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     Aug 22, 2007

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Asia looks for consensuses

By Scott B MacDonald

Chinese Communist Party (CCP), to be in total control of the nation's political life. This includes the stifling of democratic voices in Hong Kong and threatening of Taiwan's political experiment - as both represent the view that there can be more than one political viewpoint.

The unstated part of the Ramo's Beijing Consensus is that without



control over the nation's political discourse, the CCP cannot impose its economic policies. The rule of law is not to establish a level playing field for all actors, but to be used to maintain the political rule of a single party and, by that, political stability. Change is allowed, but it is top-down, imposed, and directed.

Yet the globalization and economic liberalization that have occurred have also stirred social unrest brought about by serious environmental and corruption problems that have eroded the CCP's legitimacy. There is a fundamental tension in sequencing economic reform ahead of political reform - or, in the case of China, the absence of political reform (except at a glacial pace). The result is more as Ross Terrill observed, in contrast to Ramo's environmentally friendly and corruption-free Beijing Consensus developmental end goal: "The essential traits of the new Chinese Empire are three: its driving force comes from above, not below; it sees itself as the guardian of truth; and any compromises it makes with other powers are tactical in nature, not based on an acceptance of moral comparability between China and the rest of the world of sovereign states."

Despite the substantial problems facing China - both economic and political - there is an appeal on the development front. Ramo is hardly alone in being apprehensive that opening political systems (as part of the globalization process) opens the door to instability. Yale University's Amy Chua starts her book World on Fire:
The sobering thesis of this book is that the global spread of markets and democracy is a principal aggravating cause of group hatred and ethnic violence throughout the non-Western world. In the numerous societies around the world that have a market-dominant minority, markets and democracy are not reinforcing. Because markets and democracy benefit different ethnic groups in such societies, the pursuit of free-market democracy produces highly unstable and combustible conditions.
Yet globalization has occurred throughout Asia, and the result has not been a complete breakdown in law and order. Progress has actually been made on the economic front. South Korea's and Taiwan's current open political systems and advanced economies also came from a process akin to the Beijing Consensus - with economic development ahead of political development. However, in both cases there was an evolution from hard authoritarianism to soft authoritarianism to a form of democracy, which is more open and accommodative of a changing global system.

Along the lines of a more evolutionary shift of political institutions, Michael Vatikiotis observed: "The pace and manner of political change may seem at odds with Western norms, but there it would be wrong to assume that people are naturally disposed to enduring tyranny and oppression. The form of freedom and democracy they crave is not necessarily identical with that practiced in the West, but there is a growing desire to be treated as subjects and not objects of political life."

In a sense, this is the core of the debate that Asia faces with its future - how to transit from closed political systems like China's where corruption flourishes to more open political systems, which have problems but are seeking to improve through better transparency and better corporate governance as well as more flexible political institutions. Flexibility is key - it allows greater accommodation of public demands in an environment of change. There is a point where change must occur, within a managed context, or the risk of political upheaval becomes overwhelming.

Is the answer the Beijing Consensus? India offers a major counterpoint to the Beijing Consensus. Indeed, a "New Delhi Consensus" can serve as a counterpoint to the authoritarian bent of the Chinese model:
  • A strong adherence to democratic government, based on parliamentary give-and-takes.
  • Settling of major debates about economic policy via the ballot box and parliament (a more difficult process in the short term).
  • A legal system relatively independent of the dominant political party.
  • An apolitical military establishment (unlike China's People's Liberation Army).
  • Support of the increasing multinational nature of local companies.
  • An economically expanding and politically articulate middle class, supportive of globalization.
  • A desire to strike more of a balance than in the West between the haves and the have-nots. Copying high-end Western materialistic society is not entirely a viable option in the short term, but the gap can be closed over time.

    While India has enormous problems surrounding economic disparities, environmental pollution, infrastructure needs and corruption, it may just offer a kinder and gentler approach to the thornier issues of globalization and political order, especially when compared with China's top-down authoritarianism. A New Delhi Consensus may also offer a milder form of globalization than some of the hardcore aspects of the Washington Consensus and its emphasis on totally unfettered free markets.

    What is often forgotten in the development debate is that the West's success came on the back of winners and losers, sociopolitical upheavals, and some degree of human suffering. Additionally, a New Delhi Consensus, like a Beijing or Washington Consensus, should not be adopted as an ideology, but rather as a policy framework.

    In many regards, Asia is in the process of economic convergence, pushed along by the relentless nature of globalization. Over time, it will make a decision between the Beijing Consensus and its New Delhi counterpart. By sheer demographic weight and the rapid takeoff of these two economies, the rest of Asia will be impacted, as will the rest of the world. The alternative to finding the "right path" means political chaos and economic failure, something that Asia cannot afford in the 21st century.

    Notes
    1. Joshua Cooper Ramo, "China has discovered its own economic consensus", Financial Times, May 7, 2004, p 13. For a lengthier treatment, see his The Beijing Consensus (London: The Foreign Policy Center, 2004).
    2. Ibid.
    3. See Lucian Pye, Asian Power and Politics (Boston: Harvard University Press, 1985).

    Scott B MacDonald is editor of KWR International Advisor.

    (Posted with permission from KWR International, Inc, (KWR), a consulting firm specializing in the delivery of research, communications and advisory services.)

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