Growth and Freedom in Asia

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Growth and Freedom in Asia

Does economic growth inevitably lead to democracy? China and Vietnam are growing fast, but political freedom still lags.

China’s growing economic prowess has been long and widely reported. Already the world’s third-largest economy, many expect it to overtake Japan for second place by the end of this year. Meanwhile, it’s already become the world’s largest exporter, after surpassing Germany at the end of last year; its exports in the first half of 2010 soared 35.2 percent to $705.09 billion.

Fellow communist nation Vietnam is no slouch either, with its economy growing by 5.32 percent last year—the fastest in South-east Asia. And Vietnam is also, like China, working to attract further foreign investment. In May 2010, for example, Vietnamese President Nguyen Minh Triet returned from Helsinki with a promise that Finland would invest $1 billion over the next few years, with Finnish companies set to invest in core industries including information technology, ship building, wood and paper.

The question that such figures have left people wondering, of course, is whether this rapid economic growth—and the potential commensurate greater standing on the world stage—will inevitably lead to greater democratic, social and political freedoms at home?

At first glance China would, so far, appear to suggest not. While it has opened up its doors to foreign companies, the Communist Party maintains a firm grip over the levers of power and, to a large extent, its citizens.

But one Chinese diplomat, who asked not to be named, argues the picture is more complex. ‘It’s important for people to understand that without proper political reforms, the economic miracle can’t be achieved,’ he says noting that those reforms there have been are often overlooked by the West. ‘China is very different from Western countries, so they should consider its cultural background, its history and its stage of development…(and) refrain from drawing simple conclusions that present day China is just a black-and-white story.’

He also disputes the notion that there’s undue restriction on freedom of expression, noting for example that the official Xinhua News Agency and the People’s Day have opened up a column for members of the public to comment on key issues.

Meanwhile, earlier this year, the National People’s Congress amended the country’s Electoral Law to equalise the voting rights for selecting deputies for rural residents with those of their urban counterparts. In addition, for more than a decade there have been competitive popular elections in villages that allow an estimated 700 million farmers to elect village chiefs. Such processes are part of what the diplomat describes as an ongoing effort to listen more closely to the people, something he believes is essential for continued development.

Still, the country is far from what could be deemed a functioning multiparty democracy, with the Communist Party instead creating a sense of legitimacy for its existence by delivering strong economic growth, argues Hans Vriens, a managing partner at Singapore-based advisory firm Vriens and Partners. He also notes the growing number of unions, and a number of high-profile cases recently which suggest worker organisation is enabling Chinese workers to secure higher wages.

Jagdish Sheth, author of Chindia Rising, believes that a growing middle class such as is appearing in China almost inevitably eventually leads to political and economic reforms, with ‘democratisation of capital’ being ‘the first step towards democracy.’

‘You have to privatise wealth first, and this means that communist countries have to change their societies in order to create wealth for their people,’ he says. ‘If that isn’t done right, then any form of democracy would be unstable, and you’ll see consequences like the toppling of the incumbent government or a situation where elections are won or lost every two years.’

So, will a Chinese or Vietnamese shift to democracy look anything like the changes that took place in Eastern Europe? Michael Dembinski, head of policy at the British Polish Chamber of Commerce, says he doesn’t think so, largely because of the ‘huge cultural and historical differences between Asia and the Central and Eastern Europe.’

He argues that the close proximity of these countries to their Western models allowed countries like Poland to find and examine best practices simply by looking across their borders, and that although both Asian nations will eventually ‘dissolve into a more democratic framework,’ it could be a 100-year process.

Indeed, a number of countries appear to have continued to prosper without any particular push for democracy.

Singapore, one of the wealthiest nations per capita, has by most reckonings a partial democracy at best, with many accusing the government of exploiting the country’s strict libel and slander laws to bankrupt political opponents. As a consequence, the People’s Action Party has been in power since Singapore gained independence from the United Kingdom in 1965, with the government’s success remaining focused on key personalities such as Minister Mentor Lee Kwan Yew—the country’s first prime minister after independence—and his son Lee Hsien Loong, Singapore’s third premier.

But as Andrew Ellis, director for Asia and the Pacific at the Institute for Democracy and Electoral Assistance, notes, the example of Singapore is by no means the rule in Asia, with countries including South Korea and the Philippines demonstrating that growth and democracy can go hand-in-hand (although he’s careful to draw a distinction between a shift from authoritarianism and moves toward a free market economy and democracy).

So where does this leave the prospects for democracy in Asia’s two communist giants? Simply put, high income countries ‘tend to be democracies, but low income nations tend not to be,’ says Robert Wade, professor of Political Economy at the London School of Economics, who adds that when average incomes rise it means countries are better able to sustain a substantive rather than just a formal democracy.

But he cites South Korea and Taiwan as two examples that underscore the point that although economic growth is often a necessity for democracy, it isn’t always a trigger for it. As he notes, they were, after all, ‘already as rich as the southern European Mediterranean countries before they finally became real democracies in the late 1980s.’