Amitav Acharya

Democratising Southeast Asia: Economic Crisis and Political Change

Working Paper No. 87

August 1998

The views presented in this paper are those of the author(s) and do not necessarily reflect those of the Asia Research Centre or Murdoch University.

© Copyright is held by the author(s) of each working paper: No part of this publication may be republished, reprinted or reproduced in any form without the permission of the paper’s author(s). National Library of Australia.

ISBN: 0-86905-675-1 ISSN: 1037-4612

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INTRODUCTION

Among the multiple effects of the current Asian economic crisis is the challenge it has posed

to authoritarian rule. While governments of the region emphasize the social dislocation and

the potential for political instability caused by the economic downturn, Musa Hitam, a former

Malaysian deputy prime minister, has pointed out that ‘in the present social, economic

scenario, the human rights cause seems to be [a] winner here.’1 Contrasting the political chaos

and the collapse of the Suharto regime in authoritarian Indonesia with the smooth leadership

transitions in democratic South Korea, the Philippines, and Thailand, advocates of democracy

argue that democratic regimes are more capable of effective governance and crisis

management than authoritarian ones. Furthermore, the notion of ‘Asian values’, once credited

with the region’s economic success, and for some time a powerful conceptual justification for

authoritarian rule, is now being blamed for the economic crisis.

Until now, the literature on democratization in Southeast Asia focussed on the effect of

rapid economic growth on the performance legitimacy of the regimes, the size and attitude of

the middle class, and the prospects for civil society.2 Little was said about the impact of

external factors in facilitating or inhibiting democratization. Yet, the current economic turmoil

shows that the domestic forces that affect democratization often derive their strength from

international ones.

This article is a preliminary attempt to analyze the impact of the economic crisis on the

prospects for democratization in Southeast Asia. It looks at how the crisis has shaped the

debate on the nexus between democracy and development. Secondly, it examines the role

international and regional factors behind democratization, factors that have received little

attention in the literature on Southeast Asian democracy. Another issue covered by the article

is the regional and international consequences of the pressure for democratization, especially

its possible impact on regional norms that have underpinned the Association of Southeast

Asian Nations (ASEAN). By looking at the interrelationship and interaction between

economic crisis and democratization from a domestic, regional and international relations

perspective, this article argues that what is happening in Southeast Asia may have important

lessons for the theories of democratization.

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RETHINKING THE DEMOCRACY AND DEVELOPMENT NEXUS

Scholars of democracy have long assumed that rapid economic growth is a powerful, if not

the sole, determinant of democratization.3 As an influential formulation by Huntingon put it,

‘democratization occurs most frequently and also most easily in countries that have reached

the upper-middle income levels of economic development.’4 But the situation in Southeast

Asia in the decades of rapid economic growth resisted the expectations of theory. Rapid

economic growth did not reduce elite cohesion, as predicted by theory. Moreover, growth

produced claims of ‘performance legitimacy’, defined as ‘characteristics of states seeking

legitimacy through acts of rule that assist the economic system in producing an ever

increasing flow of goods and services for the consumer.’5 It not only allowed regimes to

deflect criticism of their authoritarian rule, but also gave it adequate resources and

opportunities to co-opt a significant portion of the middle class. The ruling elites in Singapore

Malaysia, Indonesia and Thailand, remained fairly cohesive. Instead of engendering greater

political openness and participatory institutions, rapid growth became the principal

justification for authoritarian rule, enabling the ruling regimes to claim that economic growth

could not have been achieved without the regime’s ability to ensure political stability and

continuity.

The current economic crisis may show that economic downturns are more important

than economic growth per se in encouraging democratization. The ‘de-legitimizing effects’ of

the current economic crisis in evident not just in Indonesia, but also in Thailand and Korea.

Indonesia’s initial swift response to the economic crisis seemed to reinforce the view that

authoritarian political systems are better able to deal with national economic problems. But

the Suharto government’s subsequent difficulties in restoring confidence in the Indonesian

economy was blamed on the known failings of the political order, including cronyism,

nepotism, and his failure to name a successor. It emboldened the opposition, not just the

traditional anti-Suharto elements such as Megawati Sukarnoputri, or disgruntled generals, but

also the ‘modernist’ Islamic forces which had provided support the regime in the early 1990s.

Ultimately, the economic crisis forced the issue of political succession in Indonesia,

culminating in Suharto’s resignation. Earlier, failure to deal with the economic crisis had

precipitated the downfall of another Southeast Asian government, in Thailand, albeit in much

less dramatic and violent circumstances.

3

During the boom years, Singapore’s Lee Kuan Yew had argued that ‘the exuberance of

democracy leads to undisciplined and disorderly conditions which are inimical to

development.’6 Disagreeing with this view, newly-elected President Ramos of the Philippines

reminded Mr Lee that the authoritarianism of the Marcos era contributed in no small way to

the country’s economic ruin. But Lee’s comments fed into the ‘Asian values’ discourse,

which provided an implicit and culturally-rooted rationale for justification for authoritarian

government. But confronted with the prospects for a major regional economic downturn, Lee

himself has acknowledged that nepotism is a Confucian weakness and that networking

(Guanxi) is ‘not a good Asian value’. Some Asian values were detrimental to development

since they were not ‘not compatible with the competitive free market.’7 Musa Hitam has gone

even further, arguing that the success attributed to the ‘Asian Way’ also bred ‘arrogance,

corruption, dependence, and failures’.8 Western media commentary has zoomed on this point;

‘The financial crisis’ wrote the Daily Telegraph of London in an editorial, ‘has shaken faith in

“the Asian way of doing things” vaunted by autocratic governments. That is no bad thing, for

the cause of both democracy and sound economics.’9

In their study of democratization, O’Donnell and Schmitter point out that one of the key

legitimation strategies for authoritarian regimes is to ‘act as agents of transnationalization,

opening the economy to foreign trade and investment, [thereby] increasing its vulnerability to

externally generated impacts’.10 Economic globalization, including the internationalization of

production and finance, renders authoritarian regimes more vulnerable to external economic

and political pressures. The political effects of the current economic crisis tend to support this

hypothesis.

Apart from increasing the vulnerability of Southeast Asian regimes to external

economic and political pressures, economic globalization has also created some powerful

obstacles to democratic breakdowns in the region. In Thailand, a country with a history of

democratic breakdowns (largely due to military coups), globalization provided a crucial

support to democracy in Thailand. As one analyst observes, a successful future coup in

Thailand, in order to have public support, would require ‘a strategy of hitherto untried

approaches that combine seizure of power with methods to sustain business confidence.’11 But

from the late 1980s, fears that political instability caused by coups or attempted coups may

drive away foreign investors and undermine economic growth led the middle class and

business groups in Thailand to oppose military intervention in politics. It is significant in the

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wake of the recent economic crisis, the elected regime’s (of Chavalit Yongchaiyudh) failure

to deal effectively with the problems did not renew domestic support for miltary rule, despite

initial rumors of an impending coup.

Much more debatable has been attempts to turn Lee’s earlier ‘democracy is bad for

development’ logic on its head. Unlike Indonesia, South Korea and Thailand were able to find

political alternatives to the existing regimes with relative ease, regimes which then moved to

distance themselves from the mistakes of their predecessors and adopt measures to rectify the

situation. Comparing ‘the nepotism and cronyism surrounding Suharto with the fresh

approach to Korea’s problems by Kim Dae Jung, an editorial in London’s Daily Telegraph

argued: ‘[T]he encouraging lesson from this upheaval is that democracy helps a country to

cope with rapid economic change. There is less fear of personal loss and a greater

responsiveness to the broader needs of society.’12 Madeleine Albright, the US Secretary of

State, has lost no time and opportunity in stressing the same point. In her view, democratic

governments in Korea, the Philippines and Thailand, made progress in overcoming the

economic crisis ‘in part because their people were able to elect new governments, which

started work in a climate of openness and trust, and with the moral legitimacy to call for

shared sacrifice.’13 Indonesia, in her view, now had a chance to follow their footsteps. Her

views are not without support from within the Southeast Asian region. Outgoing President

Ramos of the Philippines was even more blunt in his latest statement on the democracy-

development nexus. Blaming the ‘agony’ of the Asian economies on lack of ‘transparency

and democratic controls’, Ramos stated, ‘the present economic crisis proves that in choosing

democracy over authoritarianism, we Filippinos were on the side of history, rather than

outside of it, as earlier believed.’ 14

This allusion to his earlier debate with Lee Kuan Yew did not escape a reposte from the

Singaporean statesman. ‘Indonesia did better than the Philippines in the last 30 years, and

may well do so again in the next 30 years’, said Lee, adding ‘[I]t is better not to be black-and-

white in categorising countries as democratic and therefore successful or authoritarian and

prone to failure.’15 Despite his earlier criticism of nepotism, Lee rejects that Asian values

contributed to the economic crisis in the region. As he put it, ‘having Asian values did not

necessarily translate into having a general lack of transparency.’ The fact that Singapore had

Asia values and transparency did not spare it from the crisis, because of the regional

contagion.16 According to Lee, what the demonstrators in Indonesia were demanding was not

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democracy, but an end to corruption, cronyism and nepotism, and the rule of Suharto. The

solution to Asia’s economic problems did not lie in greater democracy, but better government,

or ‘good governance’, including ‘sound banking laws, rigorous supervision in the financial

sector and proper corporate governance.’17

THE LIMITS OF ‘DEMOCRATIC ASSISTANCE’

Scholars of democratization have identified several international factors in promoting

democracy. As Larry Diamond puts it, while ‘the course of political development and regime

change [owes] primarily to internal structures and actions’, the latter have also been ‘shaped

historically by a variety of international factors’.18 Scholarly work has pointed, among other

things, to the role of international sanctions, democratic assistance, policies and pressure from

international organizations, snowballing (demonstration) effects, in promoting democracy.

Until recently, democracy in Southeast Asia received little direct support from the

international community. Guided by Cold War geopolitics, the West viewed authoritarianism

as an acceptable alternative to communism. Democracy was ignored in order to sustain the

West’s authoritarian but anti-communist allies in power, as indicated by the US support for

the Diem regime in South Vietnam, Lon Nol in Cambodia and Suharto in Indonesia.

Moreover, strategic developments in the wake of the US withdrawal from Indochina in 1975

also undermined democracy in Southeast Asia. Fearful of renewed communist subversion,

Southeast Asia’s pro-Western regimes strengthened their internal security measures which

thwarted the scope for political debate and undermined the development of civil society.19 The

Vietnamese invasion of Cambodia in 1978 and the ideological polarization of Southeast Asia

had a debilitating effect on democracy in the region. Embroiled in the Cambodia conflict,

ASEAN countries emphasized regime security and performance legitimacy, often at the

expense of political openness. ASEAN’s high-profile diplomacy in the Cambodia conflict and

its anti-communist and ‘free market’ posture appealed to the West, diverting international

attention from domestic authoritarianism. Indeed, domestic stability and economic growth

achieved under authoritarian rule (the Philippines being the major exception to this) not only

earned ASEAN certain immunity from international pressure, but ASEAN also begun

projecting itself as a model for the developing world.

The end of the Cold War saw the US embrace the ‘enlargement’ of democracy as a

sequel to the ‘containment’ of communism.20 It also saw greater emphasis on a set policy

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instruments to promote democratization, among them aid conditionality (linking aid to human

rights and democracy) and humanitarian intervention.21 But Southeast Asia was more or less

exempt from the kind of vigorous democratization campaign directed by the Western

countries and international financial institutions in economically weaker African and Latin

American states. 22 Opposition to authoritarian rule in Southeast Asia was tempered by a

pragmatic recognition of trade and investment opportunities available in the region. This had

been true not only of the soft authoritarian regimes as in Singapore, Malaysia or Indonesia,

but also such hard authoritarian regimes as Vietnam, where market-oriented economic reform

earned the regime a reprieve from Western democratic assistance. Only in major instances of

democratic breakdowns or near-breakdowns did the Western governments respond with

conspicuous pressure, as in the case of the 1991 Dili massacre in Indonesia and the sanctions

briefly imposed on Thailand in response to the Bloody May episode. But the fact that only

two countries, Denmark and Canada, cut off aid to Indonesia after the Dili massacre suggests

limited nature of international reaction. Instead of using sanctions to support democratization,

Western countries hoped that economic growth and liberalization, partly fostered through

Western trade and investment, could ultimately promote democratization. This policy

framework would allow the Western countries to exploit economic opportunities while

appearing to meet their commitment to democracy and human rights.

In Southeast Asia, the closest case of democratic assistance during the Cold War period

was in the Philippines, where the US exerted pressured on President Marcos to renounce

power and subsequently backed Corazon Aquino against the repeated threat of military

takeover. What caused the shift in US policy towards Marcos is a matter of debate. It is clear

that the shift was not triggered by the declining importance of the US bases in the Philippines.

In the mid-1980s, these bases, hosting the largest US permanent military presence outside of

continental United States, were considered critical to US power projection capabilities in the

Pacific and Indian Oceans, including the strategically vital Persian Gulf. Neither can one

regard the end of the Cold War as the major factor, since the shift occurred well before the fall

of the Berlin Wall. In retrospect, what perhaps mattered most for Washington was the

perception that repression and lack of economic performance has made the Marcos regime a

serious liability for the US, threatening vital US interests in the country. The regime’s

continued existence was a major factor behind the growing militancy of the New People’s

Army, whose made the US military bases a major target of its propaganda. Continued US

support for the regime would have seriously alienated the middle class population as well,

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which was fed up with the Marcos dictatorship. Thus, promoting democratic change in the

Philippines was the only option available to the US in protecting its military access. It was as

much a case of geopolitical self-interest as the enlightened championing of democratic values

that made the US to seek the ouster of Marcos.

In the early 1990s, Cambodia experienced one of the largest multilateral efforts in

human history in support of democratic transition. The peace-building role of the United

Nations Transitional Authority in Cambodia was to facilitate and implement a comprehensive

political settlement in Cambodia, based on a Western Liberal-democratic model. But the

UNTAC-supervised election in Cambodia did not settle the issue of democratic power-

sharing in Cambodia. The subsequent instability in Cambodia has prompted criticism that the

attempt to find a democratic solution to the Cambodia conflict was perhaps a flawed approach

from the outset. The unraveling of the Paris Agreement in 1997 provided powerful

ammunition to those who argued that external imposition of democracy might not be work in

a country with no tradition of democracy. Historical and cultural forces may be an important

determinant of whether democratic experiments mandated by the international community

would succeed in developing countries with a strong authoritarian political tradition.

The recent political events in Southeast Asia do not indicate a drastic change in Western

policy of cautious support for democratization in the region’s larger states. Arguably, the

Western countries have tended to view the economic crisis more as an opportunity for

liberalizing Asia’s markets than its political systems. Western official commentary routinely

blames the crisis on corruption and inefficiency, rather than the lack of democracy per se.

While domestic opposition to authoritarian rule in Southeast Asian countries is deriving moral

strength from such criticism, Western governments have generally viewed restoration of

political order to be a more important goal than democratization. Indonesia is a case in point.

Official US policy, as articulated by the Secretary of State, Madeline Albright, holds that

‘democracy can only be built by the people of Indonesia’ although, ‘what America says and

does will matter’.23 Yet, there was no official US action to precipitate the departure of

Suharto. As the Washington Post remarked in an editorial, ‘sticking with Suharto almost to

the end, the United States played not much [of a] role in his downfall, and it now can best

leave the political debates to the Indonesians.’24

The Clinton administration continued backing the Suharto regime until its very final

moments, even in comparison to the very late decision by the Reagan administration to

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withdraw support from Marcos in 1986. While US officials did call for ‘restoration of order

without violence and a genuine opening of a dialogue on political reform’,25 it was not a

demand for linking IMF loans to political reform. Rather, Washington was demanding

Suharto’s compliance with the IMF’s economic and financial prescriptions. The Australian

government more explicitly rejected any linkage between economic and political reform in

Indonesia. Peter Costello, the Australian Treasurer, argued that ‘at the end of the day, it’s

economic reform which is going to improve opportunities for people in Indonesia’, while

Prime Minister John Howard praised Suharto’s last-ditch plan for handing over power as

‘statesman-like’.26

Post-Suharto US policy towards Indonesia calls for ‘progress toward open, accountable

government’, ‘free elections…in a timeframe and under rules acceptable to the Indonesian

people’ 27, space for political parties and labor unions, press freedoms, and the release of

political prisoners. But following the departure of Suharto, the US is even less inclined to link

its support for multilateral aid to Indonesia with democratic reforms.28 Albright promised

bilateral humanitarian and development assistance, aid to civil society, and assistance to

electoral process.29 Overall, the US is reluctant to push too strongly for democratization,

which it fears may cause greater political instability.

In Africa and Latin America, international financial institutions have played a far more

important role in promoting political change than in Southeast Asia, where the need for

multilateral assistance was much less urgent due to rapid economic growth fueled by

abundant private foreign capital. Thus, international financial institutions lacked the necessary

clout to push for political transitions, even in such aid dependent countries like Vietnam,

Laos, Cambodia and Burma.

There is little question that the policies and actions of the IMF were an important factor

in the failure of the Suharto regime to survive Indonesia’s economic crisis. For example,

criticism by the IMF officials of the Suharto regimes apparent unwillingness to implement the

full range of IMF-imposed measures led to a significant fall in the value of its currency which

in turn produced progressively more vocal calls for his replacement. The Managing Director

of the IMF, Michel Camdessus, has defined the IMF’s task in the region to include

‘dismantling an economic system based on conglomerates, the collusion between the state,

banks and business, and the restrictive markets.’30 It is not difficult to see that the successful

implementation of these measures also requires the dismantling of the political systems in

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which they have thrived so far. Greater transparency may allow non-elites to have greater

access to information about growth rates and the state of inequity. The breakdown of the

monopolies which have provided the economic lifeline to authoritarian rulers and an end to

the cosy relations between the political and the economic elite may open up more political

space for the middle class and other segments. While democratization is not an official goal of

the IMF, this could be an unintended consequence of the IMF conditions.

Whether the role of international financial institutions, notably the IMF, in the

economic crisis will help the process of democratization in Southeast Asia must be viewed

with caution. Visiting Jakarta in early February 1998, World Bank President James

Wolfensohn denied that democratisation was part of the his mission. Corruption, in his view,

was an ‘economic problem’. Brushing aside requests by the International NGO Forum on

Indonesian Development to make human rights, democracy and rule of law as part of the

criteria for assisting Indonesia, he stated that he was not there to make any political

judgements or ‘helping Suharto or the political opposition.’31

Apart from resisting ‘democratic assistance’, Southeast Asian regimes in the early

1990s had proved to be quite resilient against the so-called ‘snowballing effect’ of

democratization. In the 1980s, successful democratic transitions in Korea and Taiwan in the

1980s begged the question as to whether Southeast Asia would undergo a similar process of

political change. If Southeast Asian countries could follow the pathways to prosperity laid

down by the first generation NICs, then why should they be resistant to their political

predicament? Yet, no such snowballing was in evidence, a fact partly explained by the

differences in the domestic and historical conditions between South Korea and Taiwan on the

one hand and the Southeast Asian states on the other. The communist systems in Vietnam and

Laos improved their chances of survival compared to their counterparts in Eastern Europe by

beginning their economic reform process well before the collapse of communism in Eastern

Europe. Along with China, subsequently joined by Burma, they constituted examples of

economic perestroika without political glasnost. Whether Southeast Asian authoritarianism

was more ‘soft’ than its Northeast Asia counterpart, and hence less susceptible to popular

demands for liberalization, could be debated. But there was little question that the multi-

ethnic character of Southeast Asian polities imposed special constraints on democratization,

as in the case of Malaysia where the delicate ethnic balance has justified authoritarianism to

ensure Malay dominance of the polity and eventually the economy. Moreover, authoritarian

10

regimes in Korea and Taiwan were far more dependent on foreign strategic support than

Singapore, Malaysia and Indonesia. To that extent, the latter remained somewhat less

vulnerable to global strategic change and external pressure favoring democratization.

The downfall of the Suharto regime cannot be accurately described as a case of

democracy’s snowballing effect. But there are firm indications that the Indonesian military

had been unnerved by democratisation elsewhere in the region. As a senior adviser to

President Habibie noted, ‘The [Indonesian] military saw the coming of democracy to Asia

and Indonesia, and are preparing for that.’32 The chief of socio-political affairs of the

Indonesian Armed Forces, ABRI, has likened events in Indonesia with past developments in

the Soviet Union and Eastern Europe. He acknowledges that for some time, ABRI has studied

other recent cases of transition from military to civilian rule so as to prepare itself for such an

eventuality. In his view, ABRI is following a familiar pattern across East Asia, in South

Korea, Taiwan, the Philippines and Thailand.33

DEMOCRACY AND REGIONAL NORMS

The theory and practice of democratic assistance accords an important place to international

and regional organizations in promoting democracy.34 For example, the EC (now EU) played

a major role in democratic transitions in Spain, Portugal and Greece, and later in Turkey and

the new states in Eastern Europe. The Organization of American States’ Santiago declaration

expresses an explicit commitment to democracy as a key principle of regionalism. The

Organization for Security and Cooperation in Europe’s Office of Democratic Institutions and

Human Rights monitors trends in democratization and helps member countries establish and

consolidate democratic institutions. The Organization of African Unity has endorsed

democratic governance as a way of dealing with Africa’s political conflicts and economic ills.

Among other things, several regional organizations have insisted on democratic political

systems in their prospective members as a necessary criteria for gaining membership and for

maintaining their membership status. For example, democratic transitions in Spain, Portugal,

Greece and Turkey were influenced by a consideration of their membership in the European

Union, which requires all members to follow democratic practices and observe respect for

human rights.

But the main regional grouping in Southeast Asia, the Association of Southeast Asian

Nations (ASEAN), has no such criteria. Indeed, in the case of ASEAN, the opposite may be

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the case. ASEAN’s emergence as a regional organization was facilitated by the shared

concern for regime survival and political authoritarianism.35 ASEAN constitutes an important

challenge to the ‘democratic peace’ argument; the virtual absence of war among the ASEAN

members since 1967 have been accomplished without the glue of liberal democracy.36

The more conservative rulers in ASEAN responded to the West’s post-Cold War

emphasis on human rights and democracy by forging common regional positions and

responses to human rights issues. Economic success emboldened Southeast Asian rulers to

mount a frontal attack on the West’s policies about promoting democracy. Lee Kuan Yew

deplored the ‘obsession with the U.S. media, Congress and the administration’ with ‘issues of

human rights and democracy’. In his view, this represents an ‘unfortunate’ neglect of

important ‘strategic and economic considerations’ which in the past ‘used to be’ the guiding

framework of US policy.37 Western policies of humanitarian intervention, democratic peace’

(the belief that ‘democracies do not fight each other’), and aid conditionality came to be

viewed by Southeast Asian ruling elites as instruments for Western domination of the

developing countries. Malaysia’s Prime Minister, Mahathir Mohammed, attacked what he

saw as an Western effort to impose a particular standard of democracy on ASEAN countries.

The West, in his view, could not ‘claim to have the monopoly of wisdom to determine what is

right and proper for all countries and peoples.’38 In the wake of the economic crisis, Mahathir

has continued his attack on Western human rights policies, claiming that the calls for linking

human rights to trade ‘are ideas which originate in the rich’ and ‘whose advantages seem to

accrue only to the rich.’39

Southeast Asian elites not only dismissed (and continue to dismiss, although less so

now than before the economic crisis) the suitability of Western-style democracy for the

region, they also argue that external pressures, including economic sanctions, would not be

effective in bringing about democratic change. They also warned that the West’s democratic

zeal risks undermining the foundations of regional order based on the inviolability of state

sovereignty. The very notion of democratic assistance militates against one of the most

vaunted ASEAN norms: the doctrine of non-interference in the internal affairs of members.

ASEAN did not see Vietnam’s communist political system as a barrier to its membership in

ASEAN. ASEAN was also instrumental in resisting Western calls for sanctions against the

military regime and pushing for a policy of ‘constructive engagement’.40 Buoyed by

ASEAN’s backing, neither Vietnam nor Burma saw democratization as a way of ending

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international isolation, in the manner of the South Korean elite in the 1980s. The admission of

Burma into ASEAN despite a chorus of international protest and condemnation confirmed

ASEAN’s policy that whether a country was democratic or authoritarian was not a criteria of

membership in the regional organization.

But ASEAN’s ability to resist external, including intra-regional pressures for

democratization and transparency may be wearing thin in the current economic and political

climate. Its norm of non-interference has been come under attack from some of its leaders as

they struggle with responses to the economic crisis. The Economist magazine notes that one

of the biggest failings of ASEAN was the reluctance of fellow ASEAN members to persuade

Thailand to attend to its domestic troubles more urgently. Had ASEAN been so committed to

non-interference,’friendly criticism’ of Thailand might have resulted in more timely Thai

action on the economic crisis. But ‘any persuation from fellow ASEAN members to set a new

course was so discreet that it was easy to ignore’.41

Subsequently, the Thai Foreign Minister, Surin Pitsuan, openly called for ASEAN to

review its non-interference doctrine’ ‘it is time that Asean’s cherished principle of non-

intervention is modified to allow it to play a constructive role in preventing or resolving

domestic issues with regional implications.’42 This was an implicit criticism of ASEAN’s

failure to come up with a collective response to the crisis. To make the grouping more

effective, Surin has urged that ‘when a matter of domestic concern poses a threat to regional

stability, a dose of peer pressure or friendly advice at the right time can be helpful.’43

Moreover, ASEAN economic ministers have proposed regional ‘framework’ which will

allow members to engage in ‘mutual surveillance’ of each others’ economic policies. This

marks an important departure from the principle of non-interference.44 Moreover, the crisis

saw the first direct criticism of a serving Indoensian President by the leader of another

ASEAN member. When Suharto announced Jusuf Habibie to be his choice for vice-president,

Lee Kuan Yew criticized the move, stating that the ‘market’ is not convinced that Suharto was

‘doing what is necessary’ to lift Indonesia out of trouble.45 In general, however, ASEAN

governments refrained from any expression of support for regime change in Indonesia.

Malaysian government was ‘concerned due to the close proximity’, while Prime Minister Goh

Chok Tong maintained that political unrest in Indonesia was its ‘internal affairs’ which was

upto the government of the country to handle.46

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Thailand's efforts to soften ASEAN's stance on non-interference in favour of a

"flexible engagement" policy, which may be more suited for dealing with future economic

crises, has run into serious opposition from other ASEAN members. The ASEAN Ministerial

Meeting held in late July 1998 did not endorse the Thai position. Philippines was the only

other ASEAN member to support "flexible engagement" while others urged a strict adherance

to "non-interference". But even with a more flexible notion of non-interference, ASEAN's

ability to deal with an economic crisis of these proportions is limited. Assistance to Indonesia

from fellow ASEAN members included a 10 billion Singapore dollars package from

Singapore to Indonesia, but conditions attached to this, including Jakarta’s adherance to IMF-

mandated reforms, along with Lee Kuan Yew’s earlier criticism of Habibie choice as vice-

president, have actually strained ties between the two countries. Apart from exposing the

region’s dependence on foreign capital and its vulnerability to global market and political

forces, the crisis has diminished ASEAN’s international standing, especially in view of the

ineffectiveness, indeed, virtual irrelevance, of the collective efforts by ASEAN to manage the

crisis. While the leaders of Malaysia and Singapore did travel to Jakarta to show their

solidarity with Suharto, it is doubtful that this was successful in steering Indonesia’s response

to the crisis. ASEAN members have agreed to set up what it calls a ‘co-operative financing

arrangements’ or a ‘stand-by fund’ which could be used to deal with future currency shocks

and debt crises. But the fund would only be used after an IMF-package has been put in place;

in this sense it is not a substitute for the IMF and is not intended to spare the regional

countries from unwelcome IMF measures.47 Indeed, commenting on ASEAN’s response to

the crisis, Lee Kuan Yew likened it to the ‘solidarity of fellow chicken-flu suffers’.48 Not only

ASEAN’s collective clout to deal with an economic crisis of such proportions is limited,49 but

attempts by Indonesia to secure support from within the region, within a East Asian

framework, which might have helped Southeast Asian regimes by having fewer political

strings attached to it, failed. Japan hastily downplayed its initial proposal for an Asian

Monetary Fund to deal with currency crises in the face of US pressure.

The Asian economic and political crisis, especially the situation in Indonesia, also

challenges ASEAN’s Constructive Engagement policy towards Burma. Before the downfall

of the Suharto regime, Burma, with backing from its ASEAN partners, could claim that

Indonesia’s political system was a ‘model’ of military participation in politics which it could

emulate. With its diminished standing, ASEAN may no longer be able to shield Burma from

international pressure, especially the EU’s refusal to further enhance its economic cooperation

14

with an ASEAN that includes Burma as a member. A weakened ASEAN will have less

collective capacity to resist international pressure for democratization. Already,

democratization in Thailand and Philippines has led these countries to disagree with their

other ASEAN colleagues on matters of democracy and human rights. Indeed, in 1997, both

countries initially wanted to reject Burma’s entry into ASEAN out of concern that it would

create a negative image of ASEAN before the international community.

The passing of the old generation of leadership in Southeast Asia’s regional affairs may

also augur well for democracy and human rights, although prospects for this can be

overstated. Hopes have been raised that the departure of Suharto, ASEAN’s longest serving

and most influential leader, from the regional scene may lead to a softening of ASEAN’s

support for authoritarian regimes in its member states and its clashes with the West on issues

of human rights and democracy. This may be too optimistic however, given the fact that the

Habibie government, constrained by the military, is pursuing a modest and evolutionary

program of political liberalization even in the domestic sphere.50 In the Philippines, newly-

elected President Estrada not only criticized the Suharto regime, but openly called for greater

democracy in the region. The Thai Foreign Minister, Surin Pitsuan, have even gone to the

extent of calling for using human rights and democracy as the ‘primary determinants of

foreign policy’. But then he also admitted that a ‘if our policy of promoting human rights and

democracy hurts he interests of our traders along the border, the policy will encounter

domestic political resistance and be ultimately unsustainable.’51

CONCLUSION

Not long ago, Southeast Asia was held by some to be an important example of the positive

relationship between authoritarian rule and economic growth. Now, it is being seen exactly in

the reverse light. Neither claims may be perfectly valid. Yet, by challenging a widespread

belief in the region’s elite and middle class segments that authoritarianism may be more

conducive to development and stability, the Asian economic crisis has presented Southeast

Asia with a democratic moment. Whether this moment will become a durable legacy will

depend not just on domestic forces within key regional states, but also the role of the

international community and the transformation of regional norms. The former has an

unprecedented opportunity to help in the process of democratization. But the West’s interest

in democratization is tempered by concerns for political instability. While international

15

pressures on Southeast Asian democratization matter, the impact of external forces goes

beyond the traditional notion of ‘democratic assistance’, or the use of negative and positive

sanctions to promote democratization. It is the less tangible but ultimately more powerful,

forces associated with economic globalization which are more crucial to political change in

the region.

Democracy and democratization have become an increasingly important factor

affecting the relationship between Southeast Asian states and the wider international

community. The issue of democratization is also shaping intra-regional relations, including

regional multilateral cooperation, within Southeast Asia. In particular, democratization will,

gradually if not suddenly, undermine ASEAN’s norms concerning non-interference. Unable

to cope with the effects of economic crisis at home, ASEAN governments, may not be able to

offer credible alternatives to democratization and thwart international pressures for political

change.

ENDNOTES

1 ‘Musa: Asia’s Dynamic Growth Lulled People into Complacency’, New Straits Times (Kuala Lumpur), 1 June 1998, p.4. 2 Some of the best contributions to the literature on democratization in Southeast Asia are: Kevin Hewison, Richard Robison and Garry Rodan, eds., Southeast Asia in the 1990s: Authoritarianism, Democracy and Capitalism (Sydney: Allen and Unwin, 1993); Don Emmerson, ‘A Virtuous Spiral? Southeast Asian Economic Growth and its Political Implication’, in George T. Yu, ed., Asia's New World Order (Washington Square, N.Y.: New York University Press, 1997); Don Emmerson, ‘Region and Recalcitrance: Rethinking Democracy Through Southeast Asia’, Pacific Review, vol.8, no.2 (1995), pp. 223-48; Clark D. Neher and Ross Marlay, Democracy and Development in Southeast Asia: The Winds of Change (Boulder, Colo.: Westview Press, 1995); Michael R.J. Vatikiotis, Political Change in Southeast Asia : Trimming the Banyan Tree (London: Routledge, 1996). Several other studies of democratisation in the Asia Pacific region include include Southeast Asian case studies. See Harold Crouch and James Morley, eds., Driven by Growth: Political Change in the Asia-Pacific Region (Armonk: M.E. Sharpe, 1993), pp. 277-309; Daniel A.Bell, David Brown, Kanishka Jaayasuriya and David Martin Jones, Towards Illiberal Democracy in Pacific Asia (London: Macmillan,1995); Anek Laothamatas, ed., Democratization in Southeast and East Asia (Singapore: Institute of Southeast Asian Studies, 1997): Garry Rodan, ed., Political Oppositions in Industrialising Asia (London: Routledge, 1996). 3 On the debate on the linkage between economic development and democracy see, Larry Diamond, ‘Economic Development and Democracy Reconsidered’, American Behavioral Scientist, 35 (May-June 1992); John Heliwell, ‘Empirical Linkages Between Democracy and Economic Growth’, British Journal of Political Science, April 1994; Seymour Martin Lipset, ‘The Social Requisites of Democracy Revisited’, American Sociological Review, vol. 59 (February 1994); Carlos H. Waisman. ‘Capitalism, the Market, and Democracy,’ in Gary Marks and Larry Diamond, eds. Reexamining Democracy: Essays in Honour of Seymour Martin Lipset (Newbury Park: Sage Publications, 1992),

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140-55; Dietrich Rueschemeyer, Evelyne Huber Stephens and John D. Stephens. Capitalist Development and Democracy (Chicago: University of Chicago Press, 1992) (Ch.5). 4 Samuel P. Huntington, ‘Cart Before the Horse’, Financial Mail (Johannesburg, vol.129, no.5 (30 July 1993, p.39, cited in Larry Swatuk and Timothy Shaw, eds., The South at the End of the Twentieth Century (London: Macmillan, 1994), p.236. 5 Gianfranco Poggi, The Development of the Modern State: A Sociological Introduction (London: Hutchinson, 1978), p.134. The concept of performance legitimacy had its origins in the late liberal era (late 19th and early 20th centuries), when the the state found a new and different response to the legitimacy problem: increasingly it treated industrial growth per se as possessing intrinsic and commanding political significance, as constituting a necessary and sufficient standard of each state's performance, and thus as justifying further displacements of the state/society line.

Particularly in the 1950's and 1960's, an ideal variously termed ‘industrial development’, ‘economic growth’, or ‘affluence’ gained an overwhelming grip on public imagination. It was unanimously endorsed (at any rate in their rhetoric) by political leaders of all persuasions, who treated it on the one hand as utterly self-justifying, and on the other hand as validating whatever burdens the state might impose on society. It is probably correct to see in this phenomenon another expression of the tyrannical hold of the capitalist mode of production on contemporary social existence at large.

Poggi, pp.132-33. 6 Cited in China News (Taipei), 21 November 1992. 7 Sunanda K. Dutta-Ray, ‘Only Clear Laws Can Stem the Tide:, The Straits Times, 1 March 1998, p.4. 8 ‘Musa: Asia’s Dynamic Economic Growth Lulled People into Complacency’, New Straits Times (Kuala Lumpur), 1 June 1998, p.4. 9 ‘Democracy Pays’ The Daily Telegraph, 11 March 1998, p.23. 10 ‘Negotiating Pacts’, in Transitions From Authoritarian Rule, pp.37-47, p.46. 11 Tan Lian Choo, ‘Personality Politics in Thailand’, in Southeast Asian Affairs 1991 (Singapore: Institute of Southeast Asian Studies, 1992), p.289. 12 ‘Democracy Pays’ The Daily Telegraph, 11 March 1998, p.23. 13 Secretary of State Madeleine K. Albright, Opening Remarks Before the Senate Appropriations Committee, Subcommittee on Foreign Operations, Washington, DC, June 16, 1998, as released by the Office of the Spokesman, U.S.Department of State. 14 ‘An Open Government Saved US: Ramos’, The Straits Times, 16 June 1988, p.18. 15 ‘Riots Not a Call for Democracy’, Interview with Lee Kuan Yew, The Straits Times, 16 June 1998, p.33. 16 The Straits Times, 27 January 1998, p.28. 17 ‘Riots Not a Call for Democracy’, The Straits Times, 16th June 1998, p.33. 18 Larry Diamond, ‘The Globalization of Democracy’ in Robert O. Slatter, Barry M. Schultz and Steven R. Dorr, eds., Global Transformation and the Third World (Boulder, CO: Lynne Rienner, 1993), pp. 31-69. Supporters of democratic assistance argue that US pressure was important in several instances of democratization even during the Cold War. Thus, Carter administration’s human rights policies helped democratization in Argentina and Uruguay and to a lesser extent Peru. The Reagan administration’s policies helped democratic transitions in South Korea and Chile. Proponents of democratic intervention argued that external pressure not only helps to facilitate transition from authoritarian rule, but also prevents ‘relapse’ into authoritarianism, as evident in the US role in Ecuador in 1978 and in Dominican Republic in 1978 (where US pressure is credited with preventing electoral fraud). The Reagan administration’s intervention was supposed to have prevented planned

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coups in El Salvador, Honduras and Bolivia in early 1980s and in Peru in 1989. Finally, outright US invasions restored democracy in Grenada in 1983, Panama in 1989 and Haiti in 1994. 19 In Thailand, for example, the regime of Thanom Kittikachorn re-imposed military rule in late 1971 in response to first signs of US withdrawal. Although civilian rule was restored in 1973 following major student and mass unrest, the period of civilian rule between 1973 to 1976 was marked by turbulence and uncertainty until the country reverted to military rule in 1976 until the end of Cold War. 20 William J. Barnds, ‘Democracy, Human Rights & U.S. Policies.’ Freedom Review, vol. 22, no.5 (1991), pp.27-31. 21 Benjamin Bassin, ‘Development and Democracy in the Aid Relationship,’ in Uner Kirdar and Leonard Silk, eds. A World Fit for People (New York: New York University Press, 1994), pp.114-25; Lawrence E. Harrison. ‘Nurturing Democracy Abroad.’ Freedom Review vol.22, no.5 (1991), pp.42-44. 22 For an insightful account of Western policy towards democracy in Asia, see: Muthiah Alagappa. Democratic Transition in Asia: The Role of the International Community (Special Report No.3) (Honolulu: East-West Center, 1994). 23 Albright remarks before the Senate Appropriations Committee, op.cit. 24 Reproduced in The Nation (Bangkok), 11 June 1998, p.A4. 25 Robert Garran, ‘US Insists on Reform-Aid Link’, The Australian, 21 May 1998, p.6. 26 Robert garran and Matthew abraham, ‘IMF Could Delay Loans’, The Australian, 21 May 1998, p.6. 27 ibid. 28 Janadas Devan, ‘US Aid De-linked from Jakarta Reforms’, The Straits Times (Internet Edition), 21 June 1998; Janadas Devan, ‘US Cautious Towards Indonesia’, The Straits Times (Internet Edition), 21 June 1998. 29 Albright remarks before the Senate Appropriations Committee, op.cit. 30 ‘The Right Stuff’, Far Eastern Economic Review, 18 December 1997, p.64. 31 Kafil Yamin. ‘Indonesia: World Bank Brings Aid For Jobs, Gets Flak Instead’, Inter Press Service’, 5 February, 1998. 32 ‘Abri Looking to Ease Out of Political Role’, The Straits Times, 22 June 1998, p.14. 33 ‘Abri Looking to Ease Out of Political Role’, The Straits Times, 22 June 1996, p.14. 34 ‘International Organizations and Democracy’, Editorial of Journal of Democracy, vol.4, no.3 (July 1993), p.3. The issue contains several articles dealing with the role of international organizations in promoting democracy. 35 Amitav Acharya, ‘Regionalism and Regime Security in the Third World: Comparing the Origins of the ASEAN and the GCC’ in Brian L. Job, ed., The (In)security Dilemma: National Security of Third World States (Boulder, Colorado: Lynne Reiner, 1992),pp. 143-164. 36 For an elaboration of ASEAN’s challenge to the democratic peace argument, see, Amitav Acharya, ‘Collective Identity and Conflict Management in Southeast Asia’’ in Emmanuel Adler and Michael Barnett, eds. Security Communities in Historical, Theoretical and Comparative Perspective (Cambridge: Cambridge University Press, 1998). 37 Cited in Michael Richardson, ‘For the Planners, a Time to Decide’, International Herald Tribune, 18 November 1993, p.5. 38 Cited in New Straits Times (Kuala Lumpur), 20 July 1991, p.1.

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39 Devaluation, Revaluation Are Not the Answers’, New Straits Times (Kuala Lumpur), 4 June 1998, p.12. 40 See Amitav Acharya, ‘Human Rights and Regional Order: ASEAN and Human Rights Management in post-Cold War Southeast Asia’, in James T.H. Tang, ed., Human Rights and International Relations in the Asia-Pacific (London: Pinter, 1995), pp. 167-182; Amitav Acharya, Human Rights in Southeast Asia: Dilemmas of Foreign Policy (Toronto: JCAPS, 1995). 41 ‘The Limits of Politeness’, The Economist, 28 February 1998, p.43. 42 ‘Surin Pushes ‘Peer Pressure’’, The Bangkok Post, 13 June 1998, p.5. 43 ibid. 44 ‘Beggars and Choosers’, The Economist, 6 December 1997, p.43. 45 ‘Asia: Lee Kuan Yew Criticises Indonesian Response to Crisis’, AAP Newsfeed, 8 February, 1998. 46 ‘Neighbours Express Growing Alarm’, The Straits Times (Internet Edition), 15 May 1998; ‘Let Jakarta Resolve Crisis’, The Straits Times (Internet Edition), 15 May 1998. 47 ‘Beggars and Choosers’, The Economist, 6 December 1997, p.43. 48 ‘The Limits of Politeness’, The Economist, 28 February 1998, p.43. 49 ‘Out of Depth’, Far Eastern Economic Review, 19 February 1998, p.25. 50 Donald K. Emmerson, ‘Indonesia’ Political Dilemma’, The Straits Times, 29 June 1998, p.33. 51 ‘Surin Pushes ‘Peer Pressure’’, The Bangkok Post, 13 June 1998, p.5.