Hopeful start for change

Hamid Karzai.
Hamid Karzai.
Two pivotal elections are under way in a part of the world of interest to a great many nations.

In Afghanistan, last weekend's presidential election to replace incumbent Hamid Karzai attracted more than 3000 reports of violations, exceeding the tally following a 2009 vote marred by widespread fraud.

The three frontrunners have all complained of fraud in the April 5 vote, meant to usher in Afghanistan's first democratic transfer of power as Mr Karzai prepares to step down after 12 years as head of state.

World leaders have, however, praised the election as a success because of a strong turnout of voters - estimated at 60% of the 12 million eligible - and the failure of the Taliban to stage high-profile attacks on the day.

Urban participation was unexpectedly high, but it is unclear to what extent rural voters were deterred by the militant group and what role state officials, including the police, had in encouraging civilians to back a particular candidate.

There are now fears the Taliban may exploit easing security in the Afghan capital of Kabul and increase attacks during the lengthy ballot counting process.

In India, the world's biggest election is under way, with about 800 million people expected to vote during the next five weeks.

The election will spread out in stages from two small states near Burma to include northern Himalayan plateaus, western deserts and the tropical south before ending in the densely-populated northern plains. Results are due on May 16.

Surveys show a resounding defeat is likely for the ruling Congress party, led by Sonia Gandhi and her son Rahul, after the longest economic slow-down since the 1980s stalled development and job creation in a country where half of the population is under 25.

Hindu nationalist opposition candidate Narendra Modi is seen as having a strong lead on promises of economic revival and jobs, but is likely to fall short of a majority.

India's remote northeast, a lush but underdeveloped border region of eight states home to just 27.4 million voters, is a test case for the appeal of Mr Modi's promises to fill India with new highways and fast trains and to take a tough line on frontier disputes with neighbours (China claims a section of the region).

Whoever wins the election will face some key challenges, not the least delivering a budget in June or July showing the country can contain its fiscal deficit.

To achieve a revised fiscal deficit target of 4.6% of gross domestic product for the year ended March, the Congress-led Government cut spending by $13 billion and pushed about $16 billion in subsidy costs into the next year.

That level of austerity will be hard to sustain as government spending accounts for 11% of India's GDP. Continuing to defer payments to state-run companies to compensate them for selling fuel, fertiliser and food below market prices can create havoc with their finances and force them to borrow to continue operations.

India also faces problems beyond its control, with an expected weather pattern likely to bring low rainfall.

A good monsoon last year was one bright spot of relief in an otherwise bleak economic picture with growth estimated at less than 5% in the fiscal year ending March, close to the slowest in a decade.

The Reserve Bank of India wants to bring annual consumer price inflation by January 2016 down to about 6% from the current 8.1%, meaning more interest rate increases. The central bank has raised rates since September.

Both the Afghan and Indian elections are important to political stability in a region which includes Pakistan.

As the United States continues to withdraw its troops from Afghanistan, there is a fear the Taliban will increase its presence, taking the country back to the wild faction-riven country of the past.

India has become increasingly important to New Zealand as exporters look to exploit the appetite of its growing middle class for this country's dairy products.

Surrounding Pakistan with democratically elected governments can only be good for the region, which has been militarily active for decades.

While these election may not bring lasting peace, they will hopefully provide a start to the process.

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