Jul 22, 2024 Last Updated 5:22 AM, Jul 16, 2024

Markets, morals and leadership after the boom

 Imagine a man, proud of his life's achievements, striding down the street with his head in the air. Along comes somebody, out of the blue and without warning who punches this man smack in the stomach. Winded and gasping for air, the man staggers and falls, not knowing why he was attacked. He recovers and goes home feeling dazed, but also worried. Now he is consumed with doubts. He asks himself, who was this stranger and why did he hit me? The incident bugs him all night. He can't sleep. A man of such achievement, such pride; who could possibly want to assault him? The next morning he falls ill and has to be rushed to hospital with a lacerated ulcer.

Now, put yourself in the shoes of a man like President Suharto of Indonesia, or Prime Minister Mahathir Mohamad of Malaysia. For the past decade they have presided over some 7% of growth per year; growth and prosperity has earned them plaudits and sustained them in power. Foreign investors praise them for their economic achievements, if not for their liberal politics. Along comes this economic crisis, like a tropical downpour; suddenly and without warning. They are winded, suddenly deprived of the oxygen that has sustained them in power - and exposed to all the flaws in the system they have created.

Mahathir now finds that his anti-western rhetoric has a direct impact on the value of his currency. He once remarked that he felt he could bash the west with impunity because investment kept pouring in. Suharto finds that his family's business interests have become a liability, directly affecting the value of his currency and undermining his considerable economic achievements. Not long before, foreigners would seek out joint ventures with the family firms; now they treat them like pariahs. Both men have been unwell; Suharto is suffering from a urinary tract complaint; Mahathir has had flu - both in the medical and political sense.


Given the stress these leaders have been under and the accelerated pressure for change, quite possibly the economic crisis facing Southeast Asia today will contribute to the end of Suharto's 32 year rule and Mahathir's 17 year rule. If that is so, I find it a little ironic that the end of authoritarian rule has been precipitated by economics rather than politics. The cold and heartless mechanism of the market has moved what ideals, compassion and morality failed to dislodge. It's a dangerous way to bring about political change, I think, because it happens without thorough institutional reform. There is, in other words, no guarantee that their successors will be any less authoritarian.

Markets make poor long term regulators of politics. Markets are fickle; sentiment changes or is distracted and moves on. Interests, on the other hand, especially corporate interests, tend to be more permanent, representing long term investment, and therefore bend more easily to political realities.

In the case of Indonesia many people believe that there will never be another Suharto, another leader with quite the same breathtaking powers. The pressure for political liberalisation will, they say, be overwhelming on his successor. I advise caution on this point. That's what they said after Sukarno left the stage, replaced by a shy, awkward general who always smiled called Suharto.

Back in the early 1990s I remember paying a visit to Fuad Hassan, who was then education minister in Jakarta. He reminded me that Suharto's New Order was hailed by students as the prelude to political reform back in 1966. The atmosphere of glasnost was short lived, however. By the mid-1970s, Suharto was jailing dissidents and fashioning laws to limit the basic elements of democracy vaguely enshrined in the country's 53 year-old constitution.

Suharto was never credited with liberal views, but Mahathir held liberal ideas in his youth. Given his own extensive powers today, it's ironic that in the 1970s, when he was still in the political wilderness, Mahathir criticised the country's founding Prime Minister Tunku Abdul Rahman for being too powerful and 'making the party subservient to the person.' The general feeling, he wrote 'was that whether or not the parliament sat, the government would carry on.'


The first lesson to be learned from the process of political change in Southeast Asia is that a change of leadership does not necessarily bring about a change of political culture. As I have written elsewhere, the politics of Indonesia, and to a lesser extent Malaysia, reflects the revival or recovery of essentially monarchical traditions buried deep in the indigenous culture. The transition to independence superimposed elements of democracy on a lingering culture of paternalistic rule that drew heavily on local traditions of monarchy. In the Middle Eastern context, a similar process produced what have been called 'non-hereditary monarchies', a modern tradition which Hafez Assad of Syria and Saddam Hussein of Iraq continue to uphold.

This hybrid political culture persists in Indonesia. Look how even the most ardent supporters of political change in Indonesia worry about 'who' rather than 'what' will replace Suharto. To my mind there is precious little evidence that the Indonesian body politic is ready to introduce an effective mechanism of peaceful succession, say by limiting the term of any president to two terms; or to limit the personalisation of power first Sukarno and now Suharto enjoys.

The absence of political parties operating in a vigorously pluralistic environment makes it hard to imagine a successor to Suharto who is not tied closely to the military. The threat of unrest caused by Indonesia's alarming social and economic cleavages makes it highly unlikely that Suharto's successor will weaken the power of the presidency.

Thailand may be different in this respect. Reliance on strong, charismatic leadership is there in the shape of the monarchy. But power is conveniently diffused by the King's constitutional status; the king looks after larger moral and nationalist issues, while a succession of elected prime ministers are held accountable for the economic management of the country.

Prime ministers come and go, while the monarchy offers stability through continuity. It's a crude separation of powers that allows citizens to benefit from the sustained moral authority needed to bind society together, yet hold economic managers accountable to their actions by tossing them out of office.

But let me say that despite the widely-held perception that Thailand has travelled further along the path to democracy, I sense there are many pitfalls ahead. First and foremost is the risk that institutions of democracy will be built on poor foundations. What I mean here is illustrated by theoretical work that has been done on political change in Italy.

Local participation

Robert Putnam's ground breaking study of regional government in Italy (Making democracy work: civic traditions in modern Italy, 1993) has been described as work as important to understanding democracy as De Tocqueville's Democracy in America. Serious scholars of democratic theory from Plato to De Tocqueville have all pointed out that effective democratic government depends on the quality and commitment to civic values of its citizenry. As well as elections, a legislature and a constitution, civil associations, local participation and power all contribute to the effectiveness and stability of democratic government.

Yet in the post-cold war era political progress in Asia has been judged using more macro, ephemeral aspects of government; mostly whether elections are held, regardless of their outcome. And for many Thais, it seems that democracy is to be guaranteed by a new charter that seeks to clean up politics by ruling that only educated people can stand for election.

Well, in the case of Italy, cementing democracy in place was not that easy, as Putnam so convincingly shows. It wasn't really until representative politics started working at the local level that true elements of a democratic culture began to emerge. In much the same way, here in Thailand, I cannot see genuine democratic government being established without concessions being made to regional and local autonomy.

In other words, it is less a matter of establishing strong political parties, compulsory voting and educated candidates; this amounts to imposing a democratic blueprint on a society unaccustomed to its organic nature. It is more a question of encouraging a sense of civic community, starting with popular commitment to local level organisations neither imposed nor supervised from above.

Thailand is a long way from reaching this goal. Although the new constitution allows for a degree of political decentralisation as a first step towards promoting a civic community, resistance from the centre will be strong. And as the recent district council elections on the outskirts of Bangkok demonstrated, the culture of vote-buying will be harder to erase in times of economic stress.

Michael Vatikiotis is a correspondent with the 'Far Eastern Economic Review'. Now based in Bangkok, he was posted to Indonesia in the late 1980s and early 90s, and wrote the book 'Indonesian politics under Suharto' (Routledge, 1993).

Inside Indonesia 54: Apr-Jun 1998

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