FEER: DEMOCRACY AND CRISIS

[suriya@xxxxxxxxxxxx]

DEMOCRACY AND CRISIS

Openness, participation and accountability can become the new "Asian values"

Roundtable Discussing the agenda for change 

FOR AMARTYA SEN, THE 1998 Nobel Prize winner in economics, it beats two
world wars, the atom bomb, computers, cloning, even man on the moon. "The
most important thing that has happened in the 20th century," he told his
rapt audience of national and business leaders, top economists and
academics, "is the rise of democracy." While acknowledging that liberal
politics has been centuries in the making, the India-born master of Trinity
College, Cambridge, argued: "In the 20th Century, democracy was established
as the 'normal' form of government to which any nation is entitled. We do
not have to establish afresh each time whether such and such country is
'ready' for democracy; we now take that for granted." 

No one took issue with Sen about his choice of the top 20th century event
or the supposedly worldwide norm for governance. It wasn't just because he
was preaching to freedom's faithful at the World Bank Conference on
Democracy, Market Economy and Development in Seoul in late February, the
global lender's first foray into political issues. In fact, the Asian
Economic Crisis has muted the voices that once praised East Asian
authoritarianism - including the Bank. It once extolled competent
technocracies unencumbered by elections or interest groups. But in Seoul,
the Bank's boss James Wolfensohn joined South Korean President Kim Dae Jung
in declaring: "It is only through the simultaneous establishment of open
governance and markets that genuine social development can be achieved." 

Plainly, those who favor strong governments largely free from critics'
carping would not have been popular at the forum. Fidel Ramos of the
Philippines was invited, but another leader with a sterling record was not:
Singapore's Lee Kuan Yew. Reflecting the prevailing international view,
ex-dissident Kim stressed in his opening speech: "By channeling scarce
resources into a few targeted areas, and suppressing social conflicts,
authoritarian rule can appear very effective in the short run 

 . . . But behind the facade of rapid growth are moral hazard, bureaucratic
rigidity and political cronyism. The problem of inequality - between
regions, classes and industries - also becomes more serious." 


So is the so-called Asian way of prosperity before freedom, the cause of
the Crisis? Are democracy and free markets the solution? And - a related
question also debated in Seoul - are Asian values incompatible with
democracy? Former Japanese PM Nakasone Yasuhiro blamed the Crisis on
factors outside Asia: "Much was due to the activities of hedge funds, and
they must be monitored to prevent recurrence." But most saw things as Sen
did: "The recent problems of East and Southeast Asia bring out the penalty
of undemocratic governance." The ills are often said to include cronyism,
graft and lack of transparency, even though some democracies are corrupt,
like India, while there are authoritarian places like Singapore that are
honest and efficient. 
More solid is Sen's argument that "political and civil rights give people
the opportunity to draw attention forcefully to general needs and demand
public action." For that reason, "no substantial famine has ever occurred
in any independent and democratic country with a relatively free press." In
sum, the Nobel laureate explains: "When things go fine, this instrumental
role of democracy may not be particularly missed. But it comes into its own
when things get fouled up." Nowhere is this truism more evident than in
Indonesia, where decades of suppressing unrest and even discussions about
economic inequity and ethnic animosity set the stage for the anarchy that
ousted Suharto last May and continues to bleed the nation. 

Nakasone cautioned against too drastic a swing toward freedom.
"Overemphasis on democracy has the danger of causing disorder," he said,
"and overemphasis on market economy may destroy a nation's culture while
stressing efficiency." Sen shared the latter concern over profit-oriented
free enterprise with no sense of social responsibility. But Nakasone did
concur with the general belief that greater freedom and openness is the
direction Asia is headed, even in countries where strong government has
worked. "Once development is accomplished, democracy should replace
authoritarianism," said the ex-PM. "Korea and Taiwan are two examples where
middle-class citizens played main roles in leading the shift." 

AMERICAN POLITICAL SCIENTIST FRANCIS Fukuyama also thinks Asia will go the
way of the West, adopting democracy and open markets. His most famous book,
The End of History and the Last Man, declared Western liberalism, with its
tenets of representative democracy, the rule of law, human rights and free
enterprise, triumphant after the Cold War. Besides the global tide toward
freedom, the Crisis is also driving Asia toward convergence with the West,
says Fukuyama, for it "has led to the unconditional defeat of the Japanese
economic model of state-led development." Asian authoritarianism too has
suffered setbacks, with Suharto's fall and the troubles of Malaysia's
Mahathir Mohamad. Even in China, where autocracy remains entrenched,
citizens enriched or impoverished by economic reform are increasingly
asserting themselves. 

In the Asian values debate, Fukuyama reiterated the common position that
there are different cultures in the region and no single continent-wide set

of values to speak of. Moreover, he argued, values were manifested through
institutions. For example, even if American forces imposed Western-style
democracy on occupied Japan, the country did not evolve a political
landscape with two or more parties frequently alternating in power.
Instead, the Japanese tendency to strive for consensus helped elevate and
keep a single party in power for most of democracy's half-century in Japan.
The key point is, whatever a nation or region's values may be, they could
well find expression in institutions borrowed from very different cultures. 
You Jong Keun, a top Kim aide, went further and argued that Asian values
did jibe with democracy. The concept of the mandate of heaven, enunciated
by the Chinese philosopher Mencius, conferred on rulers both legitimacy and
the duty to govern well. Otherwise, they could be overthrown. Confucian
civil-service tests, You noted, were democratic - open to anyone,
regardless of family and wealth. Confucian good governance stressed the
authority of a well-cultivated elite, "the rule of superior man." And that,
You argued, was one reason why Asian societies "failed to realize their
ideals. They did not understand the rule of law, without which
accountability, fair competition and transparency can be easily violated." 

One highly objective voice among democracy's discussants in Seoul, if 
only for his heavy use of statistics, was China-born Pei Minxin, a former
Princeton professor of politics. He used regression analysis of data on
dozens of countries to gauge the effect of democratization, rising incomes
and economic liberalization on one another and on governance. Mirroring
other studies, Pei found no clear evidence that democratic governments
promote development better than authoritarian ones. Nor does greater
political freedom improve governance appreciably; indeed, corruption tends
to rise in new democracies, particularly less affluent ones. 

Does wealth enhance political freedom? To a small degree. What does pay off
in both governance and democracy is economic reform, especially the ones
that protect property rights, promote free enterprise and enhance
macroeconomic management. "A unit increase in economic freedom has about
three times the effect on governance as a unit increase in political
freedom," Pei reported. For one thing, shrinking state control of business
limits chances for graft. Economic reform also makes people richer and more
assertive. For democracies, rising affluence tends to make them more likely
to stay free longer: eight years on average when per-capita income hits
$1,000 in purchasing-power parity terms (as in Cambodia); and 26 years at
$2,000-$3,000 PPP (Philippines). At $6,000 (Thailand), democracy becomes
immortal. 

Pei concluded that democracy advocates ought to put the priority on
economic reform - against the fashion in the West of pushing political
rights first, often with economic sanctions, which could harm private
enterprise. Besides improving governance and, in the long run, promoting
democracy, economic liberalization is less likely to be suppressed, since
it poses no political threat to regimes. Unfortunately, says Pei, "it is

harder to educate U.S. congressmen on these points than to find reformers
in non-democratic countries." 

During his presidency, Fidel Ramos also grappled with the practicalities of
promoting both democracy and development - a double-barreled agenda Lee
Kuan Yew cautioned against. In an hour-long talk with Asiaweek, he
explained how he liberalized major industries to promote growth, improve
services and liberate people and businesses from corrupt, abusive officials
and "the overpowering political influence of the elite." On the political
front, he built on the democratic foundations laid by his predecessor,
Corazon Aquino, implementing electoral and judicial reform and forging
peace accords with rebel groups threatening the fledgling Philippine
democracy. 
"People empowerment" was his overarching label for the program. In effect,
Ramos tried to make democracy really work for ordinary citizens. Summing up
his thinking, he explained: "While economic growth may begin without
democracy, democracy is possible only under the market economy, which helps
create the private realm - called civil society - that enables political
and social freedom to flourish. In turn, democracy consolidates
development. The self-worth that it nurtures in people sustains civil
society and liberates the entrepreneurial spirit." 

Kim and Sen also referred to the need for new values as nations embraced
democracy. Sen said greater public involvement can give people a deeper
sense of justice and the common good. Kim called for a spirit of "universal
globalism." If the Crisis does help create a new soul for Asians, it may
just be worth all the agony.