Amitav Acharya

Democratising Southeast Asia:

Economic Crisis and Political Change

Working Paper No. 87

August 1998

The views presented in this paper are those of the author(s) and do not necessarily reflect those of the
Asia Research Centre or Murdoch University.

© Copyright is held by the author(s) of each working paper: No part of this publication may be
republished, reprinted or reproduced in any form without the permission of the paper’s author(s).

National Library of Australia.

ISBN: 0-86905-675-1
ISSN: 1037-4612
INTRODUCTION
Among the multiple effects of the current Asian economic crisis is the challenge it has posed
to authoritarian rule. While governments of the region emphasize the social dislocation and
the potential for political instability caused by the economic downturn, Musa Hitam, a former
Malaysian deputy prime minister, has pointed out that ‘in the present social, economic
scenario, the human rights cause seems to be [a] winner here.’1 Contrasting the political chaos
and the collapse of the Suharto regime in authoritarian Indonesia with the smooth leadership
transitions in democratic South Korea, the Philippines, and Thailand, advocates of democracy
argue that democratic regimes are more capable of effective governance and crisis
management than authoritarian ones. Furthermore, the notion of ‘Asian values’, once credited
with the region’s economic success, and for some time a powerful conceptual justification for
authoritarian rule, is now being blamed for the economic crisis.

Until now, the literature on democratization in Southeast Asia focussed on the effect of
rapid economic growth on the performance legitimacy of the regimes, the size and attitude of
the middle class, and the prospects for civil society.2 Little was said about the impact of
external factors in facilitating or inhibiting democratization. Yet, the current economic turmoil
shows that the domestic forces that affect democratization often derive their strength from
international ones.

This article is a preliminary attempt to analyze the impact of the economic crisis on the
prospects for democratization in Southeast Asia. It looks at how the crisis has shaped the
debate on the nexus between democracy and development. Secondly, it examines the role
international and regional factors behind democratization, factors that have received little
attention in the literature on Southeast Asian democracy. Another issue covered by the article
is the regional and international consequences of the pressure for democratization, especially
its possible impact on regional norms that have underpinned the Association of Southeast
Asian Nations (ASEAN). By looking at the interrelationship and interaction between
economic crisis and democratization from a domestic, regional and international relations
perspective, this article argues that what is happening in Southeast Asia may have important
lessons for the theories of democratization.

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RETHINKING THE DEMOCRACY AND DEVELOPMENT NEXUS
Scholars of democracy have long assumed that rapid economic growth is a powerful, if not
the sole, determinant of democratization.3 As an influential formulation by Huntingon put it,
‘democratization occurs most frequently and also most easily in countries that have reached
the upper-middle income levels of economic development.’4 But the situation in Southeast
Asia in the decades of rapid economic growth resisted the expectations of theory. Rapid
economic growth did not reduce elite cohesion, as predicted by theory. Moreover, growth
produced claims of ‘performance legitimacy’, defined as ‘characteristics of states seeking
legitimacy through acts of rule that assist the economic system in producing an ever
increasing flow of goods and services for the consumer.’5 It not only allowed regimes to
deflect criticism of their authoritarian rule, but also gave it adequate resources and
opportunities to co-opt a significant portion of the middle class. The ruling elites in Singapore
Malaysia, Indonesia and Thailand, remained fairly cohesive. Instead of engendering greater
political openness and participatory institutions, rapid growth became the principal
justification for authoritarian rule, enabling the ruling regimes to claim that economic growth
could not have been achieved without the regime’s ability to ensure political stability and
continuity.

The current economic crisis may show that economic downturns are more important
than economic growth per se in encouraging democratization. The ‘de-legitimizing effects’ of
the current economic crisis in evident not just in Indonesia, but also in Thailand and Korea.
Indonesia’s initial swift response to the economic crisis seemed to reinforce the view that
authoritarian political systems are better able to deal with national economic problems. But
the Suharto government’s subsequent difficulties in restoring confidence in the Indonesian
economy was blamed on the known failings of the political order, including cronyism,
nepotism, and his failure to name a successor. It emboldened the opposition, not just the
traditional anti-Suharto elements such as Megawati Sukarnoputri, or disgruntled generals, but
also the ‘modernist’ Islamic forces which had provided support the regime in the early 1990s.
Ultimately, the economic crisis forced the issue of political succession in Indonesia,
culminating in Suharto’s resignation. Earlier, failure to deal with the economic crisis had
precipitated the downfall of another Southeast Asian government, in Thailand, albeit in much
less dramatic and violent circumstances.

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 During the boom years, Singapore’s Lee Kuan Yew had argued that ‘the exuberance of
democracy leads to undisciplined and disorderly conditions which are inimical to
development.’6 Disagreeing with this view, newly-elected President Ramos of the Philippines
reminded Mr Lee that the authoritarianism of the Marcos era contributed in no small way to
the country’s economic ruin. But Lee’s comments fed into the ‘Asian values’ discourse,
which provided an implicit and culturally-rooted rationale for justification for authoritarian
government. But confronted with the prospects for a major regional economic downturn, Lee
himself has acknowledged that nepotism is a Confucian weakness and that networking
(Guanxi) is ‘not a good Asian value’. Some Asian values were detrimental to development
since they were not ‘not compatible with the competitive free market.’7 Musa Hitam has gone
even further, arguing that the success attributed to the ‘Asian Way’ also bred ‘arrogance,
corruption, dependence, and failures’.8 Western media commentary has zoomed on this point;
‘The financial crisis’ wrote the Daily Telegraph of London in an editorial, ‘has shaken faith in
“the Asian way of doing things” vaunted by autocratic governments. That is no bad thing, for
the cause of both democracy and sound economics.’9

In their study of democratization, O’Donnell and Schmitter point out that one of the key
legitimation strategies for authoritarian regimes is to ‘act as agents of transnationalization,
opening the economy to foreign trade and investment, [thereby] increasing its vulnerability to
externally generated impacts’.10 Economic globalization, including the internationalization of
production and finance, renders authoritarian regimes more vulnerable to external economic
and political pressures. The political effects of the current economic crisis tend to support this
hypothesis.

Apart from increasing the vulnerability of Southeast Asian regimes to external

economic and political pressures, economic globalization has also created some powerful
obstacles to democratic breakdowns in the region. In Thailand, a country with a history of
democratic breakdowns (largely due to military coups), globalization provided a crucial
support to democracy in Thailand. As one analyst observes, a successful future coup in
Thailand, in order to have public support, would require ‘a strategy of hitherto untried
approaches that combine seizure of power with methods to sustain business confidence.’11 But
from the late 1980s, fears that political instability caused by coups or attempted coups may
drive away foreign investors and undermine economic growth led the middle class and
business groups in Thailand to oppose military intervention in politics. It is significant in the

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wake of the recent economic crisis, the elected regime’s (of Chavalit Yongchaiyudh) failure
to deal effectively with the problems did not renew domestic support for miltary rule, despite
initial rumors of an impending coup.

Much more debatable has been attempts to turn Lee’s earlier ‘democracy is bad for
development’ logic on its head. Unlike Indonesia, South Korea and Thailand were able to find
political alternatives to the existing regimes with relative ease, regimes which then moved to
distance themselves from the mistakes of their predecessors and adopt measures to rectify the
situation. Comparing ‘the nepotism and cronyism surrounding Suharto with the fresh
approach to Korea’s problems by Kim Dae Jung, an editorial in London’s Daily Telegraph
argued: ‘[T]he encouraging lesson from this upheaval is that democracy helps a country to
cope with rapid economic change. There is less fear of personal loss and a greater
responsiveness to the broader needs of society.’12 Madeleine Albright, the US Secretary of
State, has lost no time and opportunity in stressing the same point. In her view, democratic
governments in Korea, the Philippines and Thailand, made progress in overcoming the
economic crisis ‘in part because their people were able to elect new governments, which
started work in a climate of openness and trust, and with the moral legitimacy to call for
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shared sacrifice.’ Indonesia, in her view, now had a chance to follow their footsteps. Her
views are not without support from within the Southeast Asian region. Outgoing President
Ramos of the Philippines was even more blunt in his latest statement on the democracy-
development nexus. Blaming the ‘agony’ of the Asian economies on lack of ‘transparency
and democratic controls’, Ramos stated, ‘the present economic crisis proves that in choosing
democracy over authoritarianism, we Filippinos were on the side of history, rather than
outside of it, as earlier believed.’ 14

This allusion to his earlier debate with Lee Kuan Yew did not escape a reposte from the
Singaporean statesman. ‘Indonesia did better than the Philippines in the last 30 years, and
may well do so again in the next 30 years’, said Lee, adding ‘[I]t is better not to be black-and-
white in categorising countries as democratic and therefore successful or authoritarian and
prone to failure.’15 Despite his earlier criticism of nepotism, Lee rejects that Asian values
contributed to the economic crisis in the region. As he put it, ‘having Asian values did not
necessarily translate into having a general lack of transparency.’ The fact that Singapore had
Asia values and transparency did not spare it from the crisis, because of the regional
contagion.16 According to Lee, what the demonstrators in Indonesia were demanding was not

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democracy, but an end to corruption, cronyism and nepotism, and the rule of Suharto. The
solution to Asia’s economic problems did not lie in greater democracy, but better government,
or ‘good governance’, including ‘sound banking laws, rigorous supervision in the financial
sector and proper corporate governance.’17

THE LIMITS OF ‘DEMOCRATIC ASSISTANCE’

Scholars of democratization have identified several international factors in promoting
democracy. As Larry Diamond puts it, while ‘the course of political development and regime
change [owes] primarily to internal structures and actions’, the latter have also been ‘shaped
historically by a variety of international factors’.18 Scholarly work has pointed, among other
things, to the role of international sanctions, democratic assistance, policies and pressure from
international organizations, snowballing (demonstration) effects, in promoting democracy.

Until recently, democracy in Southeast Asia received little direct support from the
international community. Guided by Cold War geopolitics, the West viewed authoritarianism
as an acceptable alternative to communism. Democracy was ignored in order to sustain the
West’s authoritarian but anti-communist allies in power, as indicated by the US support for
the Diem regime in South Vietnam, Lon Nol in Cambodia and Suharto in Indonesia.
Moreover, strategic developments in the wake of the US withdrawal from Indochina in 1975
also undermined democracy in Southeast Asia. Fearful of renewed communist subversion,
Southeast Asia’s pro-Western regimes strengthened their internal security measures which
thwarted the scope for political debate and undermined the development of civil society.19 The
Vietnamese invasion of Cambodia in 1978 and the ideological polarization of Southeast Asia
had a debilitating effect on democracy in the region. Embroiled in the Cambodia conflict,
ASEAN countries emphasized regime security and performance legitimacy, often at the
expense of political openness. ASEAN’s high-profile diplomacy in the Cambodia conflict and
its anti-communist and ‘free market’ posture appealed to the West, diverting international
attention from domestic authoritarianism. Indeed, domestic stability and economic growth
achieved under authoritarian rule (the Philippines being the major exception to this) not only
earned ASEAN certain immunity from international pressure, but ASEAN also begun
projecting itself as a model for the developing world.

The end of the Cold War saw the US embrace the ‘enlargement’ of democracy as a
sequel to the ‘containment’ of communism.20 It also saw greater emphasis on a set policy

5
instruments to promote democratization, among them aid conditionality (linking aid to human
rights and democracy) and humanitarian intervention.21 But Southeast Asia was more or less
exempt from the kind of vigorous democratization campaign directed by the Western
countries and international financial institutions in economically weaker African and Latin
22
American states. Opposition to authoritarian rule in Southeast Asia was tempered by a
pragmatic recognition of trade and investment opportunities available in the region. This had
been true not only of the soft authoritarian regimes as in Singapore, Malaysia or Indonesia,
but also such hard authoritarian regimes as Vietnam, where market-oriented economic reform
earned the regime a reprieve from Western democratic assistance. Only in major instances of
democratic breakdowns or near-breakdowns did the Western governments respond with
conspicuous pressure, as in the case of the 1991 Dili massacre in Indonesia and the sanctions
briefly imposed on Thailand in response to the Bloody May episode. But the fact that only
two countries, Denmark and Canada, cut off aid to Indonesia after the Dili massacre suggests
limited nature of international reaction. Instead of using sanctions to support democratization,
Western countries hoped that economic growth and liberalization, partly fostered through
Western trade and investment, could ultimately promote democratization. This policy
framework would allow the Western countries to exploit economic opportunities while
appearing to meet their commitment to democracy and human rights.

In Southeast Asia, the closest case of democratic assistance during the Cold War period
was in the Philippines, where the US exerted pressured on President Marcos to renounce
power and subsequently backed Corazon Aquino against the repeated threat of military
takeover. What caused the shift in US policy towards Marcos is a matter of debate. It is clear
that the shift was not triggered by the declining importance of the US bases in the Philippines.
In the mid-1980s, these bases, hosting the largest US permanent military presence outside of
continental United States, were considered critical to US power projection capabilities in the
Pacific and Indian Oceans, including the strategically vital Persian Gulf. Neither can one
regard the end of the Cold War as the major factor, since the shift occurred well before the fall
of the Berlin Wall. In retrospect, what perhaps mattered most for Washington was the
perception that repression and lack of economic performance has made the Marcos regime a
serious liability for the US, threatening vital US interests in the country. The regime’s
continued existence was a major factor behind the growing militancy of the New People’s
Army, whose made the US military bases a major target of its propaganda. Continued US
support for the regime would have seriously alienated the middle class population as well,

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which was fed up with the Marcos dictatorship. Thus, promoting democratic change in the
Philippines was the only option available to the US in protecting its military access. It was as
much a case of geopolitical self-interest as the enlightened championing of democratic values
that made the US to seek the ouster of Marcos.

In the early 1990s, Cambodia experienced one of the largest multilateral efforts in
human history in support of democratic transition. The peace-building role of the United
Nations Transitional Authority in Cambodia was to facilitate and implement a comprehensive
political settlement in Cambodia, based on a Western Liberal-democratic model. But the
UNTAC-supervised election in Cambodia did not settle the issue of democratic power-
sharing in Cambodia. The subsequent instability in Cambodia has prompted criticism that the
attempt to find a democratic solution to the Cambodia conflict was perhaps a flawed approach
from the outset. The unraveling of the Paris Agreement in 1997 provided powerful
ammunition to those who argued that external imposition of democracy might not be work in
a country with no tradition of democracy. Historical and cultural forces may be an important
determinant of whether democratic experiments mandated by the international community
would succeed in developing countries with a strong authoritarian political tradition.

The recent political events in Southeast Asia do not indicate a drastic change in Western
policy of cautious support for democratization in the region’s larger states. Arguably, the
Western countries have tended to view the economic crisis more as an opportunity for
liberalizing Asia’s markets than its political systems. Western official commentary routinely
blames the crisis on corruption and inefficiency, rather than the lack of democracy per se.
While domestic opposition to authoritarian rule in Southeast Asian countries is deriving moral
strength from such criticism, Western governments have generally viewed restoration of
political order to be a more important goal than democratization. Indonesia is a case in point.
Official US policy, as articulated by the Secretary of State, Madeline Albright, holds that
‘democracy can only be built by the people of Indonesia’ although, ‘what America says and
does will matter’.23 Yet, there was no official US action to precipitate the departure of
Suharto. As the Washington Post remarked in an editorial, ‘sticking with Suharto almost to
the end, the United States played not much [of a] role in his downfall, and it now can best
leave the political debates to the Indonesians.’24

The Clinton administration continued backing the Suharto regime until its very final
moments, even in comparison to the very late decision by the Reagan administration to

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withdraw support from Marcos in 1986. While US officials did call for ‘restoration of order
without violence and a genuine opening of a dialogue on political reform’,25 it was not a
demand for linking IMF loans to political reform. Rather, Washington was demanding
Suharto’s compliance with the IMF’s economic and financial prescriptions. The Australian
government more explicitly rejected any linkage between economic and political reform in
Indonesia. Peter Costello, the Australian Treasurer, argued that ‘at the end of the day, it’s
economic reform which is going to improve opportunities for people in Indonesia’, while
Prime Minister John Howard praised Suharto’s last-ditch plan for handing over power as
26
‘statesman-like’.

Post-Suharto US policy towards Indonesia calls for ‘progress toward open, accountable
government’, ‘free elections…in a timeframe and under rules acceptable to the Indonesian
27
people’ , space for political parties and labor unions, press freedoms, and the release of
political prisoners. But following the departure of Suharto, the US is even less inclined to link
its support for multilateral aid to Indonesia with democratic reforms.28 Albright promised
bilateral humanitarian and development assistance, aid to civil society, and assistance to
electoral process.29 Overall, the US is reluctant to push too strongly for democratization,
which it fears may cause greater political instability.

In Africa and Latin America, international financial institutions have played a far more
important role in promoting political change than in Southeast Asia, where the need for
multilateral assistance was much less urgent due to rapid economic growth fueled by
abundant private foreign capital. Thus, international financial institutions lacked the necessary
clout to push for political transitions, even in such aid dependent countries like Vietnam,
Laos, Cambodia and Burma.

There is little question that the policies and actions of the IMF were an important factor
in the failure of the Suharto regime to survive Indonesia’s economic crisis. For example,
criticism by the IMF officials of the Suharto regimes apparent unwillingness to implement the
full range of IMF-imposed measures led to a significant fall in the value of its currency which
in turn produced progressively more vocal calls for his replacement. The Managing Director
of the IMF, Michel Camdessus, has defined the IMF’s task in the region to include
‘dismantling an economic system based on conglomerates, the collusion between the state,
banks and business, and the restrictive markets.’30 It is not difficult to see that the successful
implementation of these measures also requires the dismantling of the political systems in

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which they have thrived so far. Greater transparency may allow non-elites to have greater
access to information about growth rates and the state of inequity. The breakdown of the
monopolies which have provided the economic lifeline to authoritarian rulers and an end to
the cosy relations between the political and the economic elite may open up more political
space for the middle class and other segments. While democratization is not an official goal of
the IMF, this could be an unintended consequence of the IMF conditions.

Whether the role of international financial institutions, notably the IMF, in the
economic crisis will help the process of democratization in Southeast Asia must be viewed
with caution. Visiting Jakarta in early February 1998, World Bank President James
Wolfensohn denied that democratisation was part of the his mission. Corruption, in his view,
was an ‘economic problem’. Brushing aside requests by the International NGO Forum on
Indonesian Development to make human rights, democracy and rule of law as part of the
criteria for assisting Indonesia, he stated that he was not there to make any political
judgements or ‘helping Suharto or the political opposition.’31

Apart from resisting ‘democratic assistance’, Southeast Asian regimes in the early
1990s had proved to be quite resilient against the so-called ‘snowballing effect’ of
democratization. In the 1980s, successful democratic transitions in Korea and Taiwan in the
1980s begged the question as to whether Southeast Asia would undergo a similar process of
political change. If Southeast Asian countries could follow the pathways to prosperity laid
down by the first generation NICs, then why should they be resistant to their political
predicament? Yet, no such snowballing was in evidence, a fact partly explained by the
differences in the domestic and historical conditions between South Korea and Taiwan on the
one hand and the Southeast Asian states on the other. The communist systems in Vietnam and
Laos improved their chances of survival compared to their counterparts in Eastern Europe by
beginning their economic reform process well before the collapse of communism in Eastern
Europe. Along with China, subsequently joined by Burma, they constituted examples of
economic perestroika without political glasnost. Whether Southeast Asian authoritarianism
was more ‘soft’ than its Northeast Asia counterpart, and hence less susceptible to popular
demands for liberalization, could be debated. But there was little question that the multi-
ethnic character of Southeast Asian polities imposed special constraints on democratization,
as in the case of Malaysia where the delicate ethnic balance has justified authoritarianism to
ensure Malay dominance of the polity and eventually the economy. Moreover, authoritarian

9
regimes in Korea and Taiwan were far more dependent on foreign strategic support than
Singapore, Malaysia and Indonesia. To that extent, the latter remained somewhat less
vulnerable to global strategic change and external pressure favoring democratization.

The downfall of the Suharto regime cannot be accurately described as a case of

democracy’s snowballing effect. But there are firm indications that the Indonesian military
had been unnerved by democratisation elsewhere in the region. As a senior adviser to
President Habibie noted, ‘The [Indonesian] military saw the coming of democracy to Asia
and Indonesia, and are preparing for that.’32 The chief of socio-political affairs of the
Indonesian Armed Forces, ABRI, has likened events in Indonesia with past developments in
the Soviet Union and Eastern Europe. He acknowledges that for some time, ABRI has studied
other recent cases of transition from military to civilian rule so as to prepare itself for such an
eventuality. In his view, ABRI is following a familiar pattern across East Asia, in South
Korea, Taiwan, the Philippines and Thailand.33

DEMOCRACY AND REGIONAL NORMS

The theory and practice of democratic assistance accords an important place to international
and regional organizations in promoting democracy.34 For example, the EC (now EU) played
a major role in democratic transitions in Spain, Portugal and Greece, and later in Turkey and
the new states in Eastern Europe. The Organization of American States’ Santiago declaration
expresses an explicit commitment to democracy as a key principle of regionalism. The
Organization for Security and Cooperation in Europe’s Office of Democratic Institutions and
Human Rights monitors trends in democratization and helps member countries establish and
consolidate democratic institutions. The Organization of African Unity has endorsed
democratic governance as a way of dealing with Africa’s political conflicts and economic ills.
Among other things, several regional organizations have insisted on democratic political
systems in their prospective members as a necessary criteria for gaining membership and for
maintaining their membership status. For example, democratic transitions in Spain, Portugal,
Greece and Turkey were influenced by a consideration of their membership in the European
Union, which requires all members to follow democratic practices and observe respect for
human rights.

But the main regional grouping in Southeast Asia, the Association of Southeast Asian
Nations (ASEAN), has no such criteria. Indeed, in the case of ASEAN, the opposite may be

10
the case. ASEAN’s emergence as a regional organization was facilitated by the shared
concern for regime survival and political authoritarianism.35 ASEAN constitutes an important
challenge to the ‘democratic peace’ argument; the virtual absence of war among the ASEAN
members since 1967 have been accomplished without the glue of liberal democracy.36

The more conservative rulers in ASEAN responded to the West’s post-Cold War
emphasis on human rights and democracy by forging common regional positions and
responses to human rights issues. Economic success emboldened Southeast Asian rulers to
mount a frontal attack on the West’s policies about promoting democracy. Lee Kuan Yew
deplored the ‘obsession with the U.S. media, Congress and the administration’ with ‘issues of
human rights and democracy’. In his view, this represents an ‘unfortunate’ neglect of
important ‘strategic and economic considerations’ which in the past ‘used to be’ the guiding
framework of US policy.37 Western policies of humanitarian intervention, democratic peace’
(the belief that ‘democracies do not fight each other’), and aid conditionality came to be
viewed by Southeast Asian ruling elites as instruments for Western domination of the
developing countries. Malaysia’s Prime Minister, Mahathir Mohammed, attacked what he
saw as an Western effort to impose a particular standard of democracy on ASEAN countries.
The West, in his view, could not ‘claim to have the monopoly of wisdom to determine what is
right and proper for all countries and peoples.’38 In the wake of the economic crisis, Mahathir
has continued his attack on Western human rights policies, claiming that the calls for linking
human rights to trade ‘are ideas which originate in the rich’ and ‘whose advantages seem to
accrue only to the rich.’39

Southeast Asian elites not only dismissed (and continue to dismiss, although less so
now than before the economic crisis) the suitability of Western-style democracy for the
region, they also argue that external pressures, including economic sanctions, would not be
effective in bringing about democratic change. They also warned that the West’s democratic
zeal risks undermining the foundations of regional order based on the inviolability of state
sovereignty. The very notion of democratic assistance militates against one of the most
vaunted ASEAN norms: the doctrine of non-interference in the internal affairs of members.
ASEAN did not see Vietnam’s communist political system as a barrier to its membership in
ASEAN. ASEAN was also instrumental in resisting Western calls for sanctions against the
military regime and pushing for a policy of ‘constructive engagement’.40 Buoyed by
ASEAN’s backing, neither Vietnam nor Burma saw democratization as a way of ending

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international isolation, in the manner of the South Korean elite in the 1980s. The admission of
Burma into ASEAN despite a chorus of international protest and condemnation confirmed
ASEAN’s policy that whether a country was democratic or authoritarian was not a criteria of
membership in the regional organization.

But ASEAN’s ability to resist external, including intra-regional pressures for

democratization and transparency may be wearing thin in the current economic and political
climate. Its norm of non-interference has been come under attack from some of its leaders as
they struggle with responses to the economic crisis. The Economist magazine notes that one
of the biggest failings of ASEAN was the reluctance of fellow ASEAN members to persuade
Thailand to attend to its domestic troubles more urgently. Had ASEAN been so committed to
non-interference,’friendly criticism’ of Thailand might have resulted in more timely Thai
action on the economic crisis. But ‘any persuation from fellow ASEAN members to set a new
course was so discreet that it was easy to ignore’.41

Subsequently, the Thai Foreign Minister, Surin Pitsuan, openly called for ASEAN to
review its non-interference doctrine’ ‘it is time that Asean’s cherished principle of non-
intervention is modified to allow it to play a constructive role in preventing or resolving
domestic issues with regional implications.’42 This was an implicit criticism of ASEAN’s
failure to come up with a collective response to the crisis. To make the grouping more
effective, Surin has urged that ‘when a matter of domestic concern poses a threat to regional
stability, a dose of peer pressure or friendly advice at the right time can be helpful.’43

Moreover, ASEAN economic ministers have proposed regional ‘framework’ which will
allow members to engage in ‘mutual surveillance’ of each others’ economic policies. This
marks an important departure from the principle of non-interference.44 Moreover, the crisis
saw the first direct criticism of a serving Indoensian President by the leader of another
ASEAN member. When Suharto announced Jusuf Habibie to be his choice for vice-president,
Lee Kuan Yew criticized the move, stating that the ‘market’ is not convinced that Suharto was
‘doing what is necessary’ to lift Indonesia out of trouble.45 In general, however, ASEAN
governments refrained from any expression of support for regime change in Indonesia.
Malaysian government was ‘concerned due to the close proximity’, while Prime Minister Goh
Chok Tong maintained that political unrest in Indonesia was its ‘internal affairs’ which was
upto the government of the country to handle.46

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 Thailand's efforts to soften ASEAN's stance on non-interference in favour of a
"flexible engagement" policy, which may be more suited for dealing with future economic
crises, has run into serious opposition from other ASEAN members. The ASEAN Ministerial
Meeting held in late July 1998 did not endorse the Thai position. Philippines was the only
other ASEAN member to support "flexible engagement" while others urged a strict adherance
to "non-interference". But even with a more flexible notion of non-interference, ASEAN's
ability to deal with an economic crisis of these proportions is limited. Assistance to Indonesia
from fellow ASEAN members included a 10 billion Singapore dollars package from
Singapore to Indonesia, but conditions attached to this, including Jakarta’s adherance to IMF-
mandated reforms, along with Lee Kuan Yew’s earlier criticism of Habibie choice as vice-
president, have actually strained ties between the two countries. Apart from exposing the
region’s dependence on foreign capital and its vulnerability to global market and political
forces, the crisis has diminished ASEAN’s international standing, especially in view of the
ineffectiveness, indeed, virtual irrelevance, of the collective efforts by ASEAN to manage the
crisis. While the leaders of Malaysia and Singapore did travel to Jakarta to show their
solidarity with Suharto, it is doubtful that this was successful in steering Indonesia’s response
to the crisis. ASEAN members have agreed to set up what it calls a ‘co-operative financing
arrangements’ or a ‘stand-by fund’ which could be used to deal with future currency shocks
and debt crises. But the fund would only be used after an IMF-package has been put in place;
in this sense it is not a substitute for the IMF and is not intended to spare the regional
countries from unwelcome IMF measures.47 Indeed, commenting on ASEAN’s response to
the crisis, Lee Kuan Yew likened it to the ‘solidarity of fellow chicken-flu suffers’.48 Not only
ASEAN’s collective clout to deal with an economic crisis of such proportions is limited,49 but
attempts by Indonesia to secure support from within the region, within a East Asian
framework, which might have helped Southeast Asian regimes by having fewer political
strings attached to it, failed. Japan hastily downplayed its initial proposal for an Asian
Monetary Fund to deal with currency crises in the face of US pressure.

The Asian economic and political crisis, especially the situation in Indonesia, also
challenges ASEAN’s Constructive Engagement policy towards Burma. Before the downfall
of the Suharto regime, Burma, with backing from its ASEAN partners, could claim that
Indonesia’s political system was a ‘model’ of military participation in politics which it could
emulate. With its diminished standing, ASEAN may no longer be able to shield Burma from
international pressure, especially the EU’s refusal to further enhance its economic cooperation

13
with an ASEAN that includes Burma as a member. A weakened ASEAN will have less
collective capacity to resist international pressure for democratization. Already,
democratization in Thailand and Philippines has led these countries to disagree with their
other ASEAN colleagues on matters of democracy and human rights. Indeed, in 1997, both
countries initially wanted to reject Burma’s entry into ASEAN out of concern that it would
create a negative image of ASEAN before the international community.

The passing of the old generation of leadership in Southeast Asia’s regional affairs may
also augur well for democracy and human rights, although prospects for this can be
overstated. Hopes have been raised that the departure of Suharto, ASEAN’s longest serving
and most influential leader, from the regional scene may lead to a softening of ASEAN’s
support for authoritarian regimes in its member states and its clashes with the West on issues
of human rights and democracy. This may be too optimistic however, given the fact that the
Habibie government, constrained by the military, is pursuing a modest and evolutionary
program of political liberalization even in the domestic sphere.50 In the Philippines, newly-
elected President Estrada not only criticized the Suharto regime, but openly called for greater
democracy in the region. The Thai Foreign Minister, Surin Pitsuan, have even gone to the
extent of calling for using human rights and democracy as the ‘primary determinants of
foreign policy’. But then he also admitted that a ‘if our policy of promoting human rights and
democracy hurts he interests of our traders along the border, the policy will encounter
domestic political resistance and be ultimately unsustainable.’51

CONCLUSION
Not long ago, Southeast Asia was held by some to be an important example of the positive
relationship between authoritarian rule and economic growth. Now, it is being seen exactly in
the reverse light. Neither claims may be perfectly valid. Yet, by challenging a widespread
belief in the region’s elite and middle class segments that authoritarianism may be more
conducive to development and stability, the Asian economic crisis has presented Southeast
Asia with a democratic moment. Whether this moment will become a durable legacy will
depend not just on domestic forces within key regional states, but also the role of the
international community and the transformation of regional norms. The former has an
unprecedented opportunity to help in the process of democratization. But the West’s interest
in democratization is tempered by concerns for political instability. While international

14
pressures on Southeast Asian democratization matter, the impact of external forces goes
beyond the traditional notion of ‘democratic assistance’, or the use of negative and positive
sanctions to promote democratization. It is the less tangible but ultimately more powerful,
forces associated with economic globalization which are more crucial to political change in
the region.

Democracy and democratization have become an increasingly important factor

affecting the relationship between Southeast Asian states and the wider international
community. The issue of democratization is also shaping intra-regional relations, including
regional multilateral cooperation, within Southeast Asia. In particular, democratization will,
gradually if not suddenly, undermine ASEAN’s norms concerning non-interference. Unable
to cope with the effects of economic crisis at home, ASEAN governments, may not be able to
offer credible alternatives to democratization and thwart international pressures for political
change.

ENDNOTES

1
‘Musa: Asia’s Dynamic Growth Lulled People into Complacency’, New Straits Times (Kuala
Lumpur), 1 June 1998, p.4.
2
Some of the best contributions to the literature on democratization in Southeast Asia are: Kevin
Hewison, Richard Robison and Garry Rodan, eds., Southeast Asia in the 1990s: Authoritarianism,
Democracy and Capitalism (Sydney: Allen and Unwin, 1993); Don Emmerson, ‘A Virtuous Spiral?
Southeast Asian Economic Growth and its Political Implication’, in George T. Yu, ed., Asia's New
World Order (Washington Square, N.Y.: New York University Press, 1997); Don Emmerson, ‘Region
and Recalcitrance: Rethinking Democracy Through Southeast Asia’, Pacific Review, vol.8, no.2
(1995), pp. 223-48; Clark D. Neher and Ross Marlay, Democracy and Development in Southeast Asia:
The Winds of Change (Boulder, Colo.: Westview Press, 1995); Michael R.J. Vatikiotis, Political
Change in Southeast Asia : Trimming the Banyan Tree (London: Routledge, 1996). Several other
studies of democratisation in the Asia Pacific region include include Southeast Asian case studies. See
Harold Crouch and James Morley, eds., Driven by Growth: Political Change in the Asia-Pacific
Region (Armonk: M.E. Sharpe, 1993), pp. 277-309; Daniel A.Bell, David Brown, Kanishka
Jaayasuriya and David Martin Jones, Towards Illiberal Democracy in Pacific Asia (London:
Macmillan,1995); Anek Laothamatas, ed., Democratization in Southeast and East Asia (Singapore:
Institute of Southeast Asian Studies, 1997): Garry Rodan, ed., Political Oppositions in Industrialising
Asia (London: Routledge, 1996).
3
On the debate on the linkage between economic development and democracy see, Larry Diamond,
‘Economic Development and Democracy Reconsidered’, American Behavioral Scientist, 35 (May-
June 1992); John Heliwell, ‘Empirical Linkages Between Democracy and Economic Growth’, British
Journal of Political Science, April 1994; Seymour Martin Lipset, ‘The Social Requisites of
Democracy Revisited’, American Sociological Review, vol. 59 (February 1994); Carlos H. Waisman.
‘Capitalism, the Market, and Democracy,’ in Gary Marks and Larry Diamond, eds. Reexamining
Democracy: Essays in Honour of Seymour Martin Lipset (Newbury Park: Sage Publications, 1992),

15
140-55; Dietrich Rueschemeyer, Evelyne Huber Stephens and John D. Stephens. Capitalist
Development and Democracy (Chicago: University of Chicago Press, 1992) (Ch.5).
4
Samuel P. Huntington, ‘Cart Before the Horse’, Financial Mail (Johannesburg, vol.129, no.5 (30 July
1993, p.39, cited in Larry Swatuk and Timothy Shaw, eds., The South at the End of the Twentieth
Century (London: Macmillan, 1994), p.236.
5
Gianfranco Poggi, The Development of the Modern State: A Sociological Introduction (London:
Hutchinson, 1978), p.134. The concept of performance legitimacy had its origins in the late liberal era
(late 19th and early 20th centuries), when the the state found a new and different response to the
legitimacy problem: increasingly it treated industrial growth per se as possessing intrinsic and
commanding political significance, as constituting a necessary and sufficient standard of each state's
performance, and thus as justifying further displacements of the state/society line.
Particularly in the 1950's and 1960's, an ideal variously termed ‘industrial development’, ‘economic
growth’, or ‘affluence’ gained an overwhelming grip on public imagination. It was unanimously
endorsed (at any rate in their rhetoric) by political leaders of all persuasions, who treated it on the one
hand as utterly self-justifying, and on the other hand as validating whatever burdens the state might
impose on society. It is probably correct to see in this phenomenon another expression of the
tyrannical hold of the capitalist mode of production on contemporary social existence at large.
Poggi, pp.132-33.
6
Cited in China News (Taipei), 21 November 1992.
7
Sunanda K. Dutta-Ray, ‘Only Clear Laws Can Stem the Tide:, The Straits Times, 1 March 1998, p.4.
8
‘Musa: Asia’s Dynamic Economic Growth Lulled People into Complacency’, New Straits Times
(Kuala Lumpur), 1 June 1998, p.4.
9
‘Democracy Pays’ The Daily Telegraph, 11 March 1998, p.23.
10
‘Negotiating Pacts’, in Transitions From Authoritarian Rule, pp.37-47, p.46.
11
Tan Lian Choo, ‘Personality Politics in Thailand’, in Southeast Asian Affairs 1991 (Singapore:
Institute of Southeast Asian Studies, 1992), p.289.
12
‘Democracy Pays’ The Daily Telegraph, 11 March 1998, p.23.
13
Secretary of State Madeleine K. Albright, Opening Remarks Before the Senate Appropriations
Committee, Subcommittee on Foreign Operations, Washington, DC, June 16, 1998, as released by the
Office of the Spokesman, U.S.Department of State.
14
‘An Open Government Saved US: Ramos’, The Straits Times, 16 June 1988, p.18.
15
‘Riots Not a Call for Democracy’, Interview with Lee Kuan Yew, The Straits Times, 16 June 1998,
p.33.
16
The Straits Times, 27 January 1998, p.28.
17
‘Riots Not a Call for Democracy’, The Straits Times, 16th June 1998, p.33.
18
Larry Diamond, ‘The Globalization of Democracy’ in Robert O. Slatter, Barry M. Schultz and
Steven R. Dorr, eds., Global Transformation and the Third World (Boulder, CO: Lynne Rienner,
1993), pp. 31-69. Supporters of democratic assistance argue that US pressure was important in several
instances of democratization even during the Cold War. Thus, Carter administration’s human rights
policies helped democratization in Argentina and Uruguay and to a lesser extent Peru. The Reagan
administration’s policies helped democratic transitions in South Korea and Chile. Proponents of
democratic intervention argued that external pressure not only helps to facilitate transition from
authoritarian rule, but also prevents ‘relapse’ into authoritarianism, as evident in the US role in
Ecuador in 1978 and in Dominican Republic in 1978 (where US pressure is credited with preventing
electoral fraud). The Reagan administration’s intervention was supposed to have prevented planned

16
coups in El Salvador, Honduras and Bolivia in early 1980s and in Peru in 1989. Finally, outright US
invasions restored democracy in Grenada in 1983, Panama in 1989 and Haiti in 1994.
19
In Thailand, for example, the regime of Thanom Kittikachorn re-imposed military rule in late 1971
in response to first signs of US withdrawal. Although civilian rule was restored in 1973 following
major student and mass unrest, the period of civilian rule between 1973 to 1976 was marked by
turbulence and uncertainty until the country reverted to military rule in 1976 until the end of Cold
War.
20
William J. Barnds, ‘Democracy, Human Rights & U.S. Policies.’ Freedom Review, vol. 22, no.5
(1991), pp.27-31.
21
Benjamin Bassin, ‘Development and Democracy in the Aid Relationship,’ in Uner Kirdar and
Leonard Silk, eds. A World Fit for People (New York: New York University Press, 1994), pp.114-25;
Lawrence E. Harrison. ‘Nurturing Democracy Abroad.’ Freedom Review vol.22, no.5 (1991), pp.42-
44.
22
For an insightful account of Western policy towards democracy in Asia, see: Muthiah Alagappa.
Democratic Transition in Asia: The Role of the International Community (Special Report No.3)
(Honolulu: East-West Center, 1994).
23
Albright remarks before the Senate Appropriations Committee, op.cit.
24
Reproduced in The Nation (Bangkok), 11 June 1998, p.A4.
25
Robert Garran, ‘US Insists on Reform-Aid Link’, The Australian, 21 May 1998, p.6.
26
Robert garran and Matthew abraham, ‘IMF Could Delay Loans’, The Australian, 21 May 1998, p.6.
27
ibid.
28
Janadas Devan, ‘US Aid De-linked from Jakarta Reforms’, The Straits Times (Internet Edition), 21
June 1998; Janadas Devan, ‘US Cautious Towards Indonesia’, The Straits Times (Internet Edition), 21
June 1998.
29
Albright remarks before the Senate Appropriations Committee, op.cit.
30
‘The Right Stuff’, Far Eastern Economic Review, 18 December 1997, p.64.
31
Kafil Yamin. ‘Indonesia: World Bank Brings Aid For Jobs, Gets Flak Instead’, Inter Press Service’,
5 February, 1998.
32
‘Abri Looking to Ease Out of Political Role’, The Straits Times, 22 June 1998, p.14.
33
‘Abri Looking to Ease Out of Political Role’, The Straits Times, 22 June 1996, p.14.
34
‘International Organizations and Democracy’, Editorial of Journal of Democracy, vol.4, no.3 (July
1993), p.3. The issue contains several articles dealing with the role of international organizations in
promoting democracy.
35
Amitav Acharya, ‘Regionalism and Regime Security in the Third World: Comparing the Origins of
the ASEAN and the GCC’ in Brian L. Job, ed., The (In)security Dilemma: National Security of Third
World States (Boulder, Colorado: Lynne Reiner, 1992),pp. 143-164.
36
For an elaboration of ASEAN’s challenge to the democratic peace argument, see, Amitav Acharya,
‘Collective Identity and Conflict Management in Southeast Asia’’ in Emmanuel Adler and Michael
Barnett, eds. Security Communities in Historical, Theoretical and Comparative Perspective
(Cambridge: Cambridge University Press, 1998).
37
Cited in Michael Richardson, ‘For the Planners, a Time to Decide’, International Herald Tribune,
18 November 1993, p.5.
38
Cited in New Straits Times (Kuala Lumpur), 20 July 1991, p.1.

17
39
Devaluation, Revaluation Are Not the Answers’, New Straits Times (Kuala Lumpur), 4 June 1998,
p.12.
40
See Amitav Acharya, ‘Human Rights and Regional Order: ASEAN and Human Rights Management
in post-Cold War Southeast Asia’, in James T.H. Tang, ed., Human Rights and International
Relations in the Asia-Pacific (London: Pinter, 1995), pp. 167-182; Amitav Acharya, Human Rights in
Southeast Asia: Dilemmas of Foreign Policy (Toronto: JCAPS, 1995).
41
‘The Limits of Politeness’, The Economist, 28 February 1998, p.43.
42
‘Surin Pushes ‘Peer Pressure’’, The Bangkok Post, 13 June 1998, p.5.
43
ibid.
44
‘Beggars and Choosers’, The Economist, 6 December 1997, p.43.
45
‘Asia: Lee Kuan Yew Criticises Indonesian Response to Crisis’, AAP Newsfeed, 8 February, 1998.
46
‘Neighbours Express Growing Alarm’, The Straits Times (Internet Edition), 15 May 1998; ‘Let
Jakarta Resolve Crisis’, The Straits Times (Internet Edition), 15 May 1998.
47
‘Beggars and Choosers’, The Economist, 6 December 1997, p.43.
48
‘The Limits of Politeness’, The Economist, 28 February 1998, p.43.
49
‘Out of Depth’, Far Eastern Economic Review, 19 February 1998, p.25.
50
Donald K. Emmerson, ‘Indonesia’ Political Dilemma’, The Straits Times, 29 June 1998, p.33.
51
‘Surin Pushes ‘Peer Pressure’’, The Bangkok Post, 13 June 1998, p.5.

18