Monday, November 12, 2012


Last week the two leading economies of the world – US and China, went to the polls.

Barack Obama won a second term in office, only the fourth Democrat to be re-elected in the last a hundred years, in a deceptively tight race.

Days later the Chinese Communist Party’s 18th National Congress opened. The week long event will among other things see a passing of the baton from current president Hu Jintao to Vice President Xi Jinping, who would lead the most populous nation in the world for the next 10 years.

The last time the two events coincided was in 1992.

In that year Bill Clinton won an election with the slogan “It’s the economy stupid” and the country emboldened by its “defeat” of communism was about to embark on one of the longest stretches of economic growth in its history.

At the same time China’s increasing liberalization was making economists look up, but most were still focused on Japan, which while still in the throes of an economic slump, was still the nation to watch in the Far East.

Fast forward to today and the US economy is reeling from the global financial crisis, with the economy only just beginning to grow and create jobs again. While still the largest economy in the world its confidence has been truly shaken.

China meanwhile has grown its economy eighteen fold and though there are signs its beginning to slow down it is still a long way from experiencing negative growth.

It shouldn’t be, but it’s amazing what a difference twenty years makes. Since 1992 the Chinese economy has leap frogged more than nine places to its current position.

The next time the two great nations will go to the polls in the same year will be 2032.

If projections are to be believed China will by then have overtaken the US as the largest economy in the world.

The US probably had a similar albeit longer drawn out spurt of growth with the introduction of the railway and industrialization, that saw it over take England and other European nations.

They had to address the issues of economic inequalities through the abolition of slavery, legislation against monopolies, the right to vote regardless of gender or race and the laws to improve labour rights.

China too will have to work more consciously to spread the gains of economic growth more evenly among its population.

To learn from America’s experience, China’s democracy will come with the improvements in the economy.

The eventual nature of China’s democracy will not mirror America’s as it is evolving out of its own set of circumstances, but we can be sure as the country becomes more affluent and the middle class grows major changes will be necessary in the way the country is run.

America’s democracy too is still evolving.

The major strength of Obama’s two campaigns was its “massive, micro-targeted campaign and precision-crafted turnout operation”, which means they got more people to vote, making their process more democratic.

This reaching out to more and more voters has been made possible by better technology and greater funding -- both candidates tore through $6b during the campaigns.

There should be know illusions, you can write into law the best constitution in the world – like I hear Uganda has, but it is only the pressure from a critical mass of economically empowerd people over time who will ensure that governments are more transparent, accountable and representative.

Affluent people are less like to resort to violence to resolve disputes because the ensuing destruction may consume their assets too. So they insist on the creation of institutions that resolve these disputes – the legislature and judiciary, and press for them to work fairly for all, so they can be legitimate and trustworthy.

It follows that anything that frustrates economic growth and subsequently development is an enemy of democracy.

These two great nations at various stages of development are showing the way and we will be best advised to pay attention.

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