Editorial: Democracy promotes prosperity

The Commonwealth appears to have done better than Apec this month in pushing for urgent progress in world trade negotiations in Hong Kong shortly. It is unfortunate, therefore, that the Commonwealth Secretary-General, Don McKinnon, should downgrade the contribution democracy can make to economic success. New Zealand's representative at the heads of government meeting, Helen Clark, called her countryman's comment a "throwaway line" but Mr McKinnon says he does not do throwaway lines. He says he was misinterpreted.

In the speech at Malta the former National Deputy Prime Minister said: "Many people are beginning to ask whether building a democracy is really the road to prosperity. Does democracy put food on our tables, clothe our children, put roofs over our heads, or give us a future?" Trade was not just an engine for economic growth, but was the most potent weapon to combat poverty, he said.

He is right, of course, up to a point. It is possible to prosper without democracy, as China demonstrates today and as Hong Kong proved under British administration long before. Conversely, if proof was needed that democracy alone does not ensure mass prosperity it was long provided by the poverty of the world's largest democracy, India. But these are exceptions that prove the rule that democracy and prosperity go hand in hand. Developed countries that have sustainable economies built on more than a single commodity such as oil, tend to be democratic. And democracy in turn helps to generate a better economy.

Democracy alone might not put food on the table but it helps to ensure that the conditions of reliable food production and distribution continue. Democracy essentially invests every adult individual with equal power and status as voters. It requires that leaders be prepared to surrender power and position on the results of a popular vote. For that to happen, all political organisations must be confident that rivals will abide by electoral law. It is by teaching adherence to law that democracy can promote economic prosperity.

Adherence to a common law allows complete strangers to trade with each other, confident that agreements will be kept, goods and services will be reliable and payments made. In the absence of democracy political power is more easily used for private gain. Business and wealth will depend more on personal connections with the powerful than on the ability to sell in markets governed by law. Patronage and corruption will prosper.

A Chogm should be the last forum to hear a denigration of democracy. The Commonwealth is a collection of nations united by nothing except an experience of British colonialism. The organisation has at times struggled to find a cohesive, post-colonial mission but seemed to find one in the adherence to democracy and the human rights and freedoms that accompany it.

The Commonwealth has gone so far as to suspend member states such as Nigeria and Fiji for serious breaches of the democratic ideal. Now the organisation faces an awkward decision on Uganda, where the Government has just jailed an Opposition leader and where the next Chogm is to be held in 2007. It falls to the Secretary-General to carry the democratic demand to errant dictators in often poverty-stricken places and Mr McKinnon is probably weary of hearing the very arguments he put to the Malta meeting.

Neither democracy nor trade are instant remedies for poverty. A good level of popular education is needed for democracy to produce competent governments, and free trade forces painful adjustments on an unsophisticated economy. But lacking both democracy and open markets, the poor are doubly penalised.