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Minority rule, majority hate
World on Fire by Amy Chua

Review by Sreeram Chaulia

Can two seemingly unrelated issues like globalization and violent ethnonationalism actually have a priori linkages? Yale University professor Amy Chua's new book takes the globalization debate into uncharted territory via myriad comparative examples to show the explosive collision between free market democracy and ethnic hatred.

Chua begins with the murder of her Chinese Filipina aunt in Manila, an expression of the extreme frustration and anger of the indigenous majority towards Chinese "outsiders" who dominate key sectors of the Philippines' increasingly globalized economy. Plutocrats of Chinese descent, whose fortunes have ballooned due to free market economic policies, appear "to the vast majority of Filipinos as exploiters, as foreign intruders, their wealth inexplicable, their superiority intolerable". (p 4) The same story is being replayed in many other parts of Southeast Asia.

In Burma's new liberalized economy, Sino-Burmese minorities have been transformed into a garishly prosperous business community that monopolizes the gem, teak wood and light consumer industries. "Today, ordinary Burmans speak of 'the Chinese invasion' or 'recolonization by the Chinese'." Vietnam's post-1988 pro-market reforms have also marked the resurgence of Chinese commercial dominance at the expense of the impoverished locals. Here too, there is a bitter outcry against "the Chinese stranglehold".
In Thailand, all but three of the most powerful business groups are owned by Thai Chinese. In Malaysia, Chinese minorities comprise a third of the population but account for 70 percent of the country's market capitalization. In Indonesia, which has witnessed bloody anti-Chinese riots, the 3 percent Chinese minority controls 70 percent of the private economy. Throughout the region, "there festers among the indigenous majorities deep anti-Chinese resentment, rooted not just in poverty but feelings of envy, insecurity and exploitation". (p 47)

Moving to South America, Chua finds the same pattern of a "market-dominant minority" from outside grabbing the lion's portion of globalization's benefits and stoking ethnonationalist fires. Bolivia's Amerindian majority is largely excluded from the modern economy, while the white capitalists originating from Europe and North America own the most valuable natural resources and the most advanced economic sectors. "Global markets have intensified the economic dominance of Bolivia's white elite over the country's growth-stunted, impoverished indigenous majority." (p 56) In Peru, Guatemala and Ecuador too, Amerindians represent a mass underclass being bossed around by the light-skinned rich. All of Mexico's lucrative corporate sectors are concentrated in the exclusive hands of a small clubby white market-dominant minority. The latifundia feudal land ownership system, dominated by Spanish-blooded families, is booming further with each new round of pro-globalization reforms.

Other outsider minorities making hay under the neo-liberal economic order in Latin America include Lebanese, Jewish and Palestinian businessmen, who corner enormous profits in Brazil, Panama, Argentina, Belize and Honduras. All over the region, traditionally soft in ethnic identity assertion, "distinctively ethnic resentment against market-dominant light-skinned elites is on the rise." (p 73)

In post-Communist Russia, six out of the seven wealthiest and most powerful oligarchs, wielding mind-boggling political and economic leverage, are Jewish. Owing to the virulent history of Russian anti-Semitism, this racial profile of the nouveau riche has not gone unnoticed. How, it is being asked on the streets, did members of a minuscule "outsider" ethnic minority come to wield unimaginable might since 1991? Chua notes that political anti-Semitism is on the rise, as a majority of ordinary Russians believe "they have been impoverished at the expense of rich Jews." References to "Zioncrats" and "bloodsucking Yids" who hijacked privatization and stole the wealth of the Russian people are commonplace.

In southern Africa, English-speaking whites, thanks to the gargantuan head start of colonialism, lord over lucrative industries like gold, platinum, diamond mining, finance, insurance and technology. Namibia, Zimbabwe and South Africa have market-dominant white minorities that are stretching this historical lead longer due to laissez-faire market conditions. Kenya has an inordinately prosperous, disproportionately skilled white minority that cavorts in colonial fashion in country clubs and golf courses, while the 31 million blacks survive on less than two dollars per day. Indigenous Kenyan market-dominant minorities, the Kikuyu, are seen by the toilers as accomplices of these white "rulers". Nigeria's Ibo community is another indigenous market-dominant minority that dominates key sectors and is enriching itself in the globalized economy due to its long experience of manipulating markets. The Bamileke of Cameroon and the Susu of Guinea are other indigenous minorities subject to widespread resentment by the masses.

Besides whites, the other non-indigenous market dominant minorities in Africa are Indian and Lebanese merchants. Indian Kenyans, less than 2 percent of the population, "benefit extremely disproportionately from globalization and market liberalization because of their international connections" and access to capital. (p 113) Lebanese market dominance in Sierra Leone, Gambia, Cote d'Ivoire, Benin, Ghana and Liberia is astounding, encompassing fields like diamonds and gold, finance, retail, construction and real estate. Lebanese entrepreneurs, together with a handful of native politicians and foreign investors, are the principal beneficiaries of globalization in West Africa.

Chua's second part of the thesis relates to raw majoritarian democracy which, when added to markets, cooks a recipe for upheaval and ethnic conflagration. "As markets enrich the market-dominant minority, democratization increases the political voice and power of the frustrated majority." (p 124) The violence directed at Zimbabwe's white farmers and their black farmhands is "an anarchy born of democracy", ie Robert Mugabe's vote hankering and reduction of democracy to bare minimum electoral connotation.

Nationalization of "foreign-owned property" is the result of this sort of lopsided democracy that is being imposed on the third world. Confiscations and expropriations in developing countries have explicitly and exclusively targeted assets and industries of the hated market-dominant minorities, giving an outlet to the popular frustration and vengeance demanded by the majority population. Demagogues promising to restore the honor and possessions of the majority are supported with wild enthusiasm, be it in post-Suharto Indonesia, which embarked on an anti-Chinese business pogrom, or Putin's Russia, which is turning on Jewish media moguls. Hugo Chavez came to power in Venezuela by attacking "rotten white elites", and the mysterious right-wing coup against him in April 2002 failed because the new leadership excluded the Pardos majority from power entirely.

To preempt confiscations, market-dominant minorities sometimes enter into symbiotic alliances with corrupt indigenous politicians, better known as crony capitalism. Sierra Leone under Siaka Stevens saw Lebanese magnate Jamil Mohammed become a shadow "co-president", with "global markets generally approving of these arrangements". (p 150) Kenya's Daniel Arap Moi concluded a network of deals with a coterie of Indian businessmen in 1978. Suharto's Chinese-friendly autocracy in Indonesia was similarly a backlash by market-dominant minorities after Sukarno's nationalizations. Marcos' crony capitalist empire with the Chinese business community in Philippines was a payback for Ramon Magsaysay's anti-Chinese drive of the fifties. Some market-dominant minorities do not rest at crony capitalism or rent seeking and seize power directly. Apartheid South Africa and the whole of Latin America bear testimony.

The most horrific outcome of free market democracy in the face of a market-dominant minority is government-sponsored attempts to "cleanse" the outsiders. Non-Russian former Soviet Republics cleansed and drove out 2 million ethnic Russians after 1991. Russia, Ukraine and Belarus upped anti-Jewish violence and expelled nearly 1 million "shylocks" in 1999. Ethiopia deported 50,000 Eritrean-Ethiopians who used to dominate commerce in the last few years. An estimated 110,000 Chinese families fled Indonesia around the same period. Hutu Power advocates in Rwanda called for "majority rule" and "democratic revolution," only to mastermind a bloodcurdling genocide against Tutsi "invaders" in 1994. In the Balkans, Croat and Slovene minorities that were disproportionately prosperous vis-a-vis the more populous Serbs faced the deadly fate of mass expulsions and genocidal violence.

Extending the theory of market-dominant minorities beyond the confines of the nation-state, Chua argues that in the Middle East as a region, "globalization has wildly disproportionately benefited an 'outsider'- Israeli Jews - fuelling ethnic resentment and hatred among a massive Arab population that considers itself the 'indigenous' true owner of the land". (p 211) Besides cultural and historical enmities, the Middle East is a conflict between 221 million, largely poor Arabs, against Israel's starkly prosperous 5.2 million Jews. Arab squalor and mass frustration runs headlong into Israel's highly educated, skilled and Westernized Jews. That is why "one often hears half-admiring, half-contemptuous grumblings about Jewish wealth, greed and moneymaking tendencies" among common Arabs. (p 222) Rapid democratization of the Arab states, being pushed by the US government as a cure-all, will exacerbate ethnonationalist hatred for the market-dominant Jews and fuel even greater bloodshed.

Chua's piece de resistance is the idea that "America today has become the world's market-dominant minority." The principal beneficiary of globalization and spread of free markets, the United States, has attained heights of global economic power that are wildly disproportionate to its tiny numbers. "Our extraordinary market dominance, our global invincibility have earned the envy, fear and resentment of much of the rest of the world." (p 231) American products, companies, investors, entertainment, cuisine and culture are viewed as "outsider" threats to legitimate "indigenous" society all over the third world. Anti-Americanism is a form of "frustration heightened by access to images and information about how much better Americans live"/ (p 246) Anti-American investor confiscations and expulsions have occurred in Mexico, Argentina, Chile and Uruguay before the era of globalization, but countries daring to expropriate American property today risk serious consequences, a fact that heightens suppressed fury. The September 11, 2001 terror attacks, reminds Chua, prompted "momentary jubilation of millions of poor and exploited people around the world", not just in Muslim countries. It was a reflection of the crushing humiliation perceived to be inflicted by the US on the Third World.

Chua concludes with recommendations to prevent ethnic hatred from devouring the globalizing South. Educational reform and equalization of opportunities for poor indigenous-blooded majorities are imperative. Strong redistributive measures - progressive taxation, social security, unemployment insurance, antitrust regulation, affirmative action, dispersed capital market ownership - need to be implemented in Asia, Africa and South America. The precedent of Malaysian Prime Minister Mahathir Mohamad's ethnic quotas for bumiputra Malays could be worth emulating. Market-dominant minorities themselves should eliminate corrupt and illicit business practices that enrage the majority community, and invest in the local economies in which they thrive. Corporate responsibility by Indian firms in East Africa and Roman Abramovich in Russia are current instances of softening the ethnic fault lines that have been opened by global markets.

Washington "should not promote unrestrained, overnight majority rule" by shipping out ballot boxes for national elections in countries that have market-dominant minority problems. It must also improve its dismal foreign aid record (the US has the lowest aid budget among advanced economies, viz 0.1 percent of GDP). Chua fails to add that the vice-like grip of the United States on global financial institutions is a major source of anti-Americanism that also needs restructuring.

For those countries that ill-fit her model, Chua has an escape clause disclaimer to the thesis that free market democracy, as is being vigorously exported by globalization advocates, aggravates ethnic imbalances and distrust in the developing world. "This book is not proposing a universal theory applicable to every developing country." (p 15) She cautions against misappropriating her thesis to cases that are exceptions and outliers. As a result, she leaves scant room for disagreement or criticism.

Marxists will dislike this book since it complicates the simplistic class struggle blueprint by introducing the ethnicity card. Thomas Friedman and other globalization honchos will also dislike it for questioning their core tenets of "trickle down effect" and "lifting all boats". For those not married to ideology, Chua's sui generis theory will make a lot of sense.

World on Fire: How exporting free market democracy breeds ethnic hatred and global instability by Amy Chua, Doubleday, New York, 2003. ISBN: 0-385-50302-4. Price: US$26. 340 Pages

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Jun 7, 2003


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