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 Rousseff’s 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 Erdoğan to reshape the city with new construction, including the closing of Gezi Park, a deeply valued urban refuge, gave rise to protests; Mr. Erdoğan’s decision to respond with excessive force called into question his commitment to democracy, as did his dismissive disparaging of the protesters. Eventually, Mr. Erdoğan 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 São 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 world’s 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, Thailand’s 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 nation’s economy had enjoyed 5.3 per cent GDP growth; in the first half of 2010, Syria’s 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 government’s privatization 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 regime’s 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 world’s 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 India’s 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 India’s middle classes will be angry as well. Today’s 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.
This article first appeared in The Hindu, a leading newspaper of India.