Amy Chua: World on Fire

[Yoshie Furuhashi <furuhashi.1@xxxxxxx>]

*****   "World On Fire" by Amy Chua

A new book argues that when Third World countries embrace democracy
and free markets too quickly, ethnic hatred and even genocide can
result.
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By Michelle Goldberg

Jan. 13, 2003  |  The case Amy Chua makes in "World On Fire: How
Exporting Free Market Democracy Breeds Ethnic Hatred and Global
Instability" is so clear and persuasive it almost seems as if it had
been obvious all along. Yet her argument, that rapid switches to
majoritarian rule and free-market democracy in many Third World
countries benefit certain ethnic groups over others and lead to
vicious sectarian strife, is quite new, if occasionally overstated. .
. .

"World On Fire" is about a phenomenon Chua calls "market-dominant
minorities," groups like the Chinese in Southeast Asia, Jews in
Russia, whites in Zimbabwe and Indians in East Africa and Fiji.
Market-dominant minorities control hugely disproportionate
percentages of their countries' resources. Filipino Chinese comprise
just 1 to 2 percent of the Philippines' population, but control all
of the country's major supermarkets, fast-food restaurants and large
department stores, and all but one of the nation's banks. A similar
situation obtains in Indonesia. Jews make up a similarly tiny
proportion of Russia's population, but of the seven "oligarchs" who
control virtually all of the country's business, six are Jewish.
Lebanese dominate the economies in Sierra Leone and Gambia, while
Indians dominate the economy in Kenya, along with a smaller,
indigenous minority tribe called the Kikuyu. Similar examples abound
worldwide.

It's enormously touchy to talk about the economic element of communal
violence, especially regarding Jews, since rhetoric about one ethnic
group exploiting another is so often a precursor to atrocity. But
that's exactly why Chua's book feels so urgent. No matter how
politically incorrect it is to talk about, her book makes clear that
minority market domination is a reality in much of the world, one
that's tied up in many ways with smoldering group hatreds and
explosions of mass slaughter, and one that's made worse by Western
policies.

Chua, a professor at Yale Law School, is a careful, precise writer,
and she makes it very clear that she's not blaming prosperous ethnic
groups for violence directed against them, or blaming capitalism
alone for fomenting genocide. It's a point she makes over and over
again. (Her lawyerly penchant for summing up and reiterating her main
arguments far too many times is the book's greatest flaw.)

"The point, rather, is this," she writes. "In the numerous countries
around the world that have pervasive poverty and a market-dominant
minority, democracy and markets -- at least in the form in which they
are currently being promoted -- can proceed only in deep tension with
each other. In such conditions, the combined pursuit of free markets
and democratization has repeatedly catalyzed ethnic conflict in
highly predictable ways. This has been the sobering lesson of
globalization in the last twenty years."

Nevertheless, "World On Fire" is not an anti-globalization screed.
Chua is a former Wall Street lawyer who worked to help developing
countries privatize their resources, and she continues to believe
that, in the long term, markets offer the best hope for developing
countries. Her scathing assessment of the way the West has foisted
liberalization on the rest of the world is driven not by ideology,
but by a careful examination of globalization's unintended
consequences.

"Back in the early nineties," she writes, "I believed that the
proceeds of privatization, as a World Bank official put it, would go
to roads, 'potable water, sewerage, hospitals, and education to the
poor.' Like many in the 1990s, however, I was viewing emerging market
privatization through a rose-colored lens." Later, she adds, "Even
assuming that free market democracy is the optimal end point for most
non-Western countries, in the short run markets and democracy are
themselves part of the problem."

Explaining why market-dominant minorities exist would probably
require another volume, and Chua makes only a cursory attempt to do
so. In some cases, of course, it's obvious -- the white minority in
South Africa and Zimbabwe accumulated capital and expertise at the
expense of the grotesquely exploited majority, who cannot now catch
up without massive government help. Elsewhere group prosperity is
attributable to superior business networks. Cameroon's Bamileke, for
example, "operate an informal capital market so efficient it
constantly threatens to put government-owned banks out of business,"
Chua writes. The reasons for Jewish economic success are more
mysterious -- especially in Russia, where they've been repeatedly
subjected to vicious pogroms -- and "World On Fire" does little to
illuminate them. Chua is less interested in how minority groups come
to dominate than what happens when they do.

She argues that when economic liberalization and democracy are
rapidly introduced to countries with market-dominant minorities, the
two forces necessarily come into conflict. "Markets concentrate
enormous wealth in the hands of an 'outsider' minority, fomenting
ethnic envy and hatred among often chronically poor majorities," she
writes. "Introducing democracy in these circumstances does not
transform voters into open-minded cocitizens in a national community.
Rather, the competition for votes fosters the emergence of demagogues
who scapegoat the resented minority and foment active
ethnonationalist movements demanding that the country's wealth and
identity be reclaimed by the 'true owners of the nation.'"

In Indonesia, for example, free-market policies undertaken under Gen.
Suharto, the U.S.-backed dictator, vastly enriched the country's tiny
Chinese minority, who in turn supported the strongman. By 1998, Chua
writes, Chinese made up 3 percent of the population but controlled 70
percent of the private economy. That was the year democracy protests
and riots forced Suharto to resign. His fall was accompanied by
orgies of anti-Chinese violence -- Chinese women began wearing
"anti-rape corsets," locked steel chastity belts. "[T]he prevailing
view among the pribumi majority was that it was 'worthwhile to lose
10 years of growth to get rid of the Chinese problem once and for
all,'" she writes. "Meanwhile, the U.S. State Department called
resoundingly for free markets and democratic elections."

Many other countries share elements of this dynamic, though Chua
sometimes seems to be stretching her thesis in order to fit in as
many places as possible. She's overreaching somewhat when she says,
early on, "markets and democracy were among the causes of both the
Rwandan and Yugoslavian genocides." Clearly democracy was a factor in
both, but the economic factors are much trickier. The gap in status
between minority Tutsis and majority Hutus is indeed attributable to
globalization, but of the old-fashioned, colonial kind -- Belgian
colonizers favored minority Tutsis over majority Hutus because of
what was seen as their Caucasian-like features. And while Serbian
hatred of the Croats was fanned by Croatian economic dominance, the
Bosnians they butchered were as poor as they were. Chua makes these
caveats herself in the relevant chapters, but they dilute some of the
grand claims she lays out in her introduction.

Still, her larger point, that the policies seen as panaceas by the
West can actually make things worse, holds true. Electoral democracy
is often touted as an antidote to the tyranny and tribalism ravaging
much of the globe. "For globalization's enthusiasts, the cure for
group hatred and ethnic violence around the world is straightforward:
more markets and more democracy," Chua writes. She notes that after
Sept. 11, Thomas Friedman wrote of the Middle East, "Hello? Hello?
There's a message here. It's democracy, stupid! Multi-ethnic,
pluralistic, free-market democracy."

This one-size-fits-all prescription for curing the world's ills is
implicated in the Rwandan genocide of 1994. As Chua writes, Hutu
dictator Juvénal Habyarimana, who ruled from 1973 until the early
1990s, may have been corrupt and totalitarian, but he did protect the
Tutsi population. Once he responded to Western -- particularly French
-- calls to adopt multiparty democracy, though, Hutu supremacy became
a potent weapon for Habyarimana's political enemies. The genocidal
Hutu Power movement was buoyed on a groundswell of popular support.
Meanwhile, Chua points out, the "freedom of the press" encouraged by
the West stopped the government from shutting down the hugely
influential, rabidly anti-Tutsi newspaper Kangura.

"Sudden political liberalization in the 1990s unleashed
long-suppressed ethnic resentments, directly spawning Hutu Power as a
potent political force," Chua writes.

The idea that democracy, America's most cherished value, has
exacerbated the last century's bloodletting is terrible to
contemplate. Yet Chua's book ultimately supplies a tiny measure of
hope. Unlike Kaplan, Chua doesn't believe that enlightened autocracy
is the answer for the developing world. For her, the problem isn't
democracy itself but the speed at which it's implemented. Rushing it,
especially without protections for individual rights or institutions
for upholding the law, can be dangerous.

[Robert] Kaplan believes that the right kind of despots can sustain a
stable environment for capitalism to flourish, creating the
middle-class institutions necessary to sustain democracy. One of his
models is prosperous, undemocratic Singapore. Chua's analysis,
though, shows us that no amount of economic growth will turn
countries that have market-dominant minorities, like Indonesia, into
countries like Singapore, that don't. Prosperity and stability won't
come to those countries until they find a way to narrow the chasm
between rich minorities and poor majorities.

To that end, Chua argues for sweeping reforms that would give
disenfranchised populations a stake in their nation's resources, as
well as massive affirmative-action policies of the kind being
undertaken in South Africa and, with notable success, in Malaysia.
Such a policy is a huge departure from the free-market evangelism of
people like Thomas Friedman, but one more likely to lead to
prosperous societies that can, eventually, turn into real democracies.

Of course, it's not terribly likely that her recommendations are
going to be implemented in most places anytime soon. . . .

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About the writer
Michelle Goldberg is a staff writer for Salon based in New York.

<http://www.salon.com/books/review/2003/01/13/democracy/print.html>   *****

Amy L. Chua: <http://www.law.yale.edu/outside/html/faculty/alc53/profile.htm>

Cf. <http://www.randomhouse.com/author/results.pperl?authorid=4934> &
<http://www.writersreps.com/live/catalog/authors/chuaa.html>
--
Yoshie

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