Democratisation of the Mauritian Economy

I just had last night the enjoyable moments of watching AMY CHUA’s interview in ‘Conversation with History’. That interview followed the publishing of her book ‘World on Fire’.

The essential message of the book is: How exporting Free Market Democracy Breeds Ethic Hatred and Global Instability.

In Mauritius, it is a fact that the economy is controlled by the 7 odd families of the same ethnic group. The present government has initiated a democratisation of the economy programme. Implementers of the program could well learn from the book and be warned of the possible dangers, -social unrest, and resentment from the majority,- whilst the 7 odd families be also be warned of the dangers and the need  to dilute faster their ‘ sweet wine’  by allowing opportunities to the majority to flourish faster, in the light of what has happened elsewhere.

The book review of the book issued by the British Guardian discusses the content of the book but the interview named above supplement largely AMY CHUA points of view on the subject.

World on Fire
by Amy Chua
346pp, Heinemann, £12.99

There is a plethora of books about globalisation, many saying roughly the same thing. This one is different. It is rare, indeed, to read a book about globalisation where ethnicity is at the core of the argument. That must have something to do with the fact that the great majority of authors of such books are white and from the west. The author of this book is a Chinese-Filipina. That is also surprising because, alas, there is little Chinese writing on ethnicity either. But this book is a gem. It is not that everything Amy Chua argues is correct – it is not – but her theme is different, rich and compelling.

Her starting point is that in many developing countries a small – often very small – ethnic minority enjoys hugely disproportionate economic power. As she points out, this is not true in the west: on the contrary, we are accustomed to small ethnic minorities occupying exactly the opposite situation, a very disadvantaged economic position. The classic case is southeast Asia, where the Chinese, usually a tiny proportion of the population, enjoy an overwhelmingly dominant economic position. In the Philippines, the Chinese account for 1% of the population and well over half the wealth. The same is true in varying degrees in Indonesia, Burma, Thailand, Laos, Malaysia and Vietnam.

As Chua argues, rich and powerful minorities attract resentment everywhere: but when those minorities are ethnically different – and highly visible – then that resentment can carry a dangerous charge. “In the Philippines, millions of Filipinos work for Chinese: almost no Chinese work for Filipinos. The Chinese dominate industry and commerce at every level … all of the Philippines’ billionaires are of Chinese descent. By contrast, all menial jobs … are filled by Filipinos.” There is very little social intermixing and virtually no intermarriage. And the disparities, Chua argues, have grown more acute with globalisation and western-inspired market reforms.

Southeast Asia is an acute but by no means isolated example. Throughout Latin America, a small white elite has traditionally enjoyed both economic and political power, as well as cultural and racial pre-eminence. However, while in east Asia anti-Chinese sentiment has long been a powerful political force, in Latin America, at least until recently, there has been little ethnic – as opposed to class – resentment against the white elite. The dominance of a small white elite has long existed in southern Africa. Although the black majority now enjoys – as do their counterparts in countries such as Indonesia and Malaysia – political power in South Africa, economic power remains firmly in the hands of a tiny white elite. In east Africa, that economic elite is largely Indian; in west Africa, it is often, though in a less extreme form, the Ibos. The picture that emerges is that in much (though not all) of the developing world, economic power is largely concentrated in the hands of – to use Chua’s phrase – a “market-dominant” ethnic minority.

She argues that this disparity between the economic power of a small ethnic minority and the disadvantaged position of the majority ethnic group is a source of great political instability. Ethnicity, as we know, is potentially a highly combustible issue. “That ethnicity can be at once an artifact of human imagination and rooted in the dark recesses of history – fluid and manipulable yet important enough to kill for [Chua’s aunt, who came from an extremely rich Chinese family in Manila, was murdered by her Filipino chauffeur with the complicity of her Filipina maids] – is what makes ethnic conflict so terrifyingly difficult to understand and contain.” As Chua rightly argues, the mass killing of Tutsis by the Hutus in Rwanda in 1994 and the grievance felt by the Serbs towards the Croats in the Balkans were partly related to the economic advantage enjoyed by the Tutsis and Croats respectively, and the deep rifts that this engendered.

One of the difficulties faced by many developing countries is ethnic diversity of a scale utterly unfamiliar in the west, even the United States. Africa is the most extreme example. The major exceptions to this are China, Japan, South Korea and Taiwan, all relatively homogeneous, ethnically speaking, and very successful economically. Chua argues that globalisation has exacerbated the ethnic disparities in wealth in many countries, with the “market-dominant” ethnic minorities, for a variety of reasons, enjoying disproportionate rewards, thereby fostering growing instability. This is liable – as happened in Indonesia with the fall of Suharto and the anti-Chinese riots – to boil over at any time.

Further, she suggests that the western mantra of free markets plus democracy is ill-conceived and a recipe for disaster in such circumstances. Here the author, in challenging such a verity, not to say cliché, of modern western discourse is on powerful, if heretical, ground. The western assumption is that democracy engenders a more liberal and tolerant society, but where that society is marked by a profound ethnic cleavage, the reverse may be true. There is no doubt that the anti-Chinese riots in Indonesia reflected the sentiments of the majority; similarly, in Zimbabwe, Robert Mugabe’s desire to appropriate white farms was not least a populist appeal to the overwhelmingly black electorate. For Chua, free markets exacerbate ethnic divisions and, furthermore, democracy can act as the vehicle for a huge ethnic backlash by the majority. She believes that the idea that the two somehow form some kind of virtuous circle is wrong. Historically, this was never the case in the west: the rise of capitalism and the market long predated the achievement of democracy. And when democracy was achieved, the market was rapidly attenuated by redistribution and the welfare state, the antithesis of the kind of market policies preached and applied to the developing world by the Washington consensus.

One of the refreshing aspects of this book is not just the centrality of ethnicity, but the honesty with which Chua treats the issue. She doesn’t shy away from talking about ethnic divisions or racial prejudice. She is also thoroughly realistic about their tenacity and endurance. The roots often reach back centuries, as in the case of the Chinese in southeast Asia.

In the latter part of the book, Chua widens the geographical reach of her argument beyond the nation-state and suggests that the Middle East conflict should, in certain respects, be seen as a regional conflict between a “market-dominant” ethnic minority, the Israeli Jews, and the overwhelmingly larger Arab majority, far poorer and getting relatively poorer all the time. Finally, she considers the position of the United States in the post-cold-war world and argues that its global position is akin to that of a market-dominant ethnic minority (overwhelmingly white and perceived by others as such), which helps to explain the tidal wave of resentment against the US since September 11 and the sympathy for that event among many in the developing world.

In the western world, we are still largely in denial about the importance and potency of ethnicity. That is basically because the western world stands in such a privileged position towards the rest of the world, a situation that is intimately linked to colour: whites rarely, with the obvious exception of Jews, experience systemic prejudice. Rather they mete it out and enjoy the benefits of racial advantage. It is a pleasure to read a book that presents ethnicity as a fundamental organising principle of the era of globalisation.

· Martin Jacques is a visiting fellow at the London School of Economics Asian Research Centre.