Battle for Economy: China vs the West

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China

Farid A Malik |

Own the nation, the rest will fall into place. Chairman Mao Tse Tung was arguably one of the most outstanding leaders of China and the world. He said, “Revolution comes through the barrel of the gun.” While the state in the People’s Republic of China (PRC) takes care of every citizen, at the same time, it does not shy away from using the bullet for common good.

The economic miracle ofChina has baffled western democracies. The common law has failed in curbing corruption in the free world. Democracy is being blamed for the slow rate of progress. In Pakistan too, the democratic framework is under scrutiny. Battle lines are being drawn between economic growth and individual liberties, which do not exist in China. The success of China comes from the focus on common good while the democratic western world is plagued by the control of multinational companies, run by their greedy boards. Democracy has now become subservient to a few affluent groups. State has lost its teeth after deregulation.

The East India Company ruled over India until 1858. Governor-generals were appointed by its board. It was called the Company Raj. Finally, the monarch took control of the colony and it became the British Raj. In the 19th century there was a belief that companies could not effectively run countries. The thought was further refined in the 20th century with two world wars and three major revolutions-Bolshevik1917, Chinese 1947, Iranian 1979. Regulatory frameworks were put into place to check monopolies, profiteering and exploitation of the common man. Competition was encouraged for growth. Then came the ‘Reaganomics’ and ‘Thatcherism’, which removed all checks enacted for the common good.

It is all about the amicable sharing of nations’ wealth and resources for the common good. In the west, individual wealth has increased manifold with huge gaps between the rich and the poor. Deprivation and exploitation are on the rise. The youth have lost hope in the future and have started living on a day-to-day basis. A few years ago, I had the chance of spending a few days in central London. Even on working days, all bars at night timewere full of young people, which I found very unusual. In our student days we only had two night-outs, Friday and Saturday, and the rest were for studies and homework. It seems now that fun and socialisingcomes firstand there is no long-term planning or hope.

Unregulated MNCs have played havoc with the people. Even health and safety have been compromised in most cases, there is no one to check the greed driven excesses. Shareholders are only interested in profits and the value of their holdings. On issues of national importance most nations are divided. In the UK, Brexit has become a big challenge. Two prime ministers, David Cameron, Teresa May, had to bite the dust, while the third one, Boris Johnson, is now trying to see it through.

In the USA, the Democratic presidential candidate Bernie Sanders is raising issues affecting the common man. Unemployment, student loans, tax breaks for the rich are all being discussed. Under Donald Trump the country has gone too far towards the right, leaving the deprived segments of society behind even though they are the ones who need hand holding. Nations rise and fall together, divided they perish. Today the economic divides in the west are unbearable and insurmountable. The situation is not sustainable any longer and calls for attention.

In welfare states all natural resources have been declared public property. Revenues generated are spent on the people. There is a concept of public-private partnership with the state. In China a similar model is followed. The state receives earnings from these enterprises, which are then utilised for the common good. Monopolies of MNCs are not allowed.

After wasting a couple of decades finally a model of public-private ownership has been deployed for the development of the Thar coal reserves in the province of Sindh. The joint venture company is called the Sindh Engro Coal Mining Company (SECMC). Government of Sindh has fifty-five percent ownership while the private sector has forty-five percent stakes together with management control.

Coal is being mined for power generation with sharing of revenues. For a mine of the size of eight million tons per annum (MTPA). the tariff has been fixed at $42.45 per ton. Coal will also be used for producing clean fuels like synthetic natural gas (SNG) and liquid fuels.

For a mine of the size of about four MTPA the annual revenue of the Sindh government will be around $20 million.Such equitable models can be used for other natural resources like the Reko-Diqcopper/gold deposit or the Chiniot-Rajoa Iron Ore mine.

The economic divides in the west will ruin nations together with the democratic order. While a unified Chinese nation is moving in the right direction the divided western economies are traversing bumpy paths.

The power of vote has to be restored for democracy to survive, which will then ensure proper checks and balances for the common good. The struggles and resulting lessons from the 20th century cannot be overlooked. With rising suffering of humanity, a major change of direction is required by the free world to deal with the Chinese challenge, which seems unstoppable under the existing approach of exploitation of the masses by MNCs. Economic strangulation is as bad as curbing individual freedom, and a balance between the two has to be struck for the common good of a nation.

The writer is Ex-Chairman Pakistan Science Foundation. This article was first published in daily times and has been republished here with author’s permission.