Democratic Exuberance

July 21, 1995|By JONATHAN POWER

LONDON — London. -- In freeing Aung San Suu Kyi from house arrest last week, Myanmar's corrupt generals have finally taken a significant step back toward 1990, when Miss Suu Kyi won over 60 percent of the vote.

But whether the generals now take the road to democracy will depend on whether they judge it to be in their own economic interest. They may well persist in thinking that democracy is the enemy of progress, despite the evidence of 34 years of military rule, which has reduced their country to penury.

The Asian economic tigers argue that a firm political hand is the key to success. Lee Kuan Yew of Singapore holds that ''what a country needs to develop is discipline more than democracy. The exuberance of democracy leads to indiscipline and disorderly conduct which are inimical to development.''

South Korea, Taiwan, Malaysia, Singapore, Indonesia, Thailand and Hong Kong have all thrived under the autocrat's baton, although few ever asked if they might have made as much economic progress under democratic government.

The Philippines, however, did not fare well under dictatorship, and neither has Myanmar, formerly called Burma, which suggests that other factors are at work. The Confucian work ethic in countries with significant Chinese and Korean populations probably will produce progress under any type of political regime. so long as there is economic liberalism.

As national economies become more sophisticated and the educated middle class more influential, democracy knocks on these doors, too. South Korea, Taiwan and Hong Kong have democratized significantly over the last five years. Even in Malaysia and Singapore the pressures to loosen the reins are very apparent. In the immediate future all these fast-growth regimes, including China, will have to face the reality that nearly all the world's richest countries are free, and nearly all the poorest are not. If dictatorship made countries rich, then Africa and Latin America would, by now, be economic heavyweights.

Surprisingly, there is not much academic research on the relationship between development and democracy. An exception is a recent study by Surjit Bhalla, formerly of the World Bank, which examined 90 countries over the period 1973-1990. It found that civil and political freedoms do promote growth.

The study ranks countries on a scale of 1 to 7, ranging from free (America is 1) to not free (Iraq is 7). Other things being equal -- in particular economic freedom -- an improvement of one point in civil and political freedom raises annual growth per capita by approximately a full percentage point.

Economic freedom and political freedom reinforce each other. Economic freedom is often (but not always) all that is necessary to give the entrepreneurial and industrial-minded elbow room to get moving. This partly accounts for Southeast and East Asia's unique success.

In the long run, however, even the most apolitical capitalist learns to appreciate a political structure that will protect his property, both material and intellectual. A dictatorship, however benign, is always more vulnerable than a democracy. It can be more easily overthrown and its policies then simply reversed. Democracy and the freedoms and obligations that usually go with it -- an independent judiciary and freedom of expression, the enforcement of contracts and the inbuilt pressures for free trade -- give the businessman what he wants, while offering the educated classes an outlet for their opinions and the workers a safety valve for their grievances.

This is why, over the next 20 years, democratic India is probably bound to overtake dictatorial China -- and why, if China stamps out democracy in Hong Kong after its take-over in 1997, it will pull the plug on the most important part of its economy. It is also why the pressures to move toward more democracy in Southeast and East Asia are now irresistible and why the countries in Latin America and Africa with the best economic future are those that are most democratic.

Myanmar's generals would be wise to look where the winds of change are blowing. If ever there was a time when authoritarianism gave economic progress a brief fillip, it has long passed.

Jonathan Power writes a column on the Third World.

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