Searching for a New Asia

17 December 2000

A few months ago, all the talk on Asian politics was about reform, new politics, another wave of democratisation, stronger civil society, and higher popular participation. Look around now, and you see regimes in trouble.

In the Philippines, a corrupt populist is fighting the old political dynasties through legal process and competitive street demonstrations. In Indonesia, the new regime lurches from crisis to crisis, struggling with the legacy of a dictatorship which destroyed political institutions and murdered thousands. In Taiwan, a model “new politician” is stumbling through trip-wires set up by the old political machine he defeated at the polls. Thailand is approaching a landmark election amid growing panic that there can only be two possible outcomes: the wrong result or no result. Only Malaysia may seem solid, but that’s because the regime is using old-fashioned methods: tame judges, big sticks, and water cannons.

At the onset of the Asian economic crisis, optimists forecast that the turmoil would light a bonfire under old dictators and corrupt cronies, and a phoenix called good governance would rise from the ashes. Reality has been more complex. Economies are still tottering. Politics are less stable. People are apprehensive about the future. Why is this happening?

Last week a conference met in Japan to debate the “prospects of a new Asia” in the wake of the financial crisis. Japan has decided that it must strengthen its links with its Asian neighbours. This meeting was part of that process. The hosts had invited commentators from all over Asia to come and tell Japanese economists, businessmen and policy-makers what were the problems and prospects.

The Asian guests suggested three reasons for political instability. First, people are wondering who their governments are really working for. Is it the people who elect them, or the IMF and the international financiers who blackmail them? National governments seem incapable or unwilling to protect their people against the dangers of globalisation.

Second, people are wondering why political systems get more democratic, but old oligarchies remain in power. In Indonesia, the cronies abandoned Suharto and lined up behind new political parties so fast you could hardly see the shift. In the Philippines, big political dynasties started digging a pit under Estrada from the moment he won the biggest-ever popular mandate. In Thailand, old provincial barons took over the party which promised to be new, and are now fighting the Election Commission to preserve hallowed traditions of electoral corruption.

Third, people are showing their resentment and frustration by espousing nationalism, regional separatism, cultural revivalism, even anarchism. Globalists and modernists look at these movements as futile protests against the march of history. But this shock-horror will not make these sentiments disappear.

In sum, the demand for political participation—and the opportunities—have increased enormously. But real political power seems more than ever out of reach of most of the people.

Thailand is a good example. The level of interest in politics is higher than ever. But the most striking call in the current election campaign has come not from any political figure but from a retiring history professor suggesting people should vote for “none of the above”. And the most striking statistic in all the polls is not the lead of any party, but the 60-80 percent who can’t (or won’t) choose any of them.

Some Japanese participants saw no reasons for concern. One prominent economist argued that globalisation was good for Japan and other Asian countries, and that more market liberalisation would help Japan increase economic links with Asia. Another admitted that Japanese diplomats and businessmen found it easy to deal with old oligarchies which were known, stable, and effective at getting things done.

But another Japanese participant cautioned against concentrating on the potential economic gains from liberalisation, while ignoring the social and political consequences. He cited the experience of Latin America from the mid-1980s. There US companies certainly did well out of post-crisis liberalisation. But the Latin American populations had a tougher time. Economic growth returned, but became less stable. Exports boomed, but so many inputs were imported that the trade balance was always in crisis. Export-oriented multinationals did well, but local small-and-medium enterprises went bankrupt in droves. A few people enjoyed high incomes, but unemployment remained high, and the income gap widened. Taxes fell, but the poor had less access to education, health care and social security. The middle class shrank in size, making democratic politics less stable. Old oligarchs strengthened their grip on power, often by corrupt manipulation. Drugs, crime and social violence increased.

What is needed in Asia, this participant went on, is a new social contract with three main ingredients. First, a reduction in the power of the local oligarchies whose corrupt grabbing of benefits creates both political anger and political disillusion. Second, better social safety nets so people suffer less from the increasing imbalance and volatility in the economy. Third, promotion of small enterprises so the economy is better balanced, employment increases, and there is a local ladder of upward economic mobility.

Resisting globalisation is no more an option for Asia 2000 than it was for Latin America in the 1980s. Managing globalisation is the issue. The western liberal agenda imagines that liberalisation creates good governance and democratisation through a political “invisible hand”. But the political traditions of Japan (and of Asia more generally) appreciate that social peace and social growth need careful management.

For Thailand it may be some consolation to know that the current atmosphere of political confusion is not unique. Indeed, of all the troubled polities of Asia, Thailand may have the best chance of creating change for the better through the ballot box, rather than through messier methods. Many outside observers hope Thailand is the pioneer of a New Asia. That is why the January 6 election will take place under an international spotlight. But is there any sign that the election winners (whoever they are) will be interested in a new social contract? Or will they just liberalise the economy and let the society take care of itself?