Democracy, necessary for growth?

La démocratie, nécessaire à la croissance?

Photo: Bryan R. Smith, Agence France-Presse
The message on Twitter in Canada appears to have served as a pretext for the young prince heir of 32 year-old Mohammed bin Salman to send to its own population a message of strength for the opponents.

The diplomatic crisis between Canada and saudi Arabia illustrates the decline of the idea that democracy is a necessary condition for sustainable economic development, as well as the determination of western countries to defend it.

You can bet that nobody saw coming at the ministry of foreign Affairs of Canada, when, in response to the arrest in saudi Arabia of two activists of the rights of women, including Samar Badawi, winner of the Prix international du courage féminin 2012 awarded by the u.s. department of State, and sister of another famous prisoner of conscience saudi, Raïf Badawi, it was claimed on Twitter last week that Riyadh “release immediately” the two women “as well as all the other peace activists of human rights”.

Saying the victim of a serious “interference in its external affairs” which is equivalent to a “rape” of its national sovereignty, the saudi regime has been unpacked in the great game of diplomatic and economic sanctions, decreeing the expulsion of the canadian ambassador in Riyadh, the departure of thousands of its students and patients in Canada, the interruption of air links as well as the freezing of bilateral trade relations in addition to order, reported the Financial Times, the central bank and its public pension plans to get rid of all their stocks, bonds and cash-canada ” whatever the cost “.

Visibly stunned, the Trudeau government first requested the saudi regime that it explains to him his indignation and probed the level of support he could expect from his traditional allies in the United States and in Europe, prior to re-affirm its friendship to saudi Arabia and praise them for their important ongoing reforms, without, however, apologize for his defense of the cause of women and democracy.

Deafening Silence

For the experts, although can be awkward, the message on Twitter in Canada do not justify such an explosion of anger. Rather, it seems to have served as a pretext for the young prince heir of 32 year-old Mohammed bin Salman, at the controls, de facto, the kingdom’s wahhabi since 2015, to send to its own population a message of strength aimed at critics who find in its program of diversification of the economy and the modernisation of society goes too far or not fast enough. It was also a chance to tell the rest of the world, but especially in the western countries that saudi Arabia does not intend to let the lesson by anyone.

Sitting on a mountain of petrodollars, the saudi regime could much more easily take on the Canadian political and economic ties between the two countries does not weigh so heavy. The danger would have been that other countries, including those who claim to be champions of liberal democracy, to make common cause with their ally the canadian for the defence of human rights and against the reaction completely disproportionate to saudi Arabia. But the calls of the foot of Ottawa have met with a deafening silence.

This situation is not surprising, experts say, on the part of the american giant, which the president has no coordinated international responses, seems to give more value to the friendship of the heads of authoritarian regimes than democratic governments, and has several times expressed her admiration for the prince Mohammed bin Salman. It is not surprising not more of the part of France or the United Kingdom, taking into account, among other things, the importance of saudi Arabia for the military industry and the financial sector on the other.

Democracy in decline

Games of behind the scenes diplomatic may be (probably) underway to bring back the kingdom of saudi arabia to better feelings, but the fact that it is now Canada that finds publicly isolated and on the defensive, rather than saudi Arabia, with this history of democratic values, shows a reversal in the trend since a few years.

For a long time, western countries have believed and affirmed to others that he could not have sustainable economic growth without democratic institutions, liberal as the rule of law, protection of private property, freedom of expression and association, the election of representative governments, as well as a minimum social safety net. The logic was that a prosperous society and modern quickly becomes too complex for a central authority to be able to think, lead, and, in this context, it is important that its stakeholders have the maximum amount of information, their interactions are subject to rules that are clear, predictable and fair and that the policies are the result of the discussion the more open and informed as possible. In such a system, innovation and success are not controlled, but arise from the free flow of ideas and freedom of action. The sharing of wealth is necessary to maintain social cohesion, but also to have the most consumers as possible.

The collapse of the soviet bloc in the late 1980s, was seen as the triumph of this conception of things. But the spectacular collapse of the western economies with the financial and economic crisis of 2008-2009 has revived the plumb to his critics.

The economic success story of authoritarian countries, like China, seemed to prove that democracy was perhaps not the essential condition that said West. Those who are backward in their development model, even at side of home, for example, in Turkey and in eastern Europe. Spurred by the Great Recession, the rise of populism has even led to the election of an american president who, in the name of the defence of the economic interests of his country, said that it has nothing to do with the role of defender of liberal democracy and seems to do everything to undermine the rule of law on the international stage.

Is this all this will really cause the necessary link between democracy and economic growth in the long term ? We don’t know. Most economic commentators seem however to agree this week to say that the rants and sudden changes of direction of prince Mohammed bin Salman are not likely to help convince the foreign investors to follow his major economic reforms.