The Asian crisis: Towards democracy?

The Asian crisis: Towards democracy?

By Gwynne Dyer

This is the last in a three-part series of articles examining
the economic, social, and political implications of the crisis
that began in Asia and now threatens to involve the entire world.
Previous parts appeared in this newspaper's Friday and Saturday
(Jan. 23-24) editions.

LONDON (JP): "If the first reaction to the economic crisis by
many Asian leaders has been denial, the need to attract foreign
capital will eventually force a more rational response. That
transition may result in a change of leadership in several
countries." -- Christopher Wood, Peregrine Securities, Hong Kong

Typical Western arrogance and free-market triumphalism. What
does this ignorant Western capitalist understand of the ancient
and subtle cultures of Asia? Nothing -- and it serves him right
that the Peregrine Group has been one of Hong Kong's earliest
casualties in the Asian financial panic.

But maybe he's right nevertheless. What if modernization truly
is a package, and nobody gets to cherry-pick only the aspects
that appeal to them? If every country that acquires a modern
economy is fated to get a modern political system as well, then
Asia is heading for democracy. All across the region, there are
signs that this may be the outcome:

Bangkok, November 20: Chuan Leekpai was so surprised at
becoming prime minister on Nov. 8 that he kept forgetting and
using opposition facilities instead. He went on driving the car
assigned to the opposition leader, and showed up at a meeting
room where the opposition parties were plotting strategy against
him.

Silly old Chuan. But the point is that the Thais have
responded to the crash by dumping the traditional politicos whose
power came from buying rural votes wholesale, and who were then
compelled to loot the government while in power to refill their
coffers for the next election. In place of the robber-barons,
they have installed Chuan's Democratic Party, which is Thailand's
only modern, broadly based political party.

The "tiger" economies got to where they are now (or rather,
where they were three to six months ago) by using authoritarian
and essentially pre-modern methods to grow their economies.
Cronies and political allies got endless unsecured credits, any
little problems that this caused the financial institutions were
solved by further injections of government funds, and foreign
competition was frozen out by manipulation of the legal system.

It was a system that England's King Henry VIII or France's
Cardinal Richelieu would have been quite at home with, and it did
the job. The combination of modern production technologies with
low wages, an emerging global market, and unlimited funds for
investment enabled these countries to achieve truly amazing
growth rates. For a while.

Now the party is over, and the disciplines being applied to
Asia's emerging economies by the global markets, or directly by
the International Monetary Fund, will put an end to those pre-
modern economic relationships. They may put an end to the regimes
that built their own power on those relationships as well.

Seoul, December 24: South Korea's President-elect Kim Dae-jung
declares himself "flabbergasted" at the scale of the country's
economic crisis. But the real surprise is that this man, long
vilified as a communist by the military regimes who directed the
"Miracle on the Han (River)", and twice the target of state-
organized assassination attempts, was elected to clear up the
mess they left behind.

South Korea, like Thailand, made the formal transition from
military rule to civilian democracy at the end of the 1980s, but
neither country is yet a fully modern state where politics, the
military, the business world and the courts have clearly defined
and largely separate spheres of responsibility. Now, the crisis
is forcing them towards that conclusion.

Will it work the same way in the rest of Asia too? Will
countries like Indonesia and even China be pushed towards more
democracy, or deeper into tyranny? Analogies are tricky, but
they're all we have to work with.

The first countries to democratize, in North America and
Western Europe, did so at more or less the same time as they
modernized economically. But the economic growth was very slow by
contemporary Asian standards, and the political change came in
great sudden lurches like the American and French revolutions, so
it's hard to establish chains of cause and effect. All you can
safely say is that there was "some" link between economic
modernization and democracy in the West.

In the second great wave of democratization, in the former
communist countries of Central and Eastern Europe at the end of
the 1980s, the relationship seems closer and clearer.
The Stalinist pattern of industrialization produced "East Asian"
growth rates at first, by simply forcing peasants into the
factories and exploiting their cheap labor, but the system's
inability to move beyond primitive "command" relationships
resulted in economic stagnation by the 1970s. After two decades
of frustration, the citizens rebelled -- and their tactics were
far more sophisticated than the first-wave democratic revolutions
because they knew so much more.

The miracle of 1989-1991 was not just that all those Orwellian
dictatorships fell. It was that they almost all fell non-
violently, and were instantly replaced in most places by more or
less functioning democracies. Down in the ethnically tangled,
mountainous southern fringes of the old communist empire it got
quite bloody for a while, and many of the successor states are
still struggling economically, but the political transition was
astonishingly smooth in the industrialized countries. Why?

Because even Soviet-style industrialization produced so many
urban, literate, modern people, and even the closed Soviet-style
economies had so many contacts with the outside world, that it
was impossible to close off the information flows.

By the late 1980s, in a place like Moscow, everybody knew
everything -- about how their own country was really run, about
the alternatives available in the rest of the world, and about
the possible techniques (like non-violent action) for moving from
A to B. Then it only took a trigger like the opening of the
Berlin Wall for the whole avalanche of democratization to begin.

In the "newly industrializing countries" of Asia and
elsewhere, industrialization has produced the same critical mass
of urban, literate people that swept away the old communist
systems in Europe. There is virtually no control over the
information flows in these countries except for China, and even
there it isn't very effective. Rising prosperity has protected
some of the old regimes for a while, but unless Asians are
fundamentally different, the same logic ought to apply in the
end.

"Asian values" was a crude attempt by the authoritarian
regimes to escape this conclusion by arguing that "Asians" are
indeed fundamentally different. But the "Asian" social and
political values preached by Singapore's Lee Kuan Yew or
Malaysia's Mahathir Mohamad are virtually identical to the values
that predominated in the pre-industrial, pre-democratic West.

There is no common "Asian" culture: Thailand and Myanmar are
Buddhist, Indonesia and Malaysia are Moslem, the Philippines is
Christian, the Chinese are ex-Confucian ex-Marxist-Leninists, and
the Koreans are deeply confused Confucian/Buddhist/animist/
Christians. "Asian values", to the extent that it ever meant
anything, is a slogan in a generational war among Asians, not
some profound and ineradicable cultural difference between East
and West.

The modern style of non-violent democratic revolution was
actually pioneered in Asia, first in the Philippines in 1986,
then in Thailand, Bangladesh and South Korea (partial successes)
and in Myanmar and China (bloody failures) in 1987-1989, even
before it was copied in communist Europe. This fact largely
escaped notice because there was no monolithic political empire
in Asia, and therefore no visible "wave" effect. Until, perhaps,
now.

Jakarta, January 18: Even two months ago, it was taken for
granted that Indonesia's 76-year-old President Soeharto would win
the March presidential elections and go on to a seventh five-year
term. But now, with Indonesia's currency worth only a fraction of
its August value, many people have little left to lose. "The only
way to turn the situation around is to break the status quo,"
says Amien Rais, chairman of the 25-million-strong Moslem
organization Muhammadiyah. "And the only way to do that is to
replace Soeharto."

"He should have stepped down a long time ago, we need
different people," agreed Abdurrahman Wahid, leader of the
Nahdlatul Ulama, which claims a grass-roots membership of 30
million Moslems. And Megawati Soekarnoputri, daughter of the man
whom Soeharto replaced 32 years ago, has volunteered to run for
the presidency herself if nobody else will stand against him.

So, can economic crisis bring political reform? There is one
recent precedent: three years ago, the Mexican economy hit the
buffers just as dramatically as the recent smashes in Thailand or
South Korea. The peso halved in value, foreign investment fled,
and wages and employment collapsed. An IMF bail-out imposed
severe disciplines on the economy, and ordinary Mexicans paid the
price.

The macroeconomic statistics for Mexico have improved
tremendously since then, but real wages are still 23 percent
lower than in 1994, and job losses continued until last year. The
economic pain has been intense -- yet this is also the period
when Mexico finally took decisive steps towards democracy.

Mexico became a one-party state seventy years ago, and though
opposition parties have been allowed to operate for the past few
decades, they were never allowed to win at the federal level. In
last July's elections, however, the Institutional Revolutionary
Party (PRI) lost its majority in the lower house of Congress.

The PRI machine could have prevented it, but faced with
overwhelming public demand for fair elections, it did not.
President Ernesto Zedillo has now agreed to work with an
opposition-dominated Congress, and PRI could even lose the
presidency in three years' time. All this in the midst of, indeed
because of, the huge economic crisis that has hit the country.

Can we expect the same counter-intuitive outcome in crisis-
struck Asian countries that have not yet democratized? Very
probably, yes. If the virus spreads to China, we might even see
democratization there.

So all we have to worry about now is a global depression.