A SovereignPH.com EXCLUSIVE
A survey of Covid-19 implications from an international perspective
by Adolfo Quizon Paglinawan
Icon for emerging economies
Towards closing the preceding chapter, we quoted a question asked seven years ago by Damisa Moyo: “Is China becoming the template for emerging economies?” even as she pointed out that “there’s understandably a deep-seated presumption among Westerners that the whole world will decide to adopt private capitalism as the model of economic growth, liberal democracy, and will continue to prioritize political rights over economic rights.”
She said many who live in the emerging markets, find this an illusion.
Moyo said: “Even though the Universal Declaration of Human Rights, which was signed in 1948, was unanimously adopted, what it did was to mask a schism that has emerged between developed and developing countries, and the ideological beliefs between political and economic rights.”
Well, this schism has only grown wider. “Many people who live in the emerging markets, where 90 percent of the world’s population live, believe that the Western obsession with political rights is beside the point, and what is actually important is delivering on food, shelter, education and healthcare.”
Illustrating her point, she said: “If you’re living on less than one dollar a day, you’re far too busy trying to survive and to provide for your family than to spend your time going around trying to proclaim and defend democracy.
“Private capitalism and liberal democracy are held sacrosanct. But I ask you today, what would you do if you had to choose? What if you had to choose between a roof over your head and the right to vote?”
She qualified that she was not saying people in the emerging markets don’t understand democracy, nor was she saying that they wouldn’t ideally like to pick their presidents or their leaders. “Of course, they would,” Moyo quipped.
On the balance, emerging markets worry more about where their living standard improvements are going to come from, and how it is their governments can deliver for them, than whether or not the government was elected by democracy.
The China challenge
The fact of the matter is that this has become a very poignant question because there is for the first time in a long time a real challenge to the Western ideological systems of politics and economics.
That system that is embodied by China. Instead of private capitalism, China has state capitalism. Rather than liberal democracy, they have de-prioritized the democratic system while deciding to prioritize economic rights over political rights.
That is why they refer to it as “people’s democracy.”
Moyo emphasizes: “I put it to you today that it is this system that is embodied by China that is gathering momentum amongst people in the emerging markets as the system to follow, because they believe increasingly that it is the system that will promise the best and fastest improvements in living standards in the shortest period of time.”
First of all, it’s China’s economic performance over the past 30 years that was able to produce record economic growth and significantly move many people out of poverty, specifically putting a meaningful dent in poverty marked at over 300 million people moved out of indigence by 2013. (That figure would eventually bloom to 800 million).
The Zambian born economist adds: “It’s not just in economics, but it’s also in terms of living standards. We see that in China, 28 percent of people had secondary school access. Today, it’s closer to 82 percent. So in its totality, economic improvement has been quite significant.”
Moyo continues her narrative.
Second, China has been able to meaningfully improve its income inequality without changing the political construct.
Today, the United States and China are the two leading economies in the world. They have vastly different political systems and different economic systems, one with private capitalism, another one broadly with state capitalism.
However, these two countries have the identical “Gini Coefficient,” which is a measure of income equality. Perhaps what is more disturbing is that China’s income equality has been improving in recent times, whereas that of the United States has been declining.
Thirdly, people in the emerging markets look at China’s amazing and legendary infrastructure rollout.
She said: “This is not just about China building roads and ports and railways in her own country — she’s been able to build 85,000 kilometers of road network in China and surpass that of the United States — but even if you look to places like Africa, China has been able to help tar the distance of Cape Town to Cairo, which is 9,000 miles, or three times the distance of New York to California.”
Nothing can be more visible than that!
It’s no surprise that in a 2007 Pew survey, Africans in 10 countries said they thought that the Chinese were doing amazing things to improve their livelihoods by wide margins, by as much as 98 percent.
Finally, China is also providing innovative solutions to age-old social problems that the world faces. If you travel to Mogadishu, Mexico City or Mumbai, you find that dilapidated infrastructure and logistics continue to be a stumbling block to the delivery of medicine and healthcare in the rural areas.
However, through a network of state-owned enterprises, the Chinese have been able to go into these rural areas, using their companies to help deliver on these healthcare solutions.
Two distinct democracies
There are a lot of shifts around what China is doing in the “democratic” stance. Two kinds of democracy from the vantage point of priority, one leaning towards political rights, the other concerned about serving the people’s economic interests.
Emerging economies are recognizing that “democracy is not a prerequisite for economic growth.” On the contrary she said: “Countries like Taiwan, Singapore, Chile, not just China, have shown that economic growth is a prerequisite for democracy.”
A recent study illustrated that the estimated length of a nation’s democracy is positively correlated to its per capita income.
Moyo explains that “income is the greatest determinant on how long democracy can last. If your per capita income is $1,000 a year, your democracy will last about eight-and-a-half years. If your per capita is between $2,000 and $4,000 a year, then you are likely to only get 33 years of democracy. Only if your per capita income is above $6,000, will you have democracy come hell or high water.”
What this is telling us is that we must first have a middle class in order to hold the government accountable.
She also cautioned against putting democracy into a space where it doesn’t really fit running the risk of promoting “illiberal democracies” worse than authoritarian governments that seek to replace.
According to Freedom House, the reality around illiberal democracies is quite depressing. Although 50% of the world’s 196 countries are democratic, 70% are illiberal. Lacking at least in freedom of speech or movement. Freedom has also been on the decline every year for the past seven years onto 2013.
The lady economist said: “This shows that we got to find a more sustainable form of democracy in a liberal way, having its roots in economics. As China moves to becoming the largest economy in the world, the schism between the political and economic ideologies of the West and the East, is likely to widen.”
That can lead to a world of more state capitalism, increasing protectionism and declining political rights and individual freedoms.
The West faces a choice: compete or cooperate. It can either compete with the Chinese model by pushing its own agenda, thus widening the schism, or it can cooperate by giving emerging countries leeway to discover the systems that best fit their needs.
To remain relevant in the global economy, the West ought to consider “cooperating in the short term in order to compete;” that is, by concentrating on “economic outcomes” to bolster emerging middle classes and create prosperity, the West can aid the development of economies necessary to sustain liberal democracy.
Moyo admonishes: “Instead of criticizing China for bad behavior, the West should be showing how their own system of politics and economics is superior. Instead of shoehorning democracy around the world, the West should remember that it takes a lot of patience to develop the models and the systems that you have today.”
Enter the virus
The West must be willing to challenge assumptions regarding all systems, even democracy and private capitalism, while seeking the next evolution of prosperity. This was the socio-political discourse when Covid-19 entered the picture. The bigoted and pejorative term “Chinese virus” is a condition-reflex birthing out of this race between liberal democracy and people’s democracy.
As of Easter 2020, the United States has topped the Covid-19 worldometer, with 533,115 cases and 20,580 deaths, overtaking Spain, Italy, France and Germany. China’s statistics are almost frozen at 82,052 cases and 3,339 deaths.
While it is too early for authoritative forecasts following the aftermath of this pandemic crisis, Plamen Tonchev draws for The Diplomat three possible scenarios at this stage.
The best case envisages a moderate economic disturbance, which can hopefully be dealt with by the existing world order and through the mobilization of existing financial tools.
A much more likely scenario, which qualifies as bad, foresees severe economic damage necessitating a massive demand for reconstruction, even if it cannot be met through available resources and by the shaky global institutional architecture.
The worst-case scenario will be really ugly: it includes a devastating economic collapse of potentially historic proportions, leading to social and political turmoil in a number of countries, a sea change as to configuration of the world order, and curtailed connectivity.
How different would the world be after this plague passes through?
Ado Paglinawan is a daily commentator at Radyo Pilipinas1, and a regular columnist at the country’s newest daily news website SovereignPH.com and its partner magazine The Sovereign. He is a former Philippine diplomat, serving in the Philippine Embassy in Washington DC and Permanent Representative to the United Nations in New York as press attaché, spokesman and special assistant to Ambassador Emmanuel N. Pelaez. He has served a strategic consultant to Agriculture Secretary Luisito Lorenzo, Tourism Secretary Richard Gordon and Finance Secretary Roberto de Ocampo. He studied for 15 years at San Beda College from grade 1 to 4th year college majoring in English and Philosophy, minor in political science and history. He is a veteran of the First Quarter Storm, participating as president of the College Editors Guild of the Philippines. Ado has taken continuing studies in world politics and diplomacy, international public relations, information technology and remote sensing, and Eastern Christianity and Islamic studies, from various universities in Washington DC.