Title and Link: Is China the new idol for emerging economies? (June 2013, Scotland)
Presenter: Dambisa Moyo is a world-famous economist who studied at Harvard and Oxford and worked at the prestigious Goldman Sachs and the infamous World Bank. She has written 3 New York Times bestsellers, including Dead Aid: Why Aid is Not Working and How There is a Better Way for Africa. She is the CEO and founder of the Mildstorm Group, a firm which analyzes global macroeconomics and world financial markets. She has travelled to over 60 countries and is an expert on topics including developed, emerging (BRICs), and the frontier economies in Asia, South America, Africa and the Middle East.
Key Points – This talk is basically about economic development. Moyo discusses how the western countries are very concerned with democracy and capitalism above all else. However, she warns that it is important to develop economically before sustainable democracy is attainable. Dambisa Moyo uses China as a prime example of a country who has not used American means to grow into the huge economy it is today. She thinks that emerging countries may be better off following China’s lead if what they’re looking for is to improve livelihoods for the poorest quickly.
- “Give me liberty, or give me death” – Patrick Henry (Governor of Virginia) in 1775
- Embodies what many westerners believe – freedom in economics and politics is the best thing in the world, and the number 1 thing to strive for
- Has helped the United States to prosper economically, with incomes rates 30x what they were 50 years ago (helped to move hundreds of thousands out of poverty)
- Industrialization is exploding along with technology
- “The question before us [is not] whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched.” – Barack Obama (2009)
- Presumption the private capitalism, liberal democracy and prioritized political rights are the cornerstone of any successful society.
- The Universal Declaration of Human Rights was unanimously adopted and came into place in 1948 – however, in many cases, these aren’t being met
- There is a growing gap in ideological beliefs between developed and developing countries… between political and economic rights.
- 90% of world lives in emerging markets (and believe that the most important things are food, shelter, healthcare and education)
- When living on less than $1/day, these basic necessities are more important than democracy (what would you do if you had to choose?)
- There is a divide between what people believe in the west and what people believe in the rest of the world (worry more about living standards)
- China has gone the opposite way and prioritized state capitalism, de-emphasized democracy and prioritized economic rights
- This system seems like the best and fastest way to increase living standards quickly
- China has recorded huge growth over the last 30 years and moved much of its population out of poverty (over 300 million people)
- Secondary school access in China has jumped from 28% (in 1970) to 82% (in 2012)
- China was able to meaningfully improve its income inequality (equal GINI Coefficient as USA currently – but USA is decreasing while China is still increasing)
- China has had an amazing infrastructure roll-out (bridges, railways, roads, ports, etc. that is even surpassing the USA)
- Also created a road in Africa from Cape Town to Cairo
- Africans in 10 countries were surveyed and believe China is doing a lot to improve their countries
- Providing innovative solutions to age-old problems (such as delivering medical care in rural areas)
- Most people believe that democracy is no longer a prerequisite for economic growth (Chile, Singapore and Taiwan are good examples) – but these countries have done it in reverse
- Income is greatest determination of how long democracy can last
- First establish a middle-class that can hold the government accountable
- Worried about promoting democracy everywhere (this might be worse than what is being replaced)
- 70% of democratic countries are still illiberal (people don’t have freedom of speech or movement) – Freedomhouse (freedom is also on the decline)
- The West can either compete or cooperate
- Competition (might cause a wider gap between the west and the rest)
- Cooperation means giving emerging countries flexibility (what works best for each country?)
- The west should expand its emphasis on trade and investment in emerging markets
- West should lead by example if they want to show how great democracy is
- It took the US 167 years before equal rights for all citizens (so why are we rushing everyone else?)
- How can we create prosperity?
- This is the most important question…
- We should be more open-minded (look at our assumptions)
- Let’s make the world a better place….
Final Thoughts – Although I don’t agree with all of Dambisa Moyo’s point in her book Dead Aid, I do find this TedTalk very convincing. Political and economic freedom are both crucial aspects of any good society. However, her point about increasing the income of people first to create a middle-class makes a lot of sense. If people are barely scarping by it seems unlikely they have the time or education to fully participate in a democracy as we know it in the west. It seems that lifting people above the poverty line is the first step to take because it is so important and time sensitive. A democracy can be established 10 years from now, but if you don’t have enough to eat this week you may be negatively affected for life (or even die). I think it’s important that we, as westerners, try to understand this in the future, and look to other countries for inspiration and guidance when working in emerging countries.