Democracy and economic development

B. Herry-Priyono, Jakarta

It is consoling to read Ziad Salim's perceptive article (Economy and democracy: Don't turn out the light, The Jakarta Post, June 22, 2004). I could not agree more with his plea. As history has given us ample lessons, the drive for making any socially consequential exercise of power accountable -- which is the essence of democracy -- will never die.

It is within this spirit that I wrote the brief article to which Salim responded insightfully. There are two technical points that may be useful in this brief rejoinder.

First, when I wrote the article (JP, June 16, 2004), the title was Many entrepreneurs prefer stability to democracy. The title was in fact given by The Jakarta Post editors. It has altered the nuance of the original title I gave, The Strongman Syndrome. Of course the alteration gave a different impression to the literary direction than the one I intended.

Second, there are many styles of writing whose literary application depends on the intention of the writer. I employed in my article a genre that is perhaps close to satire. Having observed electoral power struggles in which the business sector is always deeply involved, I could not help but being engulfed by a sense of poignancy -- because of the so-called "strongman syndrome".

This time, many business tycoons resort to putting their enormous amount of money into candidates who'll guard their business interests, regardless of their orientation toward democracy.

It was against this tendency that my article ended with a pang of satirical poignancy: "As with all the talk about democracy, will the last speaker to leave the podium please turn out the lights?"

Of course, as Salim rightly suggests, the light of democracy should not be turned off. However, despite all good will, I would suggest the following analytical principle. To envision that something must benefit everyone (the business sector included) is not to confuse the normative with the factual.

The concluding question was one of many ways to express the urgency of the normative (of democracy), but at the same time was not unaware there is a yawning gap between the two.

Within this gap stand, among others, many business magnates who could influence the election outcome with their financial clout. Their stand is extremely important, for money is one of the most potent weapons of political power. No doubt, at the normative level, we want tycoons to support the democratic movement. But nothing in the real world of Indonesian politics should prevent us from suspecting what factually happens is a different story.

There is nothing new about the idea of business conservatism. In her comparative study of several countries (Mexico, South Korea, Brazil, Saudi Arabia, Tunisia, Zambia, Egypt and Indonesia), Harvard University political scientist Eva Bellin suggested the following conclusion in 2000: "private sector capitalists in Indonesia have proved consistently reluctant to embrace projects to democratize the country" and have a close "alliance with authoritarianism".

Of course, an empirical pattern is one thing, normative direction is another.

Endless debates are still underway about the precise link between the two. One of the most popular -- though popularity is not to be confused with validity -- argument is that democracy is an endogenous product of economic development.

Putting it bluntly, it is to say democracy has emerged as a result of economic development -- in the same way a dictatorship dies as a country ruled by an authoritarian regime becomes economically richer.

As a country develops its social fabric becomes more complex, its increasingly educated population begins to assert its autonomous energies. Such a society can no longer be run by authoritarian dictates. As society develops economically, various groups will rise against the dictatorial regime, and it will fall.

There is something odd here. In this view, democracy is being secreted out of dictatorships by economic development. That is, democracy is an endogenous result of economic development under dictatorship.

But, since dictatorships generate economic development while economic development leads to democracy, democracy becomes a circuitous process. Indeed, the emergence of democracy is not brought about by economic development. Rather, democracy appears exogenously as a deus ex machina.

This logic is perhaps too academic, but it may be useful to remind us that things are not as clear as they first appear. What seems to be a pattern is that democracy (at least in its formal- procedural form) is prevalent in countries with per capita incomes above US$ 4,000. It is this pattern that seems to lead us, somewhat too haphazardly, to conclude that economic development brings about democracy in a causal manner, while in fact the link is far from being a form of causality.

If economic development is measured by growth, the experience of the Philippines under Marcos as well as Chile under Pinochet was instructive. What has all this to do with the business sector? I completely agree with Salim that many business oligarchs who drive growth under such regimes are not "real entrepreneurs" but "robbers". What is implied is that the former are those who stick to an open market, whereas the latter are seekers of monopolies.

Yet, as the fate of transition economies like many Eastern European countries attest, even a so-called open market is not always compatible with the value of democracy. The root, as some economists, sociologists and political scientists increasingly observe, is the growing power of financial clout of the business magnates to capture policy making and to veto public policies intended for those who need democracy most.

Indeed, democracy does not stop with the state being democratized, for the nature of uncontrolled power shifts with the river of history. After the saga of anti-authoritarian struggle against state-based powers, the other story of democracy concerns the struggle to make money-based powers accountable. It is the unfolding of this parallel story that also interests us, no less, crucially.

So, no qualms please, Salim, for the light of democracy remains alive and bright!

The writer is a Postgraduate lecturer at the Driyarkara School of Philosophy, Jakarta.