Chinese development experience: Why have Sri Lankans failed so far?

Chinese President Xi Jinping has brought the Chinese economy to a new stage of development through pragmatic and innovative ways without deviating from fundamental Chinese characteristics

During the past decades, several East Asian economies have experienced consistent high rates of economic growth while achieving unprecedented improvements in the standard of living of their citizenry, an achievement that has been described in the famous World Bank study as ‘Asian Miracle’. Hong Kong, Taiwan, Singapore and the Republic of Korea (ROK) were the partners of this achievement. 

One analyst explained this miracle as developments that have ‘telescoped into a single generation, a process of socioeconomic development that took the advanced economies of Western Europe centuries to achieve’. This group has now been dramatically overtaken by the Communist China which has also eliminated poverty, probably excluding a few clusters in remote parts of rural China. 

Unfortunately, however, all South Asian countries including India, Pakistan, Bangladesh and Sri Lanka still remain far behind China as developing economies. It has been estimated that a high percentage of the population of many of these countries are living in abject poverty and deprivation. 

China’s economic development as now well demonstrated has been associated with technological advancement surpassing many of the advanced market economies. It is only a matter of time before China becomes the largest economy in the world. Even in the current COVID-19 pandemic situation it has emerged as the only country to record a positive growth rate in 2020, according to multilateral lending agencies.

In this context it is of significance to understand how President Xi Jinping has articulated the Chinese development within the framework of Marxist Political Economy. In this regard, a speech delivered by Jinping in the mid-August needs to be closely studied by the academics and policymakers in developing countries like Sri Lanka. 

President Jinping proposes in the speech that the Marxist political economy must be studied and developed as a higher stage of theoretical and practical advancement of Political Economy. Most relevant to the current development discourse is his combining of Marxist political economic principles with new practices of reform and opening up of the Chinese economy. 

President Jinping has also categorically mentioned that the belief of some people that Marxist political economy and the analysis in Das Capital is outdated or outmoded is arbitrary and inaccurate. Jinping states that nowadays there are various kinds of economic theories but the foundation of Chinese development cannot be explained by any theory other than the Marxist theory of political economy. 

With reference to the development of theory and practice in China, Jinping upholds the contribution by successive Chinese leaders. Going through his argument it is clear that president Jinping is contributing to the new stage of development in Marxism termed as Socialism with Chinese Characteristics. 

In his analysis President Jinping refers to almost all challenges the modern-day advanced market economies are confronting and strongly advocates study of them in the context of Marxist political economy which include theories of developing a socialist market economy, enabling market to play a decisive role in allocation of resources while providing for a prominent role for the government and state-owned enterprises in promoting, facilitating and coordinating new industrialisation, agricultural modernisation and other essential players of growth and development. It is also interesting to learn the way China addresses the property ownership/rights and right of the farmers to contract out lands. 

What President Jinping has emphasised with regard to the study of political economy has a direct relevance to Sri Lankan academics and policy makers irrespective of what they have learned in universities of the West or from multilateral or other agencies. In his presentation President Jinping has emphasised the importance of six key principles in economic development in China. 

i. Adherence to people-centric development thinking 

ii. Focusing on new development concepts with a futuristic view 

iii. Upholding basic economic systems preserving Chinese socialist characteristics 

iv. Improvement of basic distribution systems 

v. Focusing on the direction of socialist market economy 

vi. Adherence to the basic national policy of opening up when effecting necessary reforms. 

His concluding remarks would be an eye-opener to Sri Lankan and other developing country policymakers, particularly economists. 

Their commitment to upholding the basic principles and methodology of Marxist political economy does not imply rejection of the rational components of other economic theories. Western economic knowledge on areas such as finance, prices, currency, markets, competition, trade, exchange rates, enterprises, growth, and management do reflect one side of the general laws underpinning socialised production and market economics, and should therefore be used as reference. 

At the same time, however, Jinping suggests that it is necessary to keep a discerning eye on the economic theories of other countries, particularly those of the West, making sure that the wheat is being separated from the chaff. It should be ensured however, that these theories reflecting the nature and values of the capitalist system or are coloured by Western ideology are not blindly adopted. Although the discipline of economics is devoted to the study of economic issues, it does not exist in a vacuum, and therefore cannot be separated from larger social and political issues. 

Why have our economists, both in academia and in policy making positions, not understood this simple truth? Why have they failed to develop theories and explanations that address local needs like their counterparts in the region? For example, India, Pakistan or even Bangladesh have world class economists who have come up with homegrown theories and homegrown solutions to local problems. 

Could it be that our economists, unlike their regional counterparts who have succeeded, have not been able to free themselves from the clutches of the west intellectually and ideologically? How much their education in the west, reinforced through regular training given by west-dominated multilateral agencies and also frequent exposure to thinking of the west in their work, is responsible for this unfortunate situation? 

Whatever the reasons are, instead of thinking independently on their own they parrot their mentors in the west for short-term gains like easy recognition and self-fulfilment continuing the vicious circle and perpetuating the misery of their people. Irony is that when a solution is needed the only thing our experts are capable of doing is seeking refuge in programs of multilateral development agencies reminding us the famous saying attributed to Einstein that “insanity is doing the same thing over and over again and expecting different results”.

Sri Lankan policy analysts, this applies to academics and researchers too, must desist from advocating indiscriminate reliance on foreign concepts. Their analyses should be based on objective conditions that exist in Sri Lanka and associated socio-political environments namely, political economy, thoroughly and at length to prevent them being marginalised in the emerging discourse.

It is time for our academics and policymakers to change the path on which they have been travelling, the path not only built by the West but also the road rules for the travellers have been written by them. What our academics and policy makers, especially, economists have been hitherto repeatedly preaching and implementing are literally carbon copies of classical, neoclassical or Keynesian theories they have learnt without adaptation to meet Sri Lanka’s development needs.

It is stated by the historians that Lenin further developed Marxism where it was further fashioned by Stalin and Trotsky. In the modern era remarkable adaptations to it were brought in by Chairman Mao. Since then there have been many Chinese leaders who have made various pragmatic contributions for the Chinese economy. President Jinping has presently brought the Chinese economy to a new stage of development through more pragmatic and innovative ways without deviating from fundamental Chinese characteristics.

In view of the above it can be concluded that there are many lessons that developing countries like Sri Lanka can learn from the Chinese development experience. If our academics and policymakers can come out of the ivory tower of conventional framework and improve on theories and models that they have learned in the past by adapting them where necessary to local conditions, that may go a long way in help promoting effective policy for sustainable growth and development. Until and unless that happens our attempts to achieve sustainable economic growth and development in the country will remain only a pipe dream, which it is today.