What does this authoritarian moment mean for developing countries?

by Pranab Bardhan here

As the petro-authoritarianism of Russia flexes its muscles and the economic prowess of China struts in Olympic glory, developing countries in the world might start rethinking about the lectures on democracy and development they have heard all these years from the West. This is at a time when advanced capitalist democracies are reeling under the shock of unregulated financial overreach and years of living beyond their means, a far cry from the end-of-history triumphalism of capitalist democracy of less than two decades back.

The Chinese case in particular is reviving a hoary myth of how particularly in the initial stages of economic development authoritarianism delivers much more than democracy. This is also backed by the memory of impressive economic performance of other East Asian authoritarian regimes (like those in South Korea and Taiwan in the recent past). The lingering hope of democrats had been that as the middle classes prosper in these regimes, they then demand, and in the latter two cases got, the movement toward political democracy.

China’s State Enterprises – a success story with many lessons

Virodhi’s post on China is revealing and a direct challenge to the orthodoxies of growth, development and liberal agendas..

China is the center of the debate. With the brilliant show of Olympics at Beijing, the debate regarding the character of the Chinese state and society has also resurfaced. What is China? Socialist? People’s Democracy moving towards capitalism or socialism? Degenerated workers’ state? Capitalist? Imperialist? I argue that China was never a socialist state. Since its birth in 1949 in a very backward terrain, China continues to be a People’s Democracy moving towards socialism. With the advent of the period of Deng Xioping, revisionism took hold of Chinese ecnomics and society and the movement towards socialism was reversed. However, lately new information has been emerging from China which provides an interesting perspective, i.e., the reversal of the process of reversal. I am posting here an interesting article (I am not in agreement with the analysis, but the facts are interesting) that appeared in The Australian regarding the role played by the State Owned Enterprises in China:

China’s state enterprises aren’t dinosaurs

THE Olympic Games comprise China’s most prominent state-owned enterprise.

In some other countries, including Australia, the Olympics, and sport in general, are chiefly the realm of volunteers, of corporations, of a discrete professional world.

FAO: More Free Trade, More Hunger

by Esther Vivas

Today humanity produces three times what was produced in the 1960s, while the population has only doubled.  There is no production crisis in agriculture, but the impossibility of accessing food by large populations who cannot pay current prices. The solution cannot be more free trade.

The high level summit of the Food and Agriculture Organization (FAO) of the United Nations held in Rome on Food Security ended on June 5th.  The conclusions of the gathering do not indicate a change in the policy trends which have been in force these last years and which have led to the current situation.  The declarations of good intentions made by various governments and the promises of millions of euros to end hunger in the world are not capable of ending the structural causes that have generated this crisis.  On the contrary, the proposals made by the general secretary of the UN, Ban Ki-Moon, to increase food production by 50% and to eliminate the export limits imposed by some of the countries affected, only reinforce the root causes of this crisis rather than addressing and guaranteeing the food security of the majority of the people in the global South.

The world food crisis and the capitalist market

This is the first part of a three-part series of articles found here on the world food crisis.

By Alex Lantier

As the June 3-5 Conference on World Food Security of the United Nations’ Food and Agriculture Organization (FAO) began in Rome, FAO Director Jacques Diouf said of the explosion of food prices: “It is touching every country in the world. We have not only seen riots and people dying, but also a government toppled [in Haiti], and we know that many countries…could tilt to one way or the other depending on the discontent or satisfaction of their population.”

With these words, Diouf expressed the growing concern of governments and ruling elites internationally over the potentially revolutionary implications of the upward spiral of prices for basic food staples, which has already sparked a social and economic crisis of global dimensions. In recent months, strikes and demonstrations against rising food prices have occurred in many parts of the world. These initial struggles have exposed the contradiction between the elementary demand of the world’s masses for affordable food and the workings of the capitalist market.

Diouf called for donations of US$30 billion to be invested in world agriculture. Even were this sum to be allocated, it would not begin to address the sources of the current crisis, which lie in economic and political processes of privatization and price speculation that have unfolded over the past three decades and are bound up with the globalization of capitalist agriculture.

“The Bottom Billion” by Paul Collier

The most basic question addressed in development economics is “Why are some people poor?” There tend to be two highly political answers to this question: “Because capitalism is unfair” or “Because poor people don’t work hard enough.” Neither’s an especially satisfying response, and neither is well supported by data. The rise of China, India and Asia has had far more to do with embrace than rejection of the principles of capitalism, and those societies have collectively pulled hundreds of millions of people out of extreme poverty. On the other hand, hard work and embrace of free market principles isn’t likely to have much impact on a rural farmer in Chad.

Most development economists avoid arguments this simplistic, but they’re subject to their own polarization. Two of the most influential popular economic books offer the contradictory advice that rich countries need to give the developing world a whole lot more aid, and that development aid is, for the most part, a near-criminal waste of money that damages as much as it helps. Collier, to his credit, references both Sachs and Easterly in “The Bottom Billion”. A warning to my Sachs-phobic readers – he’s a fan of Sachs’s economics, though he’s far more critical of his advocacy for increased aid.

While Collier’s work is significantly more nuanced than most popular books on development economics, he’s not exactly shy or soft-spoken. He’s particularly contemptous of ideological dreamers, with a special disregard for Marxists. (In describing China’s recent economic success, he notes, “Mao made his own invaluable contribution by dropping dead.”) But he’s almost as critical of free marketeers who believe that markets will solve all development problems, especially in the poorest countries of the world.

Read more here