x Abu Dhabi, UAESunday 23 July 2017

From India to Indiana, gaps in government credibility grow

Global populations have lost all faith in politicians as they protest against economic hardships, bureaucracy and institutionalised corruption.

Anna Hazare might be onto something. The 73 year-old Indian social activist has ignited a fire in his homeland over the issue of corruption. Advocating a tough piece of legislation aimed at rooting out the graft that is pervasive in the Indian state, the once jailed and now freed activist who models himself after the late Mohandas Ghandi has begun a hunger strike and led tens of thousands in protests across several cities.

Mr Hazare's message resonates among an Indian population weary of the petty bureaucratic shakedown, the bribe-demanding policeman, or the eye-popping tales of lurid corruption among ministers and oligarchic businessmen, including a recent US$39 billion (Dh143 billion) crooked telecommunication deal.

Though not as emotionally evocative as Ghandi's march to freedom, Mr Hazare's march against graft has certainly struck a nerve.

India's youth seem to have latched onto the septuagenarian revolutionary. Twenty-seven-year-old Ramsevak Shah, quoted in the Wall Street Journal, said Mr Hazare's action "is the fight of the youth of the country."

Among the protesters who have flocked to Mr Hazare's gatherings are the legions of young, educated, middle class Indians who have passed all the tests, played by all the rules, secured the best jobs on offer and yet feel a growing disdain for their political elites.

But while Mr Hazare's hunger strike have captured global headlines, this is not just an Indian story. Frustration with political elites and a growing frustration with cronyism and mismanagement is spreading globally, faster than a high-speed Chinese train. Call it the Great Global Disenchantment.

Indeed, the recent crash of a Chinese train that left some 40 dead spawned an unprecedented barrage of criticism in Chinese state media and uncensored condemnations in blogs and websites, alleging corruption at the state railways.

Chinese cyberspace also lit up this past week when a Chinese traveller in Seattle shot a photo of the new US ambassador to China in an unguarded moment at the airport. The ambassador was carrying a backpack, stood in line patiently to buy a coffee, tried to use a coupon and was denied.

When the traveller posted the photograph on a popular Chinese website, the story went viral. Soon, tens of thousand of comments poured in, all with the same awe-struck incredulity: where was his entourage? He carried his own bags? He patiently stands in line to buy his own coffee, even using a coupon? Extraordinary. For a Chinese population accustomed to deputy assistant municipal managers sitting in the back of chauffeured cars, the ambassador's actions were truly revolutionary.

Of course, don't tell Americans that their political elites are to be admired. They, too, would find inspiration in Mr Hazare's anti-graft call. Money plays a far too prominent role in American politics, giving the hedge fund manager or the corporate executive a much more influential voice than the working man. Yes, all have an equal vote but they do not have an equal voice.

Indeed, polls indicate a growing disdain for political elites in the United States. A recent Gallup poll noted a startling fact: only 11 per cent of Americans are satisfied with "the way things are going in the United States at this time." Of course, the perilous state of the economy owes much to this number, but there is something deeper at play here: Americans have lost faith in politics and their political elite.

Indians, Chinese and Americans are not alone. It's a recurring theme across the world today.

From Latin America to South Asia, from Africa to the Middle East to Europe, a governance credibility gap is widening, with political elites either unwilling to satisfy the demands of their populations or unable to do so. Protestors in Egypt's Tahrir Square were not all Jeffersonian democrats. Many were simply tired of what they saw as bad governance: cronyism, corruption and mismanagement.

Governance credibility gaps in individual countries have always and will continue to play a critical but undefinable role in their futures. Generally, foreign investors shy away from governments with weak institutions or notoriously corrupt bureaucracies. What's more, domestic investors hold back too. Tunisian industrialists now speak openly about holding back investments for fear of government expropriation in the previous regime.

The Transparency International Corruption Index, a measure of public sector corruption, offers a fairly good indicator of relative prosperity. Singapore, top on the list, is a classic example of a city-state punching above its weight because of its institutions. The United Arab Emirates fares strongly by regional standards in the list, scoring the second highest in the Middle East after Qatar, and coming in at 28 of 178 countries, just ahead of Israel, Spain, Portugal, Taiwan, and South Korea.

But the list fails to capture something less tangible: public moods. From London's riots to the Arab Spring to the Indian Summer to violent protests in Madrid, Athens, and possibly soon Rome, a cloud of discontent hangs above our world today.

As the world economy faces the potential of a double dip recession in the United States with its attendant global contagion, a potential eurozone meltdown, a slowdown in Chinese growth and an emerging markets retreat, it is a particularly bad time for governance credibility gaps to grow.

As this gap grows and information technology allows empowered individuals and groups to organise their anger in protests, perceptions of instability will spook investment - and these two cycles will feed off each other. This Great Global Disenchantment will feed into the dizzying array of global crises we face today. Mr Hazare is riding an even bigger moment than he thinks.

 

Afshin Molavi is a senior fellow at the New America Foundation, a non partisan think tank, and a senior advisor at Oxford Analytica, a global analysis and advisory firm. Follow him on twitter at @afshinmolavi