Transitions of the angry middle class

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JACK GOLDSTONE
SHARE COMMENT (22) PRINT T+
TOPICS
economy, business and finance
economy (general)


politics (general)
democracy
What the people of India want, just as the angry middle classes in
Ukraine, Bosnia Thailand and Venezuela do, is a government that is
accountable, responsible, and effective in moving their country
further into the modern world
A few years ago, the emerging markets and middle-income developing countries
were considered to have a rosy future the rising middle class was going to
usher in an era of stability, democracy and mass consumer markets that would
lead the world economy.
The global middle class is growing, but the hoped-for smooth democratic
transitions have not occurred. Instead, what we have seen are clashes between an
increasingly angry middle class and governments that have broken faith or taken
them for granted.
Trajectory of confrontations
Last year, two of the most promising emerging market nations Brazil and
Turkey were rocked by massive urban protests. These put in doubt the future
of political parties and leaders that had seemed unassailable. The decision by
Brazilian President Dilma Rousseffs Workers Party to spend lavishly on the
World Cup and Olympics while raising bus fares and letting the exchange value of
the Brazilian Real soar hit hard at the pockets of urban Brazilians. Ms. Rousseff
had to back down and recast her policies. In Istanbul, the decision by Prime
Minister Recep Tayyip Erdogan to reshape the city with new construction,
including the closing of Gezi Park, a deeply valued urban refuge, gave rise to
protests; Mr. Erdogans decision to respond with excessive force called into
question his commitment to democracy, as did his dismissive disparaging of the
protesters. Eventually, Mr. Erdogan not only backed down, but found himself on
the defensive, with his ministers and party under investigation for corruption.
In Brazil and Turkey both recently emerged from military rule but with an
increasingly established pattern of democracy the regimes avoided the use of
deadly force and backed away from confrontation, seeking instead to respond to
the protesters demands. Yet, in the last few months, other countries that have
only started to move toward democracy more recently or more weakly have seen
similar confrontations, and these have erupted into deadly confrontations, in at
least one case (Ukraine) toppling the regime.
What is responsible for the violent protests that have emerged nearly
simultaneously in the Ukraine, Bosnia, Thailand and Venezuela? As in Brazil and
Turkey, what we are seeing is the real result of the emergence of a global middle
class not merely passive consumers or docile voters, they are demanding that
governments not accustomed to accountability and showing deference to popular
demands start acting like true democracies. Where the rulers of emerging
democracies remain visibly corrupt, or treat crucial foreign and domestic policies
simply as their personal choices to make, they are provoking waves of anger and
mass protests. And where instead of backing down they persist in confrontation,
they are reaping violence and losing control of their country.
What economic indicators show
From So Paulo to Caracas, from Sarajevo to Kiev, and from Istanbul to Bangkok,
we are seeing a similar phenomenon. These are movements of the angry
emerging middle class in countries at a crossroads. If we examine the background
to recent events in the Ukraine, Bosnia, Thailand and Venezuela, we find that
despite the geographic distances that separate them, these countries are
remarkably similar.
All four are middle-income countries. According to the International Monetary
Fund (IMF), the best off, oil-enriched Venezuela, ranks 73rd in per capita GDP
(adjusted for the purchasing power parity of its currency). Thailand ranks 92nd,
Bosnia-Herzegovina ranks 99th, and Ukraine is the poorest, ranking 106th. Thus,
among the worlds 187 countries ranked by the IMF, they are almost exactly in
the middle.
They have just arrived at the point where the vast majority of the population is
literate and expects the government to provide a sound economy, jobs and decent
public services. Yet, they are not yet economically comfortable and secure. That
security, and a better future for themselves and their children, depends very
heavily on whether government leaders will work to provide greater
opportunities and progress for the nation as a whole, or only to enrich and
protect themselves and their cronies. In sum, all these countries are at a point
where limiting corruption and increasing accountability are crucial to whether
their country will continue to catch up to the living standards of richer countries,
or fall back to the standards of poorer ones.
The short-term economic performance of these countries is not as important as
where they stand in this transition, having escaped dire poverty but now just
knocking on the door of modern western-style security and prosperity. In fact,
the short-term performance of these countries is varied. According to the World
Bank, in 2012, the economy of Ukraine grew by only 0.2 per cent, while that of
Bosnia-Herzegovina declined by 0.7 per cent. In contrast, Thailands economy
performed wonderfully, with GDP increasing by 6.5 per cent, and Venezuela also
enjoyed strong growth of 5.6 per cent.
Yet, short-term economic performance can be misleading. In 2010, just before
Egypt erupted into turmoil, the nations economy had enjoyed 5.3 per cent GDP
growth; in the first half of 2010, Syrias economy boomed with a 6.0 per cent
GDP gain. The problem is that these short-term, overall growth rates tell us
nothing about how prosperity has been distributed, about the gap between
economic growth and political exclusion, or the amount of economic growth that
is stolen through corruption. It is these latter factors that feed anger that can
erupt in protests.
Import for India
Given that people are protesting not out of sheer poverty, but against rulers they
see as stealing their chances to move forward, it should be no surprise that these
four countries are also rated as highly corrupt. According to the corruption index
compiled by Transparency International (TI), Thailand, Ukraine and Venezuela
are among the most corrupt countries in the world: Thailand ranks 102nd,
Ukraine 144th, and Venezuela at 160th in the level of perceived corruption. The
2012 TI scale rates Bosnia as somewhat more honest, at only 72nd in corruption;
but in the last year, perceived corruption has risen sharply, as one of the main
complaints of rioters in that country is that the Bosnian governments
privatisation of state assets in the last year was a spectacle of gross corruption.
To be sure, the angry middle classes that are demanding change are not always
democrats, nor are they always supported by a majority of the population. In
Thailand, the demonstrators in Bangkok are seeking to overturn a freely elected
Prime Minister who clearly has support among a majority of Thais; the yellow-
shirt activists who have shut down the government are monarchists who want an
appointed leader to take over instead. In Venezuela, the Bolivarian Revolution
remains popular with those outside the urban middle classes who have benefitted
from the regimes largesse, fiscally ruinous though it may be. Even in the
Ukraine, the protesters in Kiev overturned a government that had won electoral
support from a majority of the country, though concentrated in the southeast
portion of the country
Yet, democracy in the sense of majority rule is not what people are seeking. The
middle classes in the Ukraine, Bosnia, Thailand and Venezuela are demanding
greater accountability, and are challenging regimes seen as corrupt, out of touch
and which form obstacles to a better future.
Perhaps, most important, is what these events portend for the worlds largest
democracy India. Just as in Turkey, Brazil, Thailand and the Ukraine, India is
developing an urban middle class that aspires to a better life. Yet, just like these
countries, India cannot yet provide that middle class the assurance of security
and stability. Also, like these countries, the fruits of modernisation are being very
unevenly distributed across the population, and this problem is made worse by
rampant corruption. What the people of India want, just as the angry middle
classes in these four countries do, is a government that is accountable,
responsible, and effective in moving their country further into the modern world.
Not only the coming election, but what follows this election, will determine
whether Indias democracy remains peaceful. Much hope for change is riding on
this election, but if whoever emerges as the victor does not deliver meaningful
change, and puts India firmly back on the road to rapid economic growth with a
more open and responsible government, then Indias middle classes will be angry
as well. Todays scenes from Caracas and Istanbul may then be repeated in New
Delhi before too long.
(Jack Goldstone is Hazel Professor of Public Policy at George Mason University,
U.S.)