Volume 4 Issue 15: Intelligent Investing

Senegal Can Have Proper Democracy. Why Not Malaysia?

For many Malaysians, we have only heard of this country in Africa, Senegal, because of football. 

Compared with its neighbors, it is relatively small in size. Its total land area is about 197,000 square km, about half that of Malaysia. As with most other African nations, Senegal is a relatively poor country, with GDP per capita less than USD2,000. Compared with Malaysia, Senegal's economy would make Malaysia look like Singapore - see Chart 1.

Chart 1

Despite the given circumstances, Senegal even manages to have a proper democracy:

Senegal’s democratic tradition deeply shapes ordinary people’s expectations. In June 2011, Wade attempted to amend the constitution to eliminate a second round of voting in presidential elections should the leading candidate win 25% in the first round, rather than 50%. This effort at a constitutional coup was thwarted by massive protests in front of parliament. Slogans like “Touche pas à ma Constitution” (Don't touch my Constitution) were accompanied by “Wade, dégage!” (Wade, get out!), reminiscent of the chants in Tunisia, “Ben Ali, dégage!” 

Democratic resistance worked, blocking the amendment and creating the possibility of defeating Wade’s run for a third term. In the first round on February 26, voters showed a higher level of trust in their electoral institutions than did many political actors, who urged postponement of the election, or a boycott, on the grounds that Wade’s control of the state apparatus made a free and fair election impossible. 

In fact, a well-organized civil society and an independent press ensured that the results could not be rigged. For example, as soon as results were counted locally, they were immediately announced nationally by independent television and radio broadcasters, even when state TV stopped disclosing results. International pressure, especially from the United States, France, and the European Union, also helped to marginalize the hard-liners in Wade's entourage. 

In the crucial first round, only 35% of the electorate voted for Wade. Opposition candidates like Macky Sall, who bet on high voter turnout, fared much better than candidates who took the fight to the streets or, hoping the election would be postponed, started campaigning too late. With 26% of the first-round vote, Macky Sall was on the ballot for the runoff. 

Voters, especially in Senegal’s cities, eschewed vote-buying and instructions by some religious leaders to vote for Wade, whose aggressive strategy of clientilism and ethnic divisiveness failed conspicuously. By violating the symmetry of respect and equidistance between ethnic groups that characterizes Senegal’s pluralism, he offended far more people than he attracted. 

In the second round, all 12 unsuccessful candidates supported Sall, as they had pledged to do. With the opposition strongly united, Sall more than doubled his first-round vote, reaching 66%, while popular support for Wade stagnated. The army adhered to its tradition of non-intervention and explicitly let the president know that the result had to be respected.

So, why can't Malaysia?

Eurozone's Political Crisis (Not Economic Crisis)

After a long hiatus from the Eurozone crisis, I am back. This time, with more backing from former Spanish foreign minister and former Senior Vice President and General Counsel of the World Bank, Ana Palacio:

Europe’s current crisis is rooted in loss. Untethered from the mooring of Cold War-era bipolarity, Europe was swept off its feet and cast adrift in the currents of a globalized world, unable to find either its place or direction. Most critically, Europe’s old instincts and modus operandi persisted long after the new contours of global affairs had taken shape. 

They still do. That is why, in facing its gravest test so far, Europe seems oblivious: its leaders project confusion and indecision; its citizens exude a mixture of complacency, indifference, and self-doubt; and its institutions are locked in turf battles and remain hindered by laborious procedures and protocol. 

It is also part of the reason why markets are besieging the eurozone so incessantly. What investors sense is not weak economic fundamentals, but Europe’s weak political fundamentals – the absence of a governance structure with real power and the will to use that power to resolve problems. If Europe is to adjust to the requirements of the new “Pacific world,” it does not need fine-tuning; it needs a new design.

I had asked this question before. The Eurozone's refusal to face reality is causing a slow and painful death for its periphery. In Two-Cent Economics, Volume 3 Issue 45, I said:

Personally, observing the way things are going with the Eurozone right now, it feels a lot like watching a tragedy in slow motion. It is agonizingly painful. It would seem like you know a disaster is coming but you can't avoid it. Something like being on the Titanic as it is sinking.

And back to Ana Palacio:

Europe is plagued by three distinct problems. First, it remains incapable of adjusting to the realities of a world whose center of gravity has irrevocably shifted eastward to the Pacific, pulling with it the attention of the United States. Second, more than ever, Europeans are looking inward, as a sense of entitlement meets pervasive skepticism – a combination that permeates to the highest echelons of the Union and EU national governments.

 Source: Project Syndicate

Is Democracy An Economic Liability?

A question many of us would not ask 10-20 years ago. But as we witness the slow death of some of the Western democracies, and the rapid rise of China, I think this question will become a huge debate topic in the next 50 years or so.

Read here for some thoughts from The Economist.