Asian dilemmas: can Asia's managed capitalism keep growing if the countries don't open up politically and economically? But if they do open up, will they be inviting Western-style welfarism and strife? - Cover Story

National Review, Nov 29, 1993 by William McGurn

Can Asia's managed capitalism keep growing if the countries don't open up politically and economically? But if they do open up, will they be inviting Western-style welfarism and strife?

WHEN Lee Kuan Yew talks, Asia listens. Even people who don't like him at least pay attention. And so interest ran high when Singapore's Senior Minister visited Manila in November 1992 at the invitation of the Philippine Chamber of Commerce and Industry. In characteristic fashion, Lee told the audience he had at first hesitated to accept the invitation because he knew his would be "a contrary opinion." In equally characteristic fashion, he went on te give it to them anyway, right between the eyes:

Contrary to what American political commentators say, I do not believe that democracy necessarily leads to development. I believe that what a country needs to develop is discipline more than democracy. The exuberance of democracy leads to undisciplined and disorderly conditions which are inimical to development. The ultimate test of the value of a political system is whether it helps that society to establish conditions which improve the standard of living for the majority of its people plus enabling the maximum of personal freedoms compatible with the freedoms of others in society. Lee went on to single out an "American-style constitution" as a major cause of the Philippines' problems.

The reaction was swift, forceful, and ultimately misleading. Senator John Osmena accused the Singaporean leader of subversion, and others followed suit ("Filipinos up in arms over Lee's insults," screamed a South China Morning Post headline). President Ramos likewise attacked the notion of bypassing the democratic process. Yet for all the chest-thumping, the real story is how many Filipinos whispered approval. I happened to be in Manila at the time, and it immediately became clear to me that Lee had at least as many admirers as detractors. "If you ask me formally I will say I was outraged," chuckled a former Aquino cabinet officer. "But if you do not use my name I will tell you we are all saying, 'Of course, he is exactly right.'"

Throughout Asia today the Lee-Ramos clash has come to be depicted as a microcosm of the raging postCold War debate in the Third World: development or democracy. Unfortunately, this debate does little to illuminate, not least because even to pose it thus--development or democracy, survival or dignity, bread or freedom--obscures far more than it reveals. The real choices are more complicated: which path te development; what kind of democracy; and in what sequence they might come. These in turn break down into a host of related considerations, such as the ongoing argument between state capitalism (Korea, Japan) and liberal capitalism (Hong Kong). The same holds for the political front, where the issue is not whether there should be democracy, but the level of development necessary for its establishment, and especially whether there are not alternatives to an American-style democracy that has come to be synonymous with individual license.

Delicate questions these, with awesome repercussions for the nations now wrestling with them. Yet in this sensitive area the Clinton Administration has rushed in where even devils fear to tread. And so Asia watches, with gaping disbelief, as a host of American officials traipse through the region threatening the source of its prosperity--trade--in favor of increasingly abstract goals: the status of labor unions in Indonesia, the measurement of human rights in China, targeted trade quotas with Japan. In the real world, meanwhile, North Korea's unabashed pursuit of the nuclear bomb goes unchecked and the prospects for a successful Uruguay Round of GATT diminish. Thus does the ghost of Jimmy Carter rise over the East, tinging what should be a vigorous and healthy debate over its future with apprehension.

'The State Shall...'

NOWHERE is the debate more heated than in the Philippines, and with good reason. From 1965 to 1990, the 23 economies of East Asia have grown faster than any other region of the world, led by Japan and the high-flying Four Tigers (Hong Kong, Singapore, Taiwan, and Korea), but with the newly industrializing nations of Thailand, Malaysia, and Indonesia coming up fast. During this period these economies have grown three times as fast as Latin America, five times as fast as sub-Saharan Africa, and faster even than the oil-rich nations of the Middle East and the industrialized nations of the Organization for Economic Cooperation and Development. If growth were randomly distributed, the World Bank notes, there is roughly "one chance in ten thousand that success would have been so regionally concentrated."

What makes the Philippines central to the Asian debate is its record. It is the perfect bad example. Only a generation ago, the country was one of Asia's success stories, second only to Japan in economic performance. So far ahead was it back in the late Fifties and early Sixties that it dispatched development experts to South Korea. Today the situation is completely reversed. Here in Hong Kong, for example, the symbol of the Philippines is not Cory Aquino, with her "People Power" revolution, but the Filipina maid. There are ninety thousand Filipinas in Hong Kong alone, forced by circumstances to go abroad to raise other people's children so they can feed their own. To the Asian mind the Philippines missed the boat on prosperity because it opted for democracy too soon.