Charles Landow reviews growth and democracy around the world and news from Taiwan, Nigeria, and Indonesia in this installment of Missing Pieces. Let us know your thoughts.
- Gloomy Global Growth: The World Bank last week released a grim update of its Global Economic Prospects. The report projects that developing countries will grow by 5.4 percent in 2012 and 6.0 percent in 2013, down from 6.2 and 6.3 percent in the previous projections last June. Although countries such as China, India, Nigeria, and Bangladesh remain set for solid growth, the Bank warns that developing countries are increasingly vulnerable to a potential crisis stemming mainly from the Eurozone’s disarray. Capital flows to developing countries have plunged, exports from them have slowed, and many governments’ deficits are rising. Among the potential casualties is Egypt, whose growth is projected at only 3.8 percent this year and 0.7 percent in 2013.
- Taiwan’s Election: President Ma Ying-jeou won reelection in Taiwan last Saturday in what the Financial Times called an endorsement of his economic rapprochement with China. One element of this has been booming Chinese tourism to Taiwan. Beijing has encouraged the visits in order to “build a pro-China constituency on the island,” the Economist reports. But increased travel, along with the example of Taiwan’s vote, may be having a side effect: rising demands in China to emulate Taiwan’s democracy. The New York Times reports on the millions of Chinese who followed the campaign admiringly online.
- Nigeria’s Oil Subsidy: Nigeria produces over 2 million barrels of oil per day, but per capita GDP totals only about $1,500 and poverty remains acute. No surprise, then, that Nigerians stormed the streets after President Goodluck Jonathan lifted a fuel subsidy on New Year’s Day. Last Monday, in the face of widespread strikes and protests, Jonathan partially restored it. CFR’s John Campbell writes on ForeignAffairs.com, however, that Jonathan now “appears to be turning to repression” as he tries to squash the forces behind the protests. Meanwhile, sectarian violence simmers on, with attacks in the northern city of Kano killing more than 150 on Friday. “Taken together,” Campbell writes, “Jonathan is in danger of losing control of two volatile situations.”
- Democratic Decline: CFR’s Josh Kurlantzick wrote last week that despite high hopes sparked by the Arab upheavals, democracy around the world has continued to slide. What’s behind this “broad democratic recession?” First, Kurlantzick says, people in new democracies expect economic booms, but messy transitions often produce slow growth. The result is disillusionment with democracy. Second, many middle-class citizens are fed up with “elected autocrats,” who win power through votes but then gut democratic institutions. Kurlantzick urges the United States to repair its own political system in order to promote democracy more effectively abroad.
- Investment in Indonesia: Indonesia’s government announced last week that foreign investment reached some $19.3 billion in 2011, up 20 percent from 2010. Transportation, communications, and mining are among the leading sectors. According to the Jakarta Globe, the government expects a 25 percent jump this year. Propelling the optimism are two recent upgrades of Indonesia’s sovereign debt to investment grade, as Bloomberg Businessweek reports. Still, according to a Wall Street Journal piece, Jakarta needs to tackle corruption, boost infrastructure, and tackle political and economic reforms in order to continue its growth.