An agenda to enhance democratization process

By Elwin Tobing

BOSTON (JP): The last quarter of the 20th century witnessed a great upheaval of democratization across the world. Authoritarian political systems, either in the form of personal dictatorships, military governments or communist regimes, have shifted to democratic political systems.

The shift began in 1974 in southern European countries such as Spain, Greece and Portugal. The wind of change to democracy blew to Latin American countries in the early 1980s. It crossed the Pacific Ocean in the 1980s, sweeping across Asian countries such as the Philippines, South Korea and Thailand, then moved north, blowing away the communist regimes in the late 1980s.

Some view China's new membership of the World Trade Organization as a gateway to a democratic political system. The latest shocking wave in the closing of the 20th century is the fall of Indonesia's authoritarian regime in 1998. All these facts clearly show that democracy has been an inevitable phenomenon.

There are at least three major causes of this shift to democracy. First, either good or bad economic performances contributed to the development of democracy. The worldwide economic stagnation in the early 1970s caused many authoritarian regimes, especially in southern European, to lose legitimacy.

High inflation rates and negative rates of economic growth forced military governments in Latin America to move in a more democratic direction, while incredible economic performances in Asia produced the economic and social base for the introduction of democratic systems.

Second, the introduction of economic liberalization in the 1980s. It did not instantly create sound fundamental economies, however, it successfully manifested the importance of economic freedom, as reflected in the greater role of the market and decreasing role of the state in the economy.

As an economy evolves toward a market economy, power, although relatively slowly, is transferred from the state to society. Thus, the decreasing control of the state over society and the increasing control of society over the state has promoted democracy.

The most important cause, however, is arguably the internationalization trends that have occurred since War World II. Revolutions in science and technology have made the world a smaller place and have significantly advanced human civilization. A more civilized nation, characterized by better human rights for its people, is closely associated with democratic practices.

The demand for democracy forced authoritarian leaders to move in a democratic direction. Samuel Huntington in 1992 called this process the 'demonstration effect'. This brings a clear message to every nation that any efforts to swing the pendulum back to authoritarian regimes will render the nation an enormous cost.

Although democracy seems inevitable, its realization and advancement still require laborious efforts. The question is, how can we enhance our infant democracy amid all elements that may intervene and change the course of its development, including the threat of disintegration, violence and a fragile national leadership?

The answer lies in the role of two elements that affect democracy. The first is related to our main task, economic development.

Economic recovery efforts seriously conducted by the new government must aim at promoting more economic freedom and enhancing people's living standards.

The top priority in the new economic plan unveiled recently by the government is to obtain sound macroeconomic indicators. These targets, as well as the bank recapitalization program, are necessary but not sufficient. They are the means, not the end of our development program.

The economic plan does not reveal clear expositions and targets relating to human development such as education, income distribution and unemployment. The ultimate value of economic development is to foster political freedom by enhancing economic participation. This can only be achieved if a development program is people-based, instead of being a sound macroeconomic-based plan.

Elementary economic textbooks suggest that any efforts to obtain low inflation rates, like the 5 percent to 9 percent the government has targeted, will boost unemployment rates. This is known as the short-run tradeoff between inflation and unemployment.

Using data released by the Central Bureau of Statistics (BPS), from 1979 to 1997, the writer finds that the tradeoff did not occur in Indonesia. This implies we should soon expect a higher unemployment rate as a result of the policy of reducing inflation rates.

Ironically, high unemployment rates are widely believed to be the major cause of violence across the country. Last year, the unemployment rate was more than 20 percent (including those working less than 20 hours per week). The amount of people living under the poverty line of Rp 97,000 or around US$14 per month is 50 million (BPS, 1998). Unstable socioeconomic conditions, driven by high unemployment, will not only impede the development of democracy, but will also likely drive the nation back to authoritarianism.

A seemingly ambitious target of 3.5 percent economic growth this year will not contribute much to the development of democracy, as long as the economy is built on a rootless foundation. It is widely known that gross domestic product as an indicator of growth is misleading. It takes no account of income distribution, nor does it include the drawbacks of living on foreign assets as government and private sectors increase their spending by borrowing from abroad.

Policy makers need to recast our development planning strategy. The measurement of poverty profiles and delineation of policy action to increase the productivity of the poor have to be as important as planning the standard goal: economic growth. Rather than stressing the growth target, the government should place emphasis on how many new jobs it can create and how many small-scale businesses it can help to advance.

Only by achieving these goals, can we improve our people's socioeconomic conditions and promote our democracy. Therefore, the enhancement of our democracy requires a reorientation of our development strategy.

Another crucial factor is the leaders' capability. Due to Indonesia's paternalistic nature, a clear national vision of leaders, from political to religious leaders, constitutes a powerful motivation to promote democratic values. This suggests that our leaders should show deep compassion on democratic values and humanitarian issues regardless of their backgrounds.

They have to be the leaders in the elimination of the most fundamental obstacle to enhancing democracy: our national paranoia about religion, race and ethnicity. We undoubtedly lack leaders like first vice president Mohammad Hatta, and generals A.H. Nasoetion and T.B. Simatupang, who not only kept their faith as a personal matter, but who also stood for humanity above anything, including their careers.

The writer chairs the Indonesian Institute, a Boston-based research organization.