A Modest Proposal
|Aug 11, 2011|
What if the region’s governments closed up shop, perhaps confining themselves to flag-raising on national days or ribbon cutting at shopping mall grand openings? Would anyone notice?
That sobering thought occurred the other day when a senior politician in Indonesia, in the midst of a discussion of corruption and general governmental malaise, said: “We have analyzed this and we conclude that the government makes no difference for the economy.”
He’s right. A large domestic market, natural resources, sound fiscal policy and tons of great buzz in the investment world have combined to render Indonesia a success despite its government.
Contemplating the state of national governments in many countries can be sobering. The good news is that reasonable levels of economic growth continue anyway. Officials bicker, call for elections, maneuver against one another and collect vast amounts of illicit money. The corruption is investigated to no apparent end and no one ever seems to be found guilty.
The long-term champion of pointless government is Thailand. An endless cycle of coups and counter-coups, uprisings, constitutions and plots invoking the revered monarchy over the last many decades have done little to stop economic growth in a country that is well-placed geographically and temperamentally for investors.
Thailand has had no real government since the ultimately pointless 2006 coup against former Prime Minister Thaksin Shinawatra. That left the Yellow Shirts and Red Shirts to run riot for a few years while everyone speculated about the health of the king. The Yellows got away with pretty much anything because they were anti-Thaksin, but the Red Shirts got away with their own nonsense with virtual impunity until last year’s bloody end to their siege of Bangkok.
The end result? Thaksin’s sister is now in power, he will likely be back soon and five years was wasted. The economy keeps perking along nicely, though, at 6-7 percent, and most any businessman in Thailand will tell you that local politics makes little or no difference to investment decisions.
Indonesia’s closer neighbor, Malaysia, has had decades of impressive growth in infrastructure and the economy despite an opaque, race-based authoritarian system that seems designed to stifle entrepreneurial drive. That it hasn’t is a tribute to keen Malaysian business leaders who have kept the economy ticking over, currently still at a respectable 5.2 percent despite a brewing political mess.
The worry now, I would think, is that it is obvious that the United Malays National Organization, which has held power since independence in 1958, has lost the plot and popularity. In this case, politics could finally derail economic progress if wiser heads do not prevail and allow for the kind of democratic give and take that keeps otherwise dangerous officials busy and unable to do much damage in places like Thailand and Indonesia.
The Philippines is one place where government is taken entirely too seriously, with negative long-term effects. The feudal structure has meant that a handful of powerful families use government for their exclusive benefit and basically allow the Catholic Church to set social policy. Government’s principal role has long been to freeze non-favored actors out of economic opportunity. It is not rampant corruption, I would argue, that hurts the Philippines so much as the fact that government there is too effective at serving vested interests that have been in power for generations. The lack of social mobility this creates has harmed growth and helped lead to the exodus of many millions of the nation’s best people for opportunities abroad.
And there is Indonesia. Looked at by most standards of governance, Indonesia is a mess. Education, infrastructure, law enforcement and health care are all substandard. Corruption is a plague with no cure and the investigation of wrong-doing — as with the current debacle involving former ruling party treasurer Muhammad Nazaruddin — is used primarily to destroy politicians to the advantage of other, equally suspect, political forces.
It now seems likely that Nazaruddin’s return from his Latin American sojourn to face corruption charges could turn the Democratic Party into a nonentity just in time for the 2014 elections. Somehow the cynic in me suspects this is not about justice or clean government, but about maneuvers by President Susilo Bambang Yudhoyono’s opponents simply to bring down his party.
Perhaps the only thing left is to transform the political system into a TV soap opera. The politicians could fight over the advertising revenues.
(A. Lin Neumann is a senior advisor to the Jakarta Globe and one of the founders of Asia Sentinel.)