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Social Development

A Calm Look At ‘Growing Pains’ of Emerging Countries

Aug 13 , 2013

Several emerging countries experienced social unrest in recent months, with persistent troubles in Turkey and Brazil causing particular concern. The disturbances are not only giving those countries a lot of pain but also casting a shadow of gloom over the future of all the emerging nations that emerged in the wake of the financial crisis that threw the west into recession. It is necessary to identify the cause of the social unrest and to make an accurate assessment of its effect in order to prescribe the right medication that will bring about speedy recovery and boost the healthy development of emerging countries.

The first to report complications was Turkey, hailed as the “democratic model” for the Middle East, which saw a mass rally in downtown Istanbul in late May quickly escalate into protracted anti-government protests punctuated by violent clashes between the police and civilians, dealing a heavy blow to the ruling party as well as Prime Minister Recep Tayyip Erdogan, who boasts a long and rather remarkable track record as head of government up to that point. The next to suffer similar problems was Brazil, where large-scale protests took place throughout the nation in mid-June. They were followed by a general strike more recently. It is interesting to note that the spark that ignited nationwide protests was the government’s decision to increase bus fares and over-spending on World Cup preparations. People also demanded anti-corruption measures, healthcare improvement and better education facilities; while President Dilma Rousseff’s approval rate took a nosedive.

The primary causes of these emerging nations’ “growing pains” have to be internal, meaning that things have gone wrong inside. The social unrest in Turkey and Brazil were caused by developmental imbalance and a failure to correct it, which led to political and social crises. Developmental imbalance refers to economic growth without matching social development, resulting in a widening wealth gap and class conflict born of an unfair distribution of resources, a serious shortage of public products, the undelivered promise of livelihood and social security improvement and the governments’ arrogance, slow response and overreaction to public discontent, all of which exacerbated misgivings between the governments, ruling parties and their respective subjects. As the situation went downhill the governments have been a step or two behind all the way and have almost lost control completely.

Another common problem with these emerging countries is their single product economies and delayed reform dragging economic growth down while pushing consumer prices up, resulting in the economy teetering on the verge of “stagnation”. The situation was further destabilized by the sizzling discontent of young people amid rising unemployment. Brazil is a perfect example of this dangerous condition and it is not alone. Three of the other four of the five major emerging economies popularly known as BRICS (Brazil, Russia, India, China and South Africa) are also experiencing a significant economic slowdown, with China seeing a moderate one.

In the era of globalization, emerging economies are inevitably affected by the fits and starts of dominant western economies, particularly the latter’s self-indulging monetary policy of “quantitative easing”, which has left emerging economies in a miserable lurch. It must be noted that the United States has been the arch culprit, by transferring its own crisis to the rest of the world through wanton abuse of its dollar hegemony. The Federal Reserve Board (Fed) has kept interest rates super low and launched three rounds of “quantitative easing”, flooding global markets with cheap green backs. Now, it is making the world nervous by repeatedly hinting that it will soon “quit the QE game”. By first easing and then tightening the US has made emerging economies unable to ease or tighten: easing will draw imported inflation; while quitting will drive foreign investors away and send financial markets into shock.

Meanwhile, the strategic outlook of the international situation shows that external factors are just as guilty of giving emerging economies as much pain as they are getting from their internal problems. “A tempest begins as a breeze.” Every time an emerging country is “under the weather”, western powers’ meddling is more likely responsible than not. International relations in the “post-financial crisis era” is characterized by strategic brain games and competition between western developed countries and non-western emerging nations. From this angle one can see clearly the nature of the problems. In order to end the crisis and stay in control of the international system, western powers have adopted a three-pronged strategy to transfer their crises to emerging countries: one is the economic approach, by abusing the quantitative easing monetary policy at the expense of international financial stability; then there is the political trap, in the shape of western-style “democracy” and “freedom”, luring emerging nations into crippling internal chaos fanned by non-government organizations, the Internet and foreign media hype; the third is the diplomatic club and carrot, pushing for “re-bonding” of western powers on the one hand and playing down as well as breaking up emerging countries’ cooperation on the other.

As for the prospect and effect of emerging nations’ “growing pains”, we need to make an accurate assessment first. It should be noted that the simultaneous rise of emerging countries cannot be smooth sailing all the way; and one or more may go astray or even “sink.” On the other hand, the “growing pains” of emerging countries happen in phases but can be overcome with the right approach and perseverance. They are not incurable and should not be exaggerated. The problems are generally controllable. They are called “growing pains” because they are bound to happen during development and progress, but are unlikely to reverse and cut short emerging nations’ rise and advance. It is very important to see emerging countries in perspective and never underestimate or overestimate their problems.

As the largest emerging nation, China must learn from other emerging countries’ “mistakes” and make sure not to repeat them by curing the causes as well as the symptoms and doing everything necessary to ensure its own lasting political stability and social harmony; while playing the role of the “bellwether” and pushing for the unity, mutual assistance and joint rise of emerging nations. China should step up efforts to promote “broad cooperation” of emerging countries, including strengthening China-Russia strategic cooperation, steadily expanding the coverage of BRICS around China-Russia strategic cooperation and perfecting its structure; enhancing the exchange of experience in nation building and governance, synchronizing but not necessarily unifying mode of development, helping one another forward, focusing on advancing energy and financial cooperation, joining hands in containing the US’ financial hegemony, and neutralizing effect of western powers’ “re-bonding”.

The author is deputy director of the Institute of World Politics under the Academy of Contemporary International Relations.

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