Don’t Take Democracy for Granted in Asia

Don’t Take Democracy for Granted in Asia

By Mark Beeson on 12:44 pm January 18, 2014.
A little less than three decades ago, Francis Fukuyama made a very big name for himself by predicting that liberal democracy would sweep the planet. Simply put, in a world freed of the divisive ideology of the Cold War, in which capitalism reigned triumphant, individuals simply wouldn’t put up with authoritarian governments that tried to curb liberty and individual interests.It’s easy to be wise after the event, of course, but even at the time, not everyone shared Fukuyama’s optimism. Nations with no history of democratic rule or extant elites with little interest in providing it, were not likely to become democracies easily.

For Fukuyama in particular, this deflating possibility was brought home with particular force by America’s disastrous involvement in Iraq. Not only was there no guarantee of spontaneous democratic transitions, but it was also pretty difficult to impose them, too. But even if the Middle East is (still) an especially difficult case, surely Asia looked more promising? After all, East Asia’s “miraculous” economic development had astounded the world, and one of the big ideas in the social sciences is that there’s a relationship between economic development and political emancipation.

Once living standards reach a certain level, the argument goes, there’s more money to spend on things like education, and people’s ideas and expectations change as a consequence. These days people can also see what’s happening in the rest of the world much more easily, and may judge their own governments unfavorably by comparison. In such an environment, one might be forgiven for thinking that democracy is the only game in town. And yet it is not only the current political crises in countries such as Bangladesh and Thailand that remind us that democracy is far from secure in a number of Asian states. In some parts of Southeast Asia democracy has either yet to arrive (Vietnam, Cambodia, Brunei, Laos and Burma) or is only partially realized.

They certainly have elections in Singapore and Malaysia, for example, but the results are generally a foregone conclusion. As the Trekkies might say, “it’s democracy, Jim, but not as we know it.”

East Asia is such a famously heterogeneous place that there is no simple explanation for democracy’s mixed fortunes in the region. However, my colleague Ben Reilly has persuasively argued that in Southeast Asia’s case, at least, proximity to China might have something to do with it. It is no coincidence, Reilly suggests, that Indonesia and the Philippines are the great hopes for Southeast Asian democracy, while the much closer mainland states like Vietnam and Cambodia have found it hard to escape China’s authoritarian influence.

This thesis may not be a complete explanation of regional political development, but even if it’s only part of the answer it assumes great importance because China is, as they say, on the rise. China’s historical influence over the East Asian region has been immense and is currently being renewed. Its significance as a regional role model is, therefore, especially significant.

The big point to make about China, of course, is that it’s not democratic. Even more importantly, perhaps, there is no sign that it’s about to become so. On the contrary, for all the interest in the possible development of civil society, social media and (some) press freedoms in China, the Chinese Communist Party does not tolerate political opposition and remains firmly at the center of power.

This is not how things were supposed to work — or not according to much Western political theory and historical precedent, at least. In Europe, economic development led inexorably to political transformation, emancipation and pluralism, as a powerful, self-interested capitalist class pushed for power. Many commentators in the West still take to the European experience to be the inevitable — if somewhat delayed — template of history.

They may yet be proved correct, but China’s experience suggests that this is anything but certain. True, there are plenty of capitalists in China now, but they aren’t pushing for political freedom or an overthrow of the status quo. On the contrary, many of China’s most successful entrepreneurs are also members of the CCP — a possibility that both Marx and Mao failed to foresee.

As long as China’s nouveau riche can make money in a stable social environment, they are quite willing to trade off a little political freedom, it seems.

The optimists may yet be proved correct, especially if Indonesia remains democratic and continues to prosper. There is, however, nothing inevitable about this, let alone about China following suit. It is sobering to remember that it took a major economic and subsequent political crisis for Indonesia to break free of its authoritarian past.

One can only speculate on the circumstances that might induce China to embark on something similar. Until it does though, the skeptics’ doubts about the prospects for democratic transition — let alone consolidation — in much of Asia, need to be taken seriously.

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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