Failures – exposed, reflected, considered

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Chicken or egg: democracy vs economic growth – case Thailand

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With 2011, a wave of unrest descended upon the MENA. What became later known as “Arab Spring“ represented a ragged set of uprisings throughout MENA countries including Tunisia, Egypt, Libya, etc. The vision of those uprisings was but one, at least initially, as it could be heard on every street and square, shouted or screamed from mouths young and old. Freedom. Democracy.

Some of those uprisings turned ugly (civil war in Libya and Syria), others (Tunisia, Egypt) ushered in what many reformers/revolutionaries believed to be a new era.

Freedom, democracy. Of course, those high-pitched and loaded terms are as cliché by now, without much merit nor substance, rallying slogans for disillusioned and ignorant. What people really meant, or needed to mean, was “better life standards,“ “more and secure jobs“ (on social/personal level) and “economic growth“ (on national level).

Another cliché/stereotype associates democracy and economic growth. Many think that those two are interchangeable, i.e. occurrence of one will automatically imply or cause the other. Then there is “modernization theory,” predominant since the late 1950s onward, and which claimed that middle and other aspiring classes created by industrial capitalism would necessarily (and eventually) bring about accountable and democratic governments. Reality is less obvious that this foregone and simplistic conclusion.

Why so? There is an easily spotted pattern, in which democracies usually are among the economically developed countries. However, the paths to democracy are varied. One is tempted to think that lack of economic stability or growth, which implies increasing poverty levels, will trap societies in a vicious political circle of dictatorial reign and economic deterioration. While bonds of poverty cannot be dismissed, they are not inexorable. Countries such as Taiwan, South Korea, Japan, Singapore, Malta and Greece went from utter poverty into spectacular growth, some as much as quadrupling their per capita incomes. Dictatorships bloomed in Taiwan and Singapore during the entire and South Korea during most of this period of drastic economic transition and growth. Only Japan and Malta remained democratic throughout their respective periods of economic growth, and Portugal as well as Greece tattered between democracy and dictatorship, while growing economically.

There is no predictable pattern, but once a democracy is established, its survival depends on a few factors. Foremost among them is the level of economic development.

Let’s have a closer analysis of how a democracy caused an economic depression, with a study of Thailand’s recent history.

In the 1980s and early 1990s, nations from Indonesia to the Philippines embarked on their own democratic transitions, not unlike the 2011 Arab Spring. In Thailand, hundreds of thousands (middle class) came out into the streets of Bangkok in 1992 to bring down a military government. They wanted democracy and freedom. Thailand boasted a large, educated middle class, one of the best-performing economies in the world, and a relatively robust civil society. By the late 1990s, Thailand had held several free elections and passed a reformist constitution that enshrined greater protections for civil liberties and created a wealth of new institutions designed to ensure civil rights.

However, the “reformist“ frenzy started cooling off in the late 1990s, as many leading Thai reformers, who were behind the protests in 1992, backed off. They believed that Thailand had passed a threshold (of transition to democracy and economic growth), and as a result, many NGOs, media watchdogs, and organizations that were instrumental during and in the immediate aftermath of the 1992 uprising closed down. It only helped, with dawn of the Asian financial crisis in 1997, to put many of those idealistic-minded middle-class reformers into unemployment, making it even harder for them to spend time volunteering at organizations dedicated to reforms.

As Thai reformers slowly drifted off, a telecommunications tycoon Thaksin Shinawatra used his fortune to build a political party. He bought up politicians to join his party. To soften the blow and an at the same time trying to appeal to the larger part of the Thai society, the poor, Thaksin initiated a well-thought combination of entrepreneurial inducement and grassroots empowerment projects, including inexpensive health care schemes and loans to villages to start businesses.

In 2001, Thaksin became the elected PM, and showed little love for democracy. He used his power to threaten Thailand’s free media, eviscerate its independent civil service, and launch a campaign against insurgents in the Muslim south. He rewarded political allies and punished political enemies. In 2005, Thaksin was reelected, again with massive support from the poor, and largely thanks to the lackluster opposition of the Thai middle classes, which by then had grown disillusioned with democracy, believing it had delivered only elected autocracy. The reaction was prompt. Another row of street protests in 2006, whereby Thai middle class once again took to streets, hoping to topple the elected (autocratic) government. The result was a military coup of 2006. Thaksin fled into exile.

The military coup triggered an economic meltdown. Thaksin might have damaged the country’s weak democracy, but the military ruined it. It shredded the reformist constitution and set the stage for today’s Thai government, which unleashed massive force against demonstrators who gathered in the streets of Bangkok in spring 2010.

Thaksin is once more back to the country, in a proxy way, via the elections favoring his sister’s party and her as a PM.

How to avoid a similar democracy failure in MENA?  It is essential to create and keep independent government watchdogs, new and independent press outlets. Introduction of government policies to reduce economic inequalities is also vital, allowing an increasing transition from low to middle class. Lastly, while a charismatic (or not so much) leader is a good focal point for rallying reformists, a more important and longer-term reform is to induce a knowledge economy and infrastructure facilitating foreign investment and (especially foreign-owed) property rights/protection.

Written by Hayk

February 20, 2013 at 9:19 am