Myanmar's transition raises Asia's democracy stakes

By Jonathan Power

LONDON (JP): Myanmar's wickedly corrupt generals have finally taken a significant step back towards where they were in 1990. Then Miss Aung San Suu Kyi, at last freed from house arrest last week, won over 60 percent of the vote.

But whether the generals now see themselves back on the road that leads to democracy will depend a lot on whether they judge it to be in their own economic interest. They may well persist in thinking that democracy is the enemy of progress, despite the evidence of the last 34 years of military rule which has relegated their country to being one of the poorest in the world.

After all, this is the part of the globe where the Asian tigers have shown their paces, all the while pontificating that a firm political hand was integral to their success. Listen to Lee Kuan Yew, Singapore's ex-prime minister and still its eminence grise: "I believe that what a country needs to develop is discipline more than democracy. The exuberance of democracy leads to indiscipline and disorderly conduct which are inimical to development."

South Korea, Taiwan, Malaysia, Singapore, Indonesia, Thailand and Hong Kong have all thrived under the autocrat's baton, although few ever asked if they might have made as much economic progress under democratic government.

The Philippines, however, did not fare well under dictatorship, and neither has Myanmar, which goes to suggest other factors are at work.

To put Southeast and East Asia's success down to its propensity to autocracy is to ignore its cultural peculiarities.

The Confucianist work ethic in countries with a significant Chinese and Korean population is probably unique, and as long as there is economic liberalism it will do its stuff, whatever the type of political regime.

Nevertheless, as the economy becomes more sophisticated and the educated middle class becomes more influential, democracy knocks hard on these doors too. South Korea, Taiwan and Hong Kong demonstrate this clearly, having seriously democratized over the last five years. Even in Malaysia and Singapore, where governments mix a version of democracy with their own firm hand, the pressures to loosen the reins further are very apparent.

Whether now or in five years time, but probably not longer, all these fast growth regimes, including China, will have to face reality and reality is that nearly all the world's richest countries are free, and nearly all the poorest are not. If dictatorship made countries rich, then Africa and Latin America would, by now, be economic heavyweights.

Surprisingly, there is not much academic research on the relationship between development and democracy, but one recent study by Surjit Bhalla, formerly of the World Bank, goes a long way towards filling in the detail.

It examines 90 countries over the period 1973-90. It finds that civil and political freedoms do promote growth. Bhalla ranks countries on a scale of 1 to 7, ranging from free (America is 1) to not free (Iraq is 7). Other things being equal--in particular economic freedom--an improvement of one point in civil and political freedom raises annual growth per head by approximately a full percentage point.

Economic freedom and political freedom reinforce each other. In the first instance--and this partly accounts for Southeast and East Asia's unique success--economic freedom is often (but not always) all that is necessary to give the entrepreneurial and industrial-minded elbow room to get moving.

But in the long run, even the most egocentric capitalist learns to appreciate a political structure that will assure that his property, both material and intellectual, is protected.

A dictatorship, however benign, is always more vulnerable than a democracy. It can be more easily overthrown and its policies then simply reversed.

Democracy and the freedoms and obligations that usually go with it--an independent judiciary and freedom of expression, the enforcement of contracts and the inbuilt pressures for free trade--give the businessman what he wants over the long run. At the same time, it offers the educated classes an outlet for their opinions and the workers a safety valve for their grievances.

This is why, over the next 20 years, democratic India is probably bound to overtake dictatorial China and why, if China stamps out democracy in Hong Kong after its take-over in 1997, it will end up pulling the plug on the most important part of its economy.

It is also why the pressures to move towards more democracy in Southeast and East Asia are now irresistible and why the countries in Latin America and Africa, with the best economic future, are those which are most democratic.

Myanmar's generals would be wise to look where the winds of change are blowing. If, to concede an argument, there was a time when authoritarianism gave economic progress a brief fillip, it has long passed.