Many entrepreneurs prefer stability to democracy

Many entrepreneurs prefer stability to democracy

B. Herry-Priyono, Jakarta

For almost a year during the 1998 turbulence, I happened to do
in-depth interviews with around 86 businesspeople in Indonesia
for my dissertation. Soeharto's downfall on May 21 brought them
relief as much as angst. The angst about the imminent emergence
of politico-economic disorder gradually developed into widespread
frustration with the Habibie regime.

The following verbatim remark is typical: "This situation is
confusing, very bad for business. Habibie is weak, knows nothing
about how to create stability. What we want is business. During
the era of Pak Harto, at least we had stability for business. Now
that he's gone, business is dying. We need strongman (sic.) like
him..."

As we now can see, the angst has apparently lasted much longer
than expected, and haunts the current presidential election. A
similar syndrome seems to have, once again, emerged on our
politico-economic landscape.

No doubt, the stage on which the syndrome is currently at work
is different from the one in 1998, but it is not entirely
different. Such a syndrome develops amid growing talk about the
unpredictability of the business climate, stronger demands from
the global business sector for more economic liberalization, the
view that economic salvation is Indonesia's key to redemption,
the need for increasing foreign investment to solve chronic
unemployment, and the like.

It is not the justifiability of these concerns that matters
here. For, on closer inspection, some of them are a little more
than reflections of a herd mentality. Alas, in the end, it is
neither the economic pundits nor political experts who will have
the last say, but the business sector.

As Charles Lindblom, that noted political-economist, rightly
pointed out nearly three decades ago, this fact is rooted in the
"privileged position of business in society". Even a despot and
his enlightened entourage well "understand that they must, at
peril to themselves, meet business needs", and this is true "not
because businessmen enter into interest-group and party
politics".

While the business sector shares with other sectors the need
for order and stability, it has a bigger stake than the others in
the need for order and stability. In this sense, the choice
between democracy and tyranny is relative to the imperative of
business.

To put it bluntly, if a democrat is believed to meet these
requirements, many from the business sector will support him. If
a tyrant is deemed to be better capable of providing the right
climate, they will support the dictator.

It is this syndrome that seems to have resurfaced in the runup
to the current election. And, if we investigate further, the
issue brings into the open a taboo that keeps trying to stay
hidden: The link between the economy and democracy.
Unfortunately, most accounts of the link between the two have
been boiled down to essentials, and are couched in a strange
language. It is either the political process that must obey the
demands of business convenience, or it is the business climate
that must submit to populist politics.

Again, due to the privileged position of business in society,
in the end it is the former rather than the latter that gains the
upper hand in factual terms. This, for better or worse, is no
doubt the result of the historic ascent of modern corporate
business as being increasingly the main source of employment.

Privilege begets power, as much as power begets privilege. It
is from this very logic that we hear repeated choruses of
truisms, which, boiled down to essentials, argue that the only
way to solve the chronic problem of unemployment is to give
wideranging incentives to corporate business.

Well, that is partially true if today's economy is to get
moving. But, even in Adam Smith's simple recipe, it is certainly
untrue to say that corporate business invests to create jobs. Job
creation is not the motive. Rather, it is one of many side-
effects that result from the need to reap returns on investment.
But, if the process could be gone through by involving the least
number of jobs, it would be better. Then, the argument about the
necessary link between convenience for business and employment,
alas, simply collapses.

All this is not to discourage the sort of reforms that would
make Indonesia a more hospitable place for global investors,
which, for very many reasons, are a must. Rather, this is to
alert would-be policy makers that their task is not simply to
listen blindly to economically illiterate political pundits or
politically illiterate economic experts.

As the real world is always a mixture of factors, the task is
always a matter of walking on a tightrope. Since walking on a
tightrope is a risky affair, the art of policy-making often
simply degenerates into a resort to convenience.

The game is usually played in earnest by the two most
privileged sectors in society that, in times of electoral power
struggles, tend to converge. The politicos of the Republic try to
rid themselves of their difficulties by resorting to economic
short-cuts, while the business sector turns to a search for
praetorian guards.

This is where the strongman syndrome figures large. As one of
my respondents from the corporate sector admits, "For business,
democracy or tyranny is irrelevant. Lee Kuan Yew is good, a
strongman, although his honesty may be too hard for businessmen
in Indonesia".

For some, "strongman" may simply be the term used for a
decisive leader, a highly desirable quality in leadership. For
others, it may contain a lunatic nostalgia for a Soeharto-like
figure. Still for others, the strongman seems to mean a bodyguard
for corporate power.

As with all the talk about democracy, will the last speaker to
leave the podium please turn out the lights?

The writer is Head of the Postgraduate Academic Program at the
Driyarkara School of Philosophy, Jakarta, and is an alumnus of
the London School of Economics (LSE).