015 as the state power utility, Eskom, struggled to fund repairs. Things have improved since then, with no outages for the past six months, but that has more to do with a lack of demand than anything else. “The issue isn’t that Eskom has magically turned around,” says Shaun Nel, a spokesman for South Africa’s Energy Intensive Users Group, which represents the country’s largest power consumers. “The issue is that demand has fundamentally collapsed.” Power generated by Eskom’s plants last year fell to the lowest level since 2006. Eskom says that demand has dropped but not drastically.
Since winning reelection as party leader in 2012, Zuma has strengthened his hold on power with the help of a loyalist executive committee and by bringing the state security apparatus more closely under his watch. A twoterm limit as president means he can serve only until 2019. A third term as ANC party leader would be possible