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Economics Drive Political Change

November 5, 2008


On the day after elections in America, it seems like a good time to talk about democracy elsewhere. Politicians like to talk about politics and the ideologies behind their particular brand of politics. In the West, we are fond of democracy — especially representational democracy — and we try to spread the gospel about it wherever we go. Often we hear it in speeches like the one President Woodrow Wilson gave before Congress in April 1917: “The world must be made safe for democracy. Its peace must be planted upon the tested foundations of political liberty.” Over a decade and a half before that speech, Wilson had defined what he meant by democracy. “Democracy,” he wrote in a March 1901 edition of the Atlantic Monthly, “is not so much a form of government as a set of principles.” Winston Churchill, on the other hand, did see democracy as form of government. He reportedly uttered, “It has been said that democracy is the worst form of government except all the others that have been tried.”


My colleague Tom Barnett and I have preached that if you want to instill democratic principles in governments then improve the lives of the people in autocratic countries. Economic progress almost always precedes political progress. Asia provides two good examples of economics racing ahead of politics: relations between North and South Korea and relations between Taiwan and China. In both cases, economic ties are much stronger than political ones and economic policies in North Korea and China are much more liberal than political policies. Reporter Ralph Jennings penned an article underscoring the fact that economic ties between Taiwan and China continue to strengthen [“Once hostile Taiwan, China set to sign more deals,” Washington Post, 31 October 2008]. He wrote his article as negotiators for China and Taiwan were about to meet to sign a list of deals that inspired both hope and protests. Beijing sent Chen Yunlin, Beijing’s top negotiator on Taiwan affairs, to Taiwan for the meetings. Chen is the highest-level Chinese official in decades to visit the island nation. Jennings wrote that the meetings “mark another thaw in relations between the two sides since Taiwan President Ma Ying-jeou took office in May on pledges to improve the island’s economy by getting a piece of China’s booming markets.” The economic thaw does not mean that China has given up its claims to Taiwan.

“China has claimed sovereignty over Taiwan since 1949, when Mao Zedong’s Communists won the Chinese civil war and Chiang Kai-shek’s KMT fled to the island. Beijing has vowed to bring Taiwan under its rule, by force if necessary.”

If one doubts China’s intentions, one needs look no further than its large military force. While some analysts worry that China is building up its force to confront the West, there is little doubt that its force could be used to seize Taiwan. There is also no doubt that China would rather reunite with Taiwan peacefully. The current meetings mean that Chinese leaders also see economics as way to achieve political ends.

“‘Symbolically, the meeting is important because it conveys a message from the Chinese government and leadership that they are supporting this process to enhance interaction,’ said Andrew Yang, secretary-general of the Taiwan think tank, China Council of Advanced Policy Studies. ‘It’s also conducive to (President) Ma’s commitment to keeping peace,’ he said.”

Jennings reported that Chen headed a 60-person delegation that is taking part in the meetings.

“During the week, he and Taiwan counterpart P.K. Chiang will negotiate shortening routes for direct flights, which started in July following landmark two-way talks in Beijing after a decades-long ban due to security concerns. They also aim to add six new Chinese airports to the destination list and allow daily direct flights, up from four days a week now. Another deal on the table could open direct sea cargo routes between four Taiwan ports and 10 China ports, sparing costly detours required now over sovereignty concerns. Additionally, the two sides will discuss direct air cargo flights, expanded direct postal links and a framework to handle food safety issues in light of China’s contaminated milk powder scandal that has prompted product recalls around the world. Chen, [has indicated that] he would talk to his Taiwan counterparts about cooperation to handle the global financial crisis. After the deals are signed, Chen is due to meet Taiwan’s president in his official capacity even though Beijing does not recognize Taiwan leadership titles that imply sovereignty. Ma has said he wants the two sides — the People’s Republic of China and the Republic of China, which is Taiwan’s official name — not to deny each other’s existence.”

Jennings’ article noted that protests were planned by Taiwanese groups that fear Ma will sign political deals that could compromise Taiwan’s sovereignty. Some hardcore Taiwanese still seek international recognition of the island’s sovereignty and rue the “One China” policy promoted by most countries including the United States. Despite the protests, William Foreman reported that the deals were signed [“Taiwan, China make economic history with new pact,” Washington Post, 4 November 2008]. He wrote:

“China and Taiwan made economic history Tuesday with a bold agreement that allows planes and ships to travel directly across the Taiwan Strait — the place where many have feared they would fight their next battle. Still the Asian rivals appear far from resolving the root causes of nearly six decades of hostilities and distrust. The pact was possible because negotiators set aside thorny political disputes and only focused on trade and economics. The new deal allows passenger flights directly across the 100-mile-wide Taiwan Strait that separates Taiwan from mainland China. In the past, planes had to fly into Hong Kong airspace while traveling between the two sides. Cargo ships, which used to have to stop at the Japanese island of Okinawa northeast of Taiwan, will be allowed to sail directly to the other side and cut hundreds of miles out of each trip. The deal is significant for businesses and drew applause from three chambers of commerce representing Japan, the U.S. and Europe. The groups said in a joint statement the restrictions on flights and shipping have kept Taiwan from fully participating in the global and Asian economies.”

The fact that Taiwan and China could “set aside thorny political disputes” to focus on economic issues strengthens the argument that economic change drives political change. Both China and Taiwan will benefit from closer and more liberal economic ties. This is a lesson that president-elect Barack Obama should take to heart. He campaigned on a platform that promised a less confrontational America and, according to most post-election reports, the world believes him [see “Obama victory sparks cheers around the globe,” by Joseph Coleman, Washington Post, 5 November 2008, and “For Many Abroad, an Ideal Renewed,” by Ethan Bronner, New York Times, 5 November 2008]. At the same time, the populist rhetoric he used during his campaign with its “America First” tone concerns trading partners abroad [“Asians uneasy over Obama trade stance,” by Joe McDonald, Washington Post, 5 November 2008]. The fear is that if Obama’s rhetoric turns into protectionist policies it could plunge the world into a depression. The honeymoon, however, hasn’t even started so we don’t know what the marriage is going to be like. Most analysts believe that Obama will seek out the best economic counsel he can find and that as a result he will recognize that America can’t thrive if the global trade systems suffers. It was bad economic conditions that swept Obama into office but it will take good economic conditions to usher in a more democratic era around the globe.

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