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As Australia celebrated 100 years of nationhood in 2001, Prime Minister John Howard got his groove back. To be sure, the public mood was not as ebullient as it had been a year before, when Sydney hosted the Olympic Games. As festivities marking the centenary of Federation got under way, the economy took a nap, the currency was hobbled, and policymakers were preoccupied by teething problems with a new tax system. Voters soon began looking darkly at their Conservative leader, who faced an election before the year was out. His government, in power since 1996, was widely seen as aloof and heartless.

When several high-profile companies imploded and pundits began writing Howard's political death notices, his Labor opponents gleefully anticipated their return to office. But a less obdurate Liberal leader toughed out a horrible six months to win a third term. Often caricatured as a dull man of conviction, Howard is rarely given his due as a populist genius. With aplomb, he put pre-election dollars in the right pockets, appeased the tax moaners, trusted his reading of the nation's heart-and waited for a stroke of luck. In a year when fear trumped hope and the complacent were vanquished, wily Howard was the man for the moment.

In late August, the Tampa, a Norwegian container ship en route to Singapore, rescued some 440 people from a sinking vessel in the Indian Ocean; mainly Afghans, the asylum seekers demanded to be taken to Australia. Howard acted decisively. Sensing that key constituencies felt threatened by boat people arriving every few weeks on islets to the continent's northwest, he forbade the vessel to enter Australian waters; when it did, he dispatched special forces to turn the ship away. Howard, who had won friends internationally by championing independence for tiny East Timor, was scorned by human rights groups and in diplomatic circles. But Howard, and Immigration Minister Philip Ruddock, refused to budge on so-called "border protection."

At home, the tough stand was balm to those alarmed by the Sept. 11 terrorist attacks and wary of would-be immigrants from the Middle East who were bypassing official refugee-entry channels. "We decide who comes to this country," Howard thundered at his election-campaign launch, "and the circumstances in which they come." Howard's opponent, Labor's Kim Beazley, toiled to differentiate his brand, but fell victim to lazy thinking, a resurgent economy, and the nightly news of anthrax, bombs and bin Laden. On Nov. 10, amid charges that the Tories were playing race-based politics, voters rewarded their uncompromising leader with an increased majority.

But Howard's "Pacific Solution" of paying off neighboring Nauru and Papua New Guinea to process Australia-bound boat people is a mess. Before he can slip into retirement, expected in 2003, the P.M. will have to find a less costly, long-term solution. These days, on his morning walks near his home in Sydney's Kirribilli, Howard, now 62, has a spring in his step. Australians will soon see whether their leader has been refreshed by his victory, or is simply coasting a lap of honor after a successful political career.

-By Tom Dusevic/Sydney