The speakers discuss the various Asean experiences and challenges in building and rebuilding democratic institutions during a state of transition.Indonesia in transition
With the fall of President Suharto in 1998, Indonesia found itself in a state of transition. “We reformed everything, from social to economic to political systems,” said Prof Anwar Nasution. There were four key aspects of Indonesia’s reforms. First and foremost was replacing Suharto’s dictatorship with a democracy, which led to the end of the military’s involvement in Indonesian politics.
The second aspect was replacing its decades-old centralised government system; more power is now given to its sub-provinces. Third was relaxing the government’s stranglehold on the economy. The final aspect was to improve the governance of Indonesia’s corporate sector, including state-owned enterprises.
The 1997 financial crisis hit Indonesia harder than any other South-East Asian nation. “That was the most expensive banking crisis in the history of humanity,” Nasution said. The price the country had to pay in order to repair its entire banking system was very high indeed – more than 50% of its annual GDP.
With the fall of the Suharto regime, the Indonesian Audit Board (BPK) had to learn how to do its job all over again. “During the Suharto years, auditing was not very attractive. How can you say No to a dictator?” Nasution’s first task with the BPK was to begin the eradication of corruption in the country. The result was a series of high-profile arrests, including North Sumatra Governor Syamsul Arifin, as well as the former mayor of Medan, Abdillah, and his deputy.
“We’ve made progress,” he acknowledged, “but it’s far from perfect. It takes a while.”Twisting the system
“I’m happy to be here in a moment of great optimism for the Philippines’ future,” said a smiling Risa Hontiveros.
And no wonder: it was only a few weeks ago that the country removed the chief justice of its Supreme Court, Renato Corona, whose midnight appointment by then-President Gloria Macapagal-Arroyo was considered unconstitutional. It was later found that Corona had assets that he could not possibly have amassed on his meagre government employee’s salary, and a successful impeachment ensued. Corona’s controversial appointment is just one example of how Arroyo took advantage of flaws in the country’s Constitution and twisted the system to suit her needs. “She established a cheating mechanism by co-opting the military and the Commission on Elections to swindle for her and give her a one million vote advantage over her more popular opponent.” Government bodies designed to protect the public were instead filled by Arroyo’s people, who would then protect the president from any accountability. The erosion in the Philippines’ public institutions went on for nine years before Arroyo’s eventual fall.
But Hontiveros noted that it is imperative that the people themselves claim ownership over their own nation. “When the people feel that they do not have a stake in nationbuilding, we make possible a culture of abuse and impunity. We have successfully triggered political transitions, but such transitions must be accompanied by social revolutions that would change our collective ethos. Political revolutions are not enough.”China’s shifting bottleneck problem
“China is transitioning in terms of economic growth,” said Dr Sherry Tao Kong. “Over the past 30 years we had an average of around 10% growth per annum, which is pretty mindboggling in many ways.”
From 1978 onwards, China’s secondary and tertiary industries’ share of the GDP grew from 70% to close to 90% today. This massive growth led to higher living standards, as well as an explosion in China’s industrialisation.
Rapid urbanisation ensued. What was once a 20% urban population in the whole of China has now ballooned to over 50%. “Human capital has become a huge phenomenon. There are six million graduates every year.”
But this has also led to a growing inequality within China. “Over time, you have a divide between the rural and the urban, the coastal areas and the hinterlands. All these inequality issues have been there for a long time.” Compounding this issue is the fact that the Chinese are ageing very quickly. “Based on UN estimates, by 2050 China will be as old as Europe, but only endowed with a fraction of the average income of Europeans.” Kong drew parallels between China and Indonesia: “Both republics were established in the late 1940s, both were liberated by their respective, very charismatic leaders, and their regimes ended up in economic and political disaster, and then both countries actually experienced decades-long rapid growth.” The difference, of course, is that the Suharto regime was spectacularly replaced by a democracy. China’s one-party government remains in power today.
Kong added that China is still trying to figure out how bad the situation really is, and what it can do about it. One thing is for sure: the country is facing a completely different set of challenges and conditions from what it is used to. Can its decades-old political institutions evolve with the times? Only time will tell.
“China needs to think about what I call the ‘shifting bottleneck problem’,” Kong said. “It will be a gross mistake to think that what enabled development at a different stage will continue to work today.”
“It’s not peacetime yet.”
Moderator Datuk Din Merican, an associate fellow at the Malaysian Institute of Economic Research, said it was an exciting time for Indonesia and the Philippines. “They embraced change and they are making progress. (In Malaysia) the regime is resisting change. And I think they are not going to last long if they continue this way.”
The speakers were asked to give advice for a newly elected government in dealing with institutions like the police, military and judiciary. Hontiveros said that a successful revolution was only the first step, and building relationships with the military and police was vital. “It’s not peacetime yet. Engaging the military and police institutions is difficult but necessary if we want to build a mature political system.”
Later, Kong said that, in China’s case at least, democratic elections weren’t as important as ensuring accountability. “What’s more important in my mind is to have an independent and effective judicial and legal system.”
In his closing remarks, Merican said that Malaysia needed an active citizenry. “I’m 70 now, and I’m feeling very frustrated. We need a system that’s transparent and clear, and we must fight for what is right.”