Protesters Show the BRICs May Not Be Ready for Prime Time

Protests from Brazil to Russia show that developing economies still have a long way to go.

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Demonstrators clash with police  on Wednesday, June 19, 2013, in the center of Niteroi near Rio de Janeiro. (Christophe Simon/AFP/Getty Images)
Demonstrators clash with police on Wednesday, June 19, 2013, in the center of Niteroi near Rio de Janeiro. (Christophe Simon/AFP/Getty Images)

For the past month, mass demonstrations, one million people strong, have spread across major cities in Brazil and shaken the center-left government of Dilma Rousseff, the chosen successor of former president Lula da Silva, one of the most popular figures in Brazilian history. The demonstrations started out against an increase in public transport fares, but then came to include anger over corruption in the Brazilian government, sweetheart deals in public contracting, poor public services and the arrogance of some of the country's leaders, public and private, who have ignored public demands for more accountability. The demonstrations were led by the rising middle and professional classes – 77 percent of protesters have a higher education – and student groups demanding good governance, rather than the poor demanding revolution or class warfare.

Brazil now joins two other so-called BRIC countries — India and Russia — that have witnessed mass middle-class and student demonstrations against government incompetence, corruption and mismanagement. India's mass demonstrations were directed initially against pervasive government corruption, followed more recently by police and court unwillingness to stop egregious incidents of violence against women.

In Russia, demonstrations have been directed against the "managed democracy" of Vladimir Putin, a system with the trappings of democracy that disguises a corrupt and abusive authoritarian state in which human rights leaders, independent investigative reporters, members of civil society and intellectuals are harassed by tax police, or worse, shot dead on the streets by thugs with no attempt by the police to find the perpetrators.

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A month ago, similar demonstrations broke out in Turkey when the government crushed protests over a plan to destroy a public park and build a shopping mall over it in the center of Istanbul. The demonstrations spread to other cities and have broadened to include anger over Prime Minister Recep Tayyip Erdogan's attempt to impose Islamist principles on what had been historically one of the most secular societies in the Muslim world.

While Turkey is not officially part of the BRIC countries, it very much fits their broad definition of a rapidly growing middle-income economy, large population, a rising entrepreneurial and middle class and a relatively competent government (particularly compared to fragile or failed states). Some writers created a new acronym, TIMP, which includes a different configuration of emerging market economies that includes Turkey, Indonesia, Mexico and the Philippines. Pop business analysis famously predicted these countries would be the economic wave of the 21st century.

All of these countries have aspirations to regional and even global leadership by virtue of their geographic size, rapidly growing economies and strong leadership. Wealthy advanced western democracies were warned to watch their rears or they would be overtaken by these economic powerhouses. The BRICs have challenged western democracies to change the international policy agenda on issues such as global warming, free trade and United Nations reform. Developed democracies had cultivated the BRICs (plus) for this very reason. President Bush, after the 2008 economic crisis, called for regular meetings between the G8 and the G20, which includes the BRICs and other rising powers.

But the demonstrations and the political instability in their aftermath suggests that the predicted inevitability of the rise of these countries may have been premature. For one thing, they are not a single block that acts in unison, particularly in the way their leaders reacted to the unrest. They are as different as they are similar.

Some used police repression to answer the public demands, while others promised reform. Some saw the demonstrations as a threat to their power and arrogantly dismissed them as criminals and subversives, while other leaders saw the demonstrations as a legitimate expression of public anger over real problems that needed remedy. The demonstrations, though, disguise other trends hidden beneath the surface that are signs of progress rather than retreat.

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Nobel Prize winning economist Douglass North (with Weingast and Wallis) published an influential book called "Violence and Social Orders" in 2010 which provides a framework for thinking through what is going on in the BRICs and TIMPs. The argument of the book is that the structure power, organization, and logic of advanced western democracies with free market economies are an aberration in human history, which he calls Open Access Orders. They are based on inclusive political systems based on strong institutions that are governed by predictable rules.

These systems provide public services to all based on objective eligibility requirements, enforce the rule of law equally through an independent court system and provide open access to anyone to create a civil society organization, start a new business or participate in the political system. These societies are uncommon and have only arisen in the past two centuries.

A more common model of political and social organization is not the Open Access Order, but the Natural Order (which North also calls Limited Access Orders), which characterized most of the rest of the countries in the world for the past several thousand years. In these countries, elite power brokers hold their societies together and control the human tendency towards widespread violence through patronage networks that reward the loyalty of their followers through government contracts, patronage jobs and permits to start businesses (this is called "corruption" in Open Access Orders). Coalitions of these power brokers form to organize societies, but when the ruling coalition breaks down, the societies often face societal collapse or revolution.

Open Access Orders operate very differently; they are more stable, even in times of crisis,  because of the density, legitimacy and resilience of their institutions. Their "logic," as North calls it, has led to massive wealth creation, large middle classes, stable democratic political systems that protect individual rights and limit arbitrary government action. Limited Access countries can grow into Open Access Orders by developing inclusive public and private institutions over a long and difficult process, by opening up their economies to competition, building stronger institutions and providing public services and the rule of law broadly across the society.

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None of the BRIC and TIMP countries have fully transformed themselves into Open Access Orders, but several are moving slowly and fitfully in that direction depending on the quality of their leaders. Leaders can slow the process or accelerate it through their support for reforms.

The last member of the BRIC family, China, faces the most problematic challenges. China's level of public violence and protest has reached epidemic levels; last year an estimated 173,000 incidents took place at the local level most over the confiscation of property by the government or crony capitalists associated with state interests where the citizen has no recourse. We do not know how many of the incidents were violent, and some were certainly peaceful, but the frequency of them has been growing and this reflects the underlying tensions in Chinese society where the individual citizen has few if any institutional recourses to protect themselves from the arbitrary government actions.

In a lecture at Georgetown University ten years ago, Douglass North argued that the absence in China of the rule of law and strong institutions would eventually lead to a slowdown in economic growth and political instability. The Chinese leadership has been focused on trying to build a stronger legal system and forestalling popular unrest which they believe will begin to take place if economic growth drops below 8 percent. The latest estimates are that Chinese economic growth will drop to 6 percent and then China may be the last of the BRIC countries to face mass unrest with unpredictable outcomes

Andrew S. Natsios is an executive professor at the George H.W. Bush School of Government and Public Service at Texas A&M University, a senior fellow at the Hudson Institute, and the author of "Sudan, South Sudan and Darfur: What Everyone Needs to Know." He served as administrator of the U.S. Agency for International Development and as President George W. Bush's special envoy to Sudan.

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