The writer has served as federal minister for finance, revenue and economic affairs.
The collapse of communism in Europe, leading to the former Warsaw Pact countries progressing rapidly after adopting market economies, the unprecedented growth in China since the 1990s, and the focus on growth, development and trade in most developing countries has led to a kind of global wealth creation the world has never known.
But the notion that history has ended, in the sense that the liberal democratic model coupled with a market-based economy has won the battle of ideas, as popularised by Francis Fukuyama in the 1990s, is hardly incontestable. Fukuyama’s prediction that wars amongst nation-states would end has also not panned out. Not only that half or more of the world population doesn’t live under a liberal democracy but that even where liberal democracies exist, they are in a flux. Moreover many questions are being raised about the desirability of the market-based economic model.
While the last three decades saw improvements in the lives and livelihoods of people around the world, and national incomes rose appreciably, income distribution was often top-loaded. Greater international trade led to the wages of workers rising in the developing countries, but it also resulted in wages of unskilled people declining in developed nations. This fuelled discontentment in the developed world.
Moreover, in the developing world a new class of elites emerged that disproportionately benefited from this development and growth. There is no doubt that workers in the developing world did earn more in the last few decades, but they didn’t do well relative to the rich. The angst however targeted not capital but the weak in society: ethnic or religious minorities.
Often this social discontentment saw many decidedly non-liberal notions gain momentum. While crass racism and (in non-Islamic countries) blatant misogyny were not politically correct anymore, nationalism and xenophobia (particularly Islamophobia) got a new life. We saw all manner of populists, nationalists, authoritarian and even fascist political leaders emerge around the world, many with an overly simplistic, us-versus-them, view of the world.
The governance record of these leaders hasn’t been impressive for their countries. Leaders with little appreciation for nuance and understanding of governance were particularly destined to fail. But then these populists and nationalists only focused on groups whose support brought them to power. The larger electorate or national welfare was never their concern.
I have written in this newspaper about the Dunning-Kruger effect, which postulates how people who are not knowledgeable about a subject believe that solving problems existing in that subject are easy. Many populist leaders fit this description.
In the United States, Donald Trump saw all of America’s problems emanating either from foreigners entering the US or from “bad deals” on security and trade she signed with allies. In his mind, a country running a trade surplus was necessarily taking advantage of the US. Similarly, immigrants who came to the US indulged in crime and “stole” jobs. The considerable evidence to the contrary was not really relevant.
In India too the nationalist Narendra Modi had one all-encompassing idea: Muslims were everything that was wrong with India. His antipathy for Muslims was evident since the massacre of thousands of Muslims in Gujarat in the 2002 but this anti-Muslim stance was not a winning coalition by itself. Unlike the inexperienced Trump or Imran Khan, Modi had a record of delivery in his stint as chief minister of Gujarat. Therefore he was able to complement his nationalism with a pro-growth agenda that was supported by the Indian business lobby.
Even though he has maintained India on a growth trajectory, his signature economic policy has been the demonetising of some currency notes in 2016 that led to a reduction in economic growth. But his big passion has always been to delegitimize Muslims. Thus not only has he oppressed and brutalised Kashmiris but also marginalised Muslims all over India. This may be a good ploy to win approval from his Hindutva base but the long-term effect of alienating such a large minority cannot be good.
At home of course we have Khan, the populist who over the last few years has claimed that Pakistan had one central problem – corruption – and the only antidote to this was to give him power. As proof of corruption he offered examples of our high budget deficits, our high debt, rising utility prices, and especially the metro bus routes built by the PML-N. He claimed that if deficits, debt and prices were rising that was proof enough of the prime minister being corrupt. Moreover the entire PTI as a chorus said that there was corruption in the metro bus projects: the “incontrovertible” proof offered was the high cost of the projects themselves.
A section of the population believed in his rhetoric and two years ago Khan was installed as our prime minister. In these two years, the PTI has run our economy to the ground and after examining all the PML-N projects, isn’t able to make a single specific corruption allegation. Moreover deficit, debt, inflation are all much worse under the PTI and even its unfinished solitary metro bus project has cost more than any three of the PML-N’s projects combined. If the PML-N were corrupt, then going by Khan’s logic, the PTI has to be uber-corrupt. But as is typical of populists, none of this has chastened the leader.
Whereas Trump had the fast-growing economy and the breaking of international treaties to show to his base – and seemed on a path to re-election – and Modi had India’s growing international importance and repression of Muslims to please his base, Khan had nothing to show to his base except jailing his opponents (without even instituting legal cases against them).
However the advent of coronavirus has exposed these populists, nationalist and authoritarian leaders and their empty rhetoric. The virus has in particular shone a light on the utter confusion and chaos in policy that is typical of populists. The United States, the most innovative and scientifically advanced country in the world, has had the highest incidence of infection and death toll of any country on earth. Brazil, ruled by the authoritarian Jair Bolsonaro, now has the fastest growing cases. Pakistan on June 3 had the second-fastest rising cases in the world and yet ranked at 142 for the number of tests per capita, behind Senegal, Benin, India, Nepal and Sri Lanka.
An interesting thing is how some of these populist leaders are speaking against their own policies. So Trump urged his supporters to “liberate” states from lockdown, Bolsonaro asked his citizens to defy his own government’s social distancing guidelines and Khan railed against lockdowns even as his own government imposed and extended them. Modi wanted investigations to see if water from the Ganges could cure covid. And finally in what can be only described as an epiphany, Khan is now encouraging tourism in Pakistan. This when international flights aren’t allowed to bring in passengers and domestic flights are running at about half capacity.
The coronavirus pandemic has infected millions, killed over 400,000 people, and inflicted damage worth trillions, but it has also exposed the limitations of authoritarian, nationalist and populist politicians. Perhaps it will also restore the model of competent democratic leadership.
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