http://www.atimes.com/atimes/Global_Economy/IB17Dj01.html
Feb 17, 2007 Rich bad, poor bad By Chan Akya It is the golden rule of irony that champions of certain virtues are invariably found to be exceptions to their own dogma. Thus it is that the United States has squirmed through a sequence of sex scandals involving Bible-thumping Republicans, while finding that its supposedly democratic government all too often endorses undemocratic decisions. The high-and-mighty English, who make fun of the supposedly corrupt French at every opportunity, quietly ended a corruption investigation into a Saudi arms deal for their narrow self-interest. In much the same way, supposedly egalitarian religious government in Islamic countries all too often perpetuates inequalities, and embraces authoritarianism at every turn. Bangladesh is the latest tragedy to unfold in this regard, a shining example of how quickly a progressive democratic country can turn into an entity bordering on a failed state. At the heart of this failure, in Bangladesh and elsewhere, is the broader issue of how poorly the people from Islamic countries compare with those in the rest of the developing world. What explains the strange stagnation of Islamic countries in the socio-economic arena? Perusing various reports from multilateral agencies such as the International Monetary Fund and the World Bank, one is left in no doubt whatsoever that no country run on Islamic principles has achieved anything spectacular in the past few years. Rich countries The easiest among the rich Islamic societies to study is Saudi Arabia. One single statistic is most telling in detailing the failure of Saudi society to grow - despite being the largest producer of crude oil in the world, Saudi Arabia actually imports most of its fuel, eg diesel and refined products such as lubricants. [1] The failure of industry is in essence a failure of capitalism. In most countries where wealth is concentrated in the hands of a few - such as the "robber barons" period of US history in the early 20th century or today's Russia - a functioning financial system helped to intermediate risks. This is not possible in strict Islamic societies as the religion bans usury, thus disallowing the flow of capital to the people needing it the most, ie, young entrepreneurs. Faced with uneconomic returns at home, most Middle Eastern rulers deposit their money at higher rates with European banks. A second failure in Saudi society is the absence of appropriate education for restless youth. [2] Religious education, rather than grounding in modern sciences, remains the norm. Thus while the production of muezzins is guaranteed, hiring a petroleum engineer can be tricky. In turn, this causes an excessive reliance on "infidel" immigrants, which in turn creates a multi-tier society, focusing much of the anger of locals on the wrong targets - the people who take their jobs, rather than the ones in government and religious schools who actually caused the situation to emerge. Religious education also produces famously insular people. A US magazine's poll of Arab youth found that very few had heard of the Apollo moon landings, and indeed all of them dismissed such feats as US propaganda. The notion that human beings could land on the moon would appear far-fetched to anyone who holds the satellite as a celestial object rather than an astronomical oddity. The rule of irony with which I started this article holds true here - in the Dark Ages for Europe, it was Islamic societies that led the world in the adoption and spread of science and technology. While they cannot claim to have invented much, as credit goes to the Chinese and Indian civilizations, they certainly used inventions to their advantage well before the Europeans caught on. Poor countries It is in poor countries that Islamic government fails to the greatest extent. A cursory look at populations' inequality index (the Gini coefficient) shows that the world's second- and third-largest Islamic countries, Pakistan and Bangladesh, have worse indicators than most other developing countries. In such countries, capital is simply not available to begin with. Added to this is the issue of misallocation, which I wrote about in a previous article. [3] In commenting on the Nobel Prize for Grameen bank founder Muhammad Yunus, I wrote that much of the gains from the system of micro-credit can be wiped out by political shifts. Sadly, such a shift is now happening in Bangladesh, where the increased radicalization of the population has caused foreign donors to scoot. Additionally, tough Islamic laws that the radicals would like to impose will hit the people who benefit most from micro-credit, namely Bangladeshi women. This is where the blind import of Wahhabi principles hurts developing countries the most. A partial explanation for the misery caused to Afghan people by the Taliban can be found in their tough rules against women working or even being seen in public. While such ideas may well suit a resource-rich society like Saudi Arabia, it simply does not sit well in a resource-poor landscape like Afghanistan where every labor input must be employed. Among the countries that have been slipping in and out of authoritarian governments, only one currently offers me hope, albeit tenuous. That would be Pakistan, where Prime Minister Shaukat Aziz appears to have the right ideas for developing his country. These include importing successful Pakistani business people, rather than their capital alone. That idea owes much to China, where Deng Xiaoping observed that while overseas Chinese were a prosperous lot, China itself remained poor. These business people are changing the face of Pakistani industry, although they have a long way to go before the country can catch up with the momentum seized by China and India. Structural limitations, particularly in the area of education, rule of law and physical infrastructure, remain unsolved. Exceptions to the rule The most often cited examples of Islamic countries that have produced significant improvements in living standards are Malaysia, Indonesia and Turkey. That observation fails because all three are secular if not democratic countries. The rule of law, as understood in Western societies, has been a key factor in their success. The broader exception to the points raised above have been the successful Muslim entrepreneurs to emerge across European countries. As I observed in past posts on the performance of emigres in Europe, Muslims have done extremely well in Britain, Germany and France, although media attention all too often falls on the exceptions. Be that as it may, it does push through the point that it is not the people who fail but rather their system that fails them. Muslims in open, democratic societies do extremely well; those in closed, religiously controlled societies do not. It could well be that the future of the Islamic world lies with the progress of the British Bangladeshi, German Turk and French Algerian communities. As with any generalization, this one too is fraught with the potential for going wrong - namely, that continued adverse media focus actually forces a self-perpetuating crisis of youngsters turning to extremism. This is perhaps an area for European governments to focus on, seeing as it is not only their own futures but also that of the Islamic world that they have responsibility for overseeing. The title of this article is with due apologies to America's homily to capitalism, Rich Dad, Poor Dad by Robert T Kiyosaki. Notes 1. In-Sen!, Asia Times Online, September 16, 2006. 2. Love your children, those little terrors, ATol, November 4, 2006. 3. A capital alternative to terror, ATol, October 21, 2006. (Copyright 2007 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
