Development and the crisis of global nationalism

Members of hardline Muslim groups hold a big national flag as they attend a protest against Jakarta's incumbent governor Basuki Tjahaja Purnama

Gunnar Myrdal is remembered for an expanded vision of development that accounted for institutions. Unfortunately, he also perpetuated a view that nationalism in Asia, fueled by ignorant and superstitious religiosity, was bad for development and that European nationalism was better: “In Europe, nationalism, despite its association with romanticism, remained secular and rational at its core.” My view, elaborated in this paper, is that there is a more complex relationship between nationalism and economic development than Myrdal imagined—not just in Asia, but all over the world.

Nationalism is a complicated relationship

Nationalism can be seen as a complex relationship and, like most such relationships, people have to work hard to balance the tension between self and others. While many nations have succeeded in using nationalism to develop, this same nationalism has also generated forms of exclusivism and competition that make it hard to resolve shared global problems. Economic development is an important—but not the only—goal that nations must pursue. While some see the rise of nationalism, or you might even say, tribalism, as a sign of the end of the world, there is actually a form of self-interest that has increased growth.

Nationalism in Asia

Japan provides a surprising example. Meiji Japan’s top-down nationalism led to rapid expansion of its own development as well as to imperial expansion. While the cruelties of Japanese colonialism have rightfully led to its denunciation, for various reasons, the institutions and programs established during Japan’s rule in the colonies were well suited to modern development. After the war, countries such as Korea and Taiwan were able to adapt Japan’s top-down model, its colonial institutions and a virulent anti-communist nationalism that—when combined with the security and economic opportunity by the United States—led to rapid growth. By the late 1970s, this exclusive form of nationalism was replaced in both countries by a grass-roots nationalism that demanded more participatory modes of political and economic governance, leading to more balanced growth.

Growth was likewise driven in the populous nation-states of China and India, despite their disparity in experiments with socialist forms of development and varied U.S. influence. Growth in both nations was enabled by powerful nationalist movements—especially revolutionary nationalism in China—premised on a more equitable contract with the population than the older imperialist order. Development, in other words, was encouraged by the inclusive nationalism that grew out of redistributive justice and the economic and political failures of the older system, and the rise of new classes that demanded change.

In Southeast Asia, the rise of the nation paired with inclusion (in a Japan-centered regional economy) led to growth during the 1970s-1990s. Interdependence was cemented after the Asian financial crisis of 1997-98 as the region emerged with new ideas for shared economic security through the Association of Southeast Asian Nations (ASEAN). While nationalist competition within ASEAN continues, it is still a major force for integration and growth.

The two forms of (European) nationalism

The earliest forms of nationalism in Europe were closely linked to imperialism and the twin forces of economic development and exclusion, which continued well into the twentieth century. As Eric Hobsbawm has pointed out, imperial expansion was justified by a nationalism that was more racist than rational. Hannah Arendt points out that imperialists were able to harness nationalism because they claimed to supersede the reality of internal national divisiveness and represent the glory of the nation. Through the World Wars and on into the post-war peace, this “glory” has expressed itself in both hate and inclusion.

How can these impacts be so profoundly different? Scholars often distinguish between two types of nationalism: an ethnic variety built on race, religion, and language, versus a civic nationalism, in which rights are granted to all citizens, regardless of race, ethnicity, language, religion, or culture. German nationalism is, for example, often condemned as ethnic and exclusive, whereas Anglo-French nationalism is seen to be civic and inclusive. It is this the civic model that Myrdal had in mind when comparing Europe and South Asia, and it is this model that was dominant during the first few decades after the Second World War, embedded in the protocols of the United Nations and eventually leading to a notion of development that includes the eradication of poverty and higher standards of living for all.

Unfortunately, central to the modern history of nation-states is the alternation between capitalist expansion and a closing off of the national economy based on “the principle of social protection” but also on ethnic exclusivism and hostile nationalism. Today, aided by the volatility of the global economy, a narrower ethnic—sometimes even racist—vision of the nation has reasserted itself, which can be seen in the support of elected populist leaders around the globe.

It’s the movements that count

These fluctuations in the tone of a particular form of nationalism are shaped by more than state-influenced macro-economic factors. Most international studies of economic development take the nation-state as a stable basis of their analysis. When comparing the economic achievements or failures of nations, analysts refer to the state’s aggregate indices and policies towards, say, capital formation, foreign debt, currency controls, or balance of trade. While indispensable, these analyses can miss how changes in sociopolitical forces transform development strategies and vice versa. Sociopolitical movements largely determine whether a nation turns inward or outward.

The imaginary—and the movements they often give birth to—can be integrative or contentious. To take the most evident expressions of how imaginaries have reshaped society and the world, consider the difference between Maoist and contemporary China or, for that matter, between Nehru’s vision and contemporary India. While the broad goals of national development may remain, the frontiers of community inclusion, class configuration, and possibilities of nationalism have changed dramatically.

The U.N.-sanctioned civic model of nationalism and stabilization of economic flows (under the Bretton Woods regime of global economic exchange) produced the breathing space for emergent nations to cultivate inclusive national models of development. Many erstwhile colonies, which were multi-ethnic, embraced nationalist leaders who developed policies principally of civic nationalism to accommodate minorities.

In Asia, leaders such as Nehru and Sukarno of Indonesia and, later, Zhou Enlai of China, reiterated this commitment. They developed the principles of Panchasheela—a doctrine of non-interference in the internal affairs of others. Conflicts and pressures of the Cold War led to the movement’s dissipation, but the civic inclusivism upon which they were cultivated has had an enduring influence in the larger nations of Asia.

Is this the end?

Nationalism in Europe and Asia has had many faces: revolutionary, top-down, anti-communist, participatory, civic, ethnic, and religious. The immediate post-war decades saw a largely inclusive civic model across much of the globe, permitting new nation-states to develop capabilities and resources without strong ethnocentric biases. The prevalence of the post-war inclusive model had much to do with the geopolitical circumstances of the victory of the Allied Forces in the Second World War, but it was also enabled by strong anti-imperialist national movements. They were also movements for the reduction of inequality and social justice.

More recently, the relationship between national political movements and economic development has taken a more sinister turn, exposing the tension between self and other that lies at the heart of all forms of nationalism. The global ascendance of neoliberal capitalism has been accompanied by the rise of chauvinistic, populist nationalism. The connection between nationalism and development appears to have come full cycle from a century ago, when its darkest forms drove the world into two global conflicts.

Have we learned the necessary lessons? On the one hand, nationalism today works to protect against real or perceived predation, as well as to integrate the nation for competitive advantage. On the other, while economic globalization has made the world more interdependent, nationalism has made it difficult to translate this interdependence into cooperation, especially for problems such as the planetary environmental crisis.