Will economics brings about democracy?
By Makmur Keliat
The following article is the first of two articles on the relations between market economy and democratization.
SURABAYA (JP): The hypothesis that there is a correlation between the market economy and liberal democracy is by no means new. It is argued that a stable democracy requires certain preconditions in education, urbanization, economics, and the press.
Conventional wisdom has is that the spirit of democracy will flourish in countries where these indices are high.
Although some doubt the validity of this idea for developing countries, there is a new enthusiasm among social scientists to prove such a correlation.
Recent studies have examined evolving democratic systems in developing countries. While many democratic governments in developing countries fell to authoritarian ones in the past, the tectonics of history are pushing in a different direction now. Latin America was the first region to emerge from authoritarianism in the early 1980s, followed by some East Asian countries in the mid and late 1980s: the Philippines, South Korea and Taiwan.
The collapse of the Soviet Union further boosted the idea that liberal democracy and the market economy represent the best way of life for humanity. Moreover, rapid economic globalization has allowed global capital flows to promote ever more sweeping market liberalization worldwide. The dramatic advances in information technology are creating a virtual society, kindling a slow brushfire of democracy.
Indonesia is an interesting case. With average annual growth of six percent under the New Order regime, Indonesia has achieved remarkable economic progress compared to other developing countries in Latin American or Africa.
As a result of this success, there has been an explosion of university graduates. Economic development has brought more and more villagers into the booming cities, and a ballooning middle class has emerged.
Though export revenues from oil are still significant, they account for less than half of the balance of trade. The erratically fluctuating price of oil prompted the Indonesian government to introduce market-oriented economic reforms. Since 1973 various packages of economic deregulation were launched to diversify exports and shift from an import substitution strategy to an export oriented one. In short, the economy has gradually become more integrated into the global economic structure.
Politically, Indonesia is in a complicated situation. The country is still being governed by an authoritarian regime, and various sectors of society have become more vocal in the past few years.
Strikes are cropping up more frequently in big cities like Jakarta, Surabaya, Bandung and Medan, suggesting that the co- opting strategy the government has adopted seems no longer to be working. The aspirations of workers are not being met.
The establishment of the Indonesian Prosperous Labor Union (SBSI) in 1992 underlines this point. It amounted to a rejection of the All-Indonesia Workers Union (SPSI), the only union allowed, a body close to the government.
It is also worth mentioning that there is an increasing number of mass organizations with political aspirations. The acronyms they adopt often imply this. The Indonesian National Unity Party for instance uses the acronym PNI (formerly the acronym of the Indonesian Nationalist Party which was merged into the Indonesian Democratic Party). Meanwhile Majelis Syarikat Ummat Muslimin Indonesia uses the acronym Masyumi (formerly of the Majelis Syuro Indonesia, a leading political party of the 1950's which disbanded in 1960).
Moslem intellectuals established their own organization in 1990, the Association of Indonesian Moslem Intellectuals (ICMI). Meanwhile the YKPK (National Foundation Brotherhood) and PCPP (Association of Intellectuals for Pancasila Development) established in 1995 could be considered an intellectual-political organization simply because many noted Indonesian politicians and retired generals are members.
Various economic issues such as capital concentration and conglomeration, economic inequity, and poverty in rural areas are not taboo anymore. Demands for the breaking up of dubious monopolies are being openly articulated.
It is becoming increasingly common to see protests and counter-protests in front of the House of Representatives. The government itself has announced that the army's quota in the House will be reduced. However, it remains questionable whether all this means that Indonesia is heading toward democracy.