January 12, 1999
By GEORGE MELLOAN
An attractive young Norwegian woman named Hilde Johnson has a title that is perhaps unique in politics. She is Norway's Minister of International Development and Human Rights.
Her job is to promote human rights and economic development in countries throughout the world as part of Norway's traditional foreign policy concerns with humanitarian issues, especially in the developing world. And the idea that her two missions belong in the same portfolio makes a lot of sense when you think about it.
"Human capital is the engine of economic development," said Ms. Johnson on a recent visit with Journal editors. She believes that it is impossible to tap the energy and creativity of able individuals in places where the natural rights to free expression, free movement and free association are suppressed. Having spent her formative years in Africa, she has some direct knowledge of the costs of economic underdevelopment.
Not surprisingly, her views are borne out by statistical research, at least in a very general sense. The nation states that offer their citizens an environment of both legal order and individual freedom also tend to be the most prosperous. The Index of Economic Freedom, published cooperatively by Journal editorial page editors and the Heritage Foundation, correlates well, if not exactly, with the Survey of Freedom published by Freedom House, which focuses primarily on human rights and political freedom.
Singapore and Hong Kong might seem to be the exception in that they consistently are at the top of the economic freedom list but have certain limitations on political freedom. But it should always be remembered that economic freedom is itself an important element in the pantheon of human rights. The right to own real property, to conduct business relatively free of government restriction and to trade freely can hardly be discounted as a contribution to the quality of human life. So Hong Kong and Singapore offer an important measure of freedom despite the absence of well-developed systems of two-party democracy.
This is not to denigrate the importance of a constitutionally protected right to choose political leaders through democratic means. This element of human freedom is sometimes discounted in places that have managed to develop economically in the absence of a fully functioning democratic system. But the 1997 Asian economic meltdown shed some interesting light on that issue. The more liberal states, in overall political and economic terms, seemed to fare best and those with more restricted political and economic rights the worst. China is the single exception to this rule, but the "China miracle" has concealed some underlying problems that are almost certain to erupt in the future.
Interestingly enough, adversity in Asia has had some positive spin-offs. Some of the countries most affected by the meltdown have become more democratic, not less. Thailand and South Korea, already well advanced toward democracy when the troubles hit, have new governments that are making significant changes in economic policies. Even Indonesia, after a change in government, seems to be moving cautiously toward political liberalization.
It should be noted that Indonesia has never been, since its independence from the Dutch, a harsh dictatorship along the lines of a Cuba or Vietnam. Indeed, the authoritarian Suharto regime justified its existence on grounds that it was saving the country from communism. It employed a brand of crony capitalism that, for all its faults, brought about impressive economic development. One result was the spectacular city of Jakarta, with its fine hotels, gleaming skyscrapers and well-manicured parks.
But the meltdown displayed the weakness of this system of one-party rule and cronyism. When the Indonesian rupiah came under market pressure, the government acted to protect the closed little community of banking cronies rather than the economy as a whole. Its disastrous tactic of flooding the banks with liquidity was a natural concomitant of the devaluation of the rupiah advised by the International Monetary Fund and U.S. Treasury.
But Indonesia had a sufficiently responsive political system to punish President Suharto and his family and cronies for this mistake, by forcing him out of office. Successor B.J. Habibie, admittedly a Suharto protege, has seen fit--to improve his chances of winning an election in his own right if nothing else--to give opposition politicians and the press a freer hand.
What this suggests is that not only do economic and political freedom advance economic development, but the reverse is true as well. Indonesia's economic growth resulted in development of a middle class which is not content with authoritarian rule. It has long been a theory of political scientists that harsh political regimes are almost always moderated by the development of a middle class. Indonesia seems to support that theory.
Perhaps even better support is offered by India, which during a long slow period of development has nonetheless managed to develop a middle class estimated by some observers at 150 million people. It is no small thing that Freedom House, in its latest report, said that India, a country of nearly a billion people, moved from "partly free" to "free" in 1998. This reading was based on a finding of greater internal stability, less inter-communal violence and the peaceful transfer of power to a party long in opposition to the Congress party. This upgrading of such a populous place allowed Freedom House to report that freedom made major gains in 1998 and that 40% of the world's population now lives in free societies.
Of course, it can be argued that the ruling BJP party in India is nationalistic and harbors a disturbing contingent of Hindu religious radicals. But then democracy is never orderly. The point of democracy is to allow all segments of a population to feel represented. The economic decisions are not always rational either. The democratic welfare states of Europe have fostered high unemployment, for example.
In short, there is as yet no paradise on earth achieved by any system, even those that engender a high level of respect for human rights. But Norway and its young Minister of International Development and Human Rights would seem to be on the right track. Human creativity is indeed the engine of economic development and the best systems are the ones that allow creativity to thrive. If Freedom House's reading of world politics is accurate, it is good news indeed.