By Tumbul Trawally, Seattle, USA
China and Russia are communist totalitarian countries, but took very different paths when it came to opening their economies. When Russia opened her economy, she chose the path of patronage and corruption. When China liberalized her economy, her main objective was to pull millions of her citizens out of extreme poverty. The country’s leaders laid out plans for China to become the manufacturing hub of the world. China’s predecessors as the manufacturing hub of the world were Britain in the 19th century and America in the 20th century. As a result of China’s liberalized economy, she lifted more than 850 million Chinese out of extreme poverty, according to the World Bank. The World Bank measures extreme poverty as the percentage of people living on the equivalent of $1.90 (US dollars) or less per day. China’s definition of extreme poverty is different from that of the World Bank, and is defined as earning less than $2.30 (US dollars) a day, at Purchasing Power Parity (PPP). Purchasing Power Parity is the measurement of prices in different countries that uses the price of specific goods or services to compare the absolute purchasing power of the countries’ currencies, in relation to the US dollar.
First, let us define Gross Domestic Product (GDP). It is the monetary value of all goods and services produced in a country in a year. Some economists prefer the GDP/PPP in determining the living standard of a nation because it eliminates the differences in price levels among countries. The comparison between countries reflects only the differences in the volume of goods or services purchased. For example, when comparing a Gambian’s standard of living to that of a Swiss national, you compare the price of a basket of goods in The Gambia to the price of a similar basket of goods in Switzerland, at the U. S. dollar exchange rate. Furthermore, since 1990, China’s GDP per capita has increased fivefold. GDP per capita is the GDP divided by the population. This is how China pulled millions out of extreme poverty. However, with regard to all the economic progress China has made within the past decades, she is still a developing country. China is number 81 on the world GDP per capita list, behind Iran and Seychelles. The world GDP per capita list in 2021 has Luxembourg, Ireland, Switzerland, and Norway at the top; the bottom of the list looks like the African Union (AU). Most economists prefer the GDP per capita measurement in determining standard of living, not the nominal GDP or the GDP/PPP.
So far, China has succeeded in having a dual system: liberal economy and a totalitarian political system. It has defied all economic theories of associating economic progress with a liberal democratic system. As the size of the Chinese middle class grows, they will demand more freedom. It is what economists call “Similarity of Preference.” It means people who earn similar incomes have similar desires and tastes, regardless of their habitat or country of residence. I think the jury is still out on China’s ability to balance the dual system. We will see when China’s middle class reaches that critical mass level. China’s pivot to a capitalist economic system underscores the triumph of a democratic capitalist system over a totalitarian centrally planned economy. Winston Churchill summed it best: democracy is the worst form of government, except for all those others that have been tried; capitalism is the worst economic system, except for the alternatives.
On the other hand, Russian economic liberalisation benefited only the Oligarchs (super rich). In fairness to President Putin, the Oligarchs were a creation of his predecessor, Boris Yeltsin. President Yeltsin privatized state controlled monopolies, by offering them to his cronies, at pennies on a dollar. The Oligarchs became extremely rich, while the ordinary Russian saw none of the benefits of privatization. In Gambian terms, it is similar to President Barrow nationalising the electricity & water company (NAWEC), and selling it to a friend or family member, at bututs on a dalasi. Being a monopoly, the new owner is bound to make a lot of money. President Putin came to power in 2000 and continued down the path of economic disaster that his predecessor had laid out. Putin created new Oligarchs among his friends and family. When the economy stumbled, President Putin resorted to Nationalism as a way of distracting attention from his failures. One of the false excuses he uses to justify the invasion of Ukraine is to fight Nazism. Ukrainian President Zelenksky is Jewish and lost family members in the Holocaust. How ridiculous a statement that is! President Putin does not want Ukraine to move closer to the West, because a democratic and prosperous Ukraine poses an existential threat to his government. Remember West and East Germany? Any government based on nationalism ends up failing after it runs out of excuses or manufactured enemies.
We saw the nationalism card played by Donald Trump in the US. He characterised Mexicans as rapists and drug dealers, to appeal to his base of white supremacists. Its mantra always is: us against them! We have also seen it played out in the Brexit elections in Britain, and is partly responsible for Boris Johnson’s popularity among the English electorate. Remember, England accounts for about 84 percent of the population of Britain. The English are nostalgic for the 19th century Britain, when the Royal Navy ruled the seas, the sun never set on the British Empire, and the pound sterling was the reserve currency of the world. Well Shakespeare said “nostalgia is the dominant sentiment of age.” It shows in the divide in the Brexit elections. The younger voters were not nostalgic for the so-called good old days—but the older voters were. According to the Bank of England’s forecast of the effects of Brexit on the UK economic growth, the GDP would be stunted by 2–8 percent. That is a serious drop in the standard of living, and rise in unemployment. It is nothing different from the nationalist policies of Victor Urban in Hungaria, Bolsonaro in Brazil, and Modi in India. Although, in India, Prime Minister Modi’s nationalist government is largely religious based (Hindu Nationalism).
In a similar vein, in The Gambia, we witnessed the ethno-nationalist movement in southern Senegal. The guerilla group is yearning for a majority Jola nation. Yahya Jammeh shares a similar vision! He propped them up and became their main benefactor. As I mentioned earlier, the mantra of nationalism, be it ethno, tribal, or religious has always been: us against them. Yahya Jammeh insulted Mandinkas (40 percent of the population) at his rallies, with the specific aim of driving a wedge between them and the other tribes. Luckily, for Gambia, a vast majority of Gambians, with the exception of the likes of the Momodou Saballys and the Saul Badgies, did not buy into his stupid, mischievous acts of divide and rule. The rebels use Gambia as a transit point for their illicit trade in timber and other commodities. The Gambia government should stop them from using our port for exporting their timber to China. Our relationship with Senegal is too vital–for our democracy–to sacrifice on the whims of ethno-tribalists in Cassamance.