The late Lee Kuan Yew was without doubt an
extraordinary person. Say what you like about the late Mr. Lee but on the whole,
he did good for Singapore. Sure, I have my grouses about Singapore and how life
has become expensive. However, as one Dutchman said to me “Where else is there.”
If you think about it objectively, Lee Kuan Yew got most things right and I
will never tire of saying this but Singapore is pretty much what any city or
country should be – clean, green and rich.
However, while Mr. Lee was undoubtedly an extraordinary
leader, he developed what one could call a glaring flaw. In his later years as
a consultant to nations, he developed a philosophical aversion to natural law –
namely an aversion to the laws of natural selection. He seemed to genuinely
believe that the system he created, which was all about the perpetual rule of
an “intelligentsia” concentrated around his family (both his actual family and
political party) was the best possible system for Singapore and would last in
perpetuity.
The man who forged a nation where citizens pledged to “build
a democratic society, based on justice and equality” ended up arguing that
Singapore would be undone by a “two-party” system and while Mr. Lee had the
wisdom to know when to curb himself (let’s remember he voluntarily stepped
aside and made his successors remember to let him come to them), this wasn’t necessarily
the case with the people after him. Whilst Singapore’s political system seems
to continue to deliver the proverbial goodies, one cannot help but feel that
there is a genuine belief in the elites that they have received the “mandate of
heaven” to be where they are. I mean, which other “free-market” capitalist society
actually has business leaders saying “the market is too small for competition.”
So, was Mr. Lee, right? Is an iron grip on power
better for the economy than letting people do what they want? Sitting in
Singapore, which seems relatively stable (no Trump and no Brexit) compared to
pretty much most of the world, the answer might be yes.
However, around November of last year, I attended a
talk by His Excellency, Mr. Ignacio Concha, the Chilean Ambassador. This was a talk
about investment opportunities in Chile, which is the most advanced economy in
South America.
Chile's “success story” once made it comparable to an Asian Tiger economy rather than a Latin one. More importantly, Chile was once run by a strong man, called Augusto Pinochet, who along with murdering millions, actually stabilized the economy and set Chile onto the path of growth and development.
One might argue that Chile under Pinochet was a
classic example of the benefits of strong man rule. However, the Ambassador
made the point that the real explosion the Chile's growth came in the decade
after the return to democracy (1990). If you were to look at World Bank
statistics, you would realise that the Ambassador is right:
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CL
If you look at the statistics closely, Chile’s real explosion
didn’t happen in 1990 with when Pinochet stepped aside but in 2000 when he was
arrested in the UK on the orders of the Spanish Magistrate Baltasar Garcon.
This marked the beginning of the end of his influence on the country.
So, while there is a case to say that Pinochet, for
all his faults, did stabilize the Chilean Economy, there is a case to say that his
influence held the country back and the country only started exploding into
wealth and advancement when his influence over the country ended.
There’s a similar example closer to home. In South East
Asia, there is Indonesia, which is by far and away the economy that counts on
the global stage. For 30-years, Indonesia was run by a strong man. Like
Pinochet in Chile, Suharto had millions killed. However, he was a stable force
in Indonesia and the ASAEAN region. Coming from Singapore, where there are
memories of “Konfrontasi” under his predecessor, Sukarno, Suharto was a vast improvement.
He kept Indonesia stable and focused on itself rather than on us, which allowed
us to grow.
When Suharto fell, it seemed that things were a little
bit messier. However, if you look at growth figures, Indonesia has done exceedingly
well and being the world’s third largest democracy has been good for Indonesia’s
entrepreneurs. The years under Jokowi, Indonesia’s first entrepreneur president,
have been particularly good for growth:
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ID
On the African continent, there’s Nigeria. Like
Indonesia in South East Asia, Nigeria is the giant in its neighborhood. For the
better part of its Independence, Nigeria was run by its generals. There were
periods of vast growth, which were then followed by economic collapse. Nigeria
was effectively driven by oil exports. Then, in 1999, the last and worst of its
military dictators died. Nigeria returned to civilian rule and growth has been
steady. While Nigeria has by no means escaped poverty, its been remarkably
steady since 2000.
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=N
So, if you look at the examples of Chile, Indonesia
and Nigeria, there is a case to be made for democracy being good for growth.
Yes, rule by strong men can be necessary to bring a sense of stability.
However, that’s only good up to a certain point. A lot of the benevolent effects
of strong man rule depends on the strong man himself. In Singapore, we’re lucky
that the “strong man” was Mr. Lee who got things right and saw to it that his
immediate successors remained honest. However, there’s no guarantee that the
next few leaders will remain honest or get too used to the perks of power.
Nigeria’s plethora of military strong men turned what
should be an exceedingly wealthy place into a basket case. Suharto was a force
for stability but when things collapsed in 1997, he was exposed as being more
interested in hanging onto power to protect family wealth than running the
country.
Democracy and competition for power are actually good.
When you let people get on with it within a certain framework, you actually
create prosperity. It may look messy and ride may be rough, but in the end, letting
people get on with it and making them have a stake in the country is actually
good for everyone
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