Should the Arab world follow China, or follow India, asks Ayman El-Amir* In a world where globalisation presents both a threat and a promise, many developing countries, including Arab ones, are grasping for the secret formula that made China and India global economic giants in the span of 25 years. With its staggering economic growth for more than a decade, China has leapfrogged from market economy to miracle economy. It achieved a 10.5 per cent increase in Gross Domestic Product (GDP) last year alone. India, which is considered the world's fourth largest economy in terms of purchasing power parity, is poised to be the world's third economic power after the US and China in less than two decades. While dependent on imported oil and raw material, both countries have developed manufacturing capacity that is inundating world markets. What is puzzling is that both Asian economic powers owe their achievements to incompatible political ideologies. China is governed by an avowed communist elite, while India is proudly the world's most populous democracy where people freely vote governments in and out of office. So, for struggling developing countries, which is the shortest cut to riches? For the Arab states of the Middle East the challenge is even greater. They are mostly countries in transition that are meandering towards consistent political and economic systems. This motley group of countries ranges from feudal monarchies to republican autocracies, with few exceptions in between. Their difficult road to development is strewn with civil conflict, sectarian chaos, military occupation, foreign political and military hegemony, internal repression and the destabilising effect of the threat of terrorism. On the other hand, China and India are beating the staunchest world economic powers, the US included, at their own game, competing in all industries, from chip making to movie making. Arab countries can boast of little more than oil and gas exports, modest tourism and no regional integration to speak of. The dilemma for developing Arab countries is whether a sound democratic environment based on strong political institutions, free elections, power sharing and rotation, respect for human rights and a genuine separation of powers is a pre-requisite for robust economic growth and integration in the global economy. For some, the need does not arise as long as millions of barrels of oil continue to flow out and billions of US dollars flow back. They have China and India's voracious appetite for raw material to thank for the bonanza of oil prices of last year. For some other Arab countries, an ironclad hold on power through a single party system, festooned with democratic slogans, is the guaranteed way to ensure stability and make economic progress. They can confidently point to China and to South Korea a decade ago, to show that liberal democracy was no pre- condition for economic and social prosperity. After all, in the last century, the former Soviet Union developed its awesome industrial might under conditions close to slavery during the Stalinist era and despite involvement in two scarring world wars. The paradox is that the Marxist-Leninist ideology that guided Soviet policies was unsustainable. The empire came crashing down when it tried to modernise by adopting Western-style market economy and political liberalism. Mikhail Gorbachev's perestroika and glasnost undid it. In the 21st century's world of globalisation and the information society the rules of the game have changed. Everyone is watching, learning, cooperating and competing. The visionary objective of the framers of the United Nations Charter more than 60 years ago of "better standards of life in larger freedom" is making steady progress despite many setbacks. This may seem to be incompatible with "miraculous China", but the fact is that it is a revolving door. Economic liberalisation that started in 1978 under Deng Xiaopeng led to liberal policies allowing millions from rural areas to move to cities constituting the greater labour force needed for economic expansion. Economic liberalisation will inevitably lead to greater political flexibility if economic growth is to be sustained. If this may seem to support the argument that economic progress could be achieved in a repressive political environment, then it is misconstrued. China's stellar rise is also driven by a fierce sense of nationalism that believes that China is bound to be one of the greatest, if not the greatest, world powers of the 21st century. For sustainable economic growth to materialise, Arab countries need a liberal political environment, not repressive regimes governing behind closed doors under misleading banners of democracy and traditional values. In the past 50 years, autocracy and monopoly of power by Arab oligarchies proved to be politically costly and economically ruinous. They offered no inspiration for people of the Arab world who had struggled for decades against foreign occupation and domination only to end up in the oppressive grip of nationalist dictators. There lie the political origins of economic failure. A healthy political environment governed by the rule of law and an efficient system of education would provide the basis for sound economic policies leading to sustainable economic growth. Under such circumstances a vigorous civil society would play the effective role of watchdog in exposing and countering corruption that is the bane of successful economic and political performance. Economic failure is a consequence of corruption that is tacitly protected by a political umbrella. It is understandable that every political regime relies for its survival on a trusted class of allies whose interests are closely linked to, and dependent on, the survival of the regime in power. They will defend the regime that protects them and safeguards their interests. Such a marriage of interests can only be regulated by the rule of law and an institutional system of accountability. Under the economic reform packages introduced in China and South Korea, harsh penalties, including the death sentence, were meted out to public officials who betrayed state trust or indulged in corrupt practices. Autocratic governance is a sure recipe for corruption. The dictatorships of General Suharto in Indonesia and Ferdinand Marcos in the Philippines during the last quarter of the 20th century speak volumes of corruption and self-enrichment under the eyes of respectable international financial institutions like the World Bank. In Indonesia, the whole country turned into a family business of General Suharto, while the World Bank pumped $25 billion in loans to the Suharto's regime to support what it considered a miraculous model of poverty reduction in Asia. In the Philippines, it was a self-rewarding enrichment exercise for Ferdinand Marcos and his flamboyant wife, Emelda Marcos. Both regimes were eventually overthrown by the impoverished masses, supported by the armed forces. Arab countries are in a state of rocky political and economic transition to the unknown. Underneath the veneer of oil wealth there is many a restive population sinking deeper in extreme poverty. This is breeding increasing resentment. In some cases, particularly in the small Gulf States, the transition may lead to some form of constitutional monarchy. In other countries where draconian police state security measures seem to be the answer to all forms of protest, the transition will be towards destructive anarchy. There is no ready-made blueprint to follow, no magic formula to copy, but transparency, the rule of law, power-sharing, the promotion and protection of human rights is a never failing path to pursue. As Jean-Jacques Rousseau put it more than 200 years ago: "Good laws lead to the making of better ones, bad ones bring about worse." * The writer is former correspondent for Al-Ahram in Washington, DC. He also served as director of United Nations Radio and Television in New York.
