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After the Tsunami

Will economic crisis bring democracy to Asia?

Until the East Asian miracle went up in a cloud of smoke, most East Asian specialists and comparative political scientists were optimistic about the prospects for democracy in the region. That’s because nearly everyone subscribed to the “modernization thesis” first proposed by Stanford University Professor Seymour Martin Lipset in 1959. According to this thesis, economic development produces a new urban middle class—professionals, entrepreneurs, managers, and so on—motivated to challenge authoritarian rule. As Harold Crouch and James Morely put it in their widely cited 1993 book, at higher levels of economic growth, “we should expect the economy then to have become too complex for the state to manage alone. We should also expect that at least some of the new social classes would have become too large and politically conscious to be willing any longer to defer to the judgments of the bureaucracy or to be excluded from the political process. An important threshold should be crossed, the internal balance of power should tip, and authoritarian rule should give way to a democratic transformation.”

Democratization in the rapidly developing countries of South Korea, Thailand, and Taiwan seemed to lend support to this hypothesis. Where the model clearly did not fit, as in authoritarian Singapore and Indonesia, political scientists reasoned that it was merely a matter of time before liberal democracy would blossom. Eventually the middle classes would realize that they needed to push for democracy in order to secure access to a fair share of an ever-growing pie. A more romantic strain of thought also informed such analyses: In a 1995 book entitled Democracy and Development in Southeast Asia, Clark Neher and Ross Marlay wrote, “The winds of change in this new era of democratization have touched Southeast Asia, particularly those states in which modernization has widened people’s horizons and encouraged them to ask for greater liberty.”

On the face of it, the Asian financial crisis would seem to have introduced new grounds for pessimism. The middle classes have been the first to bear the brunt of currency depreciations and stock-market collapses. (The full impact on ordinary workers will be felt later this year.) The first group to protest the International Monetary Fund’s austerity package for Korea was a group of stock brokers who feared for their jobs. The major casualty (so far) in Hong Kong has been Peregrine Investments Holdings, one of the largest investment banks in Asia. Imported goods have become too expensive for all but the super rich: sales of imported cars, once a staple product for the Thai middle class, have dropped by nearly 40 percent in Bangkok. The Malaysian government, which had been planning to spur its next technological upgrade by developing its own version of Silicon Valley, instead launched the new year by calling on its citizens to grow cauliflower in their gardens so they wouldn’t need to import the vegetable from abroad. Thousands of university students from Asia have abandoned study plans in the United States. (Among them is a former student of mine from the National University of Singapore, who may be forced to delay his Ph.D. at Berkeley.) Asian tourists have become a rare sight in London and New York. Some members of the middle classes have even been reduced to a hand-to-mouth existence: the Far Eastern Economic Review reports that two Indonesian businessmen in suits and ties traded blows over a container of cooking oil in an upmarket bulkpurchase store. The newly impoverished middle classes, in short, now seem to have other things to worry about besides freedom and democracy. Modernization theorists may have to look outside Asia to invest their hopes.

But what if the modernization theorists had been wrong about Asia all along? Modernization theory has been challenged by another, more “pessimistic” view—developed in a 1995 book entitled Towards Illiberal Democracy in Pacific Asia, which I coauthored with three other academics. We argue that there is little basis to the claim that the middle classes are the bearers of political liberalization in the Asia-Pacific region. This revisionist standpoint developed partly in response to the experience of Southeast Asian states since the 1980s, which seemed to grow more repressive as they attained new levels of prosperity. Singapore’s brief flirtation with liberalization—a period local wits refer to as the country’s “Prague spring”—came to an abrupt end with the sacking of opposition member Chee Soon Juan from his university post in 1993. During this same period, both Indonesia and Malaysia developed into increasingly centralized one-party states. More surprisingly, perhaps, the middle classes seemed to generally support the consolidation of authoritarian rule. In Singapore, the pro-democracy opposition groups derived most of their support from the lower classes. In Malaysia, the burgeoning middle class actively supported an increasingly authoritarian and interventionist state. The prospering middle class in Indonesia also seemed firmly on the side of the status quo.

What explains the political passivity of the Asian middle classes in economic boom times? Partly, they had been kept in check by fear. Economically successful Asian states have not ruled by means of systematic terror. Instead, the right dose of “big sticks,” as Singapore’s president Lee Kuan Yew put it, has been sufficient: “You don’t have to use it often. Use it once, twice, against big people. The rest will take notice.” Another factor has been an education system that encourages rote learning and cramming for exams. Dominant, nonliberal cultural values such as deference to ruling elites may also have played a role. The most important factor, however, has been the prevalence of a state-led approach to economic development in East and Southeast Asia. The middle classes were the main beneficiaries of state economic paternalism, which gave them a strong stake in the perpetuation of authoritarian rule. The Malaysian middle class, for example, tends to be employed either in the state bureaucracy or in businesses with links to the ruling political party. One might expect academics to be more independent, but that is often not the case: in the past few years, several heads of departments at the National University of Singapore have also been members of parliament for the ruling party, and, not surprisingly, professors tend to be rewarded on grounds unrelated to academic merit. (The plaque on the desk of the head of the department of political science best expresses the dominant philosophy: “An ounce of loyalty is worth more than a pound of cleverness.”)

This is not to deny that real democratization—in the sense of free and fair competitive elections for political rulers—has occurred in some East Asian states. But, typically speaking, the middle classes have not been at the forefront of movements for political change. In Taiwan, most pro-democracy street demonstrators during the late 1980s came from the working classes. (Taxi drivers were especially prominent.) In Korea, according to Seoul National University Professor Sangjin Han, university students drew on the Confucian tradition of respect for intellectual elites and played the crucial role of establishing a society-wide commitment to democracy. The urban middle classes only took to the streets in June 1987, when continued military rule threatened to bring on social chaos shortly before the 1988 Olympic Games. And The New York Times noted that the middle-class demonstrators “took to the streets to demand democracy [but] they also chanted `order,’“ which suggests that the desire for “greater liberty” may not have been the primary motivation.

Given the middle class’s current economic troubles, the question is whether the pessimists of Asia should now become optimists. After all, the relatively impoverished middle classes may now have an incentive to question the old authoritarian ways and may seem set to finally adopt their “proper” role as the agents of political liberalization. Of course, this assumes that the authorities are held responsible for the financial crisis and that there is a better alternative in sight. And there is much variation on that count within the Asia-Pacific region.

Let us begin with the three worst-hit countries that have had to seek IMF help. In Korea, the Kim Young Sam administration was widely viewed as having contributed to the problem of corporate debt. Government officials and bureaucrats had pressured banks to make questionable loans to the country’s largest enterprises (chaebol), and the financial crisis made it obvious that the cozy relationship between government and big business needed to be changed. In this case, a ready alternative was available in the person of Kim Dae Jung, a former political dissident who had criticized the economic dominance of the chaebol in past presidential campaigns. Though Kim had been written off as a has-been by most political analysts, he narrowly edged out the “establishment candidate” in last December’s presidential elections partly due to increased support from the middle classes. Kim’s victory may serve the function of consolidating the democratic system in Korea, especially if he does a credible job of steering his nation through its worst economic crisis in decades.

In Thailand, the government of Prime Minister Chavalit Yongchaiyudh (an armed forces commander during the 1980s) was widely held responsible for having contributed to the country’s economic crisis by condoning corruption, injecting politics into economic management, and failing to overhaul the troubled financial sector. As a consequence, he was forced to support the country’s new constitution, which was designed to eradicate corruption and money politics. (It is interesting to note, however, that constitutional reformers in Thailand did not take all their cues from the ideals of Western liberal democracies: one provision prevents citizens without university degrees from running for the legislature.) But, as Thailand’s economy continued to head downward, it became clear that constitutional changes would not be enough to satisfy the urban middle classes. In this case, an alternative was also available: the Democratic Party, headed by Chuan Leekpai, which narrowly lost the last elections. Several hundred white-collar workers led demonstrations in Bangkok, and shortly thereafter Chavalit resigned and ceded power to a coalition government headed by Leekpai. The economy has gone from bad to worse, however, and it is not inconceivable that the middle class will lose faith in the democratic process.

The middle class is more divided in Indonesia, currently the epicenter of the Asian storm. The country is ruled by President Suharto, a former general who took power during an anti-Communist coup in 1965 that left more than a half million dead (primarily members of the Chinese minority). Indonesia is one of the world’s most corrupt countries, and it is well-known that the family of President Suharto has swept up most of the country’s lucrative businesses into its own government-protected monopolies (some of which are to be dismantled in accordance with the latest IMF demands). Thus, a group of academics recently urged the nation to elect a new president, adding that the reform measures backed by the IMF would not work “because the crisis is the result of the greed of a small group of people close to the power holders.” The problem, however, is that there is no credible alternative from the point of view of most local businessmen and international investors. This explains why Indonesia’s financial crisis suddenly worsened when concerns about Suharto’s health emerged last December. Suharto does face pressure to nominate a credible successor, but this can be done without strengthening the (practically nonexistent) democratic system. And, since it is widely expected that social unrest will take a turn for the worse, the military is not likely to relax its grip on power in the foreseeable future.

Hong Kong and Singapore have recently been hit by the region’s economic turmoil, but there is no obvious reason to expect that this will benefit pro-democracy forces. Few seem to blame the government for Hong Kong’s economic downturn: according to the latest poll, satisfaction with Chief Executive Tung Chee-hwa has been steadily rising since last June. The reason is that Hong Kong is widely perceived to be the victim of the regional currency crisis in Southeast Asia, which puts pressure on the Hong Kong dollar. As a result, goes the common view, the government is stuck between a rock and a hard place: either it removes the local currency’s peg to the U.S. dollar, which could trigger widespread capital flight, or it defends the peg with high interest rates, which hurts the property sector and the stock market. Furthermore, though an alternative to the ruling regime is available in the form of the Democratic Party and its allies, the Democrats have traditionally received most of their support from the lower classes. Of course, some educated professionals did support the Democrats, but this was driven primarily by fear about Hong Kong’s civil liberties following the transition to Chinese sovereignty. And the one piece of good news in Hong Kong is that the mainland’s Communist government has (so far) taken a hands-off approach to Hong Kong’s internal affairs. In short, it does not look like the middle class is about to lead a democratic revolution in Hong Kong.

The situation seems to be even more bleak for democrats in Singapore. Even the government’s critics seem to recognize that it has done a relatively good job of managing the economy. The country has prided itself on being the East Asian home of no-nonsense financial regulation, and it seemed to offer a safe haven for investors. But Singapore’s economy suddenly took a turn for the worse last December when neighboring Indonesia, one of its big Asian trading partners, seemed to be spinning out of control. The worry that antiChinese riots in Indonesia might endanger Singapore’s security also has contributed to the panic. However, it seems unlikely that the middle classes will blame the government for these developments. Moreover, there is no credible opposition capable of challenging the ruling party, since several prominent opposition figures have recently been forced into exile through various tactics in the government’s bag of dirty tricks (interrogation by the Internal Security Department, libel suits for defamation of government officials, harassment by taxation authorities, and so on).

There is, however, one argument for democracy that may be relevant even in those nations where governments are not likely to be held responsible for economic troubles. Democracy can counter the human inclination to put personal goals first at the expense of the public interest; this, in turn, can lead to a broader sense of public-spiritedness. John Stuart Mill famously described “the moral part of the instruction afforded by the participation of the private citizen, if even rarely, in public functions. He is called upon, while so engaged, to weigh interests not his own; to be guided in case of conflicting claims by another rule than his private partialities; to apply, at every turn, principles and maxims which have for their reason of existence the common good....He is made to feel himself one of the public, and whatever is for their benefit to be for his benefit.”

Conversely, Mill adds, the “subjects” of an authoritarian regime would lack trust in their fellows, have no interest in public affairs, and certainly have no inclination to sacrifice their own “private” interests for the sake of the public good: “Let a person have nothing to do for his country, and he will not care for it.” Even a “good despotism” which manages the collective interests of the people cannot counter the tendency toward selfishness since it cannot provide the opportunity for people to cooperate and to discover common interests that may otherwise have gone unnoticed. There may not be “positive oppression by officers of the state,” but “the intelligence and sentiments of the whole people are given up to the material interests, and when these are provided for, to the amusement and ornamentation, of private life.”

Alexis de Tocqueville was more cynical, pointing out that despotic rulers actually have an interest in fostering the blind pursuit of material interests: “Love of gain, a fondness for business careers, the desire to get rich at all costs, a craving for material comfort and easy living quickly become ruling passions under a despotic government.... It is in the nature of despotism that it should foster such desires and propagate their havoc. Lowering as they do the national morale, they are despotism’s safeguard since they divert men’s attention from public affairs.”

In the contemporary world, Singapore and Hong Kong best fit this description of “good” despotic regimes. Their governments are relatively “clean,” and they have provided the social conditions for the enrichment of their peoples. The flip side, however, is that Singaporeans and Hong Kongers are often described by social critics as “apathetic,” “materialistic,” and “alienated.” The Singaporean journalist Cherian George indirectly holds the government responsible for the sorry state of affairs in his country: one could hardly blame people for ignoring their political obligations, he says, “when they hear so many cautionary tales: of Singaporeans whose careers came to a premature end after they voiced dissent; of critics who found themselves under investigation; of individuals who were detained without trial or even though they seemed not to pose any real threat; of tapped phones and opened letters. The moral of these stories: In Singapore, it’s better to mind your own business, make money, and leave politics to the politicians.”

In Hong Kong, the new administration does not (so far) resort to scare tactics, but it is fixing the rules for this May’s legislative elections to ensure that the Democrats will not get a majority of the seats (for example, by slashing the number of eligible voters for “functional constituencies” from 2.7 million to 186,000). Not surprisingly, these elections have been greeted with widespread apathy, and the government’s recent costly attempt to drum up interest through a door-to-door voter registration campaign has failed to ignite interest.

Political apathy may not be a serious problem in economic boom times, but the situation may change when governments can no longer deliver material benefits and social peace. Hong Kong has been facing a serious brain drain during the last decade or so, although things were beginning to improve once it became clear that the Chinese Communist Party was not intent on killing the goose that lays golden eggs. It is less well-known that Singapore has had a similar problem. According to a poll taken last fall—before the Asian financial crisis had hit Singapore—40 percent of young people surveyed said that they were prepared to consider emigration. An earlier survey by a government think tank found that “the better educated, those with high incomes, those educated in the English stream, and the politically alienated” were especially prone to consider leaving the country for greener pastures.

It is almost certain that the brain drain will get much worse during the next two or three years. The Singaporean government had been dealing with this problem by recruiting more talent from abroad, but this strategy may no longer be effective in times of economic hardship. The only other solution is to give people a greater say in political affairs so that they will be more motivated to stick with their “fellow citizens” in the dark days ahead.

Daniel A. Bell teaches political philosophy at the University of Hong Kong. He is the author of the forthcoming East Meets West: Human Rights and Democracy in Asia. This article appeared in the March 9, 1998 issue of the magazine.