The death knell of the Commonwealth has been sounded for as long as there have been summits. By accident rather than design, this anachronistic gathering of 54 states may actually say more about the state of global priorities than the participants realise. And the direction of travel is grim.

At their meeting in Perth over the weekend, the leaders rejected many of the recommendations of a report by a team of the great and good, the eminent persons group (EPG), designed to move the Commonwealth's democratic laggards towards basic norms.

In search of a lowest-common-denominator consensus, the summit accepted some less controversial ideas, such as a charter. The idea of a human rights commissioner, however, proved too much. "There have been a few blips like in any part of the world but I don't think it demanded a commissioner," noted Suruj Rambachan, the foreign minister of Trinidad. Under pressure from South Africa and other states, the summit even refused to publish the EPG's report.

The former prime minister of Malaysia, who chaired the EPG, said the summit would be remembered as a failure. Malcolm Rifkind, the former UK foreign secretary, described the unwillingness to publish the report as a disgrace. This is hardly surprising, as the Commonwealth comprises a veritable who's who of governments with dubious human rights records – from Nigeria, Cameroon and Rwanda to Pakistan, Bangladesh and Singapore.

The prospect of progress at the next gathering in two years' time – hosted in, of all places, Sri Lanka – is even more remote. The Colombo government denounces any attempt to call it to account for human rights abuses. In front of their Commonwealth colleagues the Sri Lankans dismissed a UN-commissioned report on massacres against the Tamils as "a travesty of justice and preposterous". The Canadians, meanwhile, are threatening to boycott the 2013 heads of government meeting in protest.

The Commonwealth's weakness is specific to its history and its constitution. Any whiff of British lecturing is given short shrift; at the same time, all major decisions have to be taken by consensus, allowing recalcitrant countries to stop changes in their tracks. The only sanction, and one used rarely, is expulsion.

But the problem is far bigger than the institution. It is one that has been exercising policymakers for years. What is the relationship between human rights and economic development? To what degree do they represent western or universal values? In my book, Freedom for Sale, I argued that the trade-off between liberty and prosperity had become more alluring than ever. Regimes that can satisfy what I call the "private freedoms" – such as travelling and making money – can quite easily ensure that citizens leave the public space to them. Singapore is the model in microcosm; China is rolling it out on a far bigger scale, with Russia and others not far behind. Economic growth is the motor; consumerism is the anaesthetic for the brain.

This model has permeated into western chancelleries. For the Australian hosts of the Commonwealth conference, much of its economic boom has come from exporting raw materials to China. This has led to a recalibration in Australian priorities, with human rights concerns regarded in government as an inconvenient intrusion into trading relations. Only last month Julia Gillard, the prime minister, commissioned a white paper on Australia's place in the "Asian century". It is safe to assume this will formally inject the notion of "gradualism" into discussions about free speech and other freedoms in Asia and Oceania.

In so doing, the Australians will only be doing more overtly what the Europeans are undertaking by stealth. The more the Chinese save the flagging old economies, the more the new "reality" will be established. Watch the effect that any Chinese bailout of the euro will have on future political negotiations.

The much-vaunted Beijing consensus is now the norm across most of the developing world. This is what gives the likes of Yoweri Museveni in Uganda and Paul Kagame in Rwanda their political confidence. Kagame makes clear his respect for the Singapore model, the so-called "managed democracy", otherwise known as authoritarian capitalism.

After the genocide of 1994 Kagame gradually brought about economic recovery and social stability. He regards strong education, contract law and anti-corruption drives as the true marks of progress. As for freedom of expression, he points to the hate speech that fuelled the massacres, predominantly by Hutu militias, and he sees it as a luxury at best and divisive at worst. A number of journalists and opposition figures have been killed in recent years. In the 2010 general election, with most parties banned, he received an absurd 93% of the vote.

In an interview on Sunday with Andrew Marr, Kagame brushed aside tentative questioning, dismissing criticism of his human rights record as "absolute nonsense". In the same programme David Cameron threatened to withhold UK aid from countries that do not "adhere to proper human rights". British economic assistance should have "more strings attached", he said, particularly on the question of repression of homosexuality. But he conceded that countries could not change immediately, and that it would be a "journey".

Leaving aside the many examples of hypocrisy and double standards (who can forget the prime minister trying to flog weapons to dodgy Middle Eastern regimes days before launching the Franco-British "human intervention" in Libya), this message now has even less salience than it has ever done.

The role of western governments in proselytising about human rights has been hugely compromised. In most instances nowadays it is counterproductive. African and Asian countries can simply look to China and its allies and reap the rewards of a less squeamish approach to individual liberty.

Yet there is room for considerable optimism, and it lies in bottom-up movements, fuelled by new communications tools such as in Tunisia and Egypt. Ultimately, it is only through grassroots pressure that real improvement will come about.