Development Without Freedom

The Politics of Asian Globalization

For Father Norbert A. Pacheco, MM, a true man a/God

SONGOK HAN THORNTON AND WILLIAM H. THORNTON

National Cheng Kung University, Taiwan

ASHGATE
 r

Songok Han Thornton and William H. Thornton 2008

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system
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or otherwise without the prior permission of the publisher.

Songok Han Thornton and William H. Thornton have asserted their right under the Copyright,
Designs and Patents Act, 1988, to be identified as the authors of this work.

Published by Acknowledgements vii

Publishing Limited Ashgate Publishing Company
Gower House Suite 420
Croft Road 101 Cherry Street Introduction: Senism and the Invisible Asia
Aldershot Burlington, VT 05401-4405
Hampshire GUl l 3HR USA Globalization on Trial: Rethinking Asian Exceptionalism
England vis-a-vis the Third World 21

[Link] 2 Korean Social Democratization: A Good Idea W hile it Lasted 39

British Library Cataloguing in Publication Data

3 Booty Globalism: The Neocolonization of the Philippines 57
Thornton, Songok Han
Development without freedom : the politics of Asian
globalization 4 Lesson of the "Broken Hearts": The Rise and Fall of
1. Globalization - Political aspects - Asia 2. Asia - Indonesian Reformasi 75
Foreign relations 3. Asia - Economic policy 4. Asia­
Politics and government - 21st century 5. Asia - Economic 5 Another Thailand Was Possible: Thaksin and the Thai Response
conditions - 21st century to Globalization 95
I. Title II. Thornton, William H., 1950-
327.5'0090511
6 Sino-Globalization-Part 1: Politics of the CCP/TNC Symbiosis Ill

Library of Congress Cataloging-in-Publication Data 7 Sino-Globalization-Part 2: Selling Chinese Maldevelopment 131

Thornton, Songok Han.
Development without freedom : the politics of Asian globalization I by Songok Han Thornton
8 The Price of Alignment: India in the New Asian Drama 151
and William H. Thornton.
p. em.
Includes index. 9 The Japan Model Goes Global: A New Reverse Course 169
ISBN 978-0-7546-7227-2
1. Asia--Foreign economic relations. 2. Asia--Economic conditions--1945- 3. Financial 10 After the New World Order: The Rise of Second Way Globalization 183
crises--Asia. 4. Asia--Politics and government--1945- 5. Globalization--Economic aspects. I.
Thornton, William H., 1950- II. Title. Conclusion: The Crisis of Asian Globalization: Toward a Senism of the Left 201

Ll
Index 219
2007046440

ISBN 978 0 7546 7227 2

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 Acknowledgements

The authors wish to thank the following journals for using parts of previously
published materials: Development and Society, New Political Science: A Journal
of Politics and Culture, the Journal of Developing Societies, World Affairs: The
Journal ofInternational Issues, Radical Society, and Znet.
 Introduction

Senism and the Invisible Asia

Strange Bedfellows

A dark secret of the Cold War is that it had two losers, or at least one and a half. While
its sudden eclipse marked the beginning of US unipolarity, it also spelled the end of
America’s geopolitical free ride. No longer would the Soviets be there to enforce
“free world” cohesion under US auspices. That inadvertent and unacknowledged gift
had given the West, and America in particular, an insurmountable advantage over the
“Rest.” Had this been more appreciated, Washington might have done less to end
the bipolar game. But in the euphoria of the moment, triumphalists took unipolarity
at face value—i.e., as the unqualified victory that Francis Fukuyama celebrated with
his “end of history” thesis, giving no quarter to cultural or political alternatives.
A society could still be different, but henceforth it could not be both different and
developed.
That, at least, was the world according to neoliberalism—the emerging Washington
Consensus. The problem with this universal decree was that neoliberalism was not
the only capitalist system left standing after the Soviet fall. America may have “won
the Cold War,” but in terms of economic dynamism the Asian tigers were in good
position to win the post-Cold War. They now posed a far more threatful ideological
challenge than the Soviet “Evil Empire” had in its final years. The bottom line was
that the tigers’ phenomenal growth owed much to the very statism that neoliberalism
proscribed.
The Soviet fall had let this tiger out of its cage, leaving the question of how to
get it back in without doing irreparable damage to the capitalist world system. That
was the ideological subtext of the actions taken by the International Monetary Fund
(IMF) in response to the Asian Crash of 1997. The ensuing Asian Crisis seemed
to validate the incontrovertible superiority of American neoliberalism, which was

 What America lost, in Emmanuel Todd’s opinion, was its historical raison d’être. From
this vantage Madeleine Albright’s insistence that the United States was the “indispensable
nation” reveals precisely what it tries to hide: the functional obsolescence of the world’s sole
superpower. See Emmanuel Todd, After the Empire: The Breakdown of the American Order,
translated by C. Jon Delogu (New York: Columbia University Press, 2003), pp. 11–12.
  Stalin, as John Lewis Gaddis observes in The Cold War: A New History, had expected
capitalist fratricidal tensions to dissolve “free world” solidarity. What prevented this from
happening, ironically, was the Soviet factor itself. China has so far avoided a similar
geopolitical bonding effect by courting the major capitalist power brokers bilaterally.
 America had done much the same in World War II, when keeping the Soviets afloat was
deemed vital to the war effort. See John Lewis Gaddis, The United States and the Origins of
the Cold War, 1941–47 (New York: Columbia University Press, 1972 and 2000), p. 5.
 Development Without Freedom
the only system standing tall by the late 1990s. Only then could Washington-based
globalization claim to be as preponderant economically as America was militarily.
The Asian exception that for years had hectored US leadership appeared to have
been subdued, while the 1990s came across as an American victory parade. There
was every indication that 21st century capitalism would have its de facto capital in
Washington.
That triumphalism hardly made it into the new century. Already in April 2000
William Greider was predicting that America—with a trade deficit in 1999 nearly
triple that of 1995—was riding for a fall. This was bad news for the global economy,
since by 1998 the world, and Asia in particular, depended more than ever on
American demand. With the collapse of the US New Economy and the spate of
corporate scandals that followed, neoliberalism lost much of its allure. Asian “crony
capitalism” seemed less defective now that it had plenty of American company. The
Rim seemed primed for a full rebound.
That was not to be. If the Crash had put the tigers temporarily out of the “miracle”
business, it was a more highly charged Asian economy that threatened to keep them
out. By 2000 China was already stealing the show, drawing away capital that would
have rushed back into Crash-stricken economies. Southeast Asia was especially
vulnerable since its comparative advantage was cheap labor rather than high tech.
The region’s attempt to tap into the China boom—redirecting its industries toward

  Japan, trapped in what appeared to be an endless economic malaise (which in fact

was only a relative slump), was conveniently declared out of the running. See Robert Locke,
“Japan, Refutation of Neoliberalism” Post-Autistic Economic Review, Issue No. 30 (March
21, 2005), [Link] The irony is that without
Japan’s financing of the burgeoning US debt, America’s presumed global supremacy would
immediately be exposed as a hoax. See R. Taggart Murphy, “East Asia’s Dollars,” New Left
Review, 40 (July/August 2006), [Link]
 On the initial coexistence but ultimate clash of these two economisms, “Asian values”
and neoliberalism, see William H. Thornton, Fire on the Rim: The Cultural Dynamics of East/
West Power Politics (Lanham, MD: Rowman & Littlefield, 2002), passim.
  A rare voice in the wilderness was Paul Krugman. Even at the peak of the New Economy
he recognized that in large part the ’90s boom was a product of sluggish wages and worker
benefits. See Paul Krugman, “America, the Boastful,” Foreign Affairs, Vol. 77, No. 3 (May/
June 1998), p. 39 (pp. 32–45). A New York Times study, covering the New York region and
California, showed that the decade left the poor poorer, the middle classes slightly worse
off, and only the rich much better off. See Janny Scott, “In ’90s Economy, Middle Class
Stayed put, Analysis Suggests,” The New York Times (August 31, 2001), [Link]
com/2001/08/31/nyregion/[Link].
 William Greider, “Shopping Till We Drop,” The Nation (April 10, 2000), [Link]
[Link]/issue/000410/[Link].
  Southeast Asia was also smashed by another big investment change: before the Crash,
South Korea had been all but closed to foreign investment, but its FDI inflows rose from $2.3
billion in 1996 to $8.8 billion in 1999. The biggest impact, however, was from China, which
in past years had attracted FDI mainly for light manufacturing, real estate, and consumer
goods. With China set to join the WTO, TNCs were now equally bullish on Chinese high tech.
See G. Pierre Goad, “Anaemic Asean,” The Far Eastern Economic Review (September 7,
2000), [Link]
 Senism and the Invisible Asia 
the supply of parts for Chinese export production—effectively robbed Peter to pay
Paul. Once again, as after the Asian Crash, the transnational corporations (TNCs)
were calling the shots on what counts as development.
The vast rhetoric that had been vented on Asian cronyism was all but forgotten.
Few seemed to care that the Chinese art of guanxi (connections) made Southeast
Asian cronies look like rank amateurs. We are given to believe that there is no need
for concern, since the China that is rising is increasingly integrated into a globalist
order that still marches to Washington’s music. Kishore Mahbubani (Dean of the Lee
Kuan Yew School of Public Policy in Singapore) assures us, moreover, that China is
now run by a much reformed Chinese Communist Party (CCP), which is “the best
governing class in generations.”10
Note his choice of words: not the “best government,” but the “best governing
class.” Inadvertently Mahbubani has tipped us off to the key point: The CCP elite
is fast joining the ranks of the transnational capitalist class (TCC) that in Leslie
Sklair’s view forges global bonds without dictating the terms of local governance,
so long as these do not impede profitability.11 For those with the right guanxi, the
CCP can be a guarantor of profitability in an almost mercantile sense.12 The fact
that it is also an instrument of monumental oppression is not just incidental to this
arrangement. The specifically anti-democratic nature of CCP authority is in fact its
strongest recommendation, since this power is on loan to TNCs for the right price.
Not only has the CCP made the “trains run on time,” but, more to the point, it has
given the TNCs an inside track.
One of the CCP’s most credulous celebrants, Joshua Ramo (an affiliate of
Goldman Sachs, former foreign editor of Time, and now a professor of what amounts
to PRC sycophancy at Tsinghua University), likens his own insights to the paradigm-
breaking empiricism of Tycho Brahe. Just as Brahe escaped the confines of medieval
astronomy, Ramo sees himself as being ahead of the common lot of Beijing’s Western
cheerleaders. They view the post-Tiananmen CCP as an unfortunate but inescapable
rite of passage—a kind of protracted political adolescence—whereas for Ramo it is
the prime mover of China’s economic and moral (!) development over the last two

  See Martin Hart-Landsberg, “Neoliberalism: Myth and Reality,” Monthly Review, Vol.
57, No.11 (April 2006), [Link]
10 Kishore Mahbubani, “Understanding China,” Foreign Affairs, Vol. 84, No. 5
(September/October 2005), p. 52 (pp. 49–60). Lee Kuan Yew himself, in the same vein, holds
that Deng Xiaoping was right to order the Tiananmen massacre: “You have to remember that
this is China. When you attack the emperor, that’s it.” See “Tiananmen Square Uprising:
A Perspective,” [Link], [Link]
[Link].
11 Leslie Sklair, The Transnational Capitalist Class (Oxford, UK: Blackwell, 2001),
p. 256.
12 Tapping this resource is what divides the haves and have-nots in guanxi terms.
Few foreign businessman can even identify the right party personnel to contact for specific
needs. See Susan V. Lawrence and David Murphy, “Appearances Can Deceive,” The Far
Eastern Economic Review (December 13, 2001), [Link]
[Link].
 Development Without Freedom
decades. This is the basis of the new “Beijing Consensus” that Ramo recommends as
a prototype for the whole developing world.13

A Clash of Rival Capitalisms

It is commonly assumed that Beijing has its chief ideological rival in Washington.
Today’s CCP/TNC symbiosis does its best to suspend that contest of values, such
that fundamental opposition to Sino-globalization is more likely to arise out of local
rather than global forces. Beijing is well aware of this fact, and accordingly has been
giving greater press freedom to Western reporters even as it cracks down on its own
press and domestic non-governmental organizations (NGOs). Likewise, it opens the
floodgates for foreign direct investment (FDI) while intensifying its surveillance of
domestic entrepreneurs. Though it is wary of the “black hand” of foreign supported
NGOs such as the Empowerment and Rights Institute, which has close ties to
America’s National Endowment for Democracy,14 it has full faith and confidence
in the willingness of capitalism in general to sell out democracy for the right price.
What it fears, rather, are the traditional Asian values that suffuse organizations like
the Falun Gong.
A similar anti-traditionalism has attended the Asian takeoff in general throughout
the “miracle” years. East Asia has been so tightly identified with economic dynamism
that in most other respects its very self-identity has been effaced. The paradox is
that while the “miracle” has commonly been explained in terms of “Asian values,”
these in turn have been reduced to market values that were held in low esteem by
traditional Asian societies.15 That commercial paramountcy was clearly imported
from the West.16 To put it bluntly, the line of “Asian values” that has been capsulated
in the “Lee thesis” (propounded by the former Singapore prime minister Lee Kuan
Yew) is not the least bit Asian.17
This emphasis on quasi-Asian economism has obscured one of the darkest
secrets of the “miracle”: the huge economic boost that Asian “tigers” got from the

13 Joshua Cooper Ramo, Beijing Consensus: Notes on the New Physics of Chinese Power
(London: Foreign Policy Center, 2004), pp. 6 and 13.
14 Yongding, “China’s Color-Coded Crackdown,” Yale Global Online, originally from
Foreign Policy (October 18, 2005), [Link]
15 Lucian W. Pye, “‘Asian Values’: from Dynamos to Dominoes?,” in Lawrence Harrison
and Samuel P. Huntington (eds), Culture Matters: How Values Shape Human Progress (New
York: Basic Books, 2000), pp. 248–9 (pp. 244–55).
16 This cultural import is hardly the best the West has to offer. Rim countries took Western
economism without its liberal baggage. Today neoliberalism also drops much of that baggage,
even in the West. John Gray contrasts the altruistic liberalism of John Stuart Mill with the
rank narcissism that pervades today’s consumer culture. Mark Garnett sees this latter-day
liberalism as unsustainable—hence the title of his book: The Snake that Swallowed its Tail:
Some Contradictions in Modern Liberalism (Exeter, UK: Imprint Academic, 2004).
17 Amartya Sen’s conception of “development as freedom” refutes both major tenets
of the Lee thesis: a) that political liberty and civil rights are uniquely Western values, and b)
that withholding these rights helps to stimulate and stabilize the Asian growth economy. See
Amartya Sen, Development as Freedom (New York: Alfred A. Knopf, 1999), p. 15.
 Senism and the Invisible Asia 
Cold War. That geopolitical leverage did more than distinguish the Pacific Rim
from other developing regions. It also allowed Rim economism to profitably coexist
with American capitalism. So long as the Cold War lasted, it was in the interest of
both systems to downplay this clash of rival capitalisms. Their artificial conflation
gave the impression of a single capitalist phalanx on the march. Much as Soviet and
Chinese communisms were once equated in Cold War domino theory, capitalism
was now treated as a monolith—indeed, as modernity itself. To be part of this global
process was to be legitimate. That was the gift of Western capitalism to Rim regimes.
They in turn bestowed an image of vitality on enervated Western economies.
More insidiously, and with no mention of Cold War privileges, the success of
Rim economies was used to discredit dependency theory or any other apologetic
for Third World underdevelopment. Thus the Asian miracle contributed much to the
“undevelopment” of the development concept itself. If the idea of Asian exceptionalism
set a logical limit on the Rim system as a global model, the post-1997 Asian Crisis
did the very opposite: by puncturing the “miraculous” image of Rim economics it
produced a global leveling effect. That alone was enough to put globalization on trial,
for the Rim had long been cast as the flagship of capitalist development.
This demotion of Rim economism paves the way for new perspectives on
underdevelopment. An implicit contribution of the dependency paradigm was its
rejection of the “one-size-fits-all” growth formula that was equated in modernist
thought with development per se. Unfortunately, dependency theory posited its own
one-size excuse for the failure of Third World development. In this respect Rimism
and dependency are twin fallacies, like two sides of a counterfeit coin.
This study departs from both, and from the standard antiglobalist polemic as well,
by assigning greater importance to the domestic decisions of individual developing
countries. In opposition to the neo-modernist singularity of globalist “TINA”
(the notion that “There Is No Alternative” to market fundamentalism), we argue
that developing nations—and especially those that possess at least the procedural
rudiments of democracy—do have real choices. While the Crash put an end to the
myth of Asian exceptionalism, the subsequent Crisis (though neoliberal globalists
are still in denial)18 marked the end of one-size-fits-all globalization. The almost
exclusively economic focus of IMFism may still obtain,19 but the developing world
is now awake to its agenda.
In this context we turn to the developmental revisionism of Amartya Sen, who
offers a path “beyond Right and Left,” and beyond the polemics of both globalism
and dependency. It is necessary to proceed cautiously here, since the Senian

18 One of the most obtuse cases in point is that of Deepak Lal, who agrees that the Asian
model is dead, but insists that its demise proves that “the Anglo-Saxon model of capitalism is
the only viable one in the long run.” See Deepak Lal, In Praise of Empires: Globalization and
Order (New York: Palgrave Macmillan, 2004), p. 132.
19 President Hugo Chávez of Venezuela charges that Latin American nations are now
so tightly under the grip of the IMF, the World Bank and multinational corporations that they
have lost whatever autonomy they once had. In his opinion, therefore, these countries can no
longer be considered democracies. See “President Hugo Chavez Frias Says There are No Real
Democracies in Latin America,” [Link] (December 6, 2004), [Link]
com/printer_news.asp?id=23865.
 Development Without Freedom
model we adopt carries us into unexplored territory. Not even Sen himself can be
trusted as our unqualified guide. Recently he shocked his antiglobalist followers
by underscoring his own place in pro-globalization ranks;20 yet his model, we
contend, has a life of its own. It affords ample space for every democratic country
to craft its own developmental objectives. In casting off the constraints of Cold War
geopolitics, developing nations do not have to indenture themselves to the post-Cold
War dictates of globalization. This study, accordingly, makes no case for a particular
developmental politics or policy. Rather it takes an anti-TINA stance for choice itself
against globalist co-optation.21
That choice was all but impossible during the Cold War, which promoted an
almost Faustian political bargain: in return for economic advantages, Rim nations
delivered political stagnation in the name of stability. Prior to the Asian Crash the
vital role of Cold War geopolitics in the making of the “Asian miracle” had been
invisible to most observers. Only when the “miracle” itself became problematic
were its political underpinnings exposed. The phenomenal economic growth of the
region could no longer be explained by simple reference to cultural norms such as
“Asian values.” In retrospect we can see how the geopolitical advantage the area
enjoyed for several decades went into partial eclipse as the Cold War waned, and into
almost full eclipse by the 1990s.
To the degree that the Rim’s newly industrialized countries lost their Cold War
leverage, they came under intense pressure to revamp their economies in accord with
IMF and World Bank visions of globalization. Since this neoliberal agenda would
expose these nations to forces beyond their control, they understandably resisted.
Weaker economies such as the Philippines capitulated sooner, while the bigger
“tigers” held out until the 1997 Crash forced them to relinquish statist independence
in return for emergency aid.
We now know that the demands set forth by the IMF as the condition for its
assistance contributed in no small part to the trauma of the Asian Crisis. Many
critical studies—ranging from those of establishment insiders such as Joseph Stiglitz,
Jeffrey Sachs, and George Soros to the growing body of antiglobalist discourse—
have charged the “Washington Consensus” with responsibility for turning the Crash
into a full-blown socioeconomic Crisis. This study builds on those critiques while
treating the Crisis itself as a window on the emerging politics of globalization. Our
major theoretical premise is Sen’s axiom of “development as freedom,” from which
it follows that just and sustainable development is best achieved where economic

20 See Amartya Sen, “Freedom as Progress,” interviewed by Laura Wallace, Finance

and Development (September 2004), p. 7 (pp. 4–7). In all fairness, however, it should be
noted that Sen has never been a neoliberal globalist. In a 1982 review of P.T. Bauer’s assault
on economic equality, Sen ardently defended egalitarianism on both ethical and instrumental
grounds. That review reflects his position to this day. See Sen, “Just Desserts,” a review of
P.T. Bauer, Equality, the Third World, and Economic Delusion (1982), [Link]
[Link]/~bhatta/BookReview/sen_on_bauer.html.
21 The term “globalist” is here used with reference to an ideological apotheosis of the
market. The term does not apply to any and all advocates of globalization. Sen strongly favors
globalization, yet stresses that “the market is just one institution among many. It needs to be
accompanied by democracy, a free press, and social opportunities … ” Ibid.
 Senism and the Invisible Asia 
and political priorities are balanced and hence (to use our term) “concurrent.” This is
the foundation for the “concurrence model” that we apply throughout the book.
By contrast, the development model advanced by most “Asian values” proponents
stresses the priority of economic goals.22 Too often such economism becomes an
obstacle to political development, as growth is taken as a validation of the political
status quo. Thus material growth becomes a source of blanket legitimacy. By removing
that political stamp of approval, the Asian Crisis had the effect of opening the door
for other developmental options. Authoritarian regimes such as Suharto’s found
themselves de-legitimized. The question was what would fill the resulting void.
Unfortunately this political opening was coupled with economic depression.
Sen’s development model makes a case for political and economic concurrence,
not for less economic concern. From this perspective the post-Crisis condition of
Southeast Asia is hardly more conducive to political development than the pre-Crisis
situation was, for poverty is as much a developmental obstacle as authoritarianism
is. While there is no definitive roadmap for sustainable development, Stiglitz has
cogently argued that IMF-directed globalization is definitely the wrong map. But the
rising current of Washington-directed militarization is even worse.23 As John Gray
stresses, each country needs to draw its own developmental map.
The problem is that such radical diversity could void the very point of a “map,”
which is directional assistance. The Millennium Challenge Account (MCA), enacted
by the US Congress in 2004, recognizes the need for democratic progress as a criterion
for development aid.24 This is a positive step, but it could also provide a coercive device
for advancing US interests. Here we try to avoid two methodological imbalances:
the Cold War trap of political amoralism (which led Bretton Woods institutions to
fund a long list of authoritarian regimes) and the “postmodern” trap of uncritical

22 The “Asian values” model works on the official assumption that political advances
will follow naturally from economic ones, but also on the unofficial assumption that
authoritarianism holds a signal advantage for development. At most this is a short-term
advantage, and there is much evidence that even that benefit is largely a myth. Historical
data suggest that democracies grow just as fast, and are far better at avoiding catastrophes
and promoting a broad range of well-being. The Soviet Union, for example, did at one point
achieve a high rate of growth, but not the kind of general well-being that Senism fosters. See
Joseph T. Siegle, Michael M. Weinstein, and Morton H. Halperin, “Why Democracies Excel,”
Foreign Affairs, Vol. 83, No. 5 (September/October 2004), p. 58 (pp. 57–71); and Charles
Kenny, “Do We Know How to Develop?,” The Globalist (January 25, 2005), [Link]
[Link]/DBWeb/[Link]? StoryId=4331.
23  This helps to explain the decline in mass protest against global financial institutions.
The global justice movement has shifted attention to US military interventions in support of
armed globalization. See James H. Mittelman, “Where Have All the Protesters Gone?,” Yale
Global (October 4, 2004), [Link] This has turned
out to be a dead-end street. Even as American support for the Iraq war plummeted from
70 percent for to 58 percent against, public protests subsided. See Drake Bennett, “Where’s
the Protest?,” [Link] (November 5, 2006), [Link]
articles/2006/11/05/wheres_the_protest/.
24 Siegle, Weinstein, and Halperin, op. cit., p. 67.
 Development Without Freedom
relativism (which has ensnared many postdevelopment theorists). A modified Senian
model can provide, we suggest, a post-Cold War sense of direction.

Sen and the Crash

Initial reactions to the Asian Crash of 1997 included a strong dose of moral repugnance,
with indigenous “crony capitalism” taking most of the blame. Gradually, however,
it began to dawn on all but the most doctrinaire free marketeers that the problem
had a global reach. There was something disingenuous about blaming the Crash on
the same “Asian values” that shortly before had been credited with a major role in
fueling the “Asian miracle.” For the first time, outside radical circles, the prevailing
development paradigm was under investigation for the most heinous of capitalist
crimes: econocide.25
The timing of Amartya Sen’s 1998 Nobel Prize in economics was itself a revisionist
statement. It acknowledged that the Asian Crisis ran deep, and the solution likewise
would have to address deficiencies in the whole modernist concept of development.
This paradigm shift had been building for years, but the Crash and the ensuing
Crisis provided the critical mass to take Sen’s iconoclasm from the revisionist
fringe to the inner sanctums of policy analysis, where more strident antiglobalists
and postdevelopment critics could not enter. Arguing that simple measures of GNP
were inadequate to assess standards of living, Sen integrated economic, political and
social criteria of well-being—a method that has since been adopted by the United
Nation’s Human Development Index.26
What did most to prime this reconception was the Asian Crash. The Crash made
the work of Robert Merton and Myron Scholes seem dated just one year after they won
the 1997 Nobel Prize in economics. They had applied their theories on derivatives to
the hedge fund they established in 1994, Long Term Capital Management (LTCM).
This paragon of neoliberal theory and practice turned out to be an accident waiting
to happen. And it did not require a long wait. The LTCM fiasco was all the more
portentous in that it came on the heels of the Asian Crisis. When the Crisis broke that
summer, neoliberal globalists tried to shore up its theoretical implications by blaming
the countries that were hardest hit: Thailand, Indonesia, Malaysia, South Korea,
and the Philippines. This defensive reflex reaffirmed their faith in the solvency and
indeed the moral supremacy of Western capitalism.
Then came the September 1998 collapse of LTCM. When it became obvious
that the company’s capital could not possibly cover its hulking debt,27 Washington’s
financial brokers scrambled to garner $4 billion for the emergency purchase of 90

25 It is arguable that the “Asian values” school of Rim economism is not Asian in any
traditional sense, and indeed is imported from the West. Our case for a postmaterial Asian
model is adumbrated in Songok Han Thornton, “Postmaterial Development: The Search for a
New Asian Model,” Development and Society, Vol. 33, No. 1 (June 2004), pp. 25–38.
26 “Food for Thought,” The Guardian (March 31, 2001), [Link]
saturday_ review/story/0,3605,465796,[Link].
27 Robert Skidelsky, “The World on a String,” The New York Review of Books, Vol. 48,
No. 4 (March 8, 2001), p. 10 (pp. 10–14).
 Senism and the Invisible Asia 
percent of its besieged equity.28 The moral hazard of this salvage operation was
disregarded. After preaching at length about Asian crony capitalism, neoliberals
were oddly silent when the US Federal Reserve Board assembled one of the largest
flotillas of cronies the world had ever seen,29 drawn from 15 transnational banks and
brokerage firms such as UBS, Goldman Sachs and Merrill Lynch. Not only did the
managers of LTCM keep their jobs, but the rescuers even paid them management
fees for services rendered in the course of the bailout.30
The admonitory value of the LTCM calamity was thus lost, and the chance to
implement corrective measures was missed. Three years later the energy giant Enron
collapsed, having failed in its attempt to camouflage its mammoth debt. At least it
can be said for the Nobel Prize committee that it tacitly admitted its own part in
perpetuating a seriously flawed model of economic achievement. The Washington
Consensus, unfortunately, has not been willing to draw a similar lesson from the
Asian Crisis or its Western counterparts.
In Sen’s view, the Asian Crisis exposed the high cost of undemocratic governance.
The preventive role that he assigns to democracy translates directly into one of his
basic tenets regarding the instrumental freedom of “protective security”: “Democratic
governance, including multi-party elections and open media, makes it very likely
that some arrangements for basic protective security will be instituted. In fact, the …
positive role of political and civil rights applies to the prevention of economic and
social disasters in general.”31 In the name of “Asian values” the miracle economies
of the Pacific Rim concentrated on economic growth at the expense of political
development. Under cover of dynamic and seemingly infallible economies, Western-
trained technocrats (hardly the exemplars of indigenous Asian values) dismissed the
need for broader goals such as political transparency and social security.
Sen is not denying that “crony capitalism” contributed to the Asian Crash. Rather
he differs in his understanding of the political structure that permits cronyism and
an associated lack of transparency to prevail. He finds the root cause of this failing
in “the absence of an effective democratic forum.”32 Part of the problem is that
booming economies make the protective role of democracy less apparent than is
the case under conditions of slower growth. In a high-growth country such as pre-
Crash Indonesia, that protective role is “strongly missed when it is most needed.”33
Only when things go dreadfully wrong does the advantage of a welfare model such
as Europe’s become apparent. Asian leaders insisted that such safeguards were

28 Ibrahim Warde, “Crony Capitalism: LTCM, a Hedge Fund above Suspicion,” Le

Monde diplomatique (November 5, 1998), [Link]
29 As Joseph Stiglitz and Paul Krugman point out, this double standard persists in the
Bush administration’s habit of lecturing Asians on the evils of cronyism while taking the art
of corporate politics further than any Western administration, especially in the area of foreign
policy. See Jane Hardy, “The State of the Union,” International Socialism Journal, Issue 102
(Spring 2004), [Link]
30 Kevin Dowd, “Too Big to Fail?: Long-Term Capital Management and the Federal
Reserve,” Cato Institute Briefing Papers, No. 52 (September 23, 1999), p. 11 (pp. 1–12).
31 Sen, Development, op. cit., p. 184.
32 Ibid., p. 185.
33 Ibid., p. 186.
10 Development Without Freedom
unnecessary—first because “Asian values” included communal means of caring
for people in a crisis;34 and second because it was inconceivable that a deep and
prolonged crisis could occur in an era that clearly belonged to the Pacific Rim. Asian
exceptionalists held that Western liberalism was not needed in this high-growth
sphere, and indeed would be a hindrance.
By contrast, Sen argued on instrumental as well as intrinsic grounds that the
expansion of freedom was crucial at all stages of development. Freedom is thus
a primary means of development as well as one of its foremost ends.35 This takes
Sen beyond the purported neutrality of modernist development theory.36 As he sees
it, development requires the removal of tyranny and social deprivation as well as
poverty per se. The freedom this entails has profound instrumental value.37 Against
those who consider political development an obstacle to economic success, Sen cites
the case of Botswana, Africa’s fastest growing country.38 Democracy has clearly
buttressed Botswana’s governmental transparency and public accountability, thereby
laying a foundation for sustainable economic development. And against those who
believe poor voters would always choose the shortcut of welfarism over rights, Sen
points out that this assumption has been put to the test only once, when Indian voters
categorically rejected Indira Gandhi’s suspension of civil and political rights under
emergency rule.39
A Senian balance between economic and political priorities encourages practical
reforms such as social safety nets, but also affords a market-resistant buffer for
local cultures.40 Sen’s Development as Freedom treats liberty as a key to long-term
well-being, as opposed to boom and bust economism.41 For him freedom is more
a social good than an individual right. He stresses that globalization is conducive

34 Akash Kapur, “Humane Development: An Interview with Amartya Sen,” The Atlantic
Monthly (December 15, 1999), [Link]
35 Amartya Sen, Development, op. cit., p. 10.
36 Likewise he is at odds with the relativity that attends poststructural strains of
postmodernism. This has saturated most postdevelopment theory, which is therefore so
politically inert as to pose no threat whatsoever to extant power structures. Senism is potentially
much more oppositional. Regarding postdevelopmentalism and its critics, see Arturo Escobar,
“‘Past,’ ‘Post,’ and ‘Future,’” Development, Vol. 43, No. 4 (2000), pp. 11–14.
37 Amartya Sen, Development, op. cit., pp. xii, 3 and 11.
38 Sen, Development, op. cit., pp. 149–50. The opposite case is Zimbabwe, which lost its
ability to avoid disasters such as famines when it ceased to be a functioning democracy. See
Amartya Sen, “Why Half the Planet is Hungry,” The Observer (June 16, 2002), [Link]
[Link]/Print/0,3858,4434647,00. html.
39 Ibid., p. 151.
40 Akash Kapur, “A Third Way for the Third World,” The Atlantic Monthly (December
1999), [Link]
41 Ibid. Harvard’s Dani Rodrik contends that the economic growth record of authoritarian
regimes tends to be either very good or very bad, whereas that of democracies usually occupies
the middle ground. But from a Senian vantage it is arguable that in the longer run almost
all authoritarian governments are low achievers, especially where broader developmental
objectives are considered. On Rodrik’s position see Jeff Madrick, “Democracy Has the Edge
When It Comes to Advancing Growth,” The New York Times (April 13, 2000), [Link]
[Link]/library/financial/columns/[Link].
 Senism and the Invisible Asia 11
to sustainable development only when backed by adequate national policies for
social betterment. A country will pay a huge price if it pursues economic growth
while forfeiting health care, literacy and general social opportunities. It is “not a
question of more or less government but what kind of government.”42 Even well-
functioning markets cannot solve the problems that attend a general eclipse of
human capabilities,43 defined as positive freedom rather than the standard legalistic
canon of negatively defined human rights. Capabilities, that is, entail the real choices
and opportunities available to people—a maximization of welfare that reaches far
beyond a mere calculation of GNP per capita.44
Sen’s revolutionary perspective on social well-being—which since 1993 has
been reflected in the capabilities orientation of UNDP (United Nations Development
Program) Human Development Reports—is rooted in his equally iconoclastic view
of Asian values. Instead of the now standard neoliberal formula for rapid economic
growth, Sen proposes an “Eastern strategy” of development that draws on more
humane but often overlooked dimensions of growth in a wide variety of countries:
first Japan and then the other East and Southeast Asian tigers and dragons. This
strategy lays stress on education, basic economic entitlements, land reform, and a
delicate balance of free market forces and state intervention. The modern history of
Japan discredits the conventional belief that human development is a luxury that a
country can afford only after it has gained affluence. Even at the time of the Meiji
restoration, before the advent of Japanese industrialization, Japan achieved a higher
level of literacy than Europe possessed.45
That, however, is not the basis of the exceptionalism that the term “Asian
values” has come to signify. Proponents of this development model—most notably
Singapore’s former Prime Minister Lee Kuan Yew—define the term negatively,
holding that political liberalism is a Western export unsuited to Asia. Sen, by
contrast, stresses that “the championing of democracy and political freedom in the
modern sense cannot be found in the pre-enlightenment tradition in any part of the
world, west or east.”46 Given Asia’s tremendous cultural diversity, Sen denies that
any single set of values can speak for the whole region.47 Only a universal value
such as freedom can claim such ubiquity. If freedom is essential to any full life,48

42 Amartya Sen, “Globalization Sans Social Welfare is Counter-Productive: Amartya

Sen,” Times of India (October 16, 1998), available online at [Link]
cal300/sen/art/[Link].
43 “Amartya Sen: First Asian to Win Nobel Prize in Economics for 1998,” Defense Journal
(February/March 1999), [Link]
44 John M. Alexander, “Capabilities, Human Rights and Moral Pluralism,” originally
presented at the International Seminar Development, Law and Social Justice at the Institute of
Social Studies, the Hague, the Netherlands, June 2002, and later published in The International
Journal of Human Rights, Vol. 8, No. 3 (2004).
45 Amartya Sen, “A Plan for Asia’s Growth: Build on Much That is Good in the ‘Eastern
strategy,’” Asiaweek (October 8, 1999), p. 62 (pp. 62–63).
46 Amartya Sen quoted in “Food for Thought,” op. cit.
47 Richard N. Cooper, “The Road From Serfdom: Amartya Sen Argues that Growth Is
Not Enough,” Foreign Affairs, Vol. 79, No.1 (January/February 2000), p. 167 (pp. 163–67).
48 Madrick, op. cit.
12 Development Without Freedom
democracy in turn is essential to the cultivation of freedom. To the criticism that
some countries are not “fit for democracy,” Sen rebuts that a country “has to become
fit through democracy.”49

Development as Resistance

Once the concept of development is freed from raw economism,50 consensus is

exploded on a wide range of policy issues. The resulting pluralism affords options
that narrow GNPism would never permit.51 Consider, for example, the case of the
Indian state of Kerala, which is poor even by Indian standards, yet has a remarkable
record of achievement in political freedom, health care, education and gender
equality. Through land reform and grassroots organization,52 Kerala achieved
political freedom as well as an average life expectancy of 72 years, not far behind
the American average of 76, and far higher than the Indian average of 61.53 Its
infant-mortality rate is lower than that of any developing country, and 90 percent of
Keralites are literate.54

49 Amartya Sen, “Democracy as a Universal Value,” Journal of Democracy, Vol. 10,

No. 3 (1999), [Link]
50 To accomplish this it was only necessary for Sen to point out that people in poorer
countries often enjoy better life quality than those in richer ones. See Amitai Etzioni, “The
Post Affluent Society,” Review of Social Economy, Vol. LXII, No. 3 (September 2004), p. 413
(pp. 407–20).
51 Sen’s capabilities approach can be described as “distributive sensitive,” as opposed to
the “distributive insensitive” slant of standard GNPism. See Bertil Tungodden, “A Balanced
View of Development as Freedom,” CMI Working Papers, from Chr. Michelsen Institute,
Bergen, Norway, No. 14 (2001), p. 5 (pp. 1–22).
52 Arjun Makhijani, From Global Capitalism to Economic Justice: An Inquiry into
the Elimination of Systemic Poverty, Violence and Environmental Destruction in the World
Economy (New York: The Apex Press, 1992), p. 132.
53 China’s similar average of 71 masks profound differences in more subtle health
matters, such as women’s access to medical care. China’s ratio of women to men is only .94,
just above the Indian average of .93; but Kerala’s ratio is 1.06, reflecting women’s survival
advantages in this poor but highly progressive state. See Amartya Sen, “Passage to China,”
The New York Review of Books, Vol. 51, No. 19 (December 2, 2004), [Link]
com/articles/17608. It should also be noted that in 1979, when Deng launched his economic
reforms, China had a vast lead on India in longevity. While the Chinese government paired
economic reform with a reduction in public health services, democratic pressure compelled
India to increase its services. Accordingly, the longevity gap between the two countries dropped
to seven years. The state of Kerala, however, surpassed China in the same two decades. See
Amartya Sen, “Why Democratization is not the Same as Westernization: Democracy and its
Global Roots,” TNROnline (October 6, 2003), [Link]
[Link].
54 Akash Kapur, “Poor but Prosperous,” The Atlantic Monthly (September 1998), http://
[Link]/issues/98sep/[Link].
 Senism and the Invisible Asia 13
Perhaps that explains why Kerala has been remarkably free of the xenophobia that
plagues other regions. It has a long tradition of welcoming foreign missionaries,55 and
its Hindu majority has harmoniously coexisted with Muslim and Christian minorities.
Meanwhile Kerala remains resolutely socialist, in the tradition of its communist
electoral victory of 1957. In this spirit it offers a developmental alternative that
combines a mandate for economic growth and an equitable distribution of resources.
Even Sen’s worst critics, such as Joseph Tharmangalam, admit that state intervention
(which does not preclude capitalism)56 has been effective in reducing poverty here
since the mid-1970s.57
However, the full-throttle globalization of the 1990s put Kerala under ideological
siege. Industries have tended to stay away for fear of union activism, pro-union courts
and high minimum wages. This has pushed the unemployment rate to 25 percent, the
highest in India.58 Also, by lowering tariffs on agricultural imports, India’s economic
liberalization has torpedoed Kerala’s main sector of production. Tharmangalam takes
this as proof of an inherent fallacy in Sen’s model.59 But Kerala’s plight actually
proves Sen’s point that politics and economics are mutually dependent. India’s
current restructuration stacks the deck against the socialist alternative,60 and against
Sen’s model, by ignoring qualitative measures of long-term well-being. Kerala was
bound to lose in the quantitative terms of pure economism, but those are precisely
the priorities that made for the Asian Crisis.
The Keralan dilemma is typical of the global South under the throes of neoliberal
globalization. The collapse of Third World nonalignment strategies in the early
1980s—and especially the decline of the New International Economic Order
(NIEO)—left developing countries at the mercy of First World institutions such
as the World Bank, the IMF and eventually the World Trade Organization (WTO).
Presently, however, the South is organizing a new trade bloc under the “G-20+”
label. Its major priority, as reflected at Cancún, is to rectify trade contradictions
whereby First World countries pump in $365 billion a year to agricultural subsidies
that crush the rural sectors of developing countries, all in the name of “free trade.”61
These subsidies drive down commodity prices by dumping wheat, rice, corn, cotton
and other staple products on global markets. Even the World Bank estimates that the

55 Binu Mathew, “In memory of Kerala,” Open Democracy (February 4, 2003), http://
[Link] [Link]/articles/ViewPopUpArticle=jsp?id=2&articleId=945.
56 See Govindan Parayil and T.T. Sreekumar, “Kerala’s Experience of Development and
Change,” Journal of Contemporary Asia, Vol. 33, No. 4 (2003), p. 470 (pp. 465–92).
57 Joseph Tharmangalam, “The Perils of Social Development with Economic Growth:
The Development Debacle of Kerala, India,” Bulletin of Concerned Asian Scholars, Vol. 30,
No. 1 (1998), [Link] edu/bcas/kerala/[Link].
58 Kapur, “Poor but Prosperous,” op. cit.
59 Tharmangalam, op. cit.
60 Due to India’s trade liberalization and declining prices in international markets in
2000–1, 5.5 million farmers lost $1.5 billion. See Govindan Parayil and T.T. Sreekumar, op.
cit., p. 479.
61 Daniel W. Drezner, “Seventies Chic,” The New Republic (December 10, 2003), http://
[Link]/[Link]?I=scholar&s=drezner121003.
14 Development Without Freedom
elimination of agricultural subsidies and tariffs could “lift 150 million people out of
poverty by 2015.”62
The North/South income gap is so wide, however, that nothing short of a
complete globalist overhaul could offer much promise. That is the sales pitch used
by the Washington Consensus to hawk neoliberal restructuration as the only real
Third World option. The counter-example of Kerala—where equality coexists with
high unemployment and low foreign investment—could never appeal to technocrats
steeped in US economic assumptions. A more congenial alternative is available,
however, in the “Stockholm Consensus.” Neoliberals have devoted great energy
to reframing this “Swedish model” as the “Swedish disease,” but the fact remains
that despite its relatively low per capita GDP, Sweden scores near the top of global
ratings that consider actual standards of living.63
Thanks largely to its unflinching redistribution program, Sweden ranks second
only to Denmark in egalitarian terms.64 Nonetheless it has capitalized on the high
tech surge of the late 1990s and proved itself one of the most competitive “new
economies” in the world.65 Thus it represents something of a cross between Kerala
and Silicon Valley.66 Could Kerala also make that global crossing? With a literacy
rate of 91 percent, close to that of the United States,67 it is in fact the perfect locus for
knowledge-based growth as well as “development as freedom.” Its commitment to
general education has produced remarkable benefits, especially for women. Despite
China’s one-child policy, Kerala has reduced its fertility rate more than China. It
arguably has what it takes to become a veritable Sweden for South Asia.
The Senian model could bring this black sheep in from the cold. But given the fact
that Kerala is already on the globalist blacklist, the question is whether Senism can
mount an effective antiglobalist resistance. Sen’s own politics is not up to this task,
but much as classical economics quickly transcended the writings of Adam Smith,
and Marxism soon outdistanced Marx, the Senian paradigm already reaches beyond
Sen’s personal ideology. In Development he confronted glaring global inequalities,

62 “The Unkept Promise of 2003,” The International Herald Tribune (December 31, 2003),
[Link] [Link]/cgi-bin/[Link]?template=[Link]&ArticleId=123242.
63 Daniel Brook, “How Sweden Tweaked the Washington Consensus,” Dissent (Fall
2004), [Link]
64 The “Danish lesson” has been that an effective growth economy does not require
that the welfare state be dismantled. See Jacob Kirkegaard, “A Danish Lesson for Germany,”
The Globalist: For Global Citizens, By Global Citizens (January 26, 2005), [Link]
[Link]/DBWeb/[Link]?StoryId=4347.
65 Brook, op. cit.
66 As such it is the embodiment of what has been called the post-Keynesian approach to
post-industrial development. On the contrast between post-Keynesianism and neoliberalism
see Thomas I. Palley, “Economic Theories Change But Still Fail to Recognize Natural
Resources,” The Progress Report, originally from Foreign Policy in Focus (May 2004), http://
[Link]/2004/[Link].
67 Nachammai Raman, “How almost Everyone in Kerala Learned to Read,” The Christian
Science Monitor (May 17, 2005), [Link]
 Senism and the Invisible Asia 15
but paid insufficient attention to TNCs that dominate today’s global economy.68
Likewise he has tended to neglect crucial postmaterial issues such as environmental
sustainability,69 which is far more adequately treated by the postdevelopmentalist
Arturo Escobar.
The blackest mark on Sen’s project, however, is his insistence that hunger in
the Third World is best combated through further trade liberalization and export
priority. As Vandana Shiva notes, it is precisely this kind of neoliberal regimen that
has robbed the rural poor of their land, their water, and their hope. At the WTO’s
Doha Conference in 2001 more than 100,000 workers and peasants rallied in protest.
Again in Hong Kong thousands literally went to the barricades in outrage against the
WTO as they know it: World Trade Oppression. This democratic scream in the night
is oddly ignored by Sen,70 whose call for democracy is much stronger in theory than
in oppositional practice. His politics depends very largely on the party-mediated
mechanisms of the ballot box, and today’s parties are under such tight corporate
control that the poor are left with no choice but to cast their votes in the streets.
Having brilliantly adumbrated a project for the reintegration of ethics and
economics71—whose divorce over the last two centuries would have been unthinkable
for Adam Smith himself 72—Sen fails to cross the bridge he has constructed. His
institutional commitments prevent him from aborting an international order that
he recognizes as ethically decrepit.73 Like his protégé, the liberal feminist Martha

68 James North, “Sen’s Sensibility,” The Nation (December 6, 1999), [Link]

[Link]/issue/991206/[Link].
69 Kapur, “A Third Way,” op. cit. By 2004 Sen was trying to salvage his reputation in the
environmental sphere by allying himself with the Millennium Ecosystem Assessment report
of 2003, Ecosystem and Human Wellbeing. See Amartya Sen, “Why We Should Preserve the
Spotted Owl,” The London Review of Books, Vol. 26, No. 3 (February 5, 2004), [Link]
[Link]/v26/n03/print/sen_01_html.
70 Vandana Shiva, “The Real Reasons for Hunger,” The Observer (June 23, 2002), http://
[Link]/Print/0,3858,4446511,[Link].
71 Ben Fine points out that the nexus between ethics and economics, especially in the
sphere of development, “has been dominated by Amartya Sen, almost to the extent of being
a one-man show with supporting acts.” See Ben Fine, “Economics and Ethics: Amartya Sen
as Point of Departure,” The New School Economic Review, Vol. 1, No. 1 (Fall 2004), p. 153
(pp. 151–62).
72 In this sense, as Gertrude Himmelfarb argues, Smith epitomized the British
Enlightenment’s union of virtue and reason, or in his case moral philosophy and political
economy. See her revisionist study of three enlightenments: The Roads to Modernity: The
British, French, and American Enlightenments (New York: Alfred A. Knopf, 2004).
73 Sen frames this ethical inadequacy in terms of a critique of Rawlsian justice as it
relates to transnational issues. He lays out this global dilemma as a no-man’s-land between the
national particularism of Rawls’ (initial) original position and a more Kantian universalism
which has no teeth. But Sen’s attempt to posit a Third Way beyond those failed paradigms is
too mellow and institutionally accommodating to pack much punch. Escobar is right in this
regard: before one can construct, one must deconstruct. See Escobar, “‘Past,’” op. cit.; and
Amartya Sen, “Global Justice Beyond International Equity,” in Inge Kaul, Isabelle Grunberg,
and Marc A. Stern (eds), Global Public Goods: International Cooperation in the 21st Century
(Oxford, UK: Oxford University Press, 1999), pp. 118–19 (pp. 116–25).
16 Development Without Freedom
Nussbaum, Sen lays so much stress on the capabilities aspect of positive freedom
that he leaves himself open for harsh and sometimes ad hominem criticism from a
more pedestrian, “food and shelter” school of activism.74
There is no question as to Sen’s personal concern over the material trauma of
poverty. His effort to humanize economics should not be taken as a retreat from
“food-first” imperatives, though he might do more to make this clear to readers who
do not happen to know his life story. Our criticism is directed only at his politics,
which falls short of the larger project he has launched. To put it bluntly, Sen is not
fully Senian. The social capabilities that concern him so much are rooted in a politics
of incapability that he has scarcely addressed—viz., the literal “incorporation” of
today’s public sphere.75 His failure to confront the domestic and global inroads
of neoliberalism was graphically illustrated in 2002 when he “debated” the arch-
neoliberal Lawrence H. Summers (former Treasury Secretary and later Harvard
University president) on the implications of globalization. The two economists were
in so much agreement that debate was nearly impossible.76
The key issue, as Ben Fine notes, is how to get the Senian project beyond Sen
himself.77 While Escobar calls for a general strike against the whole discourse of
development, the root of the problem is the modernist discourse of economics, which
Escobar sees as culturally inscribed.78 Neglecting cultural variability has been a
grievous mistake on the part of developmental modernists as well as neoliberal market
ideologists.79 For them the stability of a market society is a simple matter of enforcing
reasonable laws. What this ignores is the cultural and political fragility of the rule of
law itself.80 The assumption is that the market alone can deliver uninterrupted and
equitable economic growth. This utopian view, grounded in Enlightenment precepts,
not only declares less market-oriented cultures dysfunctional, but proceeds to make
them so through a remorseless program of structural adjustments. Marginalized
cultures lose the power to resist the economic imperialism that goes by the name
of globalization. The Keralas of the world are dragged down, and then declared
ideologically moribund.

74 Gerald Cohen, for example, charges both Sen and Rawls with peddling the freedom
mantra at the expense of the food-first imperative. See Christine M. Korsgarrd, “G.A. Cohen:
Equality of What? On Welfare, Goods and Capabilites,” in Martha Nussbaum and Amartya
Sen (eds), The Quality of Life (Oxford: The United Nations University and Clarendon Press,
1993), p. 60 (pp. 54–61).
75 See Carl Boggs, The End of Politics: Corporate Power and the Decline of the Public
Sphere (New York: The Guilford Press, 2000), especially Chapter 3.
76 See Nathan J. Heller, “Sen Sets Sights on World Poverty,” The Harvard Crimson
(June 9, 2004), [Link]
77 Fine, op. cit., p. 153.
78 See Arturo Escobar, Encountering Development: The Making and Unmaking of the
Third World (Princeton, NJ: Princeton University Press, 1995), pp. 54 and 62.
79 Escobar, “‘Past,’” op. cit.; and John Gray, Enlightenment’s Wake: Politics and Culture
at the Close of the Modern Age (London: Routledge, 1995), p. 101.
80 Gray, op. cit., p. 102.
 Senism and the Invisible Asia 17
Globalization on Trial

Resistance to the inroads of globalization requires more than the slightly modified
economism that has appropriated the “Third Way” label.81 It requires what we term
the “concurrence” model, with reference to Sen’s focus on concurrent economic and
political development. This applies no less to the “developed” West than to Asia.
Western democracy is also under threat from the erosion of civil society and media
pluralism by globalization. For Sen it is the informational element that is pivotal,82
since in his view democracy is not so much rooted in elections and ballots as in the
social complex of public reasoning.83 William Tabb likewise measures democracy in
terms of public participation in decision making, the availability of information, and
ancillary issues such as media control and campaign funding.84
American democracy is especially at risk in all these areas. When President Bush
abandoned the Kyoto Protocol in 2001, knowing from polls that a large majority of
Americans took the opposite view, he was hardly acting democratically.85 Nor did
he have a mandate for his rejection of arms limitation treaties and the International
Criminal Court. Clearly the administration’s stridently unilateral foreign policy is
rooted in an equally unilateral domestic agenda.86 On both fronts, Bush has rammed
through unpopular policies by way of the vastly expanded powers that a “wartime”
president enjoys. The trick, Kenneth Roth notes, is to normalize the president’s
wartime special privileges by way of a perpetual “war on terrorism.”87
This storm cloud has a silver lining, however. While Bush has expanded the range
and definition of “war,” his opponents have reciprocated by expanding the range
and definition of democracy. Tabb observes how the antiwar and antiglobalization
movements now defy national boundaries and evade the constraints of centrist
media.88 Like Sen, they demand more than minimal, pro forma democracy. This
explains why many antiglobalists have assumed Sen was on their side.89 Their
people-centered development concept has a Rawlsian cast in that it foregrounds

81 See James Petras, “The Third Way: Myth and Reality,” Monthly Review, Vol. 51, No.
10 (March 2000), [Link]
82 Sen, “Why We Should Preserve the Spotted Owl,” op. cit.
83 Concerning the democratic limits of election procedures, see Amartya Sen, “Why
Democratization is not the Same as Westernization: Democracy and Its Global Roots,” The
New Republic (October 6, 2003), [Link]
84 William K. Tabb, “After Neoliberalism?,” Monthly Review (June 2003), [Link]
[Link]/cf_o/m1132/2_55/103383506/[Link]. Likewise Robert Dahl lays stress
on the process of collective decision-making. See Robert A. Dahl, Democracy and Its Critics
(New Haven: Yale University Press, 1989).
85 Sen, “Why We Should Preserve the Spotted Owl,” op. cit.
86 See Jed Rubenfeld, “The Two World Orders,” The Wilson Quarterly (Autumn 2003),
[Link]
87 Kenneth Roth, “The Law of War in the War on Terror,” Foreign Affairs, Vol. 83, No.
1 (January/February 2004), p. 2 (pp. 2–7).
88 See Tabb, op. cit.
89 This broader concept of development was harbingered by the International Covenant
on Economic, Social and Cultural Rights (ICESCR) of 1976, where the focus was on material
needs such as food, shelter and health care as well as education and other non-material rights.
18 Development Without Freedom
the welfare of the poorest segments of the population.90 Here Sen’s approach falls
short. Useful as his informational strategies are for averting social disasters such as
famine, or contagious diseases such as SARS and Avian Flu, they are necessary but
insufficient elements of participatory democracy in an age of corporate hegemony.
“People Power,” in the developed West as well as the Rest, requires an added
activistic element.
Even where such activism is originally present in People Power, it can easily
be lost. In the case of Korea’s post-authoritarian development, formal gains in
procedural democracy and a free press (Sen’s operational forte) actually worked
against substantive democracy by projecting an aura of successful reform. This sense
of “mission accomplished” functioned as a social “pressure release,” undermining
the progressive thrust that structural change would require.91 Thus we end up with
the paradox of Philippine People Power, absent an economic dynamic for reform,
and Korean economic dynamism, absent the political will for reform.
In the hands of the IMF the word “reform” is collapsed into global economism.
It is simply taken for granted that democratization will follow economic growth.
Neoliberal reformism places great stock in “transparency” and the so-called “rule
of law,” but there is little chance that such legal mechanisms, in and of themselves,
will redound to genuine democratic development. Globalist legalism is more likely
to co-opt and perpetuate extant power structures.
Nowhere is this more obvious than in today’s Indonesia. After Suharto’s departure
the country’s free press again came under siege, this time by a court system that
professes to defend individuals against libel, but in fact defends crony capitalists and
other power brokers. The court has ordered one of the most important progressive
newspapers in the country, Koran Tempo, to pay $1 million in damages to the arch-
crony Tony Winata,92 thus pushing the paper to the brink of bankruptcy, and sending
a strong message to other media that post-Suharto reformism is an idea whose time
has passed.
This is not to suggest that Sen’s informational strategy is defective. It is simply
inadequate. In the absence of an oppositional reform dynamic it could actually work
against the democracy it seeks. Giving current power structures a democratic veneer
renders them all the more efficient in their social and ecological ravages. A paper like
the Koran Tempo could survive under Suharto but face extinction under the pseudo-

See Frances Stewart, North-South and South-South: Essays on International Economics

(Basingstoke, UK: Macmillan, 1992), p. 37.
90 European Commission, The Future of North-South Relations: Towards Sustainable
Economic and Social Development (London: Kogan Page, 1998), p. 38.
91 Democratic proceduralism is the prime ingredient of what the conservative libertarian
Justin Raimondo calls (with reference to Susan Sontag’s view of the former Soviet system as
“fascism with a human face”) “fascism with a democratic face.” See “Today’s Conservatives
Are Fascists: Torture, Dictatorship, Phony ‘Elections,’ and Endless War—It’s Fascism with
a ‘Democratic’ Face,” [Link] (January 3, 2005), [Link]
com/pt/cpt?action=cpt&title=Today%27s+Conservatives...
92 Raymond Bonner, “Battle Against Indonesian Press Moves Into the Country’s Courts,”
The New York Times (February 1, 2004), [Link]
asia/[Link].
 Senism and the Invisible Asia 19
reformist “rule of law” that has replaced him. In Korea, likewise, ostensive gains in
democratic machinery have at best served as a diversion from the anti-democratic
processes of crony corporatism.
The setbacks we have noted in the Philippines, Indonesia, and Korea suggest
that democratization is a much more complex and culturally embedded process than
early globalization theory imagined. There is no global democratic determinism
(Huntington’s “third wave”) or liberal democratic finality (Fukuyama’s “end of
history”) to rely upon. Nor is there any definitive or “consolidated” democracy
which, once achieved, can be put on automatic pilot. Democratization is a Sisyphean
process which comes in only two flavors: activistic or ersatz.
Sen, more than anyone, has integrated the democratic axiom into practical
economic thought. But there is a snag: for one who lays so much stress on freedom,
he has surprisingly little to say about resistance to repression, and in his recent
writings he takes pains to set globalists at ease about his project. He refuses to be
the Marcuse of the new youth politics of antiglobalism. Though he laments the
glaring inequalities of global capitalism, he pays scant attention to the TNCs that
dominate today’s global economy and wreak havoc on his celebrated “development
as freedom.” Useful as his informational strategies can be for averting catastrophes
such as plague or famine, they do little to promote activistic organization in support
of People Power. To tap the full oppositional force of concurrence theory, one must
liberate Sen’s model from Sen himself.
Nonetheless there is much to be said for his “Asian strategy,” which gets us past
the East/West schism that marked the Asian Crisis. Nothing could be less Senian than
those rival, pre-Crash TINAisms: made-in-Singapore “Asian values” and made-in-
America globalization. Thanks to post-Crash IMFism and now the post-9/11 “war
on terror,” America has lost much of its democratic credibility, along with most of
the soft power it enjoyed on the Rim in the early 1990s. The winners, by default,
could be some of the most undemocratic development models ever conceived, such
as Sino-globalization. “Asian values” took a hard blow from the Crash, but returned
in this even more virulent form, which is now being packaged for global export. And
there are plenty of developing nations waiting in the import line.
This resurgent authoritarianism, however, is still challenged by other Asian values.
Sen has done more than anyone to rekindle the democratic development debate on
Asian turf. This time the West is left sitting on the sidelines in a distinctly Asian contest
of development with or without freedom.93 The outcome of this trial-by-development
will define the political contours of globalization for decades to come.
While the new Asian balance of power is increasingly divided along Sino-Indian
lines, nuclear parity between these budding superpowers shifts competition to the

93 See, for example, Sen’s essay, “Human Rights and Asian Values: What Lee Kuan Yew
and Le Peng Don’t Understand about Asia,” The New Republic, Vol. 217, No. 2–3 (July 14,
1997), archived online at [Link] and [Link]
org/polinfo/polessays/[Link]. See also Kim Dae-jung, “A Response to Lee Kuan Yew: Is
Culture Destiny? The Myth of Asia’s Anti-Democratic Values,” Foreign Affairs, Vol. 73, No.
6 (November/December 1994), [Link]
Dae-jung/[Link].
20 Development Without Freedom
economic sphere. The question is whether this will foster another GDP “race to the
bottom,” marked by an even greater spread between haves and have-nots. Or will
democracy give Indo-globalization a Senian (“development as freedom”) advantage
over Sino-globalization? To tap that advantage India will have to rediscover its
Gandhian heritage of the common good. As the following chapters will show, that
basic democratic hope has flickered out in country after country. India’s success
or failure to keep this flame alive will profoundly impact the global prospect for
democracy in the 21st century.
20 Development Without Freedom

economic sphere. The question is whether this will foster another GDP "race to the
Chapter 1
bottom," marked by an even greater spread between haves and have-nots. Or will
democracy give Indo-globalization a Senian ("development as freedom") advantage
over S ino-globalization? To tap that advantage India will have to rediscover its Globalization on Trial:
Gandhian heritage of the common good. As the following chapters will show, that
basic democratic hope has flickered out in country after country. India's success Rethinking Asian Exceptionalism
or failure to keep this flame alive will profoundly impact the global prospect for
democracy in the 2 1 st century. vis-a.-vis the Third World

The Making of Third Worldism

The end of the Cold War put America in the curiously unenviable position of having
no major geopolitical rivaL Triumphalism and growing economic hubris trumped
geo-realist common sense about the dangers lurking behind US "unipolarity." Now,
instead of having one preeminent enemy, America finds itself at odds with much of
the entire world. It is telling that Secretary of Defense Robert M. Gates-who for
years served in the CIA tete-a-tete a KGB agent named Vladimir V. Putin-expresses
nostalgia toward the "less complex" days of the Cold War.!
The last glimmers of appreciation for America's global primacy were seen in
the Gulf War coalition and the vanguard role that America was invited to play in
Kosovo, after European countries proved incapable of handling this relatively small
crisis in their own backyard. However, even as Secretary of State Madeleine Albright
toasted America for being the "indispensable nation," the global drift was toward a
very dispensable view of US hegemony. In the face of what has justly been called the
criminalization of American foreign policy,2 the only surprising thing is that many
nations taking this view-let us call them the contras-are not programmatically
anti-American. They are simply non-aligned.
This, to be sure, is a new kind of non-alignment. Whereas the old Non-Aligned
Movement had been a distinctly Third World phenomenon, today's version has
expanded to include a broad range of both developed and newly industrialized
countries (NICs). One of their few common denominators is an intense aversion
to US unilateralism. Rarely is this pushed so far as Chavez's anti-American rants
or Putin's blasts at the "hyper-force" of US militarism. After throwing down the
gauntlet at a February 2007 Security Conference in Munich,3 Putin rushed over to
the Middle East to elaborate his "New Course" for a multilateral world order. Even

1 Quoted in Paul Kennedy, "The Good Old Days of the Cold War," LA [Link]
(February 1 8, 2007), [Link] 1 8 feb 1 8,0,569 1 6
02,[Link]?coll= 1 .
2 Michel Chossudovsky, "The Criminalization o f American Foreign Policy," Global
Research (February 5, 2007), [Link]
3 Ian Traynor, "Putin Hits at US for Triggering Arms Race," Observer (February 11 ,
2007), [Link] - 119093,[Link].
22 Development Without Freedom Globalization on Trial 23

so, he draped himself in the borrowed imagery of US soft power by having his chief This Wilsonian sense of restraint-keeping one 's means in tune with one 's ends,
propagandist, Vladislav Sourkov, describe him as a new Franklin D. Roosevelt.4 The and foreign policy in tune with democracy-was still an operative principle at the
point is that Washington has so completely lost its way as to appear, from a Third end of World War II. It made its mark, for example, on postwar Bretton Woods
World perspective, more fundamentally "un-American" than Putin is. What Russia organizations : the International Monetary Fund (IMF) and World Bank in 1 944, and
claims to offer, ironically, is nothing less than a global New Deal. the General Agreement on Tariffs and Trade (GATT) in 1 947. Unfortunately these
That would be a fine contribution, if only it were true. Unfortunately, as the institutions would soon be absorbed into a Cold War security system that was subj ect
Chechen holocaust amply proves, this progressive image is a hoax. Putin's patent to US fiat and given to callous disregard for Third World interests. This shift was
objective, understood through his actions rather than his words, is a reconfigured already manifest in the 1 947 Truman Doctrine, which stood Wilson 's philosophy on
Second World. The more likely locus for a real New Deal is Latin America, which its head by casting America as the military and economic policeman of the world.
naturally takes the contra route after the grievous failure of its Washington-directed Although Pax Americana worked rather well until the early 1 970s,9 for America at
restructuration of the 1 980s and early 1 990s. At that time the Pacific Rim was still least, it rested on a dubious conflation of capitalist and democratic values. 10 It hardly
relatively content with its US affiliation, and might have remained so as long as its needs to be said which of these concerns took priority in American foreign policy.
"miracle" era lasted. That all changed with the Asian Crisis, which was intensified This bracketing of democratic values meant that foreign affairs were cut loose
and prolonged by IMF-dictated "reforms." It was no secret that these strictures were from any serious ethical evaluation or restraint. I I When friendly persuasion fai led,
a product of collusion between the IMF and the US Treasury Department. Asia America was more than willing to intervene forcefully, as it did in Korea, Greece,
in general took a hard lesson from this dubious "rescue" operation, and Bush era Vietnam, the Dominican Republic, Grenada and Lebanon. Likewise it was behind the
unilateralism widened the East/West gap still farther. destabilization of regimes such as Iran, Turkey, Guatemala, Laos, Cambodia, Cuba,
The Bush agenda not only ignored the core tenets of geopolitical realism but El Salvador, Chile, Ghana, Zaire and Mali.12 Military adventurism was matched by
also the dismal outcome of past American flirtations with imperialism. Though environmental destruction, such that the US Department of Defense became the
neoconservatives often trace their ideas to Teddy Roosevelt, they forget that T.R. world's largest polluter. \3 First World domination and contamination were two sides
tacitly dropped his imperialist stance during his presidency, just as Woodrow Wilson of the same coin, just as they came together in the Soviet Union's Second World
would more openly renounce his.s Having pressured Congress to grant citizenship dominion over Eurasia.
to Puerto Ricans and independence to Filipinos, Wilson worked to put an end to all Hope for a progressive world order lay with the developing world. Having
colonialism after World War I. He was convinced that America faced a stark choice fought long and hard to rid themselves of colonialism, some Third World countries
between the ideals of democracy and those of unfettered national interest, which is understandably resisted First World neocolonialism by seeking their own path to
to say imperialism.6 Having come to see the latter as both unjust and unstable, his
Fourteen Points and his proposal for a League of Nations sought a mediating system of the Western model, albeit not a colonial model. Even this compromise is seen as too much
of international law to promote global democracy by strictly democratic means. by today's new imperialists, such as Deepak Lal, who blames Wilson for deconstructing the

Granted, he hoped other countries would model themselves on his Calvinist vision imperialist system which in Lal's view was the only safeguard against the global disorder

of America,7 but he opposed any unilateral imposition of the US modeP and economic disintegration that culminated in World War II. See Deepak Lal, In Praise of
Empires: Globalization and Order (Basingstoke, UK: Palgrave Macmillan, 2004), p. xxiv.
9 Ankie Hoogvelt, Globalisation and the Postcolonial World: The New Political Economy
4 Marie Jego, "Vladimir Putin Wants to Offer an Alternative to Washington's 'Unilateral ofDevelopment (London: Macmillan Press Ltd., 1 997), pp. 34 and 33. The Truman Doctrine
Policy,'" Le Monde (February 1 4, 2007), [Link] [Link]/web/article/0. 1 -0@2- established a counter-revolutionary policy to crush any leftist movement in the Third World.
3 2 1 4,36-867230@5 1 -866850,[Link]. See David Louis Cingranell, Ethics, American Foreign Policy, and the Third World (New York:
5 John B. Judis, "What Woodrow Wilson Can Teach Today's Imperialists," The New St. Martin 's Press, 1 993), pp. 1 26-27 . But the deeper roots of today's imperialistic agenda can
Republic (June 9, 2003 ), [Link] be traced to President Benj amin Harrison's "new diplomacy" ( 1 889- 1 908). His Secretary
3D%3D. Explosive nationalist reactions forced Roosevelt's withdrawal from the Philippines of State, James Blaine, believed the US should annex Hawaii, Cuba, Puerto Rico, and even
and Wilson's from Mexico. Anticipating the rise of Japanese power in the Pacific following Canada. For Blaine and other expansionists, Pan-Americanism was a logical extension of
Japan's defeat of Russia in 1 905, Roosevelt came to advocate Philippine independence so the Monroe Doctrine. See Fareed Zakaria, From Wealth to Power: The Unusual Origins of
as to reduce American vulnerability in Asia. See Stanley Karnow, In Our Image: Americas Americas World Role (Princeton, NJ: Princeton University Press, 1 998), pp. 1 3 7-3 9.
Empire in the Philippines (New York: Ballantine Books, 1 989), pp. 80 and 263. 10 Mark Rupert, Ideologies of Globalization: Contending Visions ofa New World Order
6 Judis, op. cit. (London: Routledge, 2000), p. 27.
7 William Pfaff, "Manifest Destiny: A New Direction for America," The New York Review 1 1 See Arturo Escobar, Encountering Development: The Making and Unmaking of the
ofBooks, Vol. 54, No. 2 (February 1 5 , 2005), [Link] 1 9879. Third World (Princeton, NJ: Princeton University Press, 1 995), p. 1 5.
8 Rather he advocated a "mandate system" whereby non-imperial nations such as Sweden 1 2 Hoogvelt, op. cit., p. 34.
would guide developing countries toward democracy. In that respect he still stopped short of a 1 3 Bob Feldman, "War on the Earth," Dollars and Sense (March/April 2003), p. 24
full reversal, for he thought it necessary to keep developing countries under the parental wing (pp. 24-27).
24 Development Without Freedom Globalization on Trial 25

development. 14 Thus Third World nationalism of the 1 950s and 1 960s grew hand-in­ In other respects Nehru's vision was more progressive. His idea of nationalism
hand with a distinctly non-aligned internationalism. At first this Third Way, like early drew upon his sense of Asia's relatively harmonious past, as compared to Europe's.
pan-Arabism, 1 5 was simply anti-colonial; but increasingly its goal shifted to escaping Using secularism and federalism to bridge the gap between Hindus and Muslims,
co-optation by the superpowers. That common cause helped Third Worldism bridge Nehru urged the new nation-state to seek unity in diversity rather than uniformity.20
the ethnic, religious and linguistic gaps that divided it, 16 thus making it the undeclared Meanwhile he continued his struggle against imperialism by refusing to enter the Cold
second front of the Cold War. Washington found it necessary to depict this thorn in War or the US-directed world system. When the World Bank retaliated by refusing to
its side as a Soviet pawn. Otherwise there could be no hiding the fact that America's fund two badly needed oil refineries, Soviet funding came to the rescue. That of course
primary goal was hegemony, not global security or democratization. threw Washington into a state of apoplexy. The rift with Washington was widened
further by India's Foreign Exchange Regulation Act (FERA) of 1 973, which set limits
on Western equity holdings. Corporations that refused to comply were forced to leave
Rise and Fall of the Old Non-Alignment
the country. So it was that Indians were deprived of Coca Cola.21
African non-alignment followed a similar pattern. In the 1 950s Africans had
One of the first to recognize the threat of capitalist recolonization in the postwar era
been optimistic about their postcolonial future. The aims of African nationalism
was India's first prime minister Jawaharlal Nehru. By the late 1 940s his government
reached far beyond the raw economism that would mark Pacific Rim development
was already forging a non-aligned blend of socialist economic development and
in coming decades. Stress was laid on freedom as well as the dignity and equality
secular democracy. 1 7 Like Gandhi, Nehru rej ected both communism and capitalism,
of African peoples.22 Rather than pure Marxist materialism, African socialism was
but supplemented Gandhi's eco-social austerity with his own pro-tech utopianism.
rooted in tradition and culture. This capacious sense of Third Worldism infused the
This was most unfortunate, for Nehru's second declaration ofIndian independence­
1 95 5 Bandung Conference in Indonesia, where Asian and African countries j ointly
liberation from the Cold War system18-was coupled with a gigantism that effectively
framed a non-aligned development strategy.23
declared war on nature. Thus it duplicated rather than supplanted the eco-imperialism
Likewise, the 1 95 8 Conference of Independent African States in Accra, attended
of First and Second World modernisms.
by all independent African governments, tried to assert a distinctive African voice.
This destructive legacy has yet to be overcome. Its bigger-is-better mindset is so
Despite America's charge that African non-alignment was a mere front for Soviet
deeply ingrained that more eco-friendly approaches to development have rarely been
vassalage,24 Accra refused co-optation by either superpower.25 Its initiatives were
embraced by ruling elites outside the US and Western Europe. 19 Purging the Third
echoed in later Third World demands for a reformed world system, e.g., the New
Worldism of Gandhi 's values meant that none of the "three worlds" would offer an
International Economic Order (NIEO), launched at the 1 973 non-aligned summit in
alternative to the ecosocial pillage that has appropriated the name "development."
Algiers. The NIEO attempted to stabilize the prices of raw materials and to regulate
the capital flows of TNCs.26
Naturally this strategy met strong resistance from US corporations, and hence
14 For our purpose "Third World" has special relevance to states which joined the from the US government. The Tunis non-aligned meeting of 1 976 took anti-
Non-Alignment Movement (NAM) and played a significant role in the decolonization and
independence process. That sense of unity has been lost today. See Tony Barnett, "States
of the State and Third Worlds," in Peter Golding and Phil Harris (eds),
Beyond Cultural
Imperialism: Globalization, Communication & the New International Order (London: Sage 20 Desai, op . cit., p. 1 1 1.
Publications, 1997), pp. 27, 45 and 47 (pp. 25-48). 2 1 Deepa Ollapally, "Third World Nationalism and the United States after the Cold War,"
1 5 Abdul-Monem AI-Mashat, "Stress and Disintegration in the Arab World," in Tawfic Political Science Quarterly, Vol. 1 1 0, No. 3 (Autumn, 1 995), pp. 425-6 (pp. 4 1 7-34).
E. Farah (ed.), Pan-Arabism and Arab Nationalism, the Continuing Debate (Boulder, CO: 2 2 Klaas van Walraven, Dreams ofPower: The Role ofthe Organization ofAfrican Unity
Westview, 1 98 7), p . 1 66 (pp. 1 65-76). in the Politics ofAfrica, 1963-1993 (Hants, UK: Ashgate, 1 999), p. 80.
1 6 Akira Iriye, Cultural Internationalism and World Order (Baltimore, MD: The Johns 23 Attended by India's Nehru, China's Zhou Enlai, and Egypt's Gamal Abdual Nasser,
Hopkins University Press, 1 997), p. 1 6 1 . 8andung put Sukamo's Indonesia and Nehru's India in the Third World driver 's seat. See
1 7 Meghnad Desai, "Communalism, Secularism and the Dilemma ofIndian Nationhood," Michael R.J. Vatikiotis, Political Change in Southeast Asia: Trimming the Banyan Tree
in Michael Leifer (ed.), Asian Nationalism (London: Routledge, 2000), pp. 1 1 3-4 (pp. 9 1 - (London: Routledge, 1 996), p. 1 74.
1 25). 24 Frank Furedi, The New Ideology of Imperialism: Renewing the Moral Imperative
18 "Deconsecrating Gandhi," The Economist, Vol. 348, No. 8083 (August 29-September (London: Pluto Press, 1 994), p. 75.
4, 1998), pp. 79-80. 2 5 Van Walraven, op. cit., pp. 9 3 and 94.
1 9 James Petras, "The Third Way: Myth and Reality," Monthly Review, Vol. 5 1 , No. 26 Kees van der Pijl, "The Sovereignty of Capital Impaired: Social Forces and Codes of
1 0 (March 2000), [Link] There are now some notable Conduct for Multinational Corporations," in Henk Overbeek (ed.),
Restructuring Hegemony
exceptions, however, such as Kenya's Green Belt Movement, founded by the winner of the and the Global Political Economy: The Rise of Transnational Neoliberalism in the 1980s
2004 Nobel Peace Prize, Wangari Muta Maathai. (London: Routledge, 1 99 3 ), p. 3 8 (pp. 2 8-57).
26 Development Without Freedom Globalization on Trial 27

imperialism as its theme,27 with special stress given to cultural hegemony.28 That same with the struggle for social and political democracy."35 Under cover of national
year UNESCO presciently called for the decolonization of information technology sovereignty, postcolonial regimes duplicated the injustice of former colonialism
(IT). 29 By the early 1 980s, however, the growing internationalization of capital and turned Third World internationalism into a body of local potentates . These neo­
was undermining Third World autonomy. 30 Foreign aid likewise came with more authoritarians extracted what they could from the great powers while squeezing their
strings attached. The top four African recipients of US aid in the 1 980s-Somalia, citizens to the limit.
Sudan, Zaire (now Congo) and Liberia-were grandly rewarded for their Cold War Foreign aid could compensate for shortages of capital and technology,36 but it
services,3 1 such that Zaire's infamous President Mobutu Sese Seko received nine also helped to militarize the Third World at the expense of civil society.37 This of
World Bank 1 0ans.32 course happened on the Pacific Rim as well, but here national leaders were in a
It is hardly surprising, therefore, that India would pay dearly for its non-alignment better position to leverage Cold War geopolitics to their advantage. That difference
in terms ofAmerican aid. By contrast, many Rim nations enjoyed lavish US funding helped propel the "miracle" growth that left other developing regions far behind.
and export advantages. Official aid figures do not begin to reflect the scope of this Unfortunately Asian intellectuals tended to attribute this dynamism not to geopolitics
difference, for America's tolerance of trade imbalances with countries on the Cold but to the growth-first authoritarianism that they dubbed "Asian values."
War frontline was a disguised form of aid. This pattern laid the foundation for the Although these claims of unique dynamism and distinct Asianness were
so-called "miracle" economics that would be used to discredit other development fraudulent, they won wide acceptance, and on this basis dependency theory was
models and non-development explanations, such as dependency theory. discredited. It was forgotten that rates of economic growth among Latin American,
Meanwhile the democratic erosion of postcolonial nationalism bled into Third African and Asian "tiger" economies were not so divergent between 1 960 and
World internationalism, sapping its ideals to the point that co-optation by the 1 9 82 : 5 percent, 4 percent, and 7 percent, respectively.38 The 2 percent difference
dominant world system was bound to follow when the price was right. 33 As a truly between Latin American and Asian tiger growth during those years hardly deserved
autonomous Third Way, rather than a simple negotiating strategy for playing one a "miracle" labeL
superpower off against the other, non-alignment was ebbing fast by the 1 980s. It was The Cold War version of "globalization" conjured the "Asian miracle" through
the end of the Cold War, however, that dealt it the final death blow. a reverse dependency that worked in favor of the Pacific Rim while relegating the
Third World to peripheral status. Exactly as dependency theory charged, alternative
modes of development were stunted by a process that can fairly be labeled the
Globalization and the Making of the ' South'
development of underdevelopment. So long as Third World alternatives were forced
to compete on this unlevel playing field, any country that wanted rapid economic
This outcome calls to mind Rosa Luxemberg's suspicion of nationalism as a vehicle
growth would have to choose its development model according to its relationship to
for progressive change. On the one hand she appreciated, as few on the Left did, the
the superpowers.39 The invisibility of the geopolitical factor buttressed the Cold War
vital importance of noncapitalistic cultures as a bulwark against capitalist pillage.34
system by keeping it beyond criticism.
On the other hand, as Joan Cocks puts it, she refused "to be swept away by the
The final nail in the underdevelopment coffin was the massive expansion of
glamour of struggles for national self-determination or to conflate those struggles
Third World debt. The General Assembly of the UN sounded a warning call with
its Declaration on the Establishment of a New International Order in 1 974 and the
Charter ofEconomic Rights and Duties ofStates in 1 976,40 but the admonition came
27 Collen Roach, "The Western World and the NWICO [New World Information
too late. Two geoeconomic factors had changed everything: the dollar had been
and Communication Order]: United they Stand?," in Peter Golding and Phil Harris (eds),
Beyond Cultural Imperialism: Globalization, Communication & the New International Order
disconnected from the gold standard as of August 1 97 1 , and new oil money had
(London: Sage Publications, 1 997), pp. 94-5 (pp. 94-- 1 1 6). flooded into the Atlantic financial system after the OPEC (Organization of Petroleum
28 Mohammed Musa, "From Optimism to Reality: An Overview of Third World
News Agencies," in Peter Golding and Phil Harris (eds), Beyond Cultural Imperialism: 35 Ibid., p. 56.
Globalization, Communication & the New International Order (London: Sage Publications, 36 Keith Griffin, Studies in Globalization and Economic Transitions (Basingstoke, UK:
1 997), p. 1 2 1 (pp. 1 1 7-46). Macmillan Press, 1 996), p . 38.
29 Roach, op. cit., p. 95 . 37 Ibid., p. 57.
30 Van der PijI, op. cit., p. 46. 38 Walden Bello, Shea Cunningham and Bill Rau, Dark Victory: The United States and
3 1 David Francis, "For Rich, Foreign Aid is a Tool for Persuasion," The Christian Science Global Poverty (London: Pluto Press, new edition, 1 999), pp. 1 3 and 30.
Monitor (June 26, 2003), [Link] 1 [Link]. 39 Mohamed Ariff and Ahmend M. Khalid, Liberalization, Growth and the Asian
32 Ibid. Financial Crisis: Lessons for Developing and Transitional Economies in Asia (Cheltenham,
33 Iriye op. cit., pp. 1 86 and 1 69 .
, UK: Edward Elgar, 2000), p. 7 .
34 S e e Joan Cocks, Passion and Paradox: Intellectuals Confront the National Question 4 0 Manuel Castells, The Rise of the Network Society (Massachusetts and Oxford:
(Princeton and Oxford: Princeton University Press, 2002), p. 57. Blackwell Publishers, 1 996), p. 1 63.
28 Development Without Freedom Globalization on Trial 29

Exporting Countries) oil hike of 1 97 3 . Commercial banks thus became financiers not No longer would there be a "peace dividend" on the Rim. The Middle East
only for Western countries but also for Arab, Latin American and East Asian ones.41 had been the major recipient of arms from the United States and the Soviet Union
The result was a truly global capitalism that ripped the developmental leverage during the Cold War, but afterwards this dubious honor would go to East Asia, where
away from struggling national economies. Petrodollars from the oil hikes fueled tripwire tensions only intensified. The Middle East and North Africa (MENA) still
both financial globalization and reactionary nationalism, which in tum joined hands imported a quarter of the world's conventional arms, but over a third now went
in the development of underdevelopment. This dual effect tends to be forgotten, to East Asia.49 It is estimated that between 1 992 and 1 996, Thailand, Indonesia,
because globalism associates the rise of globalization with the demise of regressive Malaysia, S ingapore and Myanmar spent more than $8 bil lion on weapons, and in
nationalism. In fact, as Edward Herman well argues, globalization has supported 1 996 East Asia as a whole imported more than the total international arms purchases
regressive statism by weakening the government's ability to pursue progressive of NATO and Western Europe.5o This financial incubus has been ignored in most
ends.42 accounts of Asian "crony capitalism," perhaps because the spotlight could easily
In this mid-Cold War financial circuit, northern nations tapped into OPEC profits tum on the West's complicity in the region's crony militarism.
by serving as banking conduits for petrodollars in route to the Third World.43 In 1 974 So long as the Cold War lasted, Rim nations enj oyed the "inside track" development
alone the current-account surplus of OPEC jumped from $9 billion to $65 billion, that accompanied geopolitical exigency. Globalization theory has painted a rosy,
reaching $ 1 04 billion by 1 980.44 While Third World debt had been contracted at "win-win" picture that ignores the very existence of this "inside track," for to grant
fixed and low interest rates in the mid- 1 970s, the early 1 980s witnessed the advent of it would be to acknowledge the central role of politics in the neoliberal World Order.
floating loan terms, exposing the Third World to financial peril when the US raised The actual relationship of Rim development and Third World undevelopment fits the
its prime interest rate to combat domestic inflation and strengthen the dollar. For the "zero-sum" pattern of global capital-dependency. 5 1
developing world this meant soaring debt and capital flightY Notwithstanding Rim exceptionalism, which became far less "exceptional"
Wel l over $250 billion exited these countries between 1 98 1 and 1 98 6, an amount after the Cold War, the global center still held. By the 1 980s about four-fifths of
far exceeding the $ 1 3 billion supplied by America's Marshall aid for Europe's global capital flows were between the "triad" countries of Europe, North America
postwar recovery.46 The total Third World debt of $ 5 00 billion in 1 982 jumped to and Japan.52 And by the mid- 1 990s, just prior to the Asian Crash, about 85 percent
$ 1 .2 trillion by 1 989,47 and tended to strike harder in places that were less important of global FDI was within this same "triad."53 The Crash should have buried the
geopolitically. Meanwhile the emergence of full-fledged financial globalization­ myth that globalization is an unambiguous leveling process, but of course it has
marked by a rising tide of capital flows relative to production and trade48-greatly been interpreted by neoliberals as proof that their policies need to be applied all the
increased Third World vulnerabi lity. At first this seemed to give Rim nations an even more stringently. This was the end of the late Cold War truce between neoliberal
greater edge, but the days of their Cold War advantage were numbered. universalism and Asian exceptionalism.
Currently the gap is widening between the global center (comprising most nations
of the Organization for Economic Cooperation and Development, or OECD) and the
periphery. 54 Efforts to bridge thi s North/South divide-e.g., the North American Free
41 See F. William Engdahl, "A New American Century?: Iraq and the Hidden Euro­ Trade Agreement (NAFTA) and the Free Trade Area for the Americas (FTAA)­
Dollar War," Current Concerns (April 2003), [Link] have conspicuously fai led. 5 5 The percentages speak for themselves: the richest 20
[Link]?source= . .Iarchive/2003/04/sourceI200; and Henk Overbeek and Kees van der Pij l,
percent of the world's population rakes in 82. 7 percent of global income; the second
"Restructuring Capital and Restructuring Hegemony," in Henk Overbeek (ed.), Restructuring
Hegemony and the Global Political Economy: The Rise of Transnational Neoliberalism in the
1980s (London: Routledge, 1 993), p. 1 8 (pp. 1 -27).
42 Edward S . Herman, "The Threat of Globalization," New Politics, Vol. 7 , No. 2 , Whole 49 Clement M. and Robert Springborg, Globalization and the Politics of
No. 26 (Winter 1 999), [Link] edu!�newpollissue26/[Link]. Development in the Middle East (Cambridge: Cambridge University Press, 2 00 1 ), p. 3 3 .
43 Riccardo Petrella, "Globalization and Internationalization: The Dynamics of the 50 Victor Mallet, The Trouble with Tigers: The Rise and Fall ofSouth-East Asia (London:
bmlerg;mg World Order," in Robert Boyer and Daniel Drache (eds), States Against Markets: HarperCollins, 1 999), p. 2 1 2.
The Limits of Globalization (London: Routledge, 1 996), p. 69 (pp. 62-83). 5 1 See Hoogvelt, op. cit., pp. 89 and 1 62 .
44 Robert Solomon, The Transformation of the World Economy (Basingstoke, UK: 52 Petrella, op. cit., p . 7 7 .
Macmillan Press, second edition, 1 999), p. 1 54. 5 3 Robert Boyer and Daniel Drache, "Introduction ," in Robert Boyer an d Daniel Drache
45 Arjun Makhijani, From Global Capitalism to Economic Justice: An Inquiry into (eds), States Against Markets: The Limits of Globalization (London: Routledge, 1 996), p. 2
the Elimination of Systemic Poverty, Violence and Environmental Destruction in the World (pp. 1 -27).
Economy (New York: The Apex Press, 1 992), p. 37. 54 Castells, op. cit., p. 1 08 .
46 Castells, op. cit., p. 1 66 . 55 Dorval Brunelle, "Toward a 'Free Trade Area o f the Americas': Chasing the Holy Grail
47 Makhijani, op. cit., p p . 39-40. of Free Trade," Le Monde diplomatique (April 5, 2 00 1 ), [Link]
48 Peter Drucker, The New Realities (London: Heinemann, 1 989), p. 1 20. fr/200 1 l04/05arnericas summit.
30 Development Without Freedom Globalization on Trial 31

20 percent claims 1 1 . 7 percent; the third 20 percent gets only 2 . 3 percent; while the mentioned without putting globalization itself on trial. Every effort would be made,
fourth and fifth brackets are left with a mere 1 .9 and 1 .4 percent, respectively. 56 therefore, to portray the problem as distinctly Asian. Thus Asian exceptionalism was
What is most astonishing about these figures is that they have not inspired more turned on its head: instead of explaining the miracle, it now was used to explain the
revolutionary reaction. In the case of Latin America, this mystery is compounded Crash. What it really represented was the perennial irresponsibility of Washington­
by the fact that earlier high growth years did see widespread resistance. Most Latin directed globalization, which first washed its hands of Latin America's plight, and
American nations grew rapidly in the 1 960s and 1 970s, with 6 percent per year then of the Asia Pacific's.
growth in the entire Latin sphere. But in the 1 980s the regional GDP grew at a
meager 1 percent per year, while per capita GDP fell by more than 1 0 percent.57
From Miracle to Mirage
Heavy borrowing during the 1 970s, when interest rates were low, set the stage for
this "lost decade." The total long-term debt (with a maturity of more than one year)
Following the 1 982 debt crisis in the Western Hemisphere, eight out often developing
of the region increased from $27.6 billion in 1 970 to $23 8 . 5 billion in 1 982. During
nations in the region experienced crippling capital outflows during the "lost decade"
these years the ratio of long-term debt to the region's GNP rose from 1 8. 3 percent to
of the 1 980s.64 The stark contrast between the Latin American malaise and the Asian
nearly 34 percent,58 laying the foundation for unprecedented economic dependency.
"miracle" seemed to invalidate dependency theory. In fact the Rim was j oining Latin
Mexico, for example, saw its current-account deficit grow from $ 5 . 8 billion in 1 98 9
America in a more subtle, delayed-action dependency. NICs such as Indonesia,
t o $29. 7 billion in 1 994. 59
Malaysia, Thailand, S ingapore and China attracted $70 billion of the world's
In the early 1 990s this problem was offset by the neoliberalization of cross­
$300 billion FDI between 1 987 and 1 996.65 This massive capital influx resulted in
border trade and investment. Nine out of ten Latin American countries enj oyed huge
currency appreciation, a rapid increase in borrowing, and still more investment. Of
capital inflows in the 1 992-93 period,60 with more than $30 billion pouring into
course, this process could easily be thrown into reverse through capital exit, currency
Mexico alone in 1 993.61 However, this ostensive remedy would be short-lived. When
depreciation, a lending hiatus, and investment collapse .66
Mexico's exports declined in the early 1 990s due to a strong peso, the government
Even neoliberal gurus such as Jeffrey Sachs and Lance Taylor admit that
tried to restore competitiveness with a devaluation, but dollar debts soared as the
Washington Consensus globalism was not an innocent bystander in the Asian Crash
value of the peso fell. The "Mexican miracle" turned out to be a mirage. By the end
and its aftermath. Globalist institutions had a habit of stimulating growth at a terrible
of 1 994 the country was thrown into the financial maelstrom that came to be called
cost. Debt burdens grew markedly after 1 970, as lending to the Third World jumped
the "tequila crisis."62
from $ 2 . 7 billion in 1 970 to $8.7 billion in 1 978, finally peaking at $ 1 2 billion in
Global capitalism was spared serious examination, however, by the ongoing
1 98 1 . Between 1 983 and 1 98 9 global FDI grew at nearly three times the rate of
"Asian miracle." By now the myth ofAsian exceptionalism was so deeply ingrained
exports and almost four times the rate of world GDP.67 Instability was compounded
that the lessons from the "tequila crisis" were all but ignored by Pacific Rim nations,
as foreign exchange reached nearly $ 1 trillion daily by the early 1 990s, or 40 times
despite their similar pattern of risk exposure through heavy foreign borrowing.
the daily volume of international trade.68
Net flows of private capital to Thailand, Indonesia, Malaysia, South Korea and the
After the Cold War, American banks drastically cut their loan exposure to the
Philippinesjumped from $48 bill ion in 1 994 to $93 billion in 1 996, setting the region
Third World. For international creditors the debt crisis of the 1 980s was over, but
up for the 1 997 Crash.63 The fact that this "Asian flu" was a global malady could not be
there would be no exit door for the debtor countries themselves. The South was
crippled by the rise of external Third World debt from $785 billion in 1 982 to
56 Robert Hunter Wade, "Inequality of World Incomes: What Should Be Done," Open
Democracy (November 1 4, 200 1 ), [Link] 7 .jsp.
57 Robert Solomon, The Transformation of the World Economy (Basingstoke, UK:
Macmillan Press, second edition, 1 999), p. 1 65 . 64 Dooley, op. cit., p. 1 1 5 .
58 Ibid, p . 1 66. 65 Ariff and Khalid, op. cit., p. 29.
59 Ibid., pp. 1 76 and 1 69 . 66 Philippe Aghion, Philippe Bacchetta and Abhijit Banerjee, "Capital Markets and
60 Michael P . Dooley, "Are Capital Inflows t o Developing Countries a Vote For or the Instability of Open Economies," in Pierre-Richard Agenor, Marcus Miller, David Vines
Against Economic Policy Reforms?," in Pierre-Richard Agenor, Marcus M i ller, David Vines and Axel Weber (eds), The Asian Financial Crisis: Causes, Contagion and Consequences
and Axel Weber (eds), The Asian Financial Crisis: Causes, Contagion and Consequences (Cambridge: Cambridge University Press, 1 999), p. 1 67 (pp. 1 67-94).
(Cambridge: Cambridge University Press, 1 999), p. 1 1 5 (pp. 1 1 2-26). 67 Paul Bowles and Brian MacLean, "Regional Blocs: Can Japan be the Leader?," in
61 Paul Krugman, The Return of Depression Economics (New York: W.W. Norton, Robert Boyer and Daniel Drache (eds), States Against Markets: The Limits to Globalization
1 999), p. 45. (London: Routledge, 1 996), p. 1 5 8 (pp. 1 55-69).
62 Ibid., p. 39. 68 Eric Helleiner, "Post-Globalization: Is the Financial Liberalization Trend Likely to be
63 Victor Mallet, The Trouble with Tigers: The Rise and Fall ofSouth-East Asia (London: Reversed?," in Robert Boyer and Daniel Drache (eds), States Against Markets: The Limits of
HarperCollins, 1 999), p. 167. Globalization (London: Routledge, 1 996), p . 1 93 (pp. 1 93-2 1 0) .
32 Development Without Freedom Globalization on Trial 33

$ 1 .3 trillion by 1 992 .69 For many years the Rim managed to escape this lethal to the market ideology that came to be known as neoliberalism. The Pacifi c Rim had
undertow, but the globalization of financial markets finally foreclosed on Asian bucked the system by way of power politics, but finally it too succumbed to TINA.
exceptionalism. In Walden Bello's view, the Crash was a product of the liberation At the 1 993 APEC summit, Washington demanded that the Asian tigers open up
of speculative capital from national and international regulation.70 Thus the Asian their financial markets to free capital flows. Once those controls were lifted, Korea
Crisis was a subset of the globalization process.71 and the other tigers were swept away by a flood of foreign dollars. Hedge funds like
As Paul Krugman argues, the maj or lesson of the Crash has more to do with George Soros's Quantum Fund and Julian Robertson's Tiger Fund closed in for the
politics than economics.72 A big part of the problem is that the current global system kill, raking in billions.75 One by one the tigers fell, leaving their governments no
has no stake in the welfare of a particular people or their environment, and certainly choice but to seek IMF assistance. What they got, in the name of a bailout, was a
it has no stake in their political development. For Amartya Sen that political factor is fire sale.
central to development as such. To curtail freedom in the name of "Asian values" is Grassroots aversion to TINA mounted over the years, but only recently was
not only an insult to Asian political culture-as if to say that Asians are morally or nongovernmental resistance j oined by a phalanx of developing nations. This coalition
intellectually unfit for democracy. It also puts the public at risk in a material sense, ofthe unwilling made its full debut with the breakdown of the September 2003 WTO
as the Crash amply proved. meeting at Cancun, Mexico. Whereas the Seattle anti-WTO protests of November
Prior to the Crash, however, there was an even greater danger: the risk that the 1 999 brought a "chorus of others" to the cause of "global antiglobalism,"76 Cancun
Asian "miracle" would act like a global beacon, causing highly illiberal "Asian replaced that "anti" with a more realistic "alter."77 The idea was not to combat
values" to break free from their quarantine in "Asian exceptionalism." They could globalization as such, but only to contest the monolithic corporatism that took shape
even become the developmental norm for the coming century. This is already starting after the Cold War under the banner of the New World Order. The economic wing of
to happen under the auspices of a capitalist but programmatically anti-democratic that Order-advanced by the WTO, the IMF and the World Bank78-is now j oined
China.73 That dread possibility is what Amartya S en has been trying to forestall. H e by the armed globalization that Washington unleashed after 9/ 1 1 .79 Alterglobalism
can succeed only if most Asians recognize that the "miracles" they long nurtured at defies both, but does not simply define itself negatively. Its "alter" imperative weds
the expense of political development were a mirage. So long as the Cold War lasted, globalization with values such as democracy, human rights, economic justice, and
Rim NICs were exempted from the inexorable logic of boom and bust globalization.
Their exceptional ism had always been more geopolitical than geoeconomic, and in
in Ted Schrecker (ed.), Surviving Globalism: The Social and Environmental Challenges
1 997 that fact came home to roost. (Basingstoke, UK: Macmillan Press, 1997), p. 194 (pp. 177-98).
75 William Engdahl, A Century o/War: Anglo-American Oil Politics and the New World
Order (Ann Arbor, MI: Pluto Press, 1992, revised edition), p. 230.
"Altering" Globalization
76 William H. Thornton, Fire on the Rim: The Cultural Dynamics oj East/West Power
Politics (Lanham, MD : Rowman & Littlefield, 2002), pp. 196-7.
It has been a quarter of a century since Margaret Thatcher rendered her ex
77 One of the driving forces behind alterglobalism is the emergence of the G-20 as a major
cathedra verdict that "There Is No Alternative" ("TINA") to the global processes player in trade negotiations. Since Cancun, the US has attempted to undermine G-20 solidarity
of deregulation, privatization, and government downsizing that go by the name of by shifting to a strategy of "divide-and-rule": selectively including a few developing countries
globalization.74 The point was to preclude any serious consideration of alternatives such as Brazil and India at the global bargaining table. See Walden Bello and Aileen Kwa,
"G-20 Leaders Succumb to Divide-and-Rule Tactics: The Story behind Washington 's Triumph
69 Bello, Dark, op. cit., p. 69. in Geneva," TNI ( Transnational Institute: Beyond the W T O) Publications, originally from
70 Walden Bello, The Future in the Balance: Essays on Globalization and Resistance Focus on the Global South (August 10, 2004), http ://[Link]/archivesibello/[Link].
(Oakland, CA: Food First Books, 2001), p. xiii. 78 Barbara Epstein, "Anarchism and the Anti-Globalization Movement," Monthly Review
71 See Bello, Dark, op. cit., p . 118 . (September 2001), [Link] com!cCdls/mI132/4_5 317 841313 [Link].
7 2 Paul Krugman, "What Ever Happened to the Asian Miracle?," originally i n Fortune Concerning the alter-globalist distinction between the neoliberal ideology of globalism and the
(August 18, 1997), archived [Link] See also Gerald historical process of globalization, see Benjamin Ardin, "From Globalism to Globalization:
Epstein, "International Capital Mobility and the Scope for National Economic Management," The Politics of Resistance," New Political Science, Vol. 26, No. 1 (March 2004), p. 10 (pp.
in Robert Boyer and Daniel Drache (eds), States Against Markets: The Limits oJ Globalization 5-22).
(London: Routledge, 1996), p. 215 (pp. 211-24). 79 Mark Engler, a commentator for Foreign Policy in Focus, holds that there is a complete
73 See Naazneen Barma and Ely Ratner, "China's Illiberal Challenge," Democracy: disjunction between Clinton's neoliberal corporatism and Bush's corporate imperialism. Our
A Journal oj Ideas, Issue 2 (Fall 2006), http ://[Link]/printfriendly. position, by contrast, is that these disparate globalisms have effectively merged in a post-
php?ID=64 8 5 . 9/11 "neoglobalism." See Mark Engler, "Are the War and Globalization Really Connected?,"
74 Myron J. Frankman, "Global Economy and C i v i l Society," in Ted Schrecker (ed.), Foreign Policy in Focus (October 18, 2004), http ://[Link]/papers/04 [Link] l;
Surviving Globalism: The Social and Environmental Challenges (Basingstoke, UK: Macmillan and William H. Thornton, New World Empire: Civil Islam, Terrorism and the Making of
Press, 1997), p. 97 (pp. 95-107); and also see John McMurtry, "The Global Market Ideology," Neoglobalism (Lanham, MD: Rowman & Littlefield, 2005) .
34 Development Without Freedom Globalization on Trial 35

environmental protection.80 Most especially it combats TINA with TAMA: the this regimen poor nations are shorn ofthe autonomous policy choices that constitute
recognition that "there are many alternatives." This gets us beyond the orthodox Left their economic sovereignty. 88
as well as the globalist Right. 8 1 As TNCs vastly extend their size and global reach, corporations such as IBM,
One prototype for this new direction was the UN's Brundtland Report (Our Microsoft, Dow Chemical, Nestle, Toyota, and Coca-Cola easily earn more than
Common Future, 1 987), which challenged the prevailing economic paradigm by half their revenues outside their home countries.89 That makes their power greater
stressing that developmental and environmental issues are inseparable: It is "futile than many poor countries. By the late 1 990s global communications corporations
to attempt to deal with environmental problems without a broader perspective that such as Disney!ABC , Microsoft, IBM, Apple, AOL-Time Warner, Bell Atlantic and
encompasses the factors underlying world poverty and international inequality. "82 AT&T controlled more than $5 trillion in assets,90 while the world's three richest men
Sustainable development is here defined as meeting the needs of the present without commanded more wealth than the 48 poorest countries combined.91 These economic
hampering the ability of future generations to meet their needs.83 By its very nature behemoths operate at the expense of democratic development, and ultimately at
this focus on intergenerational equity is "global" in scope,84 demanding fair exchange the expense of material development as well, insofar as bad government hampers
between nations as well as sustainable ecosystems.85 growth as well as freedom.
Alterglobalization likewise invites an "alter" Third Way. The better known As this becomes common knowledge, the Washington Consensus suffers a
Third Way of Blair and Giddens fame acknowledges many problems of current stupendous crisis of legitimacy. The result is a "soft power" vacuum that cannot
globalization yet never breaks out of the neoliberal orbit. Operating in the shadow be repaired by the token Third Way that globalists have applied like a band-aid to a
of TINA, such dubious reformism at best rises to the level of what Robert Cox has patient needing intensive care. Cancun and its ideological affiliates, such as the World
called "problem solving" as opposed to more robust "critique."86 Ultimately, though, Social Forum, have at best provided an accurate diagnosis of the malady.92 What is
it serves as an ideological prop, perpetuating the economic and political order it sorely needed is the new Third Way that is rising out of the ashes of Third World
purports to criticize. non-alignment. Unfortunately there is also a new Second World and a concomitant
The task of genuine critique must be taken up by less "centered" groups such as "Second Way," which is the very antithesis of Amartya Sen's "development as
the World Development Movement (WDM), a British organization with affiliates freedom." The most flagrant case in point is Russia's Putinism, which is worse than
around the world. Athough WDM does not demand the abolition of major globalist Sino-globalization in that it subverts democracy from within. It won popularity by
organizations, it urges the WTO to promote trade policies that are fair, transparent challenging IMF -directed neoliberalism while at the same time turning the pro forma
and democratic.87 This would mean revamping policies that intensify global apparatus of democracy against democratic values.
inequality and consistently favor TNCs. The TNC agenda has long since moved By comparison, the Chinese Communist Party (CCP) can be seen as brutally
beyond tariff reduction to a far more ambitious program of political control. Under honest, in that it makes no pretense about its anti-democratic animus. Only its Western
corporate sponsors still insist that it is marching towards democracy. This has been a
long march, as Mao himself claimed to be a proto-democrat prior to his full seizure of
power, and a host of Western analysts followed Edgar Snow in taking the bait.93 The
China model's major attraction for the world's autocratic regimes is precisely that it
80 "Alter-globalization," Wikipedia: The Free Encyclopedia (downloaded on August 13,
promises economic growth with no democratic strings attached. This perverse form of
2004), http ://en2. [Link]/wiki/Alterglobalization.
8 1 Massimo De Angelis, '''There Are Many Alternatives!' versus 'There Is No
Alternative!,'" The Commoner, No. 8 (Autumn/Winter 2004), [Link] 88 See William Greider, "Why the WTO Is Going Nowhere," The Nation (September 22,
[Link]. 2003), [Link] ?I=20030922&s=greider.
82 See W.M. Adams, Green Development: environment and sustainability in the third 89 Leslie Sklair, Globalization: Capitalism and Its A lternatives (Oxford: Oxford
world (London: Routledge, 1990), p. 58. University Press, third edition, 2002), p. 36.
83 Matthew A. Cole, Trade Liberalization, Economic Growth and the Environment 90 Songok Han Thornton, "Let Them Eat IT: The Myth of the Global Village as an
(Cheltenham, UK: Edward Elgar, 2000), pp. 5 1 -52. Interactive Utopia," CTheory (January 17, 2002), A I 03, [Link]
84 See Tables 3.3 and 3.4 of the Brundtland Report for the concepts and requirements of asp?pick=327.
sustainable development in Adams, op. cit., pp. 60 and 62. 91 "About WDM," The World Development Movement (downloaded on August 13,
85 Adams, op. cit. , p. 61. 2004), [Link] [Link].
86 See Stephen Hodben and Richard Wyn Jones, "Marxist Theories of International 92 Anthony Barnett wryly notes that even the World Economic Forum (WEF) is better
Relations," in John Baylis and Steve Smith (eds), The Globalization of World Politics: An than the WSF when it comes to policy questions on vital issues such as global warming.
Introduction to International Relations (Oxford: Oxford University Press, second edition, See Anthony Barnett, "The Three Faces of the World Social Forum," Red Pepper (February
2001), p. 212 (pp. 200-23). 2007), [Link]
87 "The WTO in Cancun," The World Development Movement, [Link] 93 In his last book, The Long Revolution, Snow recognized the danger of his long delusion
uklcampaign/cancun03/[Link]. that Chinese communism was marching toward agrarian democracy.
36 Development Without Freedom Globalization on Trial 37
alterglobalism is all the more streamlined for not being encumbered by the quasi-liberal must b e exceptional. For better o r worse, the Asian development experience i s now
baggage that neighboring Asian tigers must carry. Likewise, terrorist organizations subject to the same global forces that hold Latin America and Africa in thrall. This
such as Al Qaeda can be described as alterglobalist rather than antiglobalist insofar as will be for the better if Senian "development as freedom" finds a base camp here,
their funding and tactics have a global reach.94 What is fast emerging is a new "war but for the worse if Sino-globalization becomes the regional norm. Either way, Asian
of the worlds" whereby First World neoglobalism (the newly militarized Washington exceptionalism is defunct. For that very reason what happens here matters more than
Consensus)95 confronts not only global NGDs such as Al Qaeda but a rising host ever, since it signals the likely future of the whole Third World.
of Second World globalisms such as Putinism and the Beijing Consensus. These
reactionary alterglobalisms are abetted by the stigma Bush II has given democratic
development. His unilateralist innovations-pre-emptive warfare, "extraordinary
renditions" (i.e., kidnappings), imprisonment without trial, and barely disguised
torture-are neoconservative gifts to the cause of Second World resurgence.
Clearly democratic values are under siege in the First World as well as the Second.
The best hope for reform was raised on the Pacific Rim after the Asian Crash. Given
the fact that this region was the unchallenged lead goose of the developing world,
the global stakes were high, and the cost of failure would be all the more lamentable.
Even before the Crash, Kim Dae Jung saw democratic reform as a pan-Asian trend.96
That was before he traded in Korean social democratization for IMF restructuration.
Thailand and other Rim nations did the same, leaving no doubt that most Asian
leaders were perfectly willing to sacrifice freedom for GDP gains.
The Beijing Consensus, accordingly, has met little ideological resistance from
ASEAN ranks . It must be asked ifthis tilt toward reactionary globalization on the part
of Asian elites is representative ofAsians in general. If so, Anwar Ibraham's hopes for
an "Asian Renaissance" are entirely misplaced, and Amartya Sen's "Eastern Strategy"
is utterly utopian. After post-Crash idealism in Thailand gave way to Thaksinocracy,
and that in tum gave way to an even more overt autocracy, it must be asked if this is
the harbinger of a new set of pan-Asian values. The coup that ousted Thaksin only
extended the authoritarian power he had amassed with very little censure from the
West. Even India, the home base of Senism, seems to be sliding in this same direction,
whereby global capitalism strikes a deal with militant nationalism.
The question is what went wrong with Asian political development, and can the
problem be rectified? Ten years after the Asian Crash, commercial prosperity has
returned to much of the Rim, but the "miracle" has not, because a miracle by definition

94 It enjoys at least tacit support from many non-Muslims on the grounds that the enemy
of my enemy is my friend. Christopher Hitchens deplores such pro-Islamism in his former
colleagues on the Left. But the same globalizing impulse can be seen in Western anti-Islamism.
Olivier Roy faults Bush's global war on terror (WOT) for confiating disparate issues such as
the Palestinian crisis and the Iraq quagmire, which have little intrinsic connection and should
be dealt with separately and locally. See Christopher Hitchens, "A Man with a Score to Settle,"
a review of What s Left? How the Liberals Lost Their Way by Nick Cohen, Times Online
(January 2 1 , 2007), [Link] 1 -534-2550492-534,00.
html.; and Olivier Roy, "De-Globalize the Jihad," New Perspectives Quarterly (NPQ) , Vol .
2 3 , No. 4 (Fa11 2006), [Link] org/archieve/2006_fall/[Link] .
9 5 Thornton, New World Empire, op. cit., p . 49.
96 Kim Dae-jung, "A Response to Lee Kuan Yew : Is Culture Destiny? The Myth of
Asia's Anti-Democratic Values," Foreign Affairs, Vol. 73, No. 6 (November/December 1 994),
[Link] [Link]/conference/program/participantslKim_Dae-jungiculture .htm. ' .'
 Chapter 2

Korean Social Democratization:

A Good Idea While it Lasted

The "Miracle" Revisited

Our search for an alternative Asian globalization must begin with the question of
what went wrong with the development model that for two decades passed itself off
as the "Asian miracle." Our answer is that it followed too closely in Japan 's footsteps,
such that political development was strictly subordinated to economic growth. After
the Pacific War, when Japan showed signs of once again taking democracy seriously,
America hit the brakes. A truly popular vote was too risky a proposition in a country
where the Left stood a chance of winning political ground.
The resulting "reverse course" of 1 947 and the Yoshida plan of 1 953 set a
precedent for American anti-democratization the world over. As will be covered
in Chapter 9, the clipped-wing democracy that survived these machinations was
basically a deal struck between the American hegemon and Japan's power elite. The
latter would surrender not only real democracy but genuine national sovereignty in
return for America's security blanket. In the bargain, Japan got an economic free
ride, including a vast export outlet and freedom from the burden of full-scale military
expenses. Though its neighbors would not get such a munificent deal on the military
side, they reaped many of the same economic benefits. Thus was born the growth
formula, premised on putative "Asian values," that would set the pace for the whole
developing world. Meaningful democracy would be its first casualty. This was the
grand opening of today's "development without freedom."
Among the new Asian tigers, the fastest growing cub was the military-industrial
state of South Korea. What will concern us in this chapter, from a Senian vantage,
is Korea's second miracle: its democratic revolution of the late 1 980s. It had not
been the least bit obvious in the early 1 980s that such an event was imminent. Even
Korea's capitalist elite had not gained much freedom as a result of its astounding
achievement. Korea, Inc. was promoted insofar as it served the state, and was
never allowed to forget that it was the junior partner in the government/corporate
symbiosis.
Throughout the "miracle" years all Korean companies, including the giant
chaebols, remained subj ect to policy direction and financial discipline by the
presidential Blue House. I When Korean officials planned new proj ects, they forcefully
extracted donations from corporations. Chung Ju Yong, Hyundai's founder, admitted

1 Walden Bello and Stephanie Rosenfeld, Dragons in D istress: Asia s M iracle Economies
in Crisis (San Francisco, CA: Food First Book, 1 990), p. 47; and Stephan Haggard, The
40 Development Without Freedom Korean Social Democratization 41

that he personally handed political bribes to the Park, Chun and Roh regimes in of 1 967-7 1 . Such highly dependent development resulted in a triple alliance of the
the amounts of 1 billion, 5 billion and 1 0 billion won, respectively.2 For their very Korean state, local business and foreign (especially US) capital. lo
survival business executives had to master the arts of political entrepreneurship. That exogenous factor did not, however, "internationalize" the Korean economy
That meant placating the military elites who had dominated Korea's social hierarchy in any neoliberal sense of the word. On the contrary, within a year of his rise to power
since the military coup of May 1 96 1 . This military paramountcy, comparable in Park had nationalized five major banks. Not until the Asian Crash of 1 997-8 would
many ways to Indonesia's, made Japan, Inc. look almost democratic by comparison. this financial absolutism-the very heart of the Korean growth model-be seriously
No one in South Korea dared to question Park Chung Hee, the man at the top of the questioned. Nor did Park's iron grip on the private sector deter foreign banks from
military-industrial pyramid. funneling billions of dollars into Korean enterprises. Blue House priorities supplied
Favoring economic growth at all costs, Park had adopted an outward-looking the economic stability these lenders sought.
strategy for export-oriented industrialization.3 What made this possible was Korea's Many have concluded that this nationalist structure was the key factor in the
geopolitical indispensability. The resulting neo-mercantilist development model was Korean "miracle," as if Cold War geopolitics had nothing to do with it. The World
primed not only by massive US grants-in-aid in the 1 950s, but by America's continued Bank, for example, endorsed this statist perspective in its adulatory 1 993 report,
willingness to open its market to a flood of Korean imports.4 Thus the Korean "miracle" East Asian Miracle. Manuel Castells sets the record straight. While avoiding the
was anything but, and it must be asked if the Korean pattern of development has been Leftist term "puppets," he calls Korean and the other Asian tigers "vassal states,"
too dependent on outside factors, or on the unique circumstances of its time and place, in recognition of their distinctive statist autonomy within the context of geopolitical
to have much value as a general development model.5 dependency. I I
After all, copious US aid and loans funded 70 percent of Korea's imports and 80 It i s ironic that Park 's regime, with its pronounced socialist structure, was
percent of its domestic capital between 1 952-62.6 When US military aid and spending widely regarded as a bastion against communism. His social and political model
in support of US troops is included, total US outlays were up to $ 1 billion annually was drawn in large part from a Japanese Marxist, Takahashi Kamekici, who had
by the late 1 950s, with tens of millions more provided by NGOs such as the Ford been influential in the 1 920s and 1 930s. Despite the West's endless criticism of
Foundation.? Even in the mid-sixties this capital influx covered more than 50 percent crony capitalism after the Asian Crash, the Korean "miracle" was built on more
of Korea's total capital. From the early 1 960s to 1 979 aid accounted for more than 30 of a crony socialism: an illiberal bond between government, business, and banks. 1 2
percent of the annual GDCF.8 The geopolitical motive behind this infusion needs far Mark Clifford exaggerates the difference between Korea and Japan where the
greater attention than it has received. Gains from Korea's involvement in Vietnam politicization of business is concerned, 13 but is correct in his crucial observation
between 1 965 and 1 969 brought in an estimated $546 million, and that figure is no concerning Korea's social militarization. The postcolonial Korean state was born
doubt understated.9 This input was crucial in molding the second Five-Year Plan without a distinct capitalist class, or even a developed business class. Consequently
the Korean government looked to the military-which grew from 1 00,000 in 1 950 to
600,000 in 1 96 1 -for its managerial needs .14 In the postwar years this highly illiberal
Political Economy of the Asian Financial Crisis (Washington, DC : Institute for International
Economics, 2000), p. 20.
2 David C. Kang, Crony Capitalism: Corruption and Development in South Korea and 10 Suk Joon Kim, "Crisis, Regime Change, and Development: A Quantitative Analysis
the Philippines (Cambridge: Cambridge University Press, 2002), p. 163. of South Korean Political Transformation, 1945-1987," in Gerald E. Caiden and Bun Woong
3 Gerald Caiden and Yong-Duck Jung, "The Political Economy of Korean Development Kim (eds), A Dragon 's Progress: Development Administration in Korea (West Hartford,
under the Park Government," in Changsoo Lee (ed.), Modernization ofKorea and the Impact Connecticut: Kumarian Press, 1999), pp. 59-60 (pp. 58-{j6).
of the West (Los Angeles: East Asian Studies, University of Southern California, 1 98 1 ), pp. 1 1 Manuel Castells, End of Millennium (Oxford, UK: Blackwell, 1998), p. 283.
303--4 (pp. 285-310). 1 2 Regarding the selective and highly preferential allocation of government funds and
4 See Lee Chan-Keun, "Korean Economy in Era of Globalization," Korea Focus, Vol. 7, materials, see Yeon-ho Lee, The State, Society and Big Business in Korea (London, Routledge,
No. 2 (March/April, 1999), p. 92 (pp. 86-98). 1 997), p. 23 .
5 See Dilip K. Das, Korean Economic Dynamism (London: Macmillan, 1 992), p. 185. 13 See Mark L. Clifford, Troubled Tiger: Businessmen, Bureaucrats, and Generals
6 Peter F. Bell, "Development or Maldevelopment?: The Contradictions of Thailand's in South Korea (Armonk, NY: An East Gate BookIM.E. Sharpe, revised edition, 1998), p.
Economic Growth," in Michael J.G. Parnwell (ed.), Uneven Development in Thailand 63; and in support of our position see T.W. Kang, who notes the similarity between Japan
(Aldershot, UK: Avebury, 1 996), p. 57 (pp. 49-{j2). and Korea with regard to economic planning, export-oriented developmental strategies, and
7 David Ekbladh, "How to Build a Nation," The Wilson Quarterly (Winter 2004), http:// conglomerate-dominated industries. He contrasts this approach with Taiwan's emphasis on
[Link] ?fuseaction=wq. print&essay_id=8 7 1 63 &stoplayout=true. SMEs (small and medium size enterprises). See his Is Korea the Next Japan ?: Understanding
8 Hyun-Chin Lim, Dependent Development in Korea, 1963-1979 (Seoul: Seoul National the Structure, Strategy, and Tactics ofAmerica 's Next competitor (New York: The Free Press,
University Press, 1 985), pp. 92-3. 1 989), pp. 23 and 26-38.
9 Kang, op. cit. , pp. 38-39. During the Vietnam War, Korea exported 94 percent of its 1 4 Clifford, op. cit., p. 64; and C arter J. Eckert, "The South Korean Bourgeoisie: A Class
steel, machinery and chemicals through US contracts. See Ekbladh, op. cit. in Search of Hegemony," in Hagen Koo (ed.), State and Society in Contemporary Korea
42 Development Without Freedom Korean Social Democratization 43
system was buttressed by massive foreign aid and military support, 15 and during the implemented plan to completely withdraw American troops from Korea.23 Between
1 970s and 1 980s by foreign loans. ] 6 In effect the US ended up supporting the Blue 1 977 and 1 979 some 80 percent of manufacturing investment went to heavy industry,
House,] 7 thereby entrenching the military power structure of this rising tiger. stoked by massive foreign loans. This inflated foreign debt from $2.2 billion in 1 970
In an effort to secure some measure of self-sufficiency, Park made energy to $27. 1 billion in 1 980.24
and steel the core of his modernization drive. 1 8 He established the Korea Electric Undeniably the HCI plan and the Yushin ("revitalizing") Constitution
Power Company (KEPCO), and in a radical departure from economic common molded Korea's economic takeoff. One should recognize, however, that political
knowledge he decided to build a world class steel mill, the Pohang Iron and Steel development was obstructed by the Yushin Constitution 's prohibition against any
Corporation (POSCO) in the early 1 970s. Such compressed modernization-with kind of criticism. This blueprint for militaristic economism was drawn up in the
development centered around a few big businesses l9-was a product of the nation's 1 970s by a small circle of technocrats such as Park's economic advisor, Kim Chong
military-economic organization rather than any accepted economic logic. South Yom, and his military-political advisor, Lee Hu Rak. Mark Clifford believes this
Korean technocrats and international experts agreed that Korea had no comparative system well served Korea throughout the 1 970s. But the high growth of that decade
advantage in iron and steel production. The World Bank was therefore reluctant to resulted mainly from an influx of new capital and labor, and a high price was paid
fund the project. One technocrat, Park Tae Joon, turned to Japan for funds and got for that infusion. In the late 1 970s investment was increasingly funneled into five
approval for $500 million in grants and loans. So it was that the little fishing village industries: electronics, capital goods, transport equipment, textiles and clothing, and
of Pohang became the world's largest production site by the mid- 1 9 80s.20 basic chemicals.25 Korea's development of heavy industry in the 1 970s was largely
Taking an "in it but not of it" approach to the international market, the government based on external borrowing that by 1 982 had put Korea on the IMF 's list of the 20
aimed at a measure of domestic "self-reliance"-a milder version, one could argue, most heavily-indebted countries.26
of North Korea's ju-che philosophy. Rising dependence on Heavy and Chemical
Industries (HCI) entrenched the dominance of the chaebols in the Korean economy,
but also laid the foundation for periodic crises.21 So too it distinguished Korea from Enter the Technocrats

other Asian tigers such as Hong Kong, Singapore, and Taiwan. This plan, which
was implemented directly from the Blue House in 1 97 3 ,22 had the double effect of Those growth-at-all-costs priorities were set by the Blue House, whose relationship
consolidating domestic power even as it subordinated that power to foreign capital. with the technocrats had been rocky since the 1 960s. Park despised these made­
The HCI drive was accelerated after the Carter administration announced a never in-America experts, who advocated a textbook approach to comparative advantage
through cheap labor and labor-intensive industry. In turn, most technocrats viewed
Park's HCI plan as foolish. Park trumped all criticism by using the North Korean
(Ithaca: Cornell University Press, 1 993), pp. 1 08 and 1 29 (pp. 95-1 3 0).
1 5 Castells, op. cit. , p. 255. threat as an excuse for his economic gigantism. By the end of the 1 970s the country
16 Meredith Woo-Cumings, "The State, Democracy, and the Reform of the Corporate was paying the price in terms of overinvestment and chaebol overcapacity.27 The
Sector in Korea," in T.J. Pempel (ed.), The Politics ofAsian Economic Crisis (Ithaca: Cornell technocrats, however, were powerless to implement their own ideas.
University Press, 1 999), p. 1 20 (pp. 1 1 6-42). That changed after Park's assassination in 1 979. President Chun Doo Hwan
1 7 See Hong Nack Kim, "The 1 987 Political Crisis and its Implication for U.S.-Korean was in such desperate need of legitimacy, especially after the May 1 980 Kwangju
Relations," in Ilpyong J. Kim and Young Whan Kihl (eds), Political Change in South Korea massacre,28 that he gave the technocrats almost full control over economic affairs.
(New York: The Korean PWPA, Inc. 1 988), p. 222 (pp. 22 1 -4 1 ).
1 8 Donald Stone Macdonald, The Koreans: Contemporary Politics and Society, third
edition, edited and revised by Donald N. Clark (Boulder, CO: Westview Press, 1 996), pp. 23 Joon-Kyung Kim, S ang Dal Shim and Jun-Il Kim, "The Role of the Government in
208-9. Both KEPCO and POSCO were listed in the 1 995 Fortune 500. Promoting Industrialization and Human Capital Accumulation in Korea," in Takatoshi Ito and
1 9 See Kim Cul-Kyoo, "Impact of Korea's Economic Development on Social Conditions," Anne O. Krueger (eds), Growth Theories in Light ofthe East Asian Experience (Chicago: The
Korea Focus, Vol . 1 2, No. 3 (M ay/June 2004), p. 1 1 5 (pp. 1 1 4-3 1 ). University of Chicago Press, 1 995), p. 1 86 (pp. 1 8 1 -96).
20 Walden Bello, Shea Cunningham and Bill Rau, Dark Victory: The United States and 24 Bello and Rosenfeld, op. cit., p. 5 8 .
Global Poverty (London: Pluto Press, new edition, 1 999), p. 73. 25 Wolfgang Hillebrand, Shaping Competitive Advantages: Conceptual Framework and
21 Gregory W. Noble and John Ravenhill, "The Good, the Bad and the Ugly? Korea, the Korean Approach (London: Frank Cass, 1 996), pp. 1 5 5 and 1 57-59.
Taiwan and the Asian Financial Crisis," in Gregory W. Noble and John Ravenhill (eds), The 26 Robert Solomon, The Transformation of the World Economy (Basingstoke, UK:
Asian Financial Crisis and the Architecture of Global Finance (Cambridge: Cambridge Macmillan Press, second edition, 1 999), p. 1 42 .
University Press, 2000), p. 84 (pp. 80-1 07). 27 Jong-ChanRhee, The State andIndustry in South Korea: TheLimits oftheAuthoritarian
22 As outlined in the Declaration of Heavy and Chemical Industrialization, see Joseph State (London: Routlege, 1 994), pp. 60 and 8 1 .
J. Stem, Ji-hong Kim, Dwight H. Perkins, and Jung-ho Yoo, Industrialization and the State: 2 8 For details of the May 1 980 Kwangju incident, see James Fenton, "The Heroes of
The Korean Heavy and Chemical Industry Drive (Cambridge, MA: H arvard Institute for Kwangju," The New York Review of Books (February 22, 200 1 ), [Link]
International Development, 1 995), p. 1 7 ; also see Bello and Rosenfeld, op. cit., pp. 5 6-57. nyrev/[Link]? 2001 0222026R.
44 Development Without Freedom Korean Social Democratization 45

They wasted no time in consolidating their leadership.29 In the early 1 980s, Kim Three economic issues of the 1 980s profoundly affected policy-making: income
Jae Ik's Economic Planning Board (EPB)30 set the tone for economic development inequality, the chaebol problem, and external public debt.34 Foreign debt had doubled
by reducing government deficits, limiting monetary growth, and slowing wage between 1 980 and 1 984, making South Korea the fourth largest foreign borrower
increases. These policies would lead to government budget surpluses by the late after Argentina, Brazil, and Mexico. Korea's solution was more of the same, leaving
1 980s. But they also led to a triangular power struggle between the Blue House, the problem unresolved. A combination of low corporate profits and high capital
the chaebols and the technocrats. In the early and mid- 1 980s, the chaebols saw the investment required huge external financing, which drove corporate leverage (total
possibi lity of acquiring influence over the financial system through local and regional debt over equity) to far higher levels than any country in the world from 1 988 to
commercial banks that were undergoing IMF -directed structural adjustment. But the 1 996, the peak of the so-called miracle years. As interest rates shot up in late 1 997,
technocrats also tried to seize power in their own right, as the government-chaebol 40 percent of Korean firms found themselves not only illiquid, but insolvent. 35 Heavy
alliance was weakened. By no means were these proto-globalists simple puppets of dependence on short-term foreign debt left Korea vulnerable to currency fluctuations,
the IMF. They used it as surely as it used them. All the while, as an ardent advocate dollar interest rate changes, export slowdowns, and other shifts in the global market.
of free market restructuration, Kim Jae Ik earned enemies among the chaebols. His All these factors would surface volcanically in the Crash of 1 997.36
neoliberal agenda was cut short when he was killed by North Korean saboteurs in Although the debt crisis was temporarily alleviated after the 1 985 economic
the Rangoon bombing of 1 98 3 . recovery, this simply camouflaged the underlying defects of technocratic
Unlike Park's "bonapartist" vision o f Korea, Inc. , the government took on more development. The ensuing economic boom kept those defects out of view for
of a "regulator" function under Chun. Lacking the power to tame the chaebols years to come. Between 1 986 and 1 988, the economy grew at an unprecedented
through personal fiat, Chun resorted to the device of credit control under the rubric 1 2 percent a year for three consecutive years.37 It is telling that in 1 989 the Korean
of free market competition. 3 1 Part of the 1 980s reform agenda was massive corporate stock exchange raised more equity than the New York stock exchange, making for a
restructuring to eliminate noncompetitive and overlapping businesses. This brought capital reserves bonanza.
the era of full employment to an end, and reversed the trend toward urbanization. This only aggravated the structural flaws of a chaebol-dominated financial
Masan, an industrial city created under Park, experienced a population drop of system. Debt-led expansion and a "bigger is better" mentality are nothing new, but
26,000 as workers returned to the countryside.32 GNP was down 5 .2 percent by the this time the state was unable to constrain the business sector. Later charges of crony
end of 1 980.33 capitalism papered over the fact that critics had long kept their silence on this and
other unsavory aspects of the "miracle" economy. They had been perfectly aware of
29 Late in 1 979 and early in 1 980 the technocrats raised bank interest rates from 1 9
percent t o 2 5 percent, putting great strain on businesses that depended on cheap loans. So Woo Choong, saved Daewoo from the same fate. Meanwhile Chun launched a policy to revive
too they devalued the won by 20 percent-the first devaluation since 1 97 5 . Then Deputy SMEs, which had been systematically starved of credit under Park. See C lifford, op. cit., pp.
Prime Minister Lee Hahn Been and his economic advisors decided to let the won float. This 206 and 224; C . H. Nam, op. cit., p. 1 5 8 ; and Bello and Rosenfeld, op. cit., p. 72.
mixture of floating exchange rates and increased interest rates was a hard blow to borrowers, 3 4 Hang Yul Rhee, "The Economic Problems of the Korean Political Economy," in
who could no longer count on inflation to assist them with their loan repayments. Obviously Ilpyong J. Kim and Young Whan Kihl (eds), Political Change in South Korea (New York :
this was a risky departure. Recession might have followed, given the second oil crisis and The Korean PWPA, Inc., 1 988), pp. 1 9 1 -2 1 6 (pp. 1 89-220).
the political instability attending Park's assassination. 1 980 brought a negative real growth 35 Woo-Cumings, op. cit., p. 1 23 .
rate of 3 . 7 percent, but devaluation helped to keep the export economy afloat, and Hyundai 's 36 The problem o f short-term debt reached a crisis stage when foreign banks refused
exports doubled that year. See Clifford, op. cit., p. 1 74 ; and Jong-Chan Rhee, op. cit., p. 1 34 . ; to roll over their short-term loans. See Joseph E. Stiglitz, Globalization and Its Discontents
and Chong-Hyun Nam, "The Role of Trade and Exchange Rate Policy in Korea's Growth," (New York: W.W. Norton, 2002), p. 1 1 0.
in Takatoshi Ito and Anne O. Krueger (eds), Growth Theories in Light of the East Asian 3 7 This was due in part to the 1 985 Plaza Accord, which devalued the dollar against the
Experience (Chicago: The University of Chicago Press, 1 995), p. 1 5 8 (pp. 1 5 3-77). yen. Being loosely pegged with the dollar, Korea became more competitive in the global
30 Under President Kim Young Sam, the EPB was merged with the Finance Ministry in 1 994 market. Exports to the US doubled between 1 985 and 1 988, rising from $ 1 0. 8 billion in 1 985
to establish a new Board of Finance and Economics (BFE). See Macdonald, op. cit., p. 205. to $2 1 .4 billion in 1 988. With a current account surplus reaching nearly 8 percent of GDP in
3 1 Yeon-ho Lee, The State, SOCiety, and Big Business in South Korea (London: Routledge, 1 988, the government was forced to remove the controls on capital flows which had kept a
1 997), pp. 1 and 202 . brake on foreign debts. Meanwhile low dollar interest rates encouraged the chaebols to borrow
32 C lifford, op. cit., p. 1 89. heavily from foreign banks, laying the foundation for the debt crisis that would trigger the
3 3 More positively, inflation fel l from 29 percent in 1 980 to 7 percent in 1 982 and Crash of 1 997. As an alternative to heavy borrowing, the government turned to stock market
finally to 3 percent in 1 98 3 . The government announced an import liberalization plan for the investment, which contributed to soaring stock prices between 1 986 and 1 98 8 . See Clifford,
1 983 to 1 98 8 period, forcing chaebols into a more competitive environment. Increasingly op. cit., pp. 2 3 6 and 239-40; and Dongchul Cho, "Coping with Capital Flows and Monetary
they were compelled to justify their existence. The Kukje Group, Korea's sixth largest, was Policy Framework: The Case of Korea," in C.H. Kwan, Donna Vandenbrink and Chia Siow
entirely dismantled in 1 98 5 , which sent a strong message to the business community that no Yue (eds), Coping with Capital Flow in East Asia (Tokyo and Singapore: Nomura Research
chaebol was exempt from reform. Only aggressive lobbying by Daewoo's chairman, Kim Institute and Institute of Southeast Asian Studies, 1 998), p. 82 (pp. 79-1 1 0) .
46 Development Without Freedom Korean Social Democratization 47

Korea's excessive dependence on foreign capital, and it was well known that just as democratic revolution was the success of student and proletarian activists in gaining
chaebols were dominated by foreign capital, local SMEs (small and medium size the backing of the disfranchised middle class.42
enterprises) were exploited by the chaebols. By the late 1 980s wage accretion and As Korea's first direct popular vote, the 1 987 presidential election was an
other cost factors compelled the chaebols to look for an alternative to the export­ undeniable democratic milestone, while new constitutional revisions expanded the
oriented system of the takeoff years. Increasingly they sought greener pastures in power of the legislature.43 Given their close political relationship,44 President Roh Tae
the cheap labor of Southeast Asia and the Caribbean, leaving Korean workers and Woo inherited Chun's legitimacy problem, as well as his dependence on military and
SMEs behind. intelligence bureaucraciesY By 1 99 1 the B lue House was losing its grip on Korea,
Inc. Roh found it necessary to relax popular pressure by giving more autonomy to
local governments to elect their city and county representatives, and by liberalizing
Political Undevelopment
some national security laws.46 This, however, was a case of too little, too late.
With growth falling behind expectations and unemployment rising, economic
Frozen in its Parkian mode, the structure of the Korean economy underwent little
reform became the major issue in the 1 992 presidential election. President Kim
basic reform in the 1 980s. The economy grew quantitatively, but did not become more
Young Sam promised to cure the "Korean disease" and create a "New Korea" of
equitable. By no means was economic development the necessary and sufficient force
"clean politics" and "anti-corruption."47 Nor did he entirely renege on his pledge.
behind Korea's political development, as myth has it. On the contrary, economism
He struck a hard blow against high-level corruption by censuring, firing, or arresting
worked against social and political modernization.38 This "growth first" excuse for
more than a thousand officials in business and government. 48 He also called for full
pol itical undevelopment could work only so long as the "miracle" lasted. The oil
disclosure of the personal assets of politicians and high ranking civil servants,49
crisis of 1 979 led to recession coupled with inflation, and an unprecedented spate of
backed with a "real name" rule for all financial transactions. Tax evasion would
bankruptcies and strikes threw the Park regime off balance.
henceforth require some legal talent. And for added measure, former Presidents Roh
The Carter administration had quietly engineered a large release of dissidents,
and Chun were convicted and j ailed for corruption. 50
and now Kim Young Sam, leader of the opposition New Democratic Party, felt the
Unfortunately this political housecleaning left most of the furniture in place. Kim
time was right to openly blast the government. Predictably this brought out the
Young Sam's "reform" agenda turned out to be little more than a pressure-release
worst in Park, whose actions inflamed the public even more. By the time of Park's
mechanism. By leaving state-chaebol collusion untouched, Kim's administration
assassination, his popularity had plummeted even within his own camp. American
officials at his funeral noticed a conspicuous lack of grief among his former
supporters.39
The military coup that brought Chun Doo Hwan to power gave the country a
42 Wonmo Dong, "Student Activism and the Presidential Politics of 1 98 7 in South
leader who was even less attuned to the need for political development than Park
Korea," in I lpyong 1. Kim and Young Whan Kihl (eds), Political Change in South Korea
had been. Korea's new affluence stoked dissatisfaction in a growing middle class
(New York: The Korean PWPA, Inc., 1 988), pp. 1 76 and 1 78 (pp. 1 69-88).
that was allowed little voice. This inclined it to favor the student and proletarian 43 Young Whan Kihl, "South Korea's Search for a New Order: An Overview," in Ilpyong
resistance that was mounting in the streets. To forestall this cross-class alliance, Chun l. Kim and Young Whan Kihl (eds), Political Change in South Korea (New York: the Korean
belatedly expanded civilian participation in the government while reducing that of PWPA, Inc., 1 98 8), p. 7 (pp. 3-2 1 ).
the military.40 So too he promised more local autonomy.41 Even then, however, Chun 44 Robert E. Bedeski, The Transformation ofSouth Korea: Reform and Reconstruction in
seriously underestimated the public's thirst for reform. The key to the June 1 987 the Sixth Republic under Roh Tae Woo, 1987-1992 (London: Routledge, 1 992), pp. 27 and 39.
45 Young Whan Kihl and Ilpyong l . Kim, "The Sixth Republic: Problems, Prospects,
and the 1 98 8 Olympiad," in Ilpyong l. Kim and Young Whan Kihl (eds), Political Change in
3 8 Harold Hakwon Sunoo, America 's Dilemma in Asia: The Case of South Korea South Korea (New York: the Korean PWPA, Inc., 1 988), p. 247 (pp. 243-5 1 ).
(Chicago: Nelson-Hall, 1 979), pp. 1 3 1-2. Suk loon Kim, likewise, emphasizes how 46 Macdonald, op. cit., p. 1 24; and Bedeski, op. cit., p. 4 1 .
economism contributed to Korea's political underdevelopment. See S .1. Kim, op. cit., p. 5 8 . 4 7 lames Cotton, "Introduction," in lames Cotton (ed.), Politics and Policy in the New
39 Don Oberdorfer, The Two Koreas: A Contemporary History (Reading, M A : Addison­ Korean State: from Roh Tae-Woo to Kim Young-Sam (New York: St. Martin's Press, 1 995),
Wesley, 1 997), pp. 1 1 1 - 1 3 . pp. 1 -2 (pp. 1 -5).
40 C . l . Eugene Kim, "The South Korean Military and its Political Role," i n Ilpyong 1. 48 William H . Thornton, Fire on the Rim: The Cultural Dynamics of East/West Power
Kim and Young Whan Kihl (eds), Political Change in South Korea (New York: The Korean Politics (Lanham, MD: Rowman & Littlefield, 2002), p. 1 05 .
PWPA, Inc . , 1 98 8), pp. 1 05-6 (pp. 9 1- 1 1 2). 4 9 Bae Sun-Kwang, "Continuity o r Change: The Voter's Choice i n the 1 992 Presidential
4 1 Yong Duck lung, "The Territorial Dimension of the Developing Capitalist State: Election," in lames Cotton (ed.), Politics and Policy in the New Korean State: from Roh Tae­
Measuring and Explaining Centralization in Korea," in Gerald E. Caiden and Bun Woong Woo to Kim Young-Sam (New York: S t . Martin's Press, 1 995), p. 78 (pp. 66-82).
Kim (eds), A Dragon 's Progress: Development Administration in Korea (West Hartford, 5 0 Geir Helgesen, Democracy and Authority in Korea: The Cultural Dimension in
Connecticut: Kumarian Press, 1 99 1 ), p. 1 47 (pp. 1 47-60). Korean Politics (Surrey, UK: Curzon Press, 1 998), p. 247.
48 Development Without Freedom Korean Social Democratization 49

preserved the corporate status quO.51 Moreover, by merging the Economic Planning War vestige that could no longer be sustained. Its transformation by way of rapid
Board with the Ministry of Finance in 1 993, the government forfeited its coordinating financial liberalization set the stage for the Korean Crash, which only intensified
role, thereby setting the stage for corporate overinvestment. Though the chaebols corporate power under the name of "reform." In two decades the country had moved
were pressed to designate core businesses and eliminate non-performing ones, this from Park's crony socialism to globalist crony capitalism.
was anything but a constraint on corporatism. On the contrary, credit controls and The Crash was harbingered by the January 1 997 bankruptcy of Hanbo, a chaebol
regulations were dangerously curtailed, and in his last year Kim pushed through new specializing in steel and construction. Yet the speed and scope of the Crash took the
labor laws to make mass layoffs possible.52 This was in early 1 997, long before the nation by surprise. By September 1 997, bankruptcies and loan defaults amounted
IMF would mandate such measures in response to the Crash. The IMF would simply to almost 8 percent of the nation's GDP,57 and by October major chaebols were
be used as an excuse to complete the corporate takeover that was already in progress. collapsing. Under these straits South Korea accepted a $60 billion IMF rescue
More in the way of progressive reform was expected from Kim Dae Jung. His package and began massive corporate restructuration, especially in the financial
activist past lent credibility to his pledge to dissolve the triad of government, big sector. In short, a problem that had been triggered by inordinate liberalization
business, and banking. The Crash he inherited certainly limited the scope of his was to be cured by still more intensive liberalization. For instance, a new Foreign
fiscal opportunity, but it also weakened the corporate power base he would have Investment Promotion Act was passed in November 1 998, offering unprecedented
to contend with to effect egalitarian reforms. He appeared to be challenging this incentives to foreign investors. Acting on the newly liberalized labor laws that he
power structure when Korean Airlines (KAL) chairman Cho Yang Ho was arrested inherited from Kim Young Sam, Kim Dae Jung implemented massive layoffs that
on charges of tax evasion and embezzlement. The cardinal fact, however, was that would have a lasting impact on the social and economic fabric of the country. This
Cho had not supported Kim. It happened that Asiana Airlines, the rival of KAL, had is how Kim repaid his debt to the working classes for their steadfast support in the
its origin in the Cholla region, Kim's home turf. 53 As with the former Kim, the thrust streets and at the ballot box.
of Kim Dae Jung's so-called "reform" policy would move in the opposite direction: Efforts to raise profitability by rapidly downsizing and restructuring precipitated
toward a stronger bond between government and post-Crash business. 54 Kim was in a social crisis. 58 It is remarkable that the government's indifference to the common
fact a consummate politician from the old school, with no qualms about cutting deals worker did not provoke serious political instability, as was the case in Indonesia.
with the extant power structure. 55 Even without the financial crisis this would have Under cover of IMFism, Kim managed to implement radical trade and investment
disabled any reformism worthy of the name. liberalization at little political cost. The resulting "fire sale"-which corporate
The underlying corporatism of the two Kims formed a seamless continuity. buyers commonly referred to as their "Korea discount"59-left Korea's best known
The Crash and subsequent IMFism provided perfect cover for unpopular measures companies, such as Samsung and Posco, with over 50 percent of their stock owned
such as downsizing. Corporatism was being streamlined, not buffered. The illiberal abroad, while around 40 percent of the country's stock market capitalization was
alliance that was President Park's legacy reached its apogee of corruption and non-domestic. Such full-thrust liberalization had proved impossible when Korea
corporate largess in the mid- 1 990s, as total external debt increased from $43 . 8 billion first j oined the OECD in 1 996. It took the Crash and subsequent IMFism to fulfill
in 1 993 to nearly $ 1 62 billion by late 1 997.56 Park's statist capitalism was a Cold this globalist dream.6o

5 1 Barry K. Gills and Dong-Sook S. Gills, "South Korea and Globalization: the Rise to "Sunshine" Tactics
Globalism?," in Samuel S. Kim (ed.), East Asia and Globalization (Lanham, MD: Rowman
& Littlefield, 2000), pp. 8 1 -2 (pp. 8 1 - 1 03). To divert public attention from volatile issues such as the economic fire sale and a near­
52 David McNally, "Globalization on Trial: Crisis and Struggle in East Asia," Monthly bankrupt health care system, Kim turned increasingly to his "sunshine" policy with
Review (September 1 998), [Link] l 1 32/n4_v50/2 1 1 86772/ North Korea. On April 1 0, 2000-just days before the National Assembly election on
[Link].
April 1 3-Kim dropped the bombshell of his upcoming June 2000 summit with Kim
53 Frank Ching, "Law of the Jungle," The Far Eastern Economic Review (March 30,
2000), p. 24 (pp. 24-25).
54 "Declaration of Present Situation in Korea," Civil Society, 3 5/45 (October - December
200 1 ), provided by CCEJ News (Citizen's Coalition for Economic Justice), [Link] 57 Castells, op. cit., p. 289.
[Link]/eng/[Link]. 5 8 Ho Keun Song, "The Birth of a Welfare State in Korea: The Unfinished Symphony
55 Sang-Hun Choe, "South Korean President to Quit Governing Party," International of Democratization and Globalization," Journal of East Asian Studies, No. 3 (2003), p. 405
Herald Tribune (February 22, 2007), [Link] 1 50. (pp. 405-43).
56 Stephan Haggard and Andrew MacIntyre, "The Political Economy of the Asian 5 9 Hasung Jang, "Significance of the 'Korean Discount,' " Korea Focus, Vol . 1 2, No. 6
Financial Crisis: Korea and Thailand Compared," in Gregory W. Noble and John Ravenhill (NovemberlDecember 2004), p. 32 (pp. 32-34).
(eds), The Asian Financial Crisis and the Architecture of Global Finance (Cambridge: 60 Philip Bowring, "Who Owns South Korea?," The International Herald Tribune (July
Cambridge University Press, 2000), p. 26 (pp. 57-79); and also Gills and Gills,
op. cit., p. 86. 1 9, 2004), [Link]
50 Development Without Freedom Korean Social Democratization 51

Jong Il of North Korea.61 Clearly this revelation was designed to tip popularity ratings Earlier disclosure o f Kim's dealings might have put Lee i n office. This would
in his party's favor. Meanwhile the People's Solidarity for Participatory Democracy have terminated the sunshine policy, which violated the 1 994 Agreed Framework
(PSPD), one ofthe most influential NGOs,joined other grassroots groups in expressing and the 1 99 1 inter-Korean Joint Declaration on the Denuclearization of the Korean
disappointment at the ruling party's neglect of real reform.62 Eventually it became Peninsula.69 Six months after the election, Park Jie Won, Kim's closest advisor and a
known that just before the historic summit, the government had slipped $ 1 86 million key player in setting up the 2000 Inter-Korean Summit, was arrested for bribery and
through Hyundai to the North.63 What this purchased, at tax payers' expense, was a the abuse of power. There would be allegations that Kim's government transferred
photo-session with Kim Jong Il and a Nobel Prize for Kim Dae Jung. The Summit much more to the North than was originally thought-perhaps as much as $500
briefly renewed Kim's popularity, but soon that began to wear off. By early 200 1 his million.70 Suspicions were raised even further when the government refused to
approval ratings had fallen below 30 percent.64 investigate the incident. 7 1
Kim 's successor, Roh Moo Hyun, promised to continue the "sunshine" policy,65 Roh would be no improvement over Kim. This former labor lawyer and human
but its popular appeal had waned. To win the election he had to play his anti-American rights activist soon forgot that his close victory in December 2002 owed much to
card.66 Conversely, Roh's rival Lee Hoi Chang favored traditional containment the working classes and their unions. When his government announced its intention
and an end to financial aid to the North,67 objectives that were associated with U S to privatize the railroad system, prompting strikes in four cities, Roh found himself
priorities. I t is fair t o say that anti-Americanism won the election.68 at the same crossroads Kim had faced: the choice of serving faithful supporters or
foreign investors. His real agenda was clarified when he declared the rail walkout
6 1 Charles S. Lee, "Point of No Return," The Far Eastern Economic Review (April 20, illegal and threatened to fire striking workers .72
2000), p. 40 (pp. 40-4 1 ). The one good thing that can be said about Roh's administrative style is that he
62 Michael Vatikiotis and Shim Jae Hoon, "People's Advocate," The Far Eastern failed to master the art of the imperial presidency. Unfortunately he put nothing of
Economic Review (March 23, 2000), p. 28. substance in its place. This dearth of leadership tainted what little was left of the
63 Joseph Coleman, "S. Korean Leader Apologizes for Summit Scandal," The Washington
social democratic ideals that had propelled liberal progressivism in its more insurgent
Post (February 1 4, 2003), [Link] I 4?
phase. Ironically Roh's administration got a second wind after the conservative
language=primter.
64 John Larkin, "Kim Dae Jung Comes Up Short," The Far Eastern Economic Review opposition failed miserably in its effort to impeach him. A sympathetic public tossed
(May 24, 200 1 ), [Link] 1 05_24/pO 1 [Link]. his nascent Uri Party a majority in the legislature as ofApril 2004, putting him in full
65 Howard W. French, "Liberal Wins South Korea's Presidential Election," The New parliamentary control. Not since the end of military rule in 1 987 had any president
York Times (December 1 9, 2002), [Link] 1 2/ 1 9linternationall I 9CND­ had such a reform opportunity.73
[Link]? pagewanted=print. Roh had no clue as to how to use this mandate. What he provided was more
66 "The North and the Vote," The Economist (December 1 2, 2002), [Link] empty rhetoric than even his supporters could endure. The bluster that had added
[Link]?Story_ID- 1 49497 1 . spice to his oppositional speeches now came across as unpresidential, such that his
67 Caroline Gluck, "Korean Vote Swayed by Anti-US Mood," BBC News (December own minister of commerce, Chung Sye Kyan-who would take over as head of the
1 1 , 2002), [Link] lhi/worldiasia-pacific/[Link]. ; and also see "Anti­ Uri Party after Roh's forced resignation early in 2007-complained that the president
US Protests Grow in Seoul," BBC News (December 8, 2002), [Link] /low/
had provided the government with no compass for setting meaningful policy.74 At
worldlasia-pacific12552875 . stm. Anti-Americanism and economic turmoil also brought
least Kim had had the excuse of a global recession for his political apostasy. After
Park Geun Hye, the daughter of Park Chung Hee, into politics. Like Indonesia's Megawati
Sukamoputri, Park's popularity was based purely on the nostalgia-effect of her father's name.
See John Larkin, "Following in Father's Footsteps," The Far Eastern Economic Review (May 69 Brendan Conway, "Letter from Seoul: Sunset Approaches," The National Interest,
24, 200 1 ), [Link] 1 05_24/[Link]. Older voters (over 40) tend to Vol . 1 , No. 7 (October 23, 2002), [Link] l /Issue7/
support the conservatism of her Grand National Party (GNP), whereas younger voters tend Voi l Issue7/Conway PFVhtmi.
to be more liberal. This generational divide was a prominent factor in the public reaction 70 Don Kirk, "Key Figure in Korean Summit is Arrested," The International Herald
to the impeachment of President Roh in March 2004. See James Brooke, "South Korean Tribune (June 1 9, 2003), [Link]
Conservatives Try to Regain Voter Confidence," The New York Times (April 4, 2004), http :// tmplh&ArticleId= 1 00093.
[Link].coml2004/04/04/international/[Link]. 71 Conway, op. cit.
68 This sentiment, which had been building since the 1 997 Crash, peaked when South 72 Kim Jung Min, "Labour Pains," The Far Eastern Economic Review (July 1 0, 2003),
Koreans found out that the Yongsan US military base had been dumping toxic chemicals into p. 1 9.
a river that was a main source of drinking water for 12 million Seoulites. Many were equally 73 "Off the Hook," The Economist (May 1 4, 2004), http ://[Link]/agendal
angry at the rising subsidies for US troops: from $3 1 4 million in 1 998 to $444 million in 200 1 , [Link]? Story_ID=268243 1 ; and "Commentary: Korea's Roh has a Second
with indirect subsidies reaching more than $700 million. See "South Korea, U.S., Sign Swap Chance. Now He has to Use it," Business Week (May 3, 2004), http ://[Link].
Deal," Newmax Wires (March 29, 2003), http ://www. [Link]-binlprint_friendly. cornJprintimagazine/contentl04_1 8/b3 88 1 [Link]?chan=mz.
pl?page=[Link] . . . 74 Choe, op cit.
52 Development Without Freedom Korean Social Democratization 53

years of administrative drift, it was little wonder that the public lost interest in the economic scholarship.81 The less told side of Korean history is a continuous story of
Left and looked mainly to a field of conservative candidates in the closing months social struggle against state power. That bottom-up force of change was contained
before the December 2007 elections. Lee Myung B ak's landslide victory marked but never extinguished by the centrist engine of Korean modernization. This was
the triumph of corporatism. Given his business ties, his campaign motto might as a potent element in the minjung movement of the 1 970s and 1 980s, which in turn
well have been chaebol power. The reform spirit of 1 987 was now as remote and helped to cement the alliance of peasants, workers and progressive segments of the
irrelevant as the military dictatorship that inspired it. middle class.82
This rare and fleeting civil union developed by way of reaction to state repression. 83
Gregory Henderson's famous "politics of the vortex" is accurate so far as it goes,
Rise and Fall of the Civil Dynamic
but misses the volcanic forces building beneath the country's social surface. The
As in so many cases of IMF "rescue," Korea's post-Crash "reform" created a host political ferment of the 1 980s did not arise ex nihilo from a docile Confucian ethos.84
of new problems. Financial "liberalization" turned out to be a recipe for what Rene It was in fact a time bomb waiting to explode, given the right social and political
Dumont calls "misdevelopment."75 Walden Bello likewise sees the deregulation of environment. The Park regime, favoring the upper bourgeoisie,85 did everything
speculative capital as the main source of Asia's fall,76 while Joseph Stiglitz blames within its power to de-activate this bomb. But its suppression of opposition parties,
the IMF and the US Treasury for promoting the capital market liberalization that led civil rights and civil society only delayed the explosion. The military autocrats of
to destabilizing speculation and bad lending practices . 77 The Crash resulted when the 1 980s tried in vain to fill the vacuum left by Park's assassination. Although
the massive influx of capital of the early 1 990s was reversed in 1 997 . B ello traces martial law was declared in 1 980, workers launched massive strikes such as those
this problem to the global debt crisis of 1 982, when the IMF and World Bank offered at the Sabuk coal mine in Kangwon province, the Tongguk Steel Mill in Pusan and
assistance to derelict countries in return for sweeping structural adjustments.78 Hyundai 's Steel Mill at Inchon.86
The Bank and the Fund were determined to eliminate the protectionism of The upper bourgeoisie and petty bourgeoisie had forged a tacit alliance whereby,
state-assisted capitalism-the very system that had nurtured the "Asian miracle"­ through their very passivity, they endorsed the existing power structure. But a split
in favor of privatization. Giving its own spin to events, the Bank spotlighted the formed along regional lines. In Pusan, Kwangju and other cities, far more than in
"miracle" as the ultimate capitalist showcase, as did the business press and the media Seoul, the lower middle class tended to support student activism,87 which became
in general. 79 That fiction drew still more capital into the region, leading to grotesque more militant after the Kwangju massacre of 1 980. By 1 987 the whole middle
overinvestment-a balloon waiting for the right pen. The real "miracle" was that the class was losing patience with the government. To avoid an even worse outcome,
Crash did not come sooner.
Foreign affairs issues of the 1 990s would be closely linked to trade and economic
obj ectives. In this respect South Korea mimicked Japan's approach to comprehensive
security. This was the essence of the "New Diplomacy" that Foreign M inister Han
Sung Joo fostered within the Kim Young Sam government. While the Crash revived
Han's emphasis on economic globalism and regionalism, it also invited postmaterial
action on the part of NGOs.80 These groups issue from the deep structure of Korean 8 1 Hagen Koo argues that the standard description of "Korea, Inc." as a typical "post­
civil society, a site of change that has been largely neglected by political and Confucian state" overlooks the input of Korean civil society, which is "far from weak,
submissive, and quiescent." See Hagen Koo, "Introduction: Beyond State-Market Relations,"
in Hagen Koo, ed, State and Society in Contemporary Korea (Ithaca: Cornell University
Press, 1 993), p. 2 (pp. 1 -1 1 ).
75 In Raff Carmen, Autonomous Development-Humanizing the Landscape: An 82 Hagen Koo, "The State, Minjung, and the Working Class in South Korea," in Hagen
Excursion into Radical Thinking and Practice (London: Zed Books, 1 996), p. 1 96. Koo (ed.), State and Society in Contemporary Korea (Ithaca: Cornell University Press, 1 993),
76 Walden Bello, The Future in the Balance: Essays on Globalization and Resistance pp. 1 43 and 1 46 (pp. 1 3 1 ---62 ); and Sallie Yea, "Maps of Resistance and Geographies of Dissent
(Oakland, CA : Food First Books, 200 1 ), pp. xiii and 69. in Cholla Region," Asian Studies Institute Publications, [Link]
7 7 Stiglitz, op.
cit. , p. 2 1 2 . publications/working/[Link].
7 8 Bello, Future, op. cit. , p p . 1 0 and 1 3 . 83 Hagen Koo, "Strong State and Contentious Society," in Hagen Koo (ed.), State and
7 9 Bello, Future, op. cit., pp. 75 and 7 l . Society in Contemporary Korea (Ithaca: Cornell University Press, 1 993), p. 248 (pp. 24 1 -49).
80 Hyuk-Rae Kim, "The State and Civil Society in Transition: The Role of Non­ 84 Thornton, op. cit., p. 1 25 .
Governmental Organizations in South Korea," The Pacific Review, Vol. 1 3, No. 4 (2000), p. 85 Jang Jip Choi, "Political Cleavages i n South Korea," i n Hagen Koo (ed.), State and
608 (pp. 595---6 1 3). The most notable NGOs are the Citizen's Coalition for Economic Justice Society in Contemporary Korea (Ithaca: Cornell University Press, 1 993), p. 26 (pp. 1 3-50).
(CCEJ), the Korean Federation of Environmental Movements (KFEM), and the People's 86 Ibid., p. 29.
Solidarity for Participatory Democracy (PSPD). 87 Ibid., p. 32.
54 Development Without Freedom Korean Social Democratization 55

President Roh Tae Woo issued his fateful proclamation of June 29, 1 987,88 effectively exhibition that the Kim Young Sam government staged for it at the National Museum
surrendering to the demand for political reform.89 for Contemporary Art in 1 994 . By then a new generation of students, caught up in
A decisive factor in this proto-democratic revolution was the flood of labor unrest the burgeoning ethos of consumerism, had lost touch with the peasant and working
that swept over industrial cities between July and September 1 987. Around 3 , 5 00 class issues that fueled the minjung ethos. At this point, the best minjung art could
labor risings broke out, more than the total number of active conflicts during the be afforded only by members of the very social elite which had been the target of
Park and Chun era.90 This strife soon shifted from the SMEs to the large chaebols. In minjung politics.97
response, the upper bourgeoisie renewed its unity with the state,91 but on their terms. After the democratic revolt of 1 987, the middle class distanced itself from
At this point almost everyone wanted some form of "democracy." In the wake of student and worker activism, even as morally aloof student radicalism left the
the 1 98 7-8 worker's movement, the business class pushed its agenda on the state, workers behind. The general public's de-radicalization continued until 1 997, when
and had the financial resources to gain the upper hand in the new electoral politics.92 the Korean Crash re-opened the question of whose democracy this was. Ironically it
Even though labor union membership doubled between 1 986 and 1 990,93 capital was was the veteran dissident-turned-president Kim Dae Jung who effectively answered
already winning the war which labor had fought. that question: it belonged to the highest bidder.
New entrepreneurial players entered the field, changing the rules of the game.
Like Ross Perot in the US, Chung Ju Yong, chairman of the Hyundai Group, formed
a distinctly bourgeois party: the Unification National Party (UNP).94 This was a
statement in itself, sending a clarion message that the chaebols would no longer be
subordinate to the state. Unfortunately the shift from military to civilian politics95-
President Chun's accidental legacy-was less a democratic transformation than a
corporate one.96
Meanwhile the solidarity of civil resistance was fast dissolving. As a political
force, the minjung movement reached its critical mass in the 1 980s. One way to
trace its rise and fall is through its artistic expression. Challenging the apolitical
abstraction and elitist aestheticism of Korean modernism, minjung art focused on
working class suffering. By the early 1 990s, however, its influence was already on
the wane, and its virtual demise as a political force can be dated, ironically, with the

88 Sung Chul Yang, "An Analysis of South Korea's Political Process and Party Politics,"
in James Cotton (ed.), Politics and Policy in the New Korean State:from Roh Tae- Woo to Kim
Young-Sam (New York: St. Martin's Press, 1 995), p. 8 (pp. 6-34).
89 Manwoo Lee, "South Korea's Politics of Succession and the December 1 992 Presidential
Election," in James Cotton (ed.), Politics and Policy in the New Korean State: from Roh Tae­
Woo to Kim Young-Sam (New York: St. Martin's Press, 1 995), p. 39 (pp. 35-65).
90 Hagen Koo, "The State, Minjung, and the Working Class in South Korea," op. cit. ,
p. 1 5 6.
9 1 Jang Jip Choi, op. cit. , p. 39.
92 Carter 1. Eckert, "The South Korean Bourgeoisie: A Class in Search of Hegemony," in
Hagen Koo (ed.), State and Society in Contemporary Korea (Ithaca: Cornell University Press,
1 993), pp. 1 08 and 1 29 (pp. 95- 1 30).
93 McNally, "Globalization on Trial," op. cit.
94 Yang Gil-Hyun, "Liberalization and the Political Role of the Chaebol in Korea:
The Rise and Fall of the Unification National Party (UNP)," in James Cotton (ed.), Politics
and Policy in the New Korean State: from Roh Tae- Woo to Kim Young-Sam (New York: St.
Martin's Press, 1 995), pp. 84 and 86-7 (pp. 83- 1 08).
95 Chung-In Moon and Kang Mun-Gu, "Democratic Opening and Military Intervention
in South Korea: Comparative Assessment and Implications," in James Cotton (ed.), Politics
and Policy in the New Korean State: From Roh Tae- Woo to Kim Young-Sam (New York: St.
Martin's Press, 1 995), pp. 1 75-6 (pp. 1 70-9 1 ) . 97 See Frank Hoffmann, "Images of Dissent: Transformation in Korean Minjung art,"
96 Yang Gil-Hyun, op. cit. , p. 89. Asia Pacific Review, Vol . 1 , No. 2 (Summer 1 997), [Link]
 Chapter 3

Booty Globalism:
The Neocolonization of the Philippine s

Dependency in a Democratic Key

The year 1 946 was very ironic in U S-Philippine relations. Long before World War
II, Washington had lost faith in the strategic importance of the Philippines. 1 But in
1 946, j ust as the US relinquished its Philippine colony, that faith bounced back with
a vengeance. The presumed threat of global communism turned this geopolitical
backwater into a vital forward base, profoundly affecting American attitudes toward
Philippine domestic affairs. To control those affairs in the absence offormal colonial
oversight would require a new form of intervention: the neocolonial puppet state.
This has been Washington 's strategy of choice for guilt-free political subversion
ever since.2
F or all its democratic trappings, this model is a postwar time capsule where
dissent is concerned. Many F ilipinos who had fought alongside the Americans
against the Japanese would now be blacklisted. These included not only members
of the Communist Party of the Philippines (Partido Komunista ng Pilipinas, or
PKP) but nearly all veterans of the Huk (Hukbalahap) guerrilla army, whose call
for land reform and other egalitarian measures would signal socialism in the minds
of McCarthy-era Americans.3 Throughout the war the Huks had defended peasants
against oppressive landlords, which was not a separate cause, since the landlords
consistently sided with the Japanese. So too, prior to his exit to the US in 1 94 1 ,
President Manuel Luis Quezon had ordered government officials to cooperate
with the Japanese. But the vast majority of Philippine elites needed no presidential
encouragement. They collaborated with gusto, even as a million Filipinos died at
Japanese hands.4
Then America stepped in to stabilize the "liberated" country by handing it over
to these very same elites. This action had a deja vu quality, as half a century before
America had "stabilized" the democratic uprising against Spain in much the same

1 Stanley Karnow, In Our Image: America s Empire in the Philippines (New York:
Ballantine Books, 1 989), p. 324.
2 See Stephen Shalom, "The Philippine Model," Znet (October 2 1 , 2003), [Link]
org/sustainers/contentl2003- 1 0/2 1 [Link].
3 William Blum, Killing Hope: U.S. Military and CIA Interventions Since World War II
(Monroe, Maine: Common Courage Press, 1 995), pp. 39 and 40.
4 "Philippines History," Windows on Asia (downloaded April 30, 2006), http://
[Link]. wbwoalseasialPhilippineslHistorylhist_Jap_occupation.html.
 Booty Globalism: The Neocolonization of the Philippines 59
58 Development Without Freedom
way. In the late 1 950s, following General MacArthur 's august precedent,s the entire the US closed its grip on him. "Stability" would be a prime objective for both, 13 and
Central Committee of the PKP was arrested and imprisoned. That same year the political development would be its main victim. 1 4
legendary Lt. Col. Edward Lansdale arrived to vanquish the new Huk Army (renamed The postwar history o f the Philippines unhinges the modernist myth that political
Hukbong MapagpaZaya ng Bayan, or the People 's Liberation Army). The PKP 's progress flows naturally from economic advantage. Thanks to its geopolitical
General Secretary Jose Lava would remain in prison for the next two decades. centrality, plus a massive infusion of foreign capital, 15 the Philippines emerged in the
The newly formed Central Intelligence Agency (CIA) cut its teeth on this project. 1 950s as the most economically vibrant nation in Southeast Asia. 16 Under Marcos,
Like MacArthur, the CIA trusted the Philippine Old Guard over its democratic however, that frontrunner status was forfeited in favor of"booty capitalism," whereby
challengers: the 500,000 strong National Peasant Union (PKN) and other members the nation's economic elite bled the state in much the same way that a Mafia takeover
of the emerging Democratic Alliance.6 An appropriate puppet, Ramon Magsaysay, bleeds a healthy company. 17 US support allowed Marcos to fend off reform and
was implanted as president in 1 95 3 . This virtual CIA agent would lead the anti­ maintain the booty system through the 1 970s, but at the cost of economic dynamism.
communist crusade that set the pattern for most of Southeast Asia for the next two During his twenty years of rule, seven out of ten Filipinos would remain below the
decades.7 Thus the new postcolonial instrument of imperialism was born, giving poverty line, 18 earning the country its reputation as "the sick man of Asia."19
a democratic veneer to made-in-America policies. This neocolonialism, which The 1 980s became the country's "lost decade," as per capita income actually
Benedict Anderson dubbed "cacique democracy,"8 cut ordinary Filipinos out of the fell by 7.2 percent between 1 980 and 1 992.20 A banking crisis in 1 98 1 compelled
political loop. The Philippines missed the early postwar land reform that even Taiwan the government to liberalize financial policies, rendering it even more vulnerable
and South Korea (reactionary as they were in other respects) laid as a foundation for to the global recession that struck in 1 982. The Philippines had been on the
a budding middle class.9 That would limit domestic demand and foster the economic IMF's loan strings since 1 962, and underwent a maj or IMF Structural Adjustment
dependency that would distinguish Philippine development from the far more statist Program (SAP) in 1 979.21 Marcos now had little choice but to "SAP" the nation
economies of the leading "Asian tigers." still more,22 contributing greatly to the balance-of-payments crisis of 1 984-85 .23 The
The prime beneficiary of this neocolonization would be the Armed Forces of the
Philippines (AFP), which would hold sway both politically and economically. lo By 1 3 Emmanuel M. Pelaez, "The Philippines and the United States," in Carl H. Lande
1 970 Ferdinand Marcos had retooled the military for martial law, with 59,000 men (ed.), Building a Nation: Philippine Challenges and American Policy (Washington, DC : The
in uniform and a $572 million budget. I I But even as he closed his grip on the AFP, 1 2 Washington Institute Press, 1 987), pp. 5 1 and 52 (pp. 45-5 5).
1 4 Eero Palmujoki, Regionalism and Globalization in Southeast Asia (Basingstoke, UK:
Palgrave, 200 1 ), p. 1 3 .
1 5 Alasdair Bowie and Danny Unger, The Politics ofOpen Economies: Indonesia, Malaysia,
the Philippines and Thailand (Cambridge: Cambridge University Press, 1 997), p. 1 05 .
1 6 Anderson, op. cit., pp. 208-9.
17 Bowie and Unger, op. cit., p. 1 00. The regime's hegemonic success is suggested by
had jailed the Huk the fact that as of July 1 973 90 percent of Filippinos supported the extension of Marcos 's
5 In 1 945 MacArthur had ordered the disbanding o f the Huks and
s. Library of Congress presidential term. See Samuel Chamg Yeong Ku, Southeast Asian Governments and Politics
leaders Taruc and Casto Alejandrino. See "The Huk Rebellion," u.
(Taipei, Taiwan: Wu Nan, second edition, 2000), p. 208.
Country Studies (downloaded May 2, 2006), [Link] . htm.
Project (200 1 ), 18 Gregg R. Jones, Red Revolution: Inside the Philippine Guerrilla Movement (Boulder,
6 "The Huk Rebellion," [Link]-The Filipino Solidarity
lish!eng_hist_26 .html. CO: Westview, 1 989), p. 1 5 5 .
http ://www.1os- indios-brav [Link]!eng
Macapagal (the father 1 9 S e e Pepe Escobar, "The Sick Man o f Asia," Asia Times Online (October 1 , 2004),
7 Blum, op. cit., p. 43. The CIA found its next puppet in Diosdado
who would become the Philippine president http ://[Link]. com/atimes/[Link].
of the future President Gloria Macapagal Arroyo),
20 Paul D. Hutchcroft, "Sustaining Economic and Political Reform: The Challenges
in 1 96 1 . See Kamow, op. cit., pp. 1 5 and 363 .
8 Benedict Anderson, The Spectre of Comparision: Nationalism, Southeast Asia and the Ahead," in David G. Timberman (ed.), The Philippines: New Directions in Domestic Policy
1 998), p. 225.
and Foreign Relations (Hong Kong and Singapore: Asia Society and Institute of Southeast
World (London: Verso,
Asia Times Online (October Asian Studies, 1 998), pp. 23-24 (pp. 23-47).
9 Pepe Escobar, "Poverty, Corruption: The Ties that Bind,"
es/printN .html. 21 "The IMF and WB are Killing the Filipino People," Statement ofthe BA YAN, Bagong
5 , 2004), [Link] com!atim
" in Carl H. Lande (ed.), Alyansan Makabayan, or New Patriotic Alliance (April 1 6 , 2006), http ://[Link]-hwp.
1 0 Carl H . Lande, "Introduction: Retrospect and Prospect,
Philippine Challenges and American Policy (Washington, DC : The com/archives/54a11 1 [Link].
Building a Nation:
22 See Walden Bello, "Pacific Panopticon," The New Left Review, No. 16 (July/August
Washington Institute Press, 1 98 7), p. 12 (pp. 7-44).
ian Rule (Pittsburgh 2002), p. 72 (pp. 68-85).
1 1 Gretchen Casper, Fragile Democracies: The Legacies ofAuthoritar
. 23 Manuel F. Montes, "The Philippines as an Unwitting Participant in the Asian
and London: University of Pittsburgh Press, 1 995), p. 8 8
(New Haven: Yale Economic Crisis," in Karl D. Jackson (ed.), Asian Contagion: The Causes and Consequences
1 2 Richard J. Kessler, Rebellion and Repression in the Philippines
ofa Financial Crisis (Boulder, CO: Westview Press, 1 999), p. 244 (pp. 24 1-68).
University Press, 1 989), p. 1 1 6 .
60 Development Without Freedom Booty Globalism: The Neocolonization of the Philippines 61

domestic business sector was growing wary of such international exposure,24 and Though Aquino's name had become synonymous with People Power, i t was now
was beginning to question the nepotistic regime that had squandered the country's necessary for her to choose between fidelity to the reform movement that brought her
regional supremacy. Political storm clouds were building among the marginalized to power and surrender to the dictates of international capitalism. From the moment
rich as well as the poor. of her inauguration, her international drift had been challenged by her reformist
Fearing opposition from Corazon Aquino, Marcos called for snap elections in defense minister, Enrile, who was consequently ostracized by inner circle advisors
February 1 986 and unconvincingly declared himself the winner. This sparked the such as Joker Arroyo. 33 Enrile would be implicated in an aborted coup and forced to
"People Power" upsurge that exposed the pillars of the establishment-cronies, resign;34 and already Aquino had fired her activist labor secretary, Augusto "Bobbit"
technocrats and military brass-as fickle allies.25 The regime was doomed when Sanchez. Tellingly he was replaced with a corporate lawyer, Franklin Drilon,35 while
civilian protest was joined by a military mutiny. Defense Minister Juan-Ponce Enrile the government was packed with technocrats with strong US ties.
and some 3 00 members of the Reform the Armed Forces Movement initiated the Repeated coup attempts prompted Father Bernas, a distinguished constitutional
EDSA revolution, an acronym for the highway running between two military camps lawyer, to declare the country a "nation in crisis."36 Aquino's inherently indecisive
where the uprising began.26 coalition government was rendered even more inert by policy differences over
The People Power movement took the Philippines to a fateful developmental how to deal with communist resistance.37 There was a similar split in the military
crossroads. In April 1 986 President Aquino sought a cease-fire with insurgents, and between the traditional Old Guard and reformists, resulting in the military coup
planned to negotiate directly with the communists.27 But by October this effort had of 1 987. The reformists were far from defeated, and might have triumphed in a
met strong resistance from the AFP as well as Washington. At this critical juncture purely domestic arena. Once again, however, Washington tipped the scales against
Aquino yielded to the military and toughened her rhetoric toward the rebels.28 Some substantive democratization. More and more America was insinuating itself at all
would argue that she had little choice. The economy had been drained by a nearly levels of Philippine policy making. It even provided air support to save the Aquino
$28 billion foreign debt contracted by Marcos,29 who had also funneled billions into government in the Great Coup of 1 989.38
Swiss banks.30 She desperately needed US assistance to revive the sinking economy. Not surprisingly the administration balked at its promised land reform. The issue
Though she obtained $350 million in extra aid after her speech to the US Congress was thrown to the still unelected Congress, dominated by landlords.39 This incited
on September 1 8 , 1 986,31 this was still not enough. Her attempt to further placate the "Mendiola" incident of January 1 987, a demand for action involving 1 5 ,000
the US would have serious domestic consequences. Already her administration peasant protesters led by the Movement of Filipino Farmers (Kilusang Magbukid ng
was being called the "US-Quezon puppet show."32 What it accomplished was the Pilipinas, or KMP). Aquino refused to meet the KMP when it submitted a proposal
conversion of People Power, and hence democracy, into a hegemonic device. detailing how to achieve land reform within five years40 Nineteen farmers were killed
This putative people's President had reached much the same crossroads that South in associated police gunfire.41
Korea's Kim Dae Jung would face ten years later when he filed for IMF assistance. Progressive hopes were fast evaporating. As the tactical command center of
People Power, NGOs had entered a brief alliance with the government after the
fall of Marcos, but the "Mendiola" incident and the May 1 1 , 1 987 Congressional
24 David C. Kang, Crony Capitalism: Corruption and Development in South Korea and
elections (which restored the "caciques," or traditional agrarian elites as legislative
the Philippines (Cambridge: Cambridge University Press, 2002), p. 1 73 .
2 5 Temario C . Rivera, State of the Nation: Philippines (Singapore: Institute o f Southeast
Asian Studies, 1 996), p. 1 5 .
2 6 David G . Timberman, A Changeless Land: Continuity and Changes in the Philippine
Politics (New York and Singapore : M.E. Sharpe and Institute of Southeast Asian Studies,
1 99 1 ), p. 1 49.
27 Leonard Davis, Revolutionary Struggle in the Philippines (Basingstoke, UK: The
Macmillan Press, 1 9 89), p. 3 . 33 Timberman, op. cit. , p. 1 79 .
28 Ibid., p . 1 6 8. 3 4 W. Scott Thompson, The Philippines in Crisis: Development and Security in the
29 Karnow, op cit., p.
. 425 . Aquino Era, 1 986-92 (New York: St. Martin's Press, 1 992), pp. 25 and 60.
3 0 As one Philippine journalist put it, "The $ 1 5 billion to $20 billion that Marcos creamed 3 5 Ibid., p. 2 5 .
off has had a big effect. There's a kind of corruption that just recycles the money, but all this 36 Ibid., p. 2 6 .
was taken out." See Teodoro C. Benigno, "Culture: The Culprit," Philippine Star (March 11, 37 Rivera, op. cit., p . 1 8 .
2002), http ://[Link]/[Link]?200nO. 38 Ibid., p. 1 3 5 .
3 1 Lande, op. cit. , p. 27. 3 9 Jose Maria Sison, with Rainer Werning, The Philippine Revolution
: The Leader s
32 Theodore Friend, "The ' Yellow Revolution ' : Its Mixed Historical Legacy," in Carl View (New York: Crane Russak/Taylor & Francis Group, 1 989), p. 1 4 3 .
H. Lande (ed.), Building a Nation: Philippine Challenges and American Policy (Washington, 4 0 Davis, op. cit., p. 7 .
DC : The Washington Institute Press, 1 987), p. 76 (pp. 69-86). 4 1 Thompson, op. cit. , p p . 52-5 3 .
62 Development Without Freedom Booty Globalism: The Neocolonization o fthe Philippines 63

representatives)42 weakened the foundation for state-NGO collaboration.43 The Pushed into this comer, Aquino now placed all her bets on economic liberalization.
growing role of the AFP further undermined such ties. After 1 988, when the Foreign investment began to pour in, but was stalled in the early 1 990s in the face
administration failed to reach a peace agreement with the National Democratic Front of political instability and other setbacks, such as the earthquake of July 1 990.49
(NDF), mounting insurgency pushed Aquino toward greater military dependence.44 With debt consuming 40 percent of the nation's budget, labor protests were sparked
The AFP was now targeting NGO workers and human rights activists with impunity. when oil prices rose 32 percent in September 1 990.50 Aquino settled for a smaller
Although the number of NGOs grew significantly in the late 1 980s and 1 990s, their increase, which may have spared her the fate awaiting Suharto, who would be
influence on the government waned. This was symptomatic of People Power in toppled after he raised oil prices and public transportation fees. Aquino's remedy
general. The Philippines had escaped overt authoritarianism only to fall prey to the was booty globalization, a precocious mix of global and local cronyism. In 1 99 1 she
more covert and therefore sustainable repression that scholars would euphemistically pushed through an unprecedented law to liberalize foreign investments,5 1 and later
label "polyarchy," or "low intensity" democracy.45 that year she signed the pseudo-reformist Local Government Code. In the name of
democratic localism this law transferred political power and financial resources from
the national government to local oligarchs. 52
Booty Globalism
Aquino's attempt to placate the Old Guard hit a snag, however, where trade
Thus democratic reformism was pushed to the social margins at the very moment of liberalization was concerned. Ultimately she had to choose between domestic and
its declared victory. The same would happen in Korea, except that in the Philippines global cronies, the pivotal issue being American bases on Philippine soil. Here the
the movement retained greater potency outside the halls of power. Perhaps this was Old Guard and the masses came together against her. Without a domestic power
because it was less seduced by the false promises of raw economism. The very base, she ended up more a US puppet than even Marcos had been. In September
absence of an economic "miracle" invited political dynamism by way of resistance. 1 99 1 , under public pressure to end the lease for the Subic Bay and Clark bases,53
But this opposition proved so ineffective in achieving even its minimal goals that the the Philippine Senate voted to cancel the Military B ases Agreement (MBA). Aquino
Philippines failed on both sides, in political as well as economic terms. nonetheless bowed to US counter-pressure by accepting a $48 1 million a year rental
Aquino made her orientation clear as she turned her attention from domestic agreement for these bases.54 This was far less than the $ l .2 billion proposed in the
reform to the repayment of the nation's $28 billion foreign debt. This shift came MBA review of 1 988,55 but the US threw in an additional $ 1 60 million a year in
at the expense of economic recovery and natural resource sustainability,46 not to "multilateral assistance," making these combined funds more than the total foreign
mention broken promises regarding equitable income distribution. By 1 99 1 People direct investment (FDI) of $544 million. 56
Power was effectively orphaned.47 This invited a revival of communist and Muslim
insurgencies,48 which in tum invited still more militarization and US dependency.

49 Emilio T. Antonio, Jr., Emilio S. Neri, Jr. and Teresa V. Taningco,

"Capital Inflows and
42 Out of two hundred members of the House of Representatives, 1 3 0 belonged to the Philippine Economy: Issues and Policy Options," in C.H. Kwan,
Donna Vandenbrink and
traditional political families, while another 39 were relatives of those families. See Anderson, Chi a Siow Yue (eds), Coping with Capital Flow in East Asia (Tokyo
and Singapore: Nomura
op. cit., p. 22 1 . Research Institute and Institute of Southeast Asian Studies, 1 998),
p. 273 (pp. 272-92).
43 Along with the growth of the military, the number of NGOs burgeoned in the late 50 Bowie and Unger, op. cit., p. 1 25 .
1 970s. During the 1 950s and 1 960s the Philippines was not a maj or recipient of Official 5 1 Emmanuel S. d e Dios, "Philippine Economic Growth: Can
i t Last?," i n David G .
Development Assistance (ODA)-a crucial stimulant to NGO growth in Southeast Asia at Timberman (ed.), The Phil ippines: New Directions i n Domestic
Policy and Foreign Relations
the time. But with increasing poverty, caused by domestic economic problems and the second (Hong Kong and Singapore: Asia Society and Institute of Southeast
Asian Studies, 1 998),
global oil hike, the Marcos regime increasingly depended on ODA, and on NGOs to manage p. 62 (pp. 49-84).
it. See Gerald Clark, The Politics of N G Os in South-East Asia: Participation and Protest in 52 Steven Rood, "Decentralization, Democracy and Developm
ent," in David G.
the Philippines (London: Routledge, 1 998), pp. 62, 63 and 74. Timberman (ed.), The Philippines: New Directions in Domestic
Policy and Foreign Relations
44 Ibid., p. 82. (Hong Kong and Singapore: Asia Society and Institute
of Southeast Asian Studies 1 998) ,
45 Herbert Docena, "Philippines: Power, not Gloria," Asia Times (March 3 , 2006), http:// pp. 1 1 6, 1 1 7 and 1 26 (pp. 1 1 1 -3 5 ) . '

[Link]!atimes/Southeast_AsialHC03Ae03 .html. 53 See James Putzel, "Social Capital and the Imagined
Community: Democracy
46 Walden Bello, The Future in the Balance : Essays on Globalization and Resistance and Nationalism in the Philippines," in Michael Leifer (ed.),
Asian Nationalism (London:
(Oakland, CA : Food First, 200 1 ), p. 52. Routledge, 2000), p. 1 79 (pp. 1 70-86).
47 See Solita Collas-Monsod, "The War Against Poverty: A Status Report," in David G. 54 Karnow, op. cit., p. 43 3 .
Timberman (ed.), The Philippines: New Directions in Domestic Policy and Foreign Relations 5 5 William E . Berry, Jr., U s.
Bases in the Philippin es: The Revolution of the Special
(Hong Kong and Singapore: Asia Society and Institute of Southeast Asian Studies, 1 998), Relationship (Boulder, CO: Westview Press, 1 989), p. 295.
p. 1 00 (pp. 85-1 1 0). 56 Jonathan Napack, "Stuck at Base," The Far Eastern Economic Review
(October 1 9,
48 Kang, op . cit. , p. 1 55 . 2000), [Link] [Link]!_00 1 0_1 9/[Link].
64 Development Without Freedom Booty Globalism: The Neocolonization of the Philippines 65

Public outrage at her puppetry spilled over into the 1 992 elections. Despite the The plight of farmers fueled communist and Islamic resistance, especially
usual cheating and violence,s7 hopes were raised for a truly independent Philippines. on the island of Mindanao, home to more than two-thirds of the nation's corn
Some thought these would be the first elections where American influence was production.67 Only in retrospect would Ramos blame globalist trade practices for
transcended.58 It seemed auspicious that Fidel Ramos won with less than 24 percent their devastating impact on rural society.68 Nor did the nation as a whole have much
of the vote,59 meaning he would have to work hard to gain public support. He sought to show for its liberalization. Philippine technocrats looked on in dismay as foreign
this by way of his Security Advisor, Jose Almonte, a vocal critic of cartels and debt mushroomed from $28 billion in 1 986 to $3 1 billion in 1 992 and finally to
oligarchic privileges. Ramos gave the impression of attacking the vested interests and $45 billion in 1 997.69 This was not what they had been taught to expect in their
family monopolies that the Americans had sustained since their colonial period.60 economics indoctrination at US universities.
As president, however, Ramos soon pushed for further trade liberalization. Then Although Ramos had implemented some banking reforms by 1 997,70 he packed
Senator and now President Gloria Macapagal Arroyo led the same push in the Senate, top government positions with retired generals who were sure to suppress People
promising that WTO membership would create half a million industrial jobs and Power. During his visit to Manila, Lee Kuan Yew told Ramos that the Philippines
another half a million agricultural ones.61 Filipinos largely took the bait, accepting needed "discipline more than democracy,"7l but what Ramos provided, along with
the argument that their cheap labor would compensate for competitive defects such the usual democratic promises, was simply more of Ramos: he decided to go for a
as low technology and poor transportation. Trickle down economics would take care second term, which meant amending the Constitution and wasting his last two years
of distribution. in office in battles over this issue.72 By mid- 1 997 the country simply wanted less of
In fact, the Philippines lost hundreds of thousands of farming jobs after joining Ramos.
the WTO in 1 995 .62 This should have been no surprise, for the US, Europe and Japan
funneled nearly $ 1 billion per day in tax subsides to their agro-industries,63 all the
while insisting upon "free" international trade with developing countries. There was Politics of the Crash

moderate growth in 1 994 and 1 995 (5 . 1 and 5 . 7 percent, respectively),64 but foreign
The world business press gave the impression that the economic trauma of 1 997
exchange shortages forced a cut in government spending.65 The number of Filipinos
was greater in other Southeast Asian countries than in the Philippines. That delusion
living in dire poverty reached 1 7 million in 1 995, as compared to 1 5 million in
was based purely on the relative losses of foreign investors, not the suffering of the
1 97 5 .66
working classes. The country's poor were already on the edge of bare subsistence,
and could scarcely afford further distress. If other Rim nations seemed harder hit,
57 Carl H. Landt\ Post-Marcos Politics: A Geographical and Statistical Analysis of
this was simply because the Philippines had never risen so high. It could not be
the 1992 Presidential Election (New York and Singapore: St. Martin's Press and Institute of
expelled from a "miracle" club it had never j oined. Its average growth between 1 960
Southeast Asian Studies, 1 996), p. 1 08 .
and 1 996 was 3 .8 percent, as compared to South Korea's 8 .2 .73 As of the early 1 970s
5 8 David G. Timberman, "Introduction: The Philippines' New Normalcy," i n David G .
Timberman (ed.), The Philippines: New Directions i n Domestic Policy and Foreign Relations it was still a richer country than its Southeast Asian neighbors, but in years to come,
(Hong Kong and Singapore: Asia Society and Institute of Southeast Asian Studies, 1 998), as they began to forge the second Asian miracle, the Philippines limped along with
p. 15 (pp. 1 5-22). a 2 percent growth rate.74
59 Greg Bankoff and Kathleen Weekley, Post-Colonial National Identity in the Philippines: That contrast was definitely not due to a better "free market" record on the part
Celebrating the Centennial Independence (Aldershot, UK: Ashgate, 2002), p. 22. of the miracle makers. Quite the contrary, the Philippine government had played a
60 Hutchcroft, op. cit., pp. 25 and 3 0 . less intrusive role in the economy. That, against neoliberal preachments, may help
6 1 Renato Redentor Costantino, "Progress and Regression in the Philippines," Znet from
Business Mirror, Philippines (February 24, 2006), [Link] org/contentlprint_article.
cfm?itemID=9794&section ID= 1 . 67 Subsidies continue unabated, amounting to nearly $ 3 5 billion between 1 995 and 200 3 .
6 2 "Trade Rigged against the Poor," The International Herald Tribune (July 2 1 , 2003), Ibid.
[Link] 1 03448. 68 "Trade Rigged Against the Poor," The International Herald Tribune (July 2 1 , 2003),
63 "The Rigged Trade Game," The New York Times (July 20, 2003), http ://www. http: //www. [Link]/[Link]?template=[Link]&ArticleId= 1 0344 8 .
[Link]/2003/07/20/opinionf20SUN l .html . ; and "Trade Rigged Against the Poor," The 69 Bankoff and Weekley, op. cit. , p. 24.
International Herald Tribune (July 2 1 , 2003), [Link] 70 Putzel, op. cit. , p. 181.
te=artic1eprimt. tmplh&ArticleId= 1 03448. 7 1 Jon Liden, "The Ramos Model for Asian Leadership," The Asian Wall Street Journal
64 Hutchcroft, op. cit., p . 26. (October 27, 1 998), p. 1 0.
65 De Dios, op. cit., p. 50. 72 Ibid.
66 By contrast, Thailand managed to cut those numbers from 3 .4 million to less than 73 Kang, op. cit. , p. 54.
500,000 during the same period. See Deidre Sheehan, "Rural Poor are the Real Key," The Far 74 "The Jeepney Economy Revs up," The Economist (August 1 6, 2007), [Link]
Eastern Economic Review (May 24, 200 1 ), [Link] 1 05_24/[Link]. com/[Link]?story_id=9657 1 4 7 .
66 Development Without Freedom Booty Globalism: The Neocolonization of the Philippines 67
to explain why both local and international investment remained weak. In any case, Estrada's graft and playboy antics set the stage for People Power II, born of broad­
as one Filipino businessman put it, "We got to the party late, so we didn 't get as spectrum opposition to the government's neoliberal agenda. Among the protesters,
drunk."7S Capital account liberalization so seriously backfired that much capital exit ironically, was former President Aquino, along with small business owners and
had occurred long before the Crash.76 Even during the final quarter of 1 997, when Catholic leaders such as Cardinal Jaime S in, who had initiated People Power I in
other Rim countries were smashed by capital outflows (South Korea, Singapore 1 986.83 As tens of thousands of people gathered at the Malacanang presidential
and Thailand losing $ 1 7 billion, $ 1 3 .3 billion and $8.4 billion, respectively), the palace, E strada found himself abandoned by his army, the police and even his
Philippines attracted $204 million.77 In short, its economy had been on a recovery cabinet.84 The economy had slid into recession, while swelling deficits prompted
path when the Crisis struck. the World Bank and the IMF to hold back scheduled loans of over $500 million.8s
Thus the financial side of the Asian Crisis was more an "intruder" here than Estrada, moreover, was accused of stealing $80 million,86 which led to impeachment
elsewhere. The trauma of 1 997 is better reflected in the nation 's political upheaval proceedings.87 The night before his fall, more than one million demonstrators took to
than in its economic condition. It is no accident that tension between the military the streets, with much of the protest centered around the shrine of the 1 986 People
and the Moro Islamic Liberation Front (MILF) intensified during 1 997 . The conflict Power uprising.88
escalated when the AFP launched an attack on one of the MILF 's base camps in The final blow came in January 200 1 , when the military switched its support
Central Mindanao.78 This confrontation continued into the next two administrations, to Vice President Arroyo . 89 This was in fact a preemptive strike against a fledgling
but was eclipsed by more mainstream political unrest. People Power II. Solid backing from the military allowed Arroyo to crack down on
The landslide victory of Joseph Estrada, a former C-grade movie star, would have counter-protesters who realized that as bad as Estrada was, Arroyo would almost
been unthinkable without the turmoil that followed in the wake of the Crash. Here certainly be worse.90 On the surface she won, but her hard-line tactics proved a boon
again the Philippines was in a different cycle from most Rim nations. Having come to the Philippine Left. This polarity was further aggravated after September 1 1 , 200 1 ,
to the democratic reform party early, it also met disillusionment early. Hopes were when she emerged as the chief Asian cheerleader for the US-led war on terrorism.
plummeting here just when Indonesia and Thailand were riding a wave of democratic Arroyo's master plan since 9/ 1 1 has been to brand her enemies as terrorists: the
optimism. Even in Korea, where democratization lost much of its reformist zeal in CPP (Communist Party of the Philippines), the NPA (New People's Army) and even
the 1 990s,79 the fall from grace was not so great as in the Philippines, which failed Professor Jose Maria Sison, in exile in the Netherlands.9 1 Under cover of this threat
its people economically as well as politically. she conveniently renewed military ties with Washington, once again offering the
Drawing on his acting experience, Estrada cast himself as a defender of the poor,
but like Aquino he quickly sold his loyalty to globalist interests that sought only
"stability" on their terms. He not only stood opposed to strikes,80 but soon began
rehabilitating old Marcos cronies. This killed any hope for an end to communist 83 "Travails of a Philippine President," The New York Times (November 8, 2000),
insurgency.8 l The general public soon caught on to Estrada's duplicity, and after 1 5 [Link] com/2000/ 1 1 /08/opinionl08WED 3 . html; and Seth Mydans, "Philippine
months i n office he found himself facing more than 1 50 ,000 protesters in Manila. House Impeaches President Estrada," The New York Times (November 1 3 , 2000), [Link]
Their main complaint was that he was trying to remove constitutional restrictions that nytimes.coml200011 1 1 1 3/worldl 1 [Link].
prohibited foreigners from owning land or holding more than 40 percent ownership 84 Mark Landler, "Manila Moves Incite Talk of ' Dark Side of People Power,'" The New
of local companies.82 York Times (May 3 , 2 00 1 ), [Link] .coml200 l /05/03/world/03FILLhtml.
85 Tom Holland, "Manila's Recession Risk," The Far Eastern Economic Review
(November 2, 2000), http ://[Link].coml_001 1 _02/[Link].
86 Deidre Sheehan, "Rural Poor are the Real Key," The Far Eastern Economic Review
75 Kang, op. cit. , p. 1 5 1 . (May 24, 2 00 1 ), [Link] 1 05 _24/[Link].
76 Montes, op. cit. , p. 266.
87 Seth Mydans, "Philippine House Impeaches President Estrada," The New York Times
77 Ibid., p. 1 57 . (November 1 3 , 2000), [Link] 1 1 / 1 3/world/ 1 3 [Link].
78 Cristina V. Rodriguez, "Reporting o n an Inexplicable War," Philippine International 88 Kim Scipes, "Round Two : People's Power in the Philippines Removes Another
Review (winter 1 997-98), [Link]
President," ZNet Commentary (February 2, 2000), [Link]
79 See Songok Han Thornton, The 'Miracle' Revisited: The De-Radicalization of Korean
54a1 1 [Link].
Political Culture, New Political Science, Vol. 27, No. 2 (June 2005), pp. 1 6 1 -76. 89 Seth Mydans, "Brief Mutiny was Pale Shadow of Past Philippine Coups," The New
80 Joseph Ejercito Estrada, "The Philippine Advantage," The Asian Wall Street Journal York Times (July 2 8 , 2003), [Link]
(December 1 6, 1 998), p. 6.
html.
8 1 "Estrada Support of Marcos Cronies Threatens Peace Talks," The Hong Kong Standard 90 Deidre Sheehan, "More Power to the Powerful," The Far Eastern Economic Review
(June 28, 1 99 8), http ://[Link]-hwp. comlarchieves/54a1 1 1 7 .html.
(F ebruary 1 , 2 00 1 ), [Link] 1 02_0 1 IpO 1 [Link].
82 "'Constitution Changes Protested," The New York Times from The Associated Press 9 1 Pepe Escobar, "All Quiet on the Second Front," Asia Times Online (October 7 , 2004),
(August 20, 1 999), [Link] [Link]
68 Development Without Freedom Booty Globalism: The Neocolonization ofthe Philippines 69

Philippines as a refueling depot.92 Worse still, against the Philippine constitution, US the hope of simple justice for people with no other [Link] If a farmer's water
troops were brought in to fight on Philippine soil. The result was an unprecedented buffalo is stolen, it is extremely unlikely that the police will do anything about it. But
anti-American alliance: a potpourri of nationalists, moderate reformists, and hard­ the NPA will. 1 02 For the poor and oppressed, that is a winning argument.
left groups such as B ayan Muna (or Nation First).93 75,000 leftists joined marches The quest for justice also fuels resistance in more mainstream politics, where
under the slogan "resign all," aimed at the president and her entire government. 94 graft is the salient issue. In 2003 some 300 junior Philippine Army officers mutinied
With her back to the wall domestically, Arroyo focused all the more on the over corruption within the military and administration. 1 03 Twice in two years
international front, seeking to lure foreign investors. She not only installed a US­ Arroyo's husband, Miguel Arroyo, was mired in scandal , 104 and another scandal
trained technocratic cabinet, but even hired an American public relations firm on engulfed Chief Justice Hilario Davide, who previously had a clean reputation. This
an $800,000 contract to promote her image abroad.95 Meanwhile her domestic compromised Davide's effort to maintain the judiciary's independence from political
popularity continued to plummet and in December 2002 she announced that she co-optation, l OS including the machinations of Arroyo herself.
would not seek reelection, but would devote her remaining time in office to complete Her 2004 reelection campaign came under fire from Senator Panfilo Lacson, a
her putative "reforms."96 She changed her mind, however, as her rising geopolitical former police chief under Estrada, who was backed by the Kilusang Bagong Lipunan,
status energized her administration. or KBL Party. 1 06 Lacson's hard-line reputation compelled Arroyo to adopt similar
On the pretext of combating global terrorism-which is to say I slamism­ measures, such as the reinstatement of the death penalty. An increase of kidnapping
Washington poured in more than $90 million in military aid between fall 200 1 and cases involving business executives made such measures attractive to the business
January 2003, as compared with less than $2 million per year previously.97 However, community, which Arroyo could not ignore. 1 07 At the same time, however, she has
the root of the insurgency is not religion or ethnicity so much as poverty and social all but endorsed a shocking pattern of violence against dissident j ournalists, lawyers,
injustice. The military well knows this, and therefore considers the New People's union organizers and human rights workers. Hundreds have been liquidated in recent
Army (NPA), the military wing of the Communist Party, a much bigger threat than years,108 with very few arrests and scarcely any convictions. 1 09
all the Islamic resistance groups combined. The numbers speak for themselves: the An investigation led by former Philippine Supreme Court Justice Jose Miro held
NPA now has 1 28 guerrilla fronts in 8,000 villages, or 20 percent of all villages in military personnel responsible for most of the 830 murders that had taken place
the country.98 under Arroyo by early 2007 . The pace of these assassinations surpassed even the
Along with its comrades in the National Democratic Front, the NPA has been
stigmatized by the US State Department as a "terrorist" group, but in fact it is part
of a long struggle for substantive democracy.99 After 3 5 years in open rebellion, at 1 0 1 Carlos H. Conde, "Communist Revival Worries the Philippines," The New York Times
a cost of 40,000 lives, l Oo the Communists are again gaining strength. Indeed, they (January 4, 2004), [Link] 1 I04/internationai/[Link].
function almost like a government in many remote areas, their popular appeal being 1 02 Simon Montlake, "In Capitalist Asia, Philippines still Grapples with Communists,"
The Christian Science Monitor (December 7, 2005), [Link] l 207/
p04s0 l -[Link].
92 James Hookway, "Just Say 'No ' To U.S. Troops," The Far Eastern Economic Review 1 03 Simon Montlake, "Mutiny Raises Questions of Philippine Army Corruption," The
(December 6, 200 1 ), [Link] 1 /0 1 1 2_06/[Link]. Christian Science Monitor (July 28, 2003), [Link] 8/p07s0 1 -
93 James Hookway, "In the Clutches of the Eagle," The Far Eastern Economic Review [Link].
(February 7, 2002), [Link] I [Link]. 1 04 Marites Danguilan Vitung, "Wanted: Democratic Institutions," The International
94 Mark Mitchell, "Shut out of People Power," The Far Eastern Economic Review Herald Tribune (September 1 9, 2003), http ://[Link].comlartic1esI l I [Link].
(February 8, 200 1 ), http ://[Link].coml_O 1 02_08/[Link]. 1 05 Philip Bowring, "The Philippines: Democracy in Crisis," The International Herald
95 James Hookway, "All Things to All People," The Far Eastern Economic Review Tribune (November 3 , 2003), [Link] I 1 [Link].
(February 7, 2002), http ://[Link]/artic1esI2002/0202_07/pO I [Link]. 1 06 Rodney Tasker, "A Tough Line at the Top," The Far Eastern Economic Review
96 "Lame Duck Plan to Soar," The Economist (January 30, 2003), [Link] (February 20, 2003 ), p. 20 (pp. 20-2 1 ).
[Link]?Story_ID= 1 5603 8 5 . 1 07 Carlos H. Conde, "Philippine Reinstates Death Penalty," The International Herald
97 Joshua Kurlantzick, "Stop Arming Southeast Asia," The New Republic (January 20, Tribune (December 5, 2003 ), [Link] [Link]-bin/[Link]?template=artic1eprint.
2003), [Link] [Link]?I=20030 1 20&s=kurlantzickO I 2003 . tmplh& Artic1eId= 1 20403 .
98 Carlos H. Conde, "In Philippines, a threat revives," The International Herald 1 08 E. San Juan, Jr., "We Charge Genocide: A Brief History of US in the
Tribune (December 26, 2003), [Link] [Link]?template=artic1eprint. Philippines," Political [Link] (December 2005), [Link]
tmplh&Artic1eId= 1 22828. articleview/22741 l 1 l 331
99 E. San Juan, Jr., "Imperialist War Against Terrorism & Revolution in the Philippines," 1 09 Carlos H. Conde, "Philippine Leader Vows to Pursue Culprits in Killings of
Dissident Voice (September 1 5, 2004), [Link] 1 5 .htrn. Journalists," The New York Times (December 1 0, 2004), [Link] l 2/ 1 0/
1 00 "Accord on Philippine Human Rights Inquiry," The New York Times (February 1 5 , internationaVasial 1 [Link]; and Herbert Docena, "Killing Season in the Philippines," Asia
2004), [Link] 1 5/internationaVasial 1 [Link]. Times (June 2, 2006), [Link]
 Development Without Freedom Booty Globalism: The Neocolonization of the Philippines 71
70
, o f Argentina before its crash. 1 I9 The social turmoil she calls "terrorism" cannot be
worst periods of Marcos 20-year tyranny. 1 10 Whether or not Arroyo directly ordered
these crimes, I I I her patent indifference i s contemptib le, and should be enough, under contained by any amount of military aid.
the provisions of the Leahy Amendment, to end US military or police assistance to The thousands of protesters who marched in Manila in September 2003 , in
the Philippines. unison with anti-WTO protests in Cancun, Mexico, evoked memories of the original
Except for Iraq, there is no place on earth where a reporter's job is so dangerous People Power. Spearheaded by 30 social movements and NGOs, marchers chanted
as here. 1 I2 Meanwhile the government is issuing new restrictive guidelines for "Globalization: Betrayal of the People" and "the Philippines is not for sale."120 But in
j ournalists, some of whom have already been charged with sedition. 1 1 3 Naturally the fact the Filipinos themselves are for sale worldwide in the form of migrant labor. 121
question is how America will respond. So far Washington has refrained from any Of a less than 90 million popUlation, 10 million work abroad as contract workers or
substantive reaction, which of course sends a green light for Arroyo to keep up the domestics . 1 22 Their country neither offers them a living wage at home nor defends
good work. their human rights abroad. They are commodities for export, pure and simple.
Why has Arroyo's national sellout, punctuated by obvious election fraud,1 23
brought such a tepid public reaction? The answer, Walden Bello suggests, is the
Conclusion: End of an Era cumulative disillusionment of so many dashed reform hopes in the past. Just as
demonstrations against Estrada put Arroyo in office, there is great public confidence
Much as Aquino forfeited People Power I, Arroyo 's tum to military solutions in her that demonstrations against Arroyo could result in someone as bad or worse. 1 24
"war on terrorism" is in fact a bulwark against People Power II. Her desperate bid for Having joined the WTO in 1 995, the Philippines was obligated to fully
foreign aid could have been leveraged by Washington as a reform incentive. Instead implement its regulations by 2005 . That meant terminating the import restrictions
the Bush administration encouraged raw militarism and blatant anti-Islamism. 1 l4 that had shielded not only domestic capitalists but also (by pure accident) subsistence
Arroyo had no trouble playing this 9/ 1 1 card. Conveniently timed bombings of farmers, despite massive illegal imports from China. Now Filipino peasants face the
Christian targets preceded her state visit to Washington in May 2003 . She of course global market alone,125 while the upper bourgeoisie affiliates itself ever more with
blamed the MILF, but their denials were consistent with the organization's past the transnational capitalist class. It is hardly surprising that lower class incomes have
policy of avoiding civilian targets. 1 I 5 plummeted throughout the country. This trend is epitomized by Smoky Mountain, a
This "anti-terrorist" gambit paid off in the short run: Arroyo got her American 40-year-old garbage heap on the outskirts of Manila. Thirty thousand indigents eke
aid and won reelection in May 2004 by a margin of a million votes . 1 1 6 This left out a living here by rummaging through smoldering trash in search of things to sell,
her, however, at the helm of a sinking ship. At 80 percent of GDP, 1 I 7 the country 's recycle, or eat. Although 80 percent of their children do not attend school, some feel
public debt (due in large part to corporate and elite tax evasion)l l8 resembles that

1 1 9 Marites Danguilan Vitung, "Star power holds perils for the Philippines," The
Times (February 1 3 , International Herald Tribune (February 20, 2004), http ://[Link]?
1 1 0 Cher S. Jimenez, "Deadly Dirt Work in the Philippines," Asia
template=articleprinttmplh& Articleld= 1 3 0 3 5 3 .
2007), [Link] 1 3AeO 1 .html.
1 20 "Anti-globalization initiatives o n the WTO: A country updated-Philippines," Global
1 1 1 It is clear-in the words of the Asian Human Rights Commission-that these killings
could continue only with her direct or indirect approval . . . . " See "The President Fails to Take
Network-Asia: An Alliance of Trade Concerns an Labor NGOs in Asia (downloaded December
3, 2004), [Link] [Link].; and Herbert Docena, "Thousands march in Manila
Decisive Steps to End Extrajudicial Killings," Asian Human Rights Commission-Statement
against WTO, corporate globalization, and war," [Link] (September 14, 2003), [Link]
(July 2 5 , 2006), [Link]
[Link]/agp/free/cancunlactioniasial09 1 4march_manila.htm.
1 1 2 Diana Mendoza, "Philippines: Dangers of Journalism," ZNet (August 26, 2004),
1 2 1 Only India and China export more labor than the Philippines, whose overseas
[Link] [Link]/contentiprint_article .cfin?itemID=6 1 1 1 &sectionID= 1 .
workforce leapt from 3 80,000 in 1 986 to about 1 million in 2006. See Constantino, op. cit.
1 1 3 "Dark Days for Philippine Democracy," Th e New York Times (April 5 , 2006), http://
1 22 San Juan, Jr., "We Charge Genocide," op. cit.
[Link] s.comJ2006/04/05/[Link].
1 23 Arroyo 's voice on intercepted tapes leaves no doubt that she attempted to influence
1 1 4 Steven Rogers, "Beyond the Abu Sayyaf: The Lessons of Failure in the Philippines,"
an electoral commissioner. See Walden Bello, "The Global Crisis of Legitimacy of Liberal
Foreign Affairs, VoL 83, No. 1 (January/February 2004), p . 20 (pp. 1 5-20).
Democracy," Spectrezine (November 29, 2005), [Link]
1 1 5 Ibid., p. 1 8.
BBC News (June 20, 2004), http ://[Link].c [Link]/pr/ 1 24 Bello, "The Global Crisis," op. cit. This very disillusionment may explain why
1 1 6 "Profile: Gloria Arroyo,"
Arroyo felt secure enough to lift the state of emergency she had declared after an alleged coup

j
frl-/2lhilasia-pacific/26 1 4607. stm.
attempt. See Donald Kirk, "People-Powered Out in the Philippines?," The Christian Science
1 1 7 Simon Montlake, "As Asia booms, the Philippines is awash in red ink," The Christian
Monitor (March 1 5, 2006), [Link] 1 5/[Link].
Science Monitor (December 24, 2004), [Link] 224/[Link].
Herald Tribune 1 2 5 See Maria Linder-Hess, "Economic globalization," A Common Place (November
1 1 8 Philip Bowring, "Time for Arroyo to get tough," The International
2003), [Link] orgluslglobalizationiviewpointslLinder_Hess.html.
(June 1 , 2004), [Link] [Link]?file=5227 6 1 .html.
72 Development Without Freedom Booty Globalism: The Neocolonization ofthe Philippines 73

fortunate to make as much as 3 00 pesos a day (over 5 dollars ). 1 26 Such are the fruits (effectively surrendering to the Washington Consensus, since any such assistance
of global restructuration. would certainly come with tight strings attached) he got no more than a polite reply
Not all the poor are deluded about the benefits of booty globalization. Those from Bush. 1 2 9 The message to future Thaksins was clear regarding the delineation of
who join resistance movements will be labeled "terrorists," and their numbers are center and periphery in the global system. I 3O
sure to swell. Meanwhile globalism is armor-plating itself with a new security Like Aquino before, Arroyo knows better than to question her status as a kept
agenda. 1 27 This is necessary because one of globalization's best local allies is no woman. She limits herself to testing her power on the domestic rather than US side
longer up to the task. For nearly two decades successive waves of People Power of the globalist equation. The outcome of this experiment in political retrenchment
have served primarily as an instrument of hegemony: to contain subversive social will say much about the future of globalism'S "democratic" legitimacy. If the
forces, reducing pressure for structural change from below, as opposed to globalist Philippine power elite can get along without the camouflage of ersatz People Power,
restructuration from above. Transnational capital could not have gained its present so can other developing authoritarianisms. In that case the winner may well be Sino­
grip on Philippine policies without this populist cover. globalism, which makes no democratic claims whatsoever.
For that very reason, despite its awesome financial clout, booty globalization The clear loser in this political race to the bottom appears to be democratic
faces an uncertain political future. People Power has lost so much of its popular development: Amartya Sen's "development as freedom." If there is any ground
appeal that the Aquino-style center no longer holds. Right and Left confront each for optimism here, it issues from the fact that booty globalism-which is to say
other with no centrist buffer, such that a toughened security apparatus is required to the Smoky Mountain school of development-no longer has People Power as its
ward off militant resistance. At this j uncture, with globalization effectively moving "democratic" prop. Instead it seeks legitimacy from the same post-9/ 1 1 fear factor
millions ofworkers from the Third World into the Fourth, booty globalism will either that President Bush has made the leitmotif of his foreign as well as domestic policy.
be defeated or will triumph as never before. However, as Thaksin learned too late, this security imperative has a short shelf life.
In the latter case the country will become a happy hunting ground for global Tellingly it was the urban bourgeoisie, in league with the military and the King, that
capital, with many more Smoky Mountains on hand to keep the underclasses gainfully toppled Thaksin in September 2006. The irony is that Thaksin himself had become
employed. The big question in a country with an active and growing Left is how the chief obstacle to the implicit promise of Thaksinocracy, which was to broadly
resistance can be stunted. This includes democratic resistance. Capital will flee any share the spoils of globalization among the affluent classes. Thaksin, however, had
country that cannot offer a "stable" investment climate, and in our era the greatest behaved more and more like another Marcos or Suharto. The urban Right felt it was
destabilizing force, even greater than Islamic j ihad, is unmanaged democracy. In not getting its share of the take.
recent years there have been two proven formulas for such management: democratic Arroyo, by contrast, has much more to fear from unrest on the Left-a fire that
co-optation and Tiananmen-style repression. Arroyo fails on both sides, having could easily spread out of control. This could have a devastating effect on foreign
neither the power to crush democracy in the Beij ing manner nor the populist direct investment. To avoid capital flight, or simply to keep the peace, some form
credibility to lull reformists into a renewed state of "democratic" inertia. of People Power will have to be reactivated as a pressure release mechanism. This
Whatever the future of booty democracy in the Philippines itself, its application time, however, the general public is going to demand more of the real thing. The
elsewhere in Asia and the developing world is not in doubt. Thailand's Thaksin used resurgence of People Power on these terms could bring an end to six decades of
this democratic control mechanism to entrench his plutocracy, while his enemies "democratic" neocolonization.
used their variant of it to challenge his political machine. He was in no position to
call in American reinforcements, as nearly all Philippine presidents have at some
point, for as prime minister he had devoted much of his energy to tilting the globalist
balance of power in his favor. 1 2 8 Anti-IMFism had been the crowning glory of
early Thaksinocracy, with Washington's tacit consent, but later the tycoon-in-chief
tipped the balance too far. When he finally sent out an S.O.S. for Washington's help 1 29 On Thaksin's urgent call for help from the White House, see Seth Mydans, "Saving
Thai Democracy: Will the Cure Kill the Patient?," New York Times (August 30, 2006), http://
1 26 Escobar, "Poverty, Corruption," op. cit. [Link]/2006/08/30/worldlasia/[Link].
1 27 On neoglobalist securitization see William H. Thornton, New World Empire: 1 3 0 Nonetheless, as Washington was fully aware, Thaksin was still a moderate when
Terrorism, Civil Islam, and the Making of Neoglobalism (Lanham, MD : Rowman & it came to tipping the globalist balance. He made a show of paying back IMF loans early­
Littlefield, 2 005), pp. 20 and 2 1 ; and on securitization in the Philippines see William H. symbolically declaring independence from Washington-based globalization-yet all the while
Thornton, "Insecurity Forces: The Asian Costs of the War o n Terrorism," Radical SOciety: he worked assiduously to link Thai farm production to the global market. This put him at odds
Review of Culture and Politics, Vol . 28, No. 2 (July 2002), p. 60 (pp. 57-64). with economic nationalists, including King Bhumibol himself, who had worked just as hard
1 28 William H. Thornton, "Another Thailand was Possible: Thaksin and the Thai to tie the rural sector to self-sufficient domestic markets. See "Of Kings, Coups, and Asian
Response to Globalization," Radical Society: Review of Culture and Politics, VoL 32, No. 2 Democracies," The Christian Science Monitor (September 2 1 , 2006), [Link]
(Summer 2006), p . 73 (pp. 7 1 -80). coml2006/092 1 [Link].
 Chapter 4

Lesson of the "Broken Hearts" : The Rise

and Fall of Indonesian Reformasi

Fragile Miracle

More than anywhere else on the Rim, the Indonesian "miracle" economy came
wrapped in a political straight-j acket. To miss this fact is to minimize the emancipatory
potential ofthe Crash of 1 997-98 . It is telling that the Crash as a whole is commonly
referred to as the Asianjinancial cri s is, as if political and other non-economic factors
can be bracketed out of consideration. Such erasure long shielded corrupt regimes,
and then played a key part in turning the Crash into an ongoing Crisis.
Calls for reform were so rampant after the Crash that it i s astonishing how little
has changed. There was a changing of the guard, but not of the system or the basic
ideology. In Indonesia's 2004 election campaign, no candidate or party questioned the
neoliberal agenda of Suharto-era technocrats. ! Post-Crash "reforms" only intensified
this fixation. The very word "reform," in IMF parlance, was so economized that it
ended up as little more than a bailout mechanism for foreign and domestic investors.
The global institutions that rushed in to repair this "financial crisis" helped to stanch
the one positive effect that might have come from the Crash: the escape it promised
from developmental authoritarianism.2
Throughout the region, but especially in Indonesia, pent-up reform energies held
out hope for a developmental sea change. Once again the Troj an Horse of Western
technocracy was rolled in to guarantee the stability that a "healthy investment
climate" required. The ironic result was instability on an epoch scale. Those who
blame the IMF and other international institutions for compounding the crisis are
actually optimists. They seem to assume that these blunders were rare exceptions to
the rule, rather than cases of del iberate conformity to a global pattern that could not
have been missed by policy makers. Even in good times, IMF and World Bank lending
policies had stimulated growth at a ghastly political, social and environmental price.3
And once the crisis struck, as they knew it would, these institutions stood ready to
impose counter-Keynesian policies that served market interests at all costs.

1 Max Lane, "The Distraction is Over," Inside Indonesia (January/March 2005), http://
www. [Link]/edit8 1 1p 1 9-20_lane.html.
2 William H. Thornton, Fire on the Rim: The Cultural Dynamics of East/West Power
Politics (Lanham, MD: Rowman & Littlefield, 2002), p. 1 3 9.
3 Arturo Escobar, Encountering Development: The Making and Unmaking of the Third
World (Princeton, NJ: Princeton University Press, 1 995), p. 56.
 Lesson of the "Broken Hearts " 77
76 Development Without Freedom
success rested on their alliances. Working closely with the Army, they became a
expos ed to a development regimen
The Asia Pacifi c region would now be fully bulwark of Suharto's New Order. The Armed Forces of the Republic of Indonesia
example, the global debt crisis of 1 982,
that others knew all too welL C onsider, for (ABRI)-now called the Indonesian National Military (TNI)-needed civilian
lending to the Third World jumpe d from
which should have been no surpri se after partners to disguise its double function ("dwifungsi") of politics and security. In this
1 98 1 .4 The sweeping restructuration that
$2.7 billion in 1 970 to $ 1 2 billion in way ABRI increasingly dominated state enterprises such as oil companies. 1 0
e," which stood in stark contrast to
followed resulted in Latin America's "lost decad From the early years o f the New Order, the technocrats implemented policies
s were please d to have that growth gap
East Asia's boom of those same years. Asian to secure foreign aid, loans and investment, especially from the US and Japan. I I
the wind out of Latin dependency
explained in terms of Asian values , which took Thanks to the interpenetration of military and civilian institutions, aid that was
dency was at work on the Rim, where
theory. Few noticed that another form of depen not earmarked for the "military" could still promote the militarization of the New
capital influx throughout the 1 980s.5
geopolitical advantages guaranteed a constant Order and the de-pluralization of Indonesian politics. This techno-military merger
ce for massiv e trade imbalances that
This unlevel playing field also ensured toleran was strongly anti-communist and pro-development, those being two sides of the
were tantamount to economic aid. same geopolitical coin. Indonesia would be one of the largest recipients of US aid
to wane, and by the time of
With the end of the Cold War that tolerance started
in Asia, 1 2 while America would be Indonesia's maj or supplier of arms. 13 The first
Rim econo mies with more solicitude
the Asian Crash the IMF saw no reason to treat priority of New Order foreign policy was to clean up Jakarta's international image
Rim was effectively downgraded
than it extended to other developing region s. The so as to attract capital. Loaded down with foreign debt, the regime had little choice in
nations may later have regretted
to the status of Mexic o in its Tequila Crisis . Rim the matter. It depended upon a continuous infusion of capital for its very solvency. 1 4
time of the Crash they stil l trusted
the IMF loan terms they accepted, but at the The military therefore backed the technocrats, who in tum became rubber stamps
of IMF directives can be measured
their erstwh ile benefactor. The devastating effect for ABRI policies. 1 5
bucked the system, yet weathered
against the base line of Malaysia, a country that Two groups competed with the technocrats i n this rubber-stamp capacity:
ors.6
the Crisis better than its more compliant neighb economic nationalists, who held that the government should tightly manage the
Conversely, no country did worse than Indon esia, despite the fact that it yielde d
economy, and Suharto's cronies and relatives, who simply wanted their share of the
out of habit. To placate the West in
almost uncon ditiona lly to IMF dictate s. This was
regime implemented liberalization take. Friction with the nationalists can be divided into three phases. In the first, from
the wake of its bloody 1 965 takeover, the Suharto
to foreign investors in 1 970. 1 966 to 1 974, the technos were at the helm of most economic policymaking. Their
policie s as early as 1 967, with capital accounts opened
d devaluations of the rupiah: 1 0 international connections were in great demand at this time of acute dependency,
Jakarta sought foreign capital by way of repeate
1 983, and 3 2 percent i n 1 986.7 but their influence waned with the relative autonomy that Indonesia gained from
percent i n 1 97 1 , 5 0 percent i n 1 978, 40 percent i n
in could just as easily rush out. the global surge in oil prices of the 1 970s. Windfall revenues reached $4.2 billion
Scant attention was given to the fact that what flowed
liberalization. s in 1 974, while the second surge of 1 979-80 pushed that figure to $ 1 3 .4 billion by
Oblivious to the danger, technocrats pushed for further
1 98 1 . Thi s enabled the nationalists to seize control and press for heavily subsidized

Rise and Fall of the Technocrats

10 Syed Farid Alatas, Democracy and Authoritarianism in Indonesia and MalaYSia: The

By 1 988 neo-classical economists such as Professors Widjoyo Nitisastro and Ali Rise of the Post-Colonial State (London: Macmillan Press, 1 997), p . l 37 .
1 1 Dewi Fortuna Anwar, Indonesia in ASEAN: Foreign Policy and Regionalism (New
Wardhana had taken over Jakarta's economic planning, but these technocrats (known
York and Singapore: S1. Martin's Press and Institute of Southeast Asian Studies, 1 994), p.
to critics as the "Berkeley Mafia")9 rarely wielded power in their own right. Their
280 and p. 287.
12 Ibid., p. 2 8 1 .
l3 Ibid., p . 283. Benedict Anderson shows that the U S knew about the plan to invade East
Rau, Dark Victory: The United States and
4 Waden Bello, Shea Cummingham, and Bill
p. S and p. 1 3 .
� � �
Timo . Kissi ger imply advise � Jakarta to "do it quickly." Some 90 percent of the weapons
Global Poverty (London: Pluto Press, new edition, 1 999), used m the InVaSIOn were proVIded by the US, in clear violation of US treaty agreements.
S Ibid., p . 34.
See The Spectre of Comparision: Nationalism, Southeast Asia and the World (London : Verso,
ically independent. Its protectionism was
6 That is not to say that Malaysia was econom
influx of Japane se investm ent. See Ibid.
�or more o? this US complicity, see Adam Schwarz, A Nation, op. cit., pp.
1 998), p. l 3 3 .
made possible by an ample 203-4 . Concernmg the CIA s false report and the grossly biased coverage of the 1 965 coup, see
ed Ariff and Ahmed M . Khalid , Libera lization , Growth and the Asian Financial .
7 Moham BenedIct Anderson and Ruth McVey, "What Happened in Indonesia?," The New York Review of
mies in Asia (Cheltenham, UK: Edward
Crisis: Lessonsfor Developing and Transitional Econo Books (June 1 , 1 978), [Link] 1 44 ; and their A Preliminary Analysis
Elgar, 2000) , p. 1 57 and p. 1 59 . of the October 1, 1 965 Coup in Indonesia (Ithaca, NY: Cornell Modem Indonesia Project'
(Boulder, C O :
8 Adam Schwarz, A Nation in Waiting: Indonesia s Search for Stability
1 97 1 ).
Westview, 2000), p . 49. 1 4 Anwar, op. cit. , pp. 3 8-3 9 .
The Politics of a Troubled Relationship (London:
9 Rizal Sukma, Indonesia and China: 1 5 Sukma, op. cit. , p. 7 7 .
Routledge, 1 999), p. 76.
78 Development Without Freedom Lesson of the "Broken Hearts " 79

new industries. For the moment that put the technocrats out to pasture. They were from state coffers."25 Few in the West showed much concern about this glaring fact
soon back in vogue, however, as oil prices dropped from $30 a barrel in 1 984 to $ 1 0 prior to the Crash.
in 1 986. 1 6 The popular notion that Asia's "crony capitalists" were evil nationalists locked
Not surprisingly the technos adopted a more liberal development strategy, in mortal combat with neoliberal saviors was a disastrous error, for this myth
reversing the nationalist preference for import substitution. They devalued the guaranteed that the cure for the subsequent Crisis would be sought in still greater
rupiah in 1 986, so as to boost export competitiveness and attract foreign investment. neoliberalization. Far more than nationalist protectionism, two main causes of the
Their success lent credibility to technocratic logic, but storm clouds were building. Crash were wasted foreign investment (especially in real estate) and mounting
Between early 1 989 and 1 992 Indonesia's money supply increased more than two and private debt, which lunged from $23 billion in 1 992 to nearly $80 billion in 1 997 .26
a half times, which fueled inflation and prompted the central bank, Bank Indonesia, Between June 1 997 and January 1 998 the rupiah lost 80 percent of its value,
to tighten its monetary control. The result was a sharp rise in interest rates, higher which pushed interest rates up 60 percent. Millions ofIndonesians were plunged into
costs for businesses,17 and a plethora of bad debts. abject poverty, as per capita income dropped from $ 1 ,000 to $350.27 Nonetheless
Along with other Rim nations, Indonesia covered its surging debts by still more Suharto was unanimously re-elected by the People's Consultative Assembly in
borrowing. Foreign debt stood at around $3 .2 billion at the beginning of Suharto 's March 1 99 8 . His new cabinet-including his daughter Tutut and his arch crony
regime, and rose to $ 1 30 billion by 1 998 . 1 8 Between 1 982 and 1 99 1 the debt jumped Bob Hasan--epitomized the corruption and nepotism that condemned the country
from 29 to 72 percent of GNP. This was much higher than the debts of Mexico and Brazil to chronic maldevelopment. Student and worker protests finally toppled Suharto on
at the time of the Latin American crisis of 1 98 1-82: 52 percent and 36 percent of GNP, May 2 1 , 1 998. Eighty political parties had been established by late 1 998, twenty of
respectively.1 9 But on the Rim this pattern was becoming the norm. Foreign borrowing them being Islamic.28 The New Order seemed to be giving way to a New Disorder.
continued to grow throughout the Asia Pacific region until the time of the Crash.20
Nationalist reaction was sure to follow. Even in the 1 980's the CSIS group--the
The Suharto Mire
research and intelligence wing of the late General Ali Murtopo's political faction­
had demanded close state supervision of Indonesia's capital growth, and especially its
By the mid- 1 990s, sensing this gathering storm, Suharto turned to his technocrats
foreign capitaP l CSIS arguments gained credibility as the total debt (including private
for a solution. Unfortunately their specialty was economic acceleration. They had
commercial loans) skyrocketed, finally producing a banking crisis in 1 993 .22 Clearly it
no idea how to apply the brakes, and in any case their economic leverage had
was the liberal camp, not CSIS-style nationalism, which put the economy at risk.
eroded. They were no longer the crucial magnets for foreign investment, since
The search for solutions led to complete polarization. Some blamed the
foreign investors were now tripping over each other in their rush to win favor with
technocrats for their precipitous liberalization schemes, while others blamed Suharto
Suharto 's better-positioned cronies for projects worth billions,29 on paper at least.
for not allowing the technocrats greater sway.23 Western critics would later put the
Far from offering advice on braking techniques, international institutions joined the
onus on "crony capitalism," but these very cronies had opened the door to Western
investment frenzy. The World Bank organized donors' conferences to rake in billions
neoliberalism. What won them over to the technocrat's way of thinking was their
more, even knowing that an estimated one third of this money would be lost to
realization that opening up the banking sector would increase the flow of capital
Golkar Party corruption.30
to themselves.24 Laksamana Sukardi, former Minister of investment and state
enterprises, condemned these globalist converts as "predators" who "stole billions
2 5 Quoted in Mark Landler, "For Indonesia, Solvency is Political," The New York Times
(April 20, 200 1 ), [Link] 1 l04/20/business/[Link]?ex= 1 075266
16 Schwarz, op. cit., pp. 5 3-56. 000&en=08f9f734d50e5ea5 &ei=5070. Hence economic reformers focused their efforts on
17 Ibid., pp. 74-75 . the control of financial institutions such as state-owned banks. A case in point was the shady
1 8 Margaret Scott, "Indonesia Reborn?," The New York Review ofBooks, Vol. 4 5 , No. 13 financing of Tommy Suharto 's clove monopoly, BPPC. By February 1 99 2 , even Tommy
(August 13 , 1 998), p . 46 (pp. 43-48). admitted that the BPPC was a total failure. See Schwarz, op. cit. , p. 1 5 1 and pp. 1 5 5-6.
19 Schwarz, op. cit. , p . 79. 26 Schwarz, op. cit., p. 3 1 2 .
20 Brian Bremner, Michael Shari, Bruce Einhorn, Moon Ihlwan, Mike McNamee, 27 David Bourchier and Vedi R. Hadiz, "Introduction ," i n David Bourchier and
Vedi R.
and Kerry Capell, "Rescuing Asia," Business Week (November 1 7, 1 997), http ://www. Hadiz (eds), Indonesian Politics and SOciety: A Reader (London: RoutledgeCurzon, 2003),
businessweek. cornl 1 997/46/b3 5 5 300 l .htm. p. 19 (pp . 1 -24).
2 1 Richard Robison, "The Transformation of the State in Indonesia," in John G. Taylor 2 8 Jamhari, "Islamic Political Parties: Threats or Prospects?," in Geoff Forrester (ed.),
and Andrew Turton (eds), Sociology of "Developing Societies ": Southeast Asia (New York: Post-Suharto Indonesia: Renewal or Chaos? (The Netherlands and Singapore: KITLV Press
Monthly Review Press, 1 988), p. 59 (pp. 48-68). and Institute of Southeast Asian Studies, 1 999), p. 1 7 1 (pp. 1 70-80).
22 Schwarz, op. cit., p. 78. 29 Ibid., p . 3 1 6.
23 Ibid., p . 74 and p . 342. 30 Abigail Abrash, "Indonesa After Suharto," Foreign Policy, Vol . 3, No. 3 4 (November
24 Ibid., p. 3 1 7. 1 998), [Link] [Link]/briefs/vol I 3/v3n34ind_body.html (also available
80 Development Without Freedom Lesson ofthe " Broken Hearts " 81

The IMF, likewise, put no pressure on Suharto to stop public subsidies for schemes world."36 A $40 billion bailout package was finally arranged for Indonesia alone.
such as Tommy S uharto 's national car project or B.J. Habibie's efforts to manufacture This action cut the political strings that could have tied the bailout to progressive
aircraft domestically. As usual the IMF served the interest of international finance, reform. The White House was content with IMF packages that left Suharto alone.
disregarding its nominal function of easing economic trauma. Previously Southeast This can be explained in two ways. N ot only does Washington accept the "Asian
Asian economies had tended to enj oy low inflation, budget surpluses, and rising values" myth that dictatorship is natural to S outheast Asia, but it clearly prefers
foreign exchange revenues, but between 1 993 and 1 99 6 i nvestment banks and authoritarian regimes that can be controlled better than unruly democracies .
international money market managers went on a lending binge.3 l Even free-market The lesser of these two evils (the notion that democracy i s a distinctly Western
proponents such as George P. Schultz, William E. S imon, and Walter B. Wriston value) would allow that US policy is not designedly imperialistic, but is simply
blamed the I MF for the global financial meltdown that followed.32 Economist Jeffrey orientalist. Suharto certainly encouraged the perception that liberal obj ectives like
Sachs accused the IMF of worsening the Crash by closing banks and slashing public democracy and human rights are incompatible with Indonesian culture,38 despite
spending-this at a time when the private sector was already deflated.33 the pluralist implications of the official state ideology of Pancasila. In fact it was
To add insult to injury, the World Bank and the IMF wrapped these decisions in a the nation's democratic propensity, which even the 1 965-66 massacre could not
cloak of cultural sensitivity, treating Suharto 's corruption, cronyism and nepotism as expunge, that necessitated the regime's iron-fist policies. 39
natural expressions of "Indonesian culture. " Meanwhile the Clinton administration The New Order had increasing difficulty with the flip side of its seeming success.
carried on business as usual by refusing to suspend Indonesia's tariff advantages Tens ion set in as economic developmen t not only outpaced political development,
.
under the Generalized System of Preferences, despite Jakarta's crackdown on but III many ways precluded it. Pressures for change were mounting, however.
unions and its failure to ensure decent working conditions. Industries linked to gross Although the regime's legitimacy depended on rapid economic growth, that very
human rights abuses and environmental destruction got full U S backing.34 This long­ growth could have a destabilizing impact when newly affluent sectors of society
standing indifference to real development needs would be recycled after the Crash, began to demand a political voice.40 Middle-clas s disaffection was amplified by the
starting with Washington's lethargic response to the Thai crisis of August 1 997. As centrifugal force of the country 's geographic expanse and ethnic diversity. While
of October 26, S ecretary o fthe Treasury Robert Rubin still ruled out an Asian bailout real per capita GDP trebled between 1 96 5 and 1 990,4 1 the regime's absolute power
on the IMF 's part. Nor did he want any other institution to do the j ob . Both he ebbed after the mid- 1 980s.42
and Larry Summers would vehemently oppose the formation of a Japanese "Asian This alone was not enough to turn the political tide, for the middle-class was too
Monetary Fund," which they saw as a potential competitor of the IMF, and hence a satisfied with the economic status quo. The fate of democratic reform rested, therefore,
challenge to American hegemony.35 with another suppressed sector of society: the Muslims who comprised 90 percent
Only when Rubin realized that American corporations were in serious j eopardy of the population.43 As in many Islamic countries, the mosque became the locus of
did he start to shift his position, announcing on October 3 1 that "Financial security oppositional politics. Realizing the growing power of Islamism, Suharto shifted his
around the world is critical to the national security and economic interest of the position in the last twelve years of his regime. For twenty years he had obstructed
United States. These countries are not only key markets for U . S . exports, but are organized Islamic activities, but now he encouraged them, so as to counterbalance
also crucial to our efforts to promote growth, peace and prosperity throughout the

36 Quoted in Abrash, op. cit.

37 Brian Bremner, Michael Shari, Bruce Einhorn, Moon Ihlwan, Mike McNamee,
and Kerry Capell, "Rescuing Asia," Business Week (November 1 7, 1 997), [Link]
businessweek.coml1 997/461b355300 1 .htm.
at [Link] l 3 /[Link]); and Schwarz, op. cit. , p. 3 1 6 .
38 Robert W. Hefner, Civil Islam: Muslims and Democratization in Indonesia (Princeton:
3 1 John Bresnan, "The United States, the IMF, and the Indonesian Financial Crisis," in
York: Princeton University Press, 2000), p. xvi and p. 5 .
Adam Schwarz and Jonathan Paris (eds), The Politics ofPost-Suharto Indonesia (New
39 Ariel Heryanto, "Indonesian Middle-Class Opposition i n the 1 990s," i n Garry
Council on Foreign Relations Press, 1 999), p. 87 (pp. 8 7- 1 1 2). Rodan (ed.),
Political Oppositions in Industrializing Asia (London: Routledge, 1 996), p. 242
32 Ibid. , p. 1 02. (pp. 241-7 1 ).
closed 40 Edward Aspinall, "The Broadening Base of Political Opposition in Indonesia,"
3 3 Schwarz, A Nation, op. cit. , p. 339 and p. 34 1 . One of the 16 banks that in
son, Bambang Trihatmodjo . A week later he reopened his bank under Garry Rodan (ed.), Political Oppositions in Industrializing Asia (London: Routledge,
belonged to Suharto's 1 996),
in p. 226 (pp. 2 1 5-40).
a new name. See Adam Schwarz, "Introduction : The Politics of Post-Suharto Indonesia,"
York: Council on 4 1 Ibid. , p. 225 .
Adam Schwarz and Jonathan Paris (eds), The Politics ofPost-Suharto (New
Foreign Relations Press, 1 999), p. 6 (pp. 1-1 5). 42 Heryanto, op. cit. , p. 24 1 .

34 See Abrash, op. cit. 43 Seth Mydans, "In Indonesia, Once Tolerant Islam Grows Rigid," The New York Times
35 T.J. Pempel, "Conclusion," in T.J. Pempel (ed.), The Politics ofAsian Economic Crisis (December 29, 200 1 ), [Link] l 1 2129/internationallasial29INDO.
(Ithaca, NY: Cornell University Press, 1 999), p. 230 (pp. 224-38). htm?pagewanted=print.
82 Development Without Freedom Lesson of the "Broken Hearts "
83
powerful military leaders such as General Benny Murdani, who openly confronted democratic civil society as in Indone sia.52 No one knew
this better than Suharto who
Suharto over the issue of his family 's corruption.44 devoted his last years in office to undermining c ivil
This contributed to a split between ABRI and Suharto over the choice of Golkar By uncritically supporting Suharto, global institu
Islam as a political free gent. �
tions helped to suppress liberal
chairman Sudharmono as vice-president.45 ABRI challenged that choice during the democratization during the "miracle" years when
political development might have
1 98 8 election, which in turn prompted Suharto to actively court tractable elements been accomplished peacefully and with little materi
al sacrifice.
of the Muslim community.46 His creation of the Indonesian Association of Muslim Nor was globalization 's econom ic impact any
less pernicious. Capital export
Intellectuals (lCMI) in December 1 990 was a blatant attempt to control Islam by :V
from e�tern �ou�tries �to�ed the "Indonesian miracl
e," which in turn did its part
exploiting the divide between the Nahdlatul Ulama (NU) traditiona ists and t�e � to reVItalIze faIth III capItal Ism as a global develo
pment strategy. Again it had to
Muhammadiyah modernists.47 The ICMI co-opted ultraconservatIve Mushm be learned the hard way that foreign capital can
be a two-edged sword. The Crash
organizations such as the Indonesian Council for Islamic Predication, or DDII, at the afforded a kind of remedial education. The rapid
exodus of capital from Asian
expense of other groupS .48 Many ABRI officers admitted that Suharto 's sponsorship NICs, c oupl �d with "resc�e" policie s that turned
. . a mere recess ion into a regional
of ICMI was a shrewd means of controlling Islamic radicals.49 depreS SIOn, SIgnaled a CrISIS of globalist ideology.
Not surprisingly this had a divisive impact on Muslim politics. While Islamic
modernists tended to welcome ICMI, the NU leader and later president Abdurrahman
Wahid stood his ground. He proclaimed his loyalty to the Constitution and the The Post-Suharto Malaise

official state ideology of Pancasila, yet declared the ICMI a Trojan Horse.5o He
further infuriated Suharto by questioning the motive behind his Islamic turn. Just as Except for its political unrest, Indonesia had all the makings of an investors' paradise.
Suharto had successfully turned techno-reformists into reactionary modernists,S1 he It had been blessed with cheap labor and inflated prices for its vast oil reserves, and
now tried to turn Islamic reformists into cronies. It was in this divide-and-conquer the ostensive stability ofthe post-Sukarno years made foreign investment fairly easy
context that B .J. Habibie, the minister of research and technology, was put in charge to obtain. 53 This changed, however, after the collapse of oil prices in the mid- 1 980s.
of ICMI, so as to marginalize moderate independents like Dawam Rahardjo. At that point the nation had to work hard to attract foreign capital, pushing it into the
Nonetheless Muslims would play a key role in the reform coalition that finally waiting arms of neoliberal restructuration.
toppled Suharto. Robert Hefner's civil Islam thesis hinges on his contention that For those who were plugged into this surging current of globalization, Indonesia
nowhere in the world have Muslim intellectuals been so engaged in the formation of of the e arly 1 990s once again seemed like a land of boundless opportunity. Yet
econ or�l1. c technocrats knew this promise depended on massive foreign investment,
.
whIch III turn depended on political stability. The question of succession cast doubt
on the future of the increasingly dysfunctional New Order. 54 It was whispered that to
44 Hefner,Civil Islam, op. cit., p. 1 8 . avoid a political upset Suharto should relinquish power before the 1 998 election. 55
45 See Schwarz, A Nation, op . cit., p. 37. Even prior to the Asian Crash, a viable pro-democracy movement was taking shape
46 Douglas E. Ramage, Politics in Indonesia: Democracy, Islam and the Ideology of
.
? .
acr s s a WIde spectrum of moderate opposition: NGOs, intellectuals , and campus
Tolerance (London: Routledge, 1 995), p. 8 5 . actIVIsts, as well as PDI and NU factions.
4 7 Schwarz, "Introduction," op . cit. , pp. 9- 1 0. O n January 20, 2002 the latest division
came with the creation of a new party by members of the United Development Party (PPP),
the nation's biggest Islamic group. The National Awakening Party (PKB), which draws 52 Seth Mydans qualifies this optimism by
noting the rise of religious violenc e in areas
members from the NU, is also subject to factionalism. See Dini Dj alal, "Indonesia: Missed such as Sulawesi, Maluk and Aceh. Islamic
politicians, especially the Defenders of Islam
Opportunities," The Far Eastern Economic Review (January 3 1 , 2002), http ://[Link]! � �
also sa rifice broad r influence when they call
articles/2002/020 1 _3 1 /p02 1 [Link]. �
Acco dmgly, voters m the 1 999 election overwh
for prohibitions on drinking, gambli ng, etc :
elmingly chose secular nationalist parties over
48 Robert W. Hefner, "Islam and Nation in the Post-Suharto Era," in Adam Schwarz and �
Islam c ones. See Mydans, op. cit. Islamic extrem
ists struck back by calling for an Indonesian
Jonathan Paris (eds), The Politics ofPost-Suharto Indonesia (New York: Council on Foreign IslamIC State (NIl). See Dini Djalal, "Indon
eisa: Forced to Serve," The Far Eastern Econom
"Third ic
Relations Press, 1 999), p. 48 (pp. 40-72); and also see Anders Uhlin, Indonesia and the Review (Apri1 4, 2002), http ://[Link].comiarticlesI200
2/0204_04/p0 [Link].
Wave ofDemocratization ": The Indonesian Pro-Democracy Movement in a Changing World 5 3 Adam Schwarz, A Nation in Waiting: Indone
sia s Search for Stability (Boulder, CO:
(Surrey, UK: Curzon Press, 1 997), pp. 66-7 . WestVI. ew, 2000), p. 4 1 .
49 Ramage, op. cit., p. 1 42. 5 4 Micha el R.J. Vatikiotis, Indonesian Politics Under Suharto: Order, Development
50 Ibid., p . 68. Pressure for Change (London: and
Routledge, revised edition, 1 994), p. 1 39 .
51 In his autobiography, Suharto describes techno-economists as a necessary evil. See 5 5 Afan Gaffer, "Indonesia 1 995 : Setting the
Tone for Transition towards the Post-S uharto
William Liddle, "Indonesia's Unexpected Failure of Leadership," in Adam Schwarz and � �
ra," in Colin Barl w and Joan Hardjono (eds),
Indonesia Assessment 1 995: Development
Jonathan Paris (eds), The Politics ofPost-Suharto Indonesia (New York: Council on Foreign In Eastern IndoneSia (Canberra: Research School of Pacific and Asian
Studies/Australia
Relations Press, 1 999), p. 23 (pp. 1 6-39). National University, 1 996), pp. 43-4 (pp. 43-57).
 Development Without Freedom Lesson of the "Broken Hearts " 85
84

The regime had to react, but there was no consensus as to what response was As a technocrat Habibie lacked a broad power base, whereas Wahid was closely
. �
appropriate-retrenchment or accommodation. Even supposedly neutral technocrats lmked to the Isiamism of rural Java. Megawati Sukarnoputri drew support from the
were emotionally divided on the issue. After the currency collapse of 1 99 7-as the legend � fher father's nationalism, while Amien Rais found a following among urban,
rupiah plummeted from 2,500 against the dollar in early 1 997 to 1 3 ,450 in June modernIst Muslims.63 Habibie's only solid support came from the armed forces of
200 1 56-three groups jousted for influence within the cabinet: economic technocrats, General Wiranto and the funding garnered by his minister, Ginandjar Kartasasmita, the
followers of Habibie, and the entourage of Suharto 's daughter Tutut.57 Habibie technocrat who steered Indonesia's compliance with the IMF restructuration package.
still looked to technology as a developmental panacea, with special stress given The absence of stable government and robust leadership made the economic crisis
to electronics, telecommunications, and transport industries,5s but other technocrats even more injurious. Habibie did improve the country's image by ratifying a number
were finally catching on to the fact that economic development barren of political of UN conventions on human rights, and he signed the UN 's Ocean Charter to use
development was a ruse. When they let this be known, Suharto summarily fired maritime resources in a sustainable way.64 So too he lifted the restrictive press law
them. These outcasts formed a group called the "Front of the Broken Hearts"­ that Suharto had imposed between 1 994 and 1 995, when three of the most respected
belated reformists who dropped their fayade of technocratic neutrality and proposed ?ewsweeklies-Tempo, DeTik and Editor-were summarily shut down.65 Ironically,
a "new morality" in opposition to Suharto 's "state criminality."59 It would be these three magazines that vocalized the public 's call for real reform
The major technocratic split was between moderate reformists like Habibie, who and actively investigated Habibie's budget after his purchase of East German navy
stuck with the geriatric New Order, and more radical factions such as the "Broken vessels. �6 T�mpo even invited BenedictAnderson, who had been banned from entering
Hearts." Early in his career Habibie had gained control of many state-owned strategic IndoneSIa smce 1 972, for a candid interview.67 To his credit, Habibie yielded to the
industries, including naval shipyards, armaments plants, and an airplane factory. public's demand for free and fair elections.68 Forty-eight parties competed in the
After he joined parliament as a Golkar member in 1 982, his family, like Suharto 's, general election of June 7, 1 999, and on October 20 the MPR (People's Consultative
began to forge its own business empire, centered around the Timsco Group. These Assembly) chose Wahid as the nation's fourth President.69
enterprises engaged in everything from chemicals to crocodile farming, and finally Habibie's greatest service to his country was to let himself be voted out of office.
came to be worth at least $60 million.60 His successor, however, would be no real improvement. It would be an understatement
Thus when Habibie talked about technological strategies to enhance competitive to say that Wahid 's leadership lacked consistency. Having shocked his allies with the
advantage,61 it was not clear if the benefit he had in mind was his country 's or his :ank ?pportunism of his 1 996 detente with Suharto, Wahid again reversed himself by
own. Clearly he was no enemy of Suharto 's political machine. Though he was Jumpmg back on the opposition band wagon when the economic crisis worsened in
forced to make some changes during his seventeen-month administration--e.g., he late 1 997. Soon he had moved to the center of the reform movement against Suharto,
released hundreds of political prisoners and allowed a free election in 1 99962-these and by July 1 998 he was seeking a new alliance with Megawati. 70
alterations were hardly satisfactory to reformasi activists. Habibie's administration, Given these vacillations, it should have come as no surprise that as president
after all, retained half of Suharto 's cabinet. Wahid would fail to deliver the main item on the reform agenda: civilian supremacy

63 Jose Manuel Tesoro, "Insider-Outsider," Asiaweek, Vol . 25, No. 52 (December 3 1 ,

1 999-January 4 , 2000), [Link] 1 2 3 1 [Link].
56 Samuel Charng Yeong Ku, Indonesia: Politics, Economy and Society (Kaohsiung,
html.
Taiwan: Kaohsiung Fu Wen, 2002), p. 65.
57 See "Indonesia's New Dynamic Cabinet," Inside Indonesia (March 1 5, 1 998), http ://
64 Bilveer Singh, Succession Politics in Indonesia: The 1998 Presidential Elections and
www. inside indonesia. org/digestldig 5 3 . htm.
the Fall of Suharto (London: Macmillan Press, 2000), p. 242.
65 See Margot Cohen, "Unsilenced: Indonesia Discovers Free Speech," The New Republic
58 B.J. Habibie, "Industrialisation and the Technological Transformation of a Nation"
(June 1 5 , 1 998), http ://[Link]/0698/06 1 5 98/cohen06 1 [Link];
( 1 986), in Ian Chalmers and Vedi R. Hadiz (eds), The Politics of Economic Development
Bruce Grant, "Crackdown in Indonesia," The New York Review of Books (Oct. 20, 1 994),
in Indonesia: Contending Perspectives (London: Routledge, 1 997), p. 1 77 and p. 1 79 (pp.
[Link] comlarticles/2 1 1 1 ; and Catherine Drucker, "Indonesia's Unfree Press,"
1 76-8 1 ).
59 Margaret Scott, "Indonesia Reborn?" The New York Review ofBooks, Vol. 45, No. 1 3 The New York Review of Books (July 1 3 , 1 995), http ://[Link] c1esI 1 8 3 7 '· and
op. cit. , p. 5 3 .
Hefner, "Islam and Nation,"
(August 1 3, 1 998), p . 46 (pp. 43-48).
66 Hefner, "Islam and Nation," op. cit. , p. 55.
60 See "A Transitional Figure," South China Morning Post (March 1 5, 2000), http ://
67 Scott Sherman, "A Return to Java," Lingua Franca, Vol . 1 1 , No. 7 (October 200 1 )
[Link]/wcha1/profiles/habibie. '
61 See Hal Hill, The Indonesian Economy Since 1 966: Southeast Asia s Emerging Giant http ://www. [Link].
68 Liddle, op. cit., p. 36.
(Cambridge, UK: Cambridge University Press, 1 996), p. 248.
62 Anthony L. Smith, "Indonesia: Transforming the Leviathan," in John Funston (ed.),
69 Abubakar E. Hara, "The Difficult Journey of Democratization in Indonesia,"
Institute of Southeast Asian Studies, Contemporary Southeast Asia, Vol. 2 3 , No. 2 (August 200 1 ), pp. 307-26.
Government and Politics in Southeast Asia (Singapore:
70 Hefner, "Islam and Nation," op. cit. , p. 55 and p. 5 9 .
200 1 ), p. 80 (pp. 74-1 1 9).
 Development Without Freedom Lesson of the "Broken Hearts " 87
86

over ABRI. Many analysts believe the retired army general and future president functionaries,79 devotees of the very policies that the poor had risen against under
Susilo Bambang Yudhoyono was already in charge of security matters,71 as he would Suharto. Thus the posts of the Finance Minister and Economic Coordination Minister
be under Megawati.72 Meanwhile Wahid found himself hostage to an emerging went to seasoned technocrats such as the ex-Bank Indonesia director, Budiono, and the
alliance between Megawati 's Indonesian Democratic Party for Struggle and Suharto's ambassador to the US, Dorodjatun Kuntjoro-Jakti.8° Megawati's fusion oftechnologism
former Golkar Party, led by Akbar Tanjung. Together the two parties held 273 of 500 and deflected populism slammed the door on more substantive reform.
lower-house seats.73 Megawati and Tanjung (who would later become embroiled in Even if Megawati had wanted progressive change, her ministers would have had
a $4 million corruption scandal)14 shot down Wahid's proposal to appoint a single to negotiate the minefield of a parliament where most MPs answered to recalcitrant
coordination minister, pressuring him to name two instead.75 His desire to please party bosses.81 Critics rightly saw her appointments as an attempt to duplicate
everyone was reflected in his motley cabinet. Suharto's old trick of relegating the economy to technocrats while keeping a tight
Clifford Geertz is not alone in his lament that Habibie and Wahid squandered grip on security matters and the legal system.82 This time, however, the old order had
Indonesia's chance to start over after Suharto.76 It was under them that residual Cold her firmly in its grip. By no accident she kept in her cabinet Supreme Court Chief
War politics gave way to an equally regressive politics of globalization. The rise Justice Bagir Manan, who had served in Suharto's infamous j udiciary throughout
of the reformasi against Suharto would have had no teeth had it not been joined by his career. The country was fast returning to the authoritarian devil it knew. At least
the urban and rural poor whose strikes and rioting pushed the government into a Suharto's regime had been effective in maintaining a semblance of national unity in
comer. This upsurge had its roots in social protests of the 1 980s against New Order its economic programs, and of winning investor and donor confidence.83 Repression
oppression launched in the name of modernization. Its real name was neoliberalism, under Megawati lost on both fronts : its retreat from reform was matched by a failure
and its thrust was only intensified after Suharto 's fall.77 "to make the trains run on time."
Clearly technocracy was more the problem than the solution. The economic
crisis, as Geertz recognized, provided a unique opportunity for Indonesia to
Losing on Both Fronts establish the rule of law, governmental transparency and accountability, and basic
human rights-all the ingredients that Western critics found wanting after the
For many years reformasi storm clouds had been building within the middle-class Crash. Arief Budiman believes this was the time for Indonesian intellectuals to
public. This idealism, however, would find little expression in the new mass politics. intervene decisively rather than entrust the political process to technocrats who
Lacking the leadership qualities of rivals such as Amien Rais,78 Megawati won the saw reform as a top-down enterpri se. At best they regarded democracy as a loan to
presidency on the strength of her family legacy and her largely symbolic opposition
to Suharto's corruption. Unfortunately she had no idea what to do with her victory.
To win public trust she was advised to seed her administration with a host of techno- 79 John McBeth and Michael Vatikiotis, "Indonesia: Lady in Waiting," The Far Eastern
Economic Review (May 1 7, 200 1 ), [Link] com/cgi-binlHSE/[Link]?url=http ://
www. feer.coml200 1 l0 1 05_ . . . ; see also "Analysts Hail Megawati 's Economics-Team

7 1 Michael Vatikiotis and John McBeth, "Marching Back," The Far Eastern Economic Appointments," ASEAN Free Trade Area (December 4, 200 1 ), [Link]
[Link].; and see John McBeth and Dini Dj alal, "The Puppet President," The
Review (October 1 2, 2000), http ://[Link].coml_00 1 0_ 1 2/[Link].
72 It did not help that Wahid's reformist ally, Lt. General Agus Wirahadikusumah, was
Far Eastern Economic Review (August 2, 200 1 ), [Link]

alienated from his fellow military officers. See John McBeth, "Military Maneuvers,"
The Far cgi?url=[Link] 1 /0 1 0 8_ . . .

(November 9, 2000), http ://[Link].coml_00 1 1 _09/p032region. 80 John McBeth, "A Parade of Surprises," The Far Eastern Economic Review (August 2 3 ,
Eastern Economic Review
200 1 ), http ://[Link]-binlHSE/[Link]?url=[Link] 1 /0 1 08 . . .
html.
73 John McBeth, "Reinventing Democracy," The Far Eastern Economic Review
(August 8 1 Sadanand Dhume, "Economic Recovery Starts Here," The Far Eastern Eco;;omic
gi-binIHSE /[Link]?u rl=[Link] [Link] l200010008 _. . . Review (August 2, 200 1 ), http ://[Link]-binlHSE/[Link]?url=http ://[Link].
24, 2000), [Link]
(January 3 1 , cornl200 1/0 1 08_ . . . ; and also Sadanand Dhume, "Debtor Nation," The Far Eastern Economic
74 Dini Dj alal, "Missed Opportunities," The Far Eastern Economic Review
2002).http ://[Link]/2002/020 1 _3 1 1p02 1 /[Link]
l. Review (September 6, 200 1 ), http ://www. [Link]-binlHSE/[Link]?url=[Link]

75 John McBeth and Dan Murphy, "Balancing Act," The Far Eastern
Economic Review _
feer.coml200 1 10 1 09 . . .

4, 1 999), [Link] .[Link] i-binlHSE/H [Link]?url=http ://[Link]. 82 John McBeth, "Rule of Law's Let-Down," The Far Eastern Economic Review
(November
(September 6, 200 1 ), [Link] ://[Link].
cornl 1 999/99 1 1 . . .
-
76 Clifford Geertz, "Indonesia: Starting Over," The New York Review ofBooks Archives _
cornl200 1 10 1 09 . . .
00005 1 1 022F (also 83 See John McBeth on the new economic disunity, "When Jakarta Fails to Act," The
(May 1 1 , 2000), [Link]
at [Link] .nybooks.c omlarticle s/article-p review?article_id= 1 08). Far Eastern Economic Review (November 1 5 , 200 1 ), http ://[Link].coml200 1 l0 1 1 1
available
77 Lane, op. cit. 1 5/pOI [Link]; and also see Sadanand Dhume on the lack of investor andlor dono -;:
The Asian Wall Street Journal (November confidence, "Donor Fatigue," The Far Eastern Economic Review (November 29, 200 1 ),
78 Jamie Mackie, "In the Shadow of Sukamo,"
[Link] 1 10 1 1 1 _29/[Link].
4, 1 998), p. 8 .
88 Development Without Freedom Lesson of the "Broken Hearts " 89

the people by the state,84 and usually they gave it a lower priority than economic terrorism")89 pointed out that "We have Christian churches here and none have
development or national stability.85 been attacked. "90
This attitude, which in good times helped to allay investors' fears of unruly As in East Timor before, the Army was responsible for the worst brutality in
populism, now contributed to the post-Crash inertia that kept those same investors Aceh.91 Far from reducing radical violence, government action accomplished the
on edge. Real political reform could have done no worse, for the unrest that bred very opposite: smothering the moderate Islamism that could have provided a natural
economic disincentives might have been ameliorated by a strong dose of hope. The dike against more radical foreign imports.92 The health of civil Islam is ultimately
economy itself was not beyond redemption, before or after Suharto 's fall. Indonesia tied to the economic and political development of the community in general. Hopes
had moderate inflation relative to other hard-hit ' miracle' economies, and it suffered for a civil solution collapsed when Megawati declared martial law on May 1 8 , 2003 .
less of a bubble effect than most. What killed confidence was the increasingly Some 50,000 troops were sent to combat 3 ,000 lightly-armed separatists.93 While
unpredictable behavior of Suharto 's government. The same iron fist which had made senior government officials downplayed the activities of real terrorist organizations
for an image of "stability" now became a huge liability, for it was obvious that such as Jemaah Islamiyah, TNI stoked militancy in Aceh by making a habit of
no institution or set of political actors could temper Suharto's dictates.86 Thus the executing unarmed civilians.94
malady behind the Indonesian Crash was more political than economic, and its long­ In his capacity as Megawati 's security minister, later president Susilo Bambang
term solution would likewise have to be found in the political domain. Yudhoyono ("SBY") approved a crackdown that cost more than 2,000 lives. Student
Under Megawati, unfortunately, the country rapidly returned to dwifungsi. The protesters and human rights groups well remember SBY from his similar activites
threat of terrorism was used to justify an undeclared war on civilian autonomy. under Suharto. He had served as a commander in East Timor at a time of heinous
Once again, and with patent US complicity, the military was taking charge. 87 human rights abuses,95 yet the fact that he was running for the presidency against the
In fact, Megawati gave TNI more independence than it had ever enj oyed under even more notorious General Wiranto helped him to pass himself off as a military
Suharto. In the absence of effective domestic or international pressure for reform, reformer as well as the essential anti-terrorist. In fact, it was on his watch that
civilian rule lost by default. This removed any chance for peaceful negotiation thousands of militant Javanese Islamists joined foreign insurgents in an assault on
with the Free Aceh Movement (Gerakan Aceh Merdeka, or GAM). 88 The Acehnese Christians in Maluku Province, while the TNI looked the other way. 96
rebels were anything but the rabid extremists that TNI would have us imagine. By
preference most would have been civil Islamists, for they disdained the brutality of
Laskar Jihad (Army of Islam) or Jemaah Islamiyah, which allegedly spearheaded
the 2002 Bal i bombing and the Christmas Eve bombings of 29 Christian churches
two years before. GAM leader Teuku Kamaruzzaman (one of two peace negotiators
who in October 2003 got 1 3 -year prison sentences on charges of "treason and 89 "Two more ex-rebel negotiators sentenced in Indonesia'S Aceh province," Agence
France-Presse, via (October 22, 2003), http ://[Link] se/webnews/
ClariNet -
wedlddlQindonesia-aceh-trial.RQTb_DOM.html.
90 Roger Mitton, "The New Crusade," Asiaweek, Vol . 27, No. 8 (March 2, 200 1 ), http ://
[Link]. Comiasiaweekimagazine/nations/p.8782. 1 0023 3 . 99html. This is consistent
with NU's policy, launched in 1 99 8 , of helping to guard churches. See Torn McCawley,
"Muslims guard Jakarta's Christians," The Christian Science Monitor (December 23, 2005),
84 Arief Budiman, "The Lonely Road of the Intellectual : Scholars in Indonesia," http ://www. csmonitor.coml2005/ 1 223/pO l s03-woap. html.
inaugural professional lecture on October 9, 1 997, at the University of Melbourne in Australia, 91 "Brutal mistakes in Indonesia," The International Herald Tribune (January 5, 2004),
[Link] icsea. [Link]-spanl0497/0T 1 [Link].; and, for the earlier development of [Link] com/[Link]?template=[Link]&ArticleId= 1 23604.
Intellectuals and Nationalism
nationalism and the role of the intellectuals, see J.D. Legge, 92 William H. Thornton, New World Empire: Islamism, Terrorism, and the Making of
in Indonesia: A Study of the Following Recruited by Sutan Sjahrir in Occupation in Jakarta Neoglobalism (Lanham, MD: Rowman & Littlefield, 2005), Chapter 4.
(Ithaca, NY: Cornell Modem Indonesia Project, 1 988). 93 John McBeth, "A Futile Fight," The Far Eastern Economic Review (June 5 , 2003), p.
85 Alatas, op. cit. , p. 1 5 9. 16 (pp. 1 6- 1 7).
86 Andrew MacIntyre, "Political Institutions and the Economic Crisis in Thailand and 94 Raymond Bonner, "Report Cites Emergence of New Islamic Militia in Indonesia,"
Indonesia," in T.J. Pemple (ed.), The Politics of the Asian Financial Crisis (Ithaca: Cornell The New York Times (February 4, 2004), [Link]
University Press, 1 999), pp. 1 54-55 (pp. 1 43-62). asial04 INDO .html.
87 Rizal Sukma, director of the Center for Strategic and International Studies in Jakarta, 95 Of the eighteen Indonesians convicted of abuses, all have had their convictions
observes that no political party dares to confront the military. See Alan Sipress, "Indonesian overturned. See "Indonesian Wins Appeal Against Rights Verdict," The New York Times
Army's Upper Hand," The Washington Post (June 26, 2003), p. A 1 0; and [Link] (November 6, 2004), http ://[Link].coml2004/ 1 1 /06/international/[Link].
washingtonpost.comlac2/wp-dynlA33 8 1 1 -2003June25?language=printer. 96 Paul Dillon, "Profile: Susilo Barnbang Yudhoyono," A [Link] (July 4, 2004), http://
88 Ibid. english. [Link].?NRJexeres/554FAF3A-B267-427A-B9FC-5488 1 [Link]. . .
90 Development Without Freedom Lesson ofthe "Broken Hearts " 91

Full Retreat province into three more manageable zones, with the military making its presence
felt all the more. As its other operations subside, TNI has a vested interest in fanning
Indonesia's political turmoil is rooted in economic oppression. Even the infamous the flames of Papuan resistance so as to justify its bloated budget. 1 0l In Papua it is
Bali bombings cannot be completely understood as an exogenous product of glo al
.
? funded directly by Freeport, which openly bribes generals for security services . 1 02
terrorism. Here especially, global and local animosities were intertwmed. LIke Aceh and Riau, likewise, have little to show for providing half of Indonesia's
multinational oil and mining operations, global tourism brings in badly needed oil outpUt. 1 03 In 1 97 1 natural gas was discovered in Aceh, where Mobil constructed
foreign exchange for Jakarta's projects, but scarcely trickles down to local workers the world's largest natural gas refinery. 1 04 GAM took shape in 1 976 in response to a
and communities. While global firms like McDonalds, KFC and Starbucks push grossly unjust distribution of gas revenues. Suharto's regime fired back by declaring
local venders out of business, the bulk of the profit exits Indonesia.97 Aceh a military operations zone (Daerah Operasi Militair, or DaM), a designation
People in many provinces, but especially in Aceh, Irian Jaya and Riau, c�nsider that lasted until after the dictator's fall in May 1 998 . 1 05 After numerous abortive truce
.
themselves every bit as colonized today as they were under the Dutch. In theIr VIew attempts, a much empowered military under (or over) President Megawati decided
Java simply replaced Holland.98 Though it has little to show for it, Irian Jaya has b �en to destroy the resistance once and for all in 2003 . Their failure opened the door in
the source of 1 5 percent ofIndonesia's foreign exchange earnings. Renamed Papu�, 1t IS .
August 2005 for more promising negotiations aimed at Aceh's eventual autonomy. 1 06
the nation's largest province, and the site ofthe world's largest gold and copper mmmg.
Similar hopes have collapsed before, but this case could be different, thanks to the
operation. Freeport McMoRan Copper and Gold Inc. ofNew Orleans has mo�opolized global spotlight that fel l on Aceh after the apocalyptic tsunami of December 2004 .
this $50 billion enterprise since 1 967, while dumping a billion tons of waste mto loc�l The question is what will happen after the Western press loses interest.
rivers.99 Papua is also the site of the world's largest gas fields, developed by Atlanttc Unfortunately that interest has not lent itself to the one thing the Acehnese want
Richfield Co., a unit of BPIAmoco. The financial and environmental wreckage ofthese even more than peace: independence. The global community flatly dismisses Aceh's
extractions has sparked a largely Christian reaction in the form of the Free Papua claim to legal secession. We are told by the world press that most Acehnese just
Movement (the Organisasi Paua Merdeka, or OPM). IOO want peace. They are presented as helpless victims caught in the middle of a war
More than ever, Papuans feel they have no peaceful options. The so-called "Act they want no part of. 1 07 GAM, by contrast, is portrayed as a violent and irresponsible
of Free Choice" that delivered them into the Indonesian state in 1 969 has now rogue organization with little local support. It is often accused, moreover, of having
been revealed as a fraud, yet neither their former Dutch overlords nor the world active Al Qaeda connections, although both GAM and the military itself deny this . l08
community has any interest in setting history straight. A Special Autonom� aw was � Even when it is granted that TNI and its affiliates are terroristic, the suggestion is
passed in 2002, but was sabotaged in 2003 by a presidential decree that dIVIded the given that the two forces basically deserve each other, while the Acehnese deserve
freedom from both.
97 Pamela Nowicka, "Invisible in Paradise," The Guardian (October 5, 2005), http:// This view of GAM grotesquely distorts its membership, its public support, and
[Link] .[Link]/0,3 858,530 1 699- 1 03677,[Link] . the historical realities behind it. For several hundred years, and into the 20th Century,
98 William Nessen, "Why not Independence?," Inside Indonesia (January/March 2003), Aceh was a sovereign state. The Dutch knew the Acehnese as their most determined
[Link] insideindonesia. org/edit8 1 /[Link]. anti-colonial foes. If any people deserve their freedom, these do. But after expelling
. .
99 Jane Perlez and Raymond Bonner, "Below a Mountam of Wealth, a River of Waste,"
the Dutch, they found themselves under similar occupation by the Javanese, who
The New York Times (December 27, 2005), [Link] 1 2/27/internationall
asial2 7 [Link].
1 00 Angel Rabasa and Peter Chalk, Indonesia s Transformation and the Stabi�ity of 1 0 1 Feije Duim, "Fixing Papua's history?," Inside Indonesia (July/September 2004),
Southeast Asia (Santa Monica, CA: Project AIR FORCE/RAND, 200 1 ), p . 2 7 . A simIlar
.
_
[Link] [Link].
increase
conflict site is Borneo, divided between Indonesia, Malaysia and Brunei. To 1 02 "Recklessness in Indonesia," The New York Times (January 9, 2006), http ://www.
agricultural productivity in Kalimantan , on the Indonesian side of Borneo, Jakarta conve ed� nytimes. coml2006/0 1 /09/opinion/09mon2 .html.
into commercia l rubber and palm oil plantations. Meanwhile it subsidized a massive 1 03 Rabasa and Chalk, op . cit. , p. 2 7 .
the forest
"transmigration" of labor from Java and Madura, leading to c1ash s between � � �
ad rese 1 04 Anthony Ried, "Aceh and Indonesia: A Stormy Marriage," PROSEA Research Paper,
deaths m Just a No. 42 (February 200 1 ) , from Program for Southeast Asian Area Studies (Taipei:
settlers and indigenous Dayaks. One such incident, in 1 999, resulted m 1 85 Academia
few days. See Michael T. Klare, Resource W ars: The New Landscape of Global Conflict (N ew Sinica), p. 5 (pp. 1 - 1 1 ).
. .
n/Owl Book and Henry Holt and Company, 200 1 ), p. 207 . LikeWise, 1 05 "Background on Aceh," Think Centre: Toward a Vibrant Political Society
York: A Metropolita (August
in Sarawak, on the Malaysian side, there has been continuing conflict
�
since 1 987 betw en 25, 200 1 ), http ://[Link].

Dayaks and government-backed logging companies. Amendmen t S90B ? �

f the Ma aysI n � 1 06 Simon Montlake, "Aceh's Rebels Give up Guns, Warily" The Christian Science
Ordinance makes it a major offense for anyone to obstruct loggmg operatIOns m Monitor (September 1 9, 2005), [Link] csmonitor.coml2005/09 1 9/p06s0 1 -[Link].
Forest
people have been
Sarawak. Even designated parks and biospheres for the Penan indigenous 1 07 Nessen, op. cit.
which invoke S90B to have Dayak protesters arrested and 1 08 Amy Chew, "Aceh Links to al Qaeda Dismissed," [Link] (July 1 4, 2002), http ://
invaded by logging companies,
sometim es shot. Ibid., p. 206. [Link]. [Link]?action=cpt&title=[Link].
92 Development Without Freedom Lesson of the "Broken Hearts " 93
proceeded to rob their natural resources and to rule them once again as de facto most Arab Islamism, they are trying to cut direct, ICMI-style ties between politics
colonial subj ects. Non-violent protest was useless, while armed resistance was almost and religion. 1 1 2 No less they oppose the government's politicization of the media.
suicidal. The military responded in its usual way: with rape, torture, and murder. Vice President Jusuf Kalla, for example, recently blasted the press for reporting on
Nonetheless international opinion-including the vast majority of policy analysts, hunger in Papua, and went on to laud the censorship policies of Singapore, Malaysia,
NGOs, foreign governments, and international media-fully backed Jakarta. Only Thailand, and China. 1 1 3
the Acehnese saw independence as a just and viable solution.lo9 Given this shameless reversion to Suharto's ways and means, it is understandable
The standard international view of this issue is that Aceh surrendered its right to that former president Wahid would condemn the present regime. 1 14 It is precisely
independence when it joined Indonesia after the Dutch departure in 1 949. This, we SBY's return to old habits that has rekindled globalist interest in Indonesia.
are told, is a legal axiom that applies no matter what crimes might later be perpetrated Foreign investment is on the mend, spurred by the World Bank's decision to restore
against the population. Never mind that numerous exceptions have been made to Indonesia's "high case" credit status. Loans of up to $ 1 .2 billion annually have been
this supposedly absolute rule, as in the former Yugoslavia, Bangladesh, Eritrea, and granted for the 2005 to 2007 period. l l s Meanwhile a new crop of technocrats, having
Bougainville, which has been promised progressive autonomy leading to a referendum forgotten the lesson of the "Broken Hearts," are there to manage the next round of
on independence after 1 0 years. As William Nessen put it, "Independence was the boom and bust economism.
ultimate solution for people suffering under European colonial domination. Why
shouldn't it be available for people, like the Acehnese, experiencing a similar lack of
political control, economic exploitation, and intolerable human rights abuses?"1 1O
The answer, ofcourse, has less to do with international law than with hard economic
reality. The global investment community has reason to appreciate Jakarta's iron grip
on the archipelago. That is why it took so long for world opinion to solidify behind
East Timor's undeniably lawful claim of independence. The kind of UN support that
it eventually gained, following the November 1 99 1 Santa Cruz massacre, I I I will not
be extended to Aceh or any other province. Even the partial autonomy that Aceh has
been promised is unlikely to be honored once world attention dissipates. That is of
little concern to the global financial institutions that Jakarta courts. For them SBY,
more than Megawati or Wahid before her, has what it takes to protect their interests.
They see hard-line tactics as necessary for stability, especially in a region of "Islamic
extremism." The present regime is therefore well-served by the imagery of Islamism
as a terrorist powderkeg ready to explode.
In fact, the most influential Muslim organizations, the NU and Muhammadiyah, 1 1 2 Ziauddin Sardar, "Can Islam change?," New Statesman (downloaded September 1 0,
have j oined hands since 9/ 1 1 to resist what they see as the twin evils of radical 2004), [Link] htm.
Islamism and government corruption. Along with the Liberal Islam Network, a new 1 1 3 "Bad Press," Jakarta Post (December 1 6, 2005), from Asia Media: Media News
youth organization, these groups are working to reignite the country's reform agenda Daily, http ://[Link]?parentid=35772. Tellingly, Kalla's chief

from the bottom up--hence the term "deformalization." So too, in stark contrast to rival in policy matters within the SBY regime is the arch-technocrat Budiono, who is silent
concerning Kalla's call for press repression. To Budiono the word "reform" means exactly
what it did to Suharto's technocrats, the "Berkeley Mafia": compliance with the neoliberal
1 09 Ibid. The tsunami of December 26, 2004, however, sapped their will to continue agenda of the IMF and the World Bank. The egalitarian meaning of reform that flowered
the struggle. Within a month of the disaster GAM was sitting down with the government following the Crash has long since wilted. On Budiono's in-house contest with Kalla see Bill
in serious talks in Helsinki. Jakarta, for its part, needed to divert attention from its heinous Guerin, "A Fight for Indonesia's Soul," Asia Times (August 4, 2007), [Link] atimes.
conduct, now that international floodlights were aimed on Aceh. It was therefore prepared comlSoutheast_AsialIH4AeO l .html.
to offer Aceh a measure of autonomy, and the Acehnese were prepared to accept the deal. 1 1 4 "Progress Slow in Indonesia's Democratic Transition: Gus Dur," The Jakarta Post
That, of course, does not resolve the sovereignty issue, any more than it did when the Dutch (July 3 0, 2007), [Link] H04.
packed their guns and left. See Gareth Evans, "Aceh is Building Peace from its Ruins," The 1 1 5 Jane Perlez, "World Bank Again Giving Large Loans to Indonesia," The New York
International Herald Tribune (December 23, 2005), http ://[Link].comlbinlprint_ipub. Times (December 2, 2003), [Link] 2102/internationaVasial02INDO.
php?file=/articlesI2005/1 2/23/news/edevans.p . . . html. Likewise, there are increasing calls for a restoration offull military relations between the
1 1 0 Nessen, op. cit. United States and Indonesia. See "Next Step with Indonesia," Washington Post (February 8,
1 1 1 Lesley McCulloch, "Building Solidarity: Why is Solidarity for Aceh so Much Weaker 2005), p . A22; And Australia is expected to sign a similar security pact. See Tom McCawley,
than for Timor?," Inside Indonesia (January/March 2005), [Link] .
"IndoneSia's Stature Rises," The Christian Science Monitor (January 1 7, 2006), [Link]
edit8 1/p 1 2- 1 3_mcull.html. csmonitor.coml2006/0 1 1 7/[Link].
 Chapter 5

Another Thailand Was Pos sible :

Thaksin and the Thai Response
to Globalization

The New Sheriff

The economics of the Asian Crisis may be fading into history, but the same cannot be
said of its politics. Post-Crash Asia finds itself at a fateful crossroads between liberal
and authoritarian development. Unfortunately it all comes down to cash value, and
the most dynamic Asian economy, on paper at least, has been the P.R.C. China's
record of recent years seems to prove what James Fallows was arguing back in the
mid- 1 990s: that political repression can be a boon to economic growth. Nor is China
the only Asian proving ground for this verdict. The case of post-Crash Thailand is
even more compelling in that here a democratic development model was actually
put to the test. This chapter will explore the reasons why Thailand so definitively
flunked that test.
One obvious reason was the pernicious genius of Thaksin Shinawatra, the prime
minister who would be king. Thaksinocracy turned democratic reform on its head
by exploiting the executive privileges that were built into the 1 997 constitution.
The assumption had been that a weak executive undercut democracy by leaving a
power vacuum for the military to fill . l Thaksin's conduct, however, gave many urban
elites second thoughts as to whether the military was as bad as a democratically
empowered tyrant. It can fairly be said that the military coup of September 2006
could not derail Thai democracy, for Thai democracy had already derailed itself.
In many ways Thaksin's TRT (Thai Rak Thai, or Thais Love Thais Party) echoed
the "Asian values" mantra of Thailand's authoritarian neighbors. But even Lee Kuan
Yew and Mohamad Mahathir-the autocratic godfathers of Singapore and Malaysia,
respectively-had serious reservations about their protege Thaksin, who refused to
heed their warnings concerning TRT tactics toward Thai Muslims. Under the guise
of anti-terrorism and a shooting war on drugs, Thaksin was prone to apply the
Fuhrer principle whenever it suited his need. Granted, he submitted his policies to
nominal democratic review, and swore fealty to King Bhuminol Adulyadej , but his
"C.E. O." style was as much at odds with standard "Asianism" as with the minimalist
model of statehood preached by neoliberals. While his anti-IMF hype earned him a
reputation as an antiglobalist, the sad truth is that Thaksin lacked the commitment

1 "The Long March Back to the Barracks," The Economist (August 23, 2007), http:
[Link]![Link]?story_id=96873 76.
 Development Without Freedom Another Thailand Was Possible 97
96

of globalization (such as This could not have happened without at least tacit approval from Thaksin. His
to be consistently "anti" anythin g. He kept those features
(such as due process rule has been likened to that of the notorious F ield Marshal Sarit Thanarat,8 but a
privatization) which served his interest, while shedding those
more apt comparison, in terms of anti-terrorist imagery, might be to Peru's Alberto
of law) which got in his way.
"neolib eral Fuj imori. In any case the buck stopped with Thaksin. The most that can be said in his
This rank opportunism fits a pattern that has been aptly termed
busines s elitism with defense is that he was more the product than the producer of Thai maldevelopment.9
populism," in reference to Thaksin's ingenious fusion of
the same mix in Russia' s He was simply its brand name. The hallmark of "Thaksinomics" was its ability
highly exaggerated aid for the poor.2 Matt Steinglass noted
Erdogan , and Britain' s to convert natural and human resources, and even natural disasters, into instant
Putin, Italy's Berlusconi, Ukraine 's Tymoshenko, Turkey' s
r, had the inside track capitalist opportunities.
Blair,3 and we may add America's Bush. Thaksin, howeve
apart was pure The tsunami, for example, gave a boost to the sex trade industry, as thousands
where developmental politics was concerned. Part of what set him
Asian futures. of sex tourists rushed from resort beaches to Bangkok. Luckily there was a buyer's
happenstance : his location at the juncture of two very contrary
were tied so closely to market waiting for them: a severe drought and a failed rice crop in northeast
Democratic hopes raised during Thailan d's "miracle" years
tization down with Thailand late in 2004 had forced an unusually large number of village girls to seek
capitalist development that the Crash threatened to take democra
with democra cy kept gainful employment in the capital. 10 Thus, in a Panglossian twist, the drought and the
the ship. Thaksin saved the ship, but very much on his terms,
to put him squarely in tsunami served the economy well. Red light tourists got more bang for their buck,
on board for purely instrumental purpose s. This would seem
these "soft authorit arians" and there was even a new commercial attraction born in the rubble : busloads of Thai
the "Asian values" camp of Lee and Mahathir, except that
y operations. tourists driving through ruined areas such as Nam Khem to take in the sights and
kept a well-lighted place for "good governance" in their one-part
Thai tradition of leaders as gawk at the survivors. I I
Thaksin, in Pasuk Phongpa ichit's view, revived the
above the law.4 In terms of GDP growth-the Holy Grail of standard economic ca1culation­
"action men" whose virtue is proven by being utterly
en as well. such diversions count as much as health care or educational activities. By this
This leadership model applies, of course, to the action man's henchm
tsunami of Decemb er 2004. standard Thailand is again on the right track, as it was before the Asian Crash, and
A window on its practical effect was provided by the
the village ofNam Khem,5 where b �fore the onslaught of IMFism turned most of Southeast Asia into a developmental
One of the most devastated Thai communities was
Armed goons were rushed in disaster zone. At the worst possible time, IMF strictures forced the virtual surrender
authorities acted fast, but not on behalf of the victims.
be resettled . Survivor s among fifty of Thailand's economic sovereignty. 12 The justifiable outrage this produced set the
to seal off beachfront property before it could
s what stage for Thaksin's grand entry into politics. In many ways his appeal mimicked that
families were not even allowed to search for their dead, much less to reposses
had met a stone wall oflocal resistanc e of Malaysia's Mahathir, whose blasts at the IMF rekindled his flagging popularity. 13
remained oftheir homes. For years developers
real estate.6 The tsunami came to their
when they tried to appropriate this prime
whole Simon Montlake, "Squatters aren't Waiting for Jakarta's Post-Tsunami Plan," The Christian
aid, serving hundreds of coastal families their eviction papers, and sweeping
of a newly globalize d Thailand .7 Science Monitor (March I S , 200S), [Link] coml200S/03 l S/p07s0 1 -[Link].
villages like Nam Khem into the assets column 8 Thirayuth Boonmi of Thammasat University has famously stressed this point, and
more recently has called Thaksin a "monster." See Nantiya Tangwisutij it and Subhatra
Bhumiprabhas, "Is Thaksin Another Dictator like Field Marshal Sarit Thanarat?," MGGPillai.
under Thaksin: A Regional and International com (February 28, 200S), [Link] mggpillai. com/print.php3?artid=9688. In fact, Sarit
2 Pasuk Phongpaichit, "Thailand
t Asian Studies, Kyoto University �ever attained the preeminence of a Suharto, Mahathir or Lee Kuan Yew. Clearly Thaksin
perspective," Core University Project, Center for Southeas
mtended to play in their league, and in pan-Asian terms he might have surpassed them if he
(September 6-8, 2004), p. S (pp. 1 -8).
Embattled Prime Minister has had kept his own house in order. On the limitations of previous Thai elites relative to these
3 Matt Steinglass, "Party professio nals: What Thailand's
Blair," Boston.c om (March 26, 2006), http :// major players, see William Case, Politics in Southeast Asia: Democracy or Less (London:
in Common with Silvio Berlusco ni and Tony
126/party ---'professionals?mode=PF. RouledgeCurzon, 2002), pp. 1 47-48.
[Link] [Link] lnews/gl obe/idea s/articles 12006/02
9 Thus Michael Conners prefers to speak of "Thailand's Thaksin" rather than "Thaksin's
4 Pasuk, "Thailand under Thaksin," op. cit., p. 4.
another S,OOO illegal immigrants Thailand." See Michael Kelly Conners, "Thaksin's Thailand-to Have and to Hold: Thai
S In addition to the S,OOO dead or missing in Nam Khem,
from Myanmar had disappea red. Moreove r, the village lost all but half a dozen of its 300 boats. �
Pol tics in 2003-2004," a paper presented to the Thai Update Conference, Macquarie
.
Fishing Village," The New York Times Umverslty (April 20-2 1 , 2004).
See Seth Mydans, "The Tsunami 's Horror Haunts a Thai
0S/02/1 4/interna tionaliasial 1 [Link]. 10 Alex Renton, "Learning the Thai Sex Trade," Prospect, Issue 1 1 0 (May 2005), http://
(February 1 4, 200S), [Link] s.coml20
Villagers Fight Builder for Land," The New York [Link] [Link]. uk/article_details.php?id=6889.
6 Seth Mydans, "Devasta ted by Tsunami,
0S/03/12/ internationaliasialI [Link]. 1 1 Mydans, "The Tsunami's Horror," op. cit.
Times (March 1 2, 200S), [Link] [Link] s.coml20
Christian Science Monitor (April 1 2 See Pasuk Phongpaichit and Chris Baker, Thailand's Crisis (Singapore and Copenhagen:
7 See Simon Montlake, "In Thailand, a Land Grab," The .
408/p07s02 -[Link] . Several hundred thousand InstItute of Southeast Asian Studies and Nordic Institute of Asian Studies, 2000), p. 36.
8, 200S), [Link] .csmonitor. coml200S/0
have similarly been refused permission to 13 Peter Symonds, "Thai billionaire Capitalizes on Anti-IMF Sentiment to Win National
Acehnese survivers of the tsunami in Indonesia
political than commercial. See Elections," World Socialist Web Site (January 1 1 , 200 1 ), [Link] l /
resettle, though here the government's motive is clearly more
98 Development Without Freedom Another Thailand Was Possible 99

But Thaksin's plutocratic populism looked more like the future. If taken up by other Perhaps it helped to control illegal drugs, but its real point was to serve notice on
Asian countries it could cast a longer shadow than the Crash itself. both domestic rivals and foreign powers that the sheriff was above the law.
Here it see�ed was the man to lead Thailand out of the globalist captivity that
the De�ocrat Pa � had come to represent under Chuan Leekpai . By the time of
. . .
the October 2003 APEC Summit in Bangkok, Thaksin had consohdated hls socIal Prototype for Re-cronification

base, winning over the rich with the fastest GDP growth in Southeast Asia, th� poor
with a sprinkling of health care and rural benefits, and the middle classes ': lth the In the wake of 9/ l 1 , the American response to TRT recalcitrance would be muffled
. at best. Washington was too pleased to get Thailand's anti-terrorist cooperation, and
lure of easy credit and a revived sense of national pride. Now Thaksmo�lcs-or
Thaksinocrony, as Thirayuth Boonmi dubs itl4-was ready to do for the re glO� what was too morally compromised by its own anti-terrorist tactics, to voice any serious
. criticism of an ally's domestic affairs. Even Thaksin's anti-IMFism was swallowed
it had done for Thailand: to show the IMF and Washington-directed globahzatlOn the
exit door. Indonesia, the Philippines and even China went to APEC as avid observers by Washington as the price of preserving robust capitalism in the face of depressed
of Thaksin's mode of development. 1 5 social expectations. Thai radicalism had waned since the end of CPT (Communist
This was more than the old Asian statism. Pre-Crash miraclism had gone far Party of Thailand) hostilities in the late 1 980s, so there was nothing to compare with
toward reducing development to economic growth, which in turn was used to justify the Philippine CPP/NPF. Wanting to keep it that way, Washington went so far as to
political stasis. 1 6 Yet through it all a rule-of-Iaw veneer had been preserved. The Crash propose Thaksin as a replacement for Kofi Annan as UN Secretary-General. 1 8
led many to demand more in the way of political reform,17 but no AS E.�.N c�untry Here, a s elsewhere in the region, the big question was how t o divide the spoils
was willing to forfeit even a fraction of its GDP growth for �on-matenal gams. !f of globalized "development." Thai voters looked to Thaksinomics for economic
Rim governments could not deliver a full and speedy economIC recovery, the pubhc salvation-their humble sliver of the capitalist pie. As the first Thai politician to
would soon give up on the political side of reform. The departure of S u�arto a�d fully tap the sound bite power of the mass media, Thaksin got the message across
.
Mahathir left a regional leadership void that any human rights or �emocratl� a�tlVlst that a vote for him was a vote for one's bank account. Being one of the richest
would have to appreciate. Then, however, a prolonged economlC slump mVIted a businessmen in Southeast Asia, he could market himself as the ideal CEO for an ailing
reversion to old voting habits, or worse. Thailand, Inc. He added a Peronist touch by expressing contempt for the "Bangkok
Thaksin's contrarian miracle formula-economism without the liberal baggage- elite" that plagued ordinary Thais as much as the IMF had. In practice, however,
was not on the surface anti-democratic. Quite the contrary, TRTism found in this opprobrium was reserved for those who were not yet enmeshed in the TRT's
democracy a useful power tool, not unlike the "democratization" t�at Bush brought political net-a more organized and expansive version of the old cronyism. Clearly
to the Middle East. By no means did Thaksin's resignation of Apnl 2006 spell the Thaksin was superbly qualified for the role of crony-in-chief. His fortune, after all,
end of Thaksinocracy, a development model which ironically might be better off had been secured through concessions granted him by the Telephone Authority of
without him. After the Crash, liberal democratization on the Rim hung on a slender Thailand in 1 990. That gave him an exclusive twenty-year monopoly over mobile
economic thread. Democratic reformism was already being blamed for economic phone services, which became the cash cow for his roaring computer business.
dysfunction when Thaksin, the new sheriff, rode into town. Liber� ism as �uch was
.
�,
One of his prime tasks, once in office, was to streamline the re-cronification
faulted for the defects of neoliberahsm, such that the very word reform took on process that was already in motion. The first general election under the celebrated
the odor of malaise. This gave Thaksin his license to ditch liberal restraints, as he did 1 997 constitution had put many familiar faces back in power. Sanoh Thientong, a
in his extra-judicial drug war of 2003 , which by some estimates claimed 2500 lives. major power broker from the pre-Crash era, was back in full stride, as was Surakiart
Sathirathai, who would end up as the TRT deputy secretary. It was Thaksin, however,
who kicked the process into high gear. No sinner would be unwelcome under the TRT
revival tent. This unite-and-conquer method would complete Thailand's 'junker"
jan200 l /thai-j l l .shtml.
synthesis: the drift over the past two decades toward the co-optation of local political
14 "Academics Take Aim," Bangkok Post (August 3, 2004), [Link] l 6.46. l 70. l 84/
educationisite2004/[Link].
networks by a new capitalist class.
. Although the resulting hybrid is in many ways less democratic than the system it
1 5 Andrew Perrin, "The Thaksin Effect," Time As ia (October 27, 2003), [Link] time.
com/time/asia/magazine/artic1e/O, 1 3 673,50 1 03 1 027 -524520,[Link]. displaces-in that it is clearly aimed at the creation of a one-party system reminiscent
.
16 Surin Pitsuwan, "The Asian Crisis, Good Governance and the Tsunaml of of Mahathir's 22-year juntal9-the absence of a credible Thai Left permitted the
Globalization," in Charles Sampford, Suzanne Condlln, Margaret Palmer and Tom Round TRT to pass itself off as the party of the people. This Peronist subterfuge effectively
(eds), Asia Pacific Governance: from Crisis to Reform (Aldershot, UK: Ashgate, 2002), p. 26
(pp. 2 5-3 0). 1 8 "Thaksin Blows Chance of UN Top Job," A ljazeera. com (October 3 1 , 2004), http ://
. . . .
1 7 See Allen Hicken, "The Politics of Economic Reform III ThaIland: CnsI� �nd [Link] [Link]-binlreview/artic1e_full_story.asp?service_id=5428 .
Compromise," William Davidson Institute Working Paper, No. 63 8 from The Wtlham 1 9 See Thitinan Pongsudhirak, "Asia's Age ofThaksin?," Project Syndicate (April 2005),
Davidson Institute (January 2004), p. 24 (pp. 1-30). [Link] proj [Link]/print_commentary/pongsudhirak l lEnglish.
1 00 Development Without Freedom Another Thailand Was Possible 101
displaced "People Power." While Thaksin struck a nationalist pose in his contest Like the CCP/TNC symbiosis i n China, Thaksin's TRT fused the new forces of
with Democrat globalism, TRT policy was no less committed to the connectivity and globalization with old guard politics. This worked domestically, allowing Thaksin to
privatization that his predecessors embraced. It simply provided local cronies with a become the first prime minister to win a consecutive term. But tactics that succeeded
better seat at the global bargaining table. This seating arrangement can be compared locally met a very different response outside Thailand. The question was how far
to India's uncanny alliance of multinational and Hindutva power bases under the Thaksin's political sway could extend in Asia, given his baneful treatment of Thai
BJP. That too involved a global/local coupling of two seemingly opposite worlds. In Muslims. After the massacre of 85 peaceful Muslim protesters at Tak Bai on October
both cases this turned out to be an unstable alliance-vulnerable to a challenge from 25, 2004, with countless more killed that same year, Malaysia and Indonesia issued
either of two sides: from a more focused business party, rather like the American public criticism, and Thailand's king called Thaksin in for a drubbing. Mahathir went
Republican Party, or from real competition on the populist side.20 even further, urging Thailand to consider granting autonomy to the south before the
Washington understandably kept its silence concerning the reactionary tilt crisis became the ASEAN equivalent of the Palestinian quagmire.
of both the BJP and TRT, for Right populists were considered more pliable than With the elections behind, Thaksin set about repairing the regional damage
Left ones such as Venezuela's Hugo Chavez. Thaksin was recognized as a useful by calling for social justice, as if he bore no responsibility for the injustice that
instrument of globalist de-radicalization. Rather like President Bush, he subverted had stained his first term. It says much about the "democratic" values espoused by
the pluralist meaning of democracy while milking its populist potential. Meanwhile globalists that they kept their silence about state terrorism in southern Thailand. Like
he won applause throughout the ASEAN sphere as the man who restored Thailand's Aceh in Indonesia, this area remained conveniently closed to journalists and aid
pre-Crash dynamism on his terms rather than the IMF 's. US-based globalists m ight workers .21 The government had too much to hide. While it is known that a handful
.
grumble, but they much preferred Thaksin's regional leadership to the more noxIOUS of Thai insurgents had fought in Afghanistan-first against the Soviets and later
antiglobalism that was waiting in the wings. Mahathir, for example, was prone to against the Americans-the scale of the southern conflagration made it obvious that
make caustic comments at the worst of times, such as after 9/ 1 1 , when Washington its prime mover was TRT policy. Muslim violence had all but disappeared by 2002,
was mounting its war on terrorism. By contrast, Thaksin sent troops to Iraq. but now returned with a vengeance. Al Qaeda would pray that all Asian governments
The question was how long Thaksin could keep his domestic house in order, and might behave in this manner.
especially his urban house. This depended in part on how long he could maintain It at least can be said of Thaksin that he kept a few of his populist promises:
the state of emergency that put him in office. At first this was mainly an economic paying attention to rural problems, reigniting the economy, and unhinging America's
sense of distress, tinged with national insult. While nationalist revulsion against the financial hold on the region. In his October 2002 keynote address to the East Asia
IMF explained the TRT's success in 200 1 , that political ticket would give Thaksin a Economic Summit, Thaksin effectively declared independence from US-directed
short ride. This, even more than his shady dealings, was the key to his ouster in April globalization. His language was veiled, but everyone knew that when he vowed to
2006. To retain legitimacy he had to get the economy rolling, but doing that removed reap the benefits of globalization in a "sustainable" way he was not talking about
the exigent atmosphere that was his political raison d'etre. He had to sustain the saving trees.
"Grand Coalition" that gave him leverage over the old patronage politics, but this The unsustainability of IMFism was common knowledge. Neoliberal mandates
would require a renewable source of emergency. had exacerbated the Asian Crisis by stunting social assistance and discouraging
As surely as it did for Bush, 9/ 1 1 came to Thaksin's rescue, and like Bush he counter-cyclical actions that could have halted the deflationary spiral. Thus a
used fear tactics to constantly recharge national anxieties. Some thought his days recession had been turned into a prolonged depression, and a putative recovery
numbered by late 2003 and early 2004, but to the surprise of many critics his heinous operation into a neoliberal shopping spree. The political rebound this produced
actions in the south actually boosted his popularity. Few cared about his friendliness came gift wrapped to Thaksin. Even as he continued privatization-a central pillar
toward the Burmese junta, and even his deadly silence during the bird flu crisis of IMFism-he promised his own de-liberalized "Third Way," along with a regional
hardly dented his re-electability. His brash refusal to accept tsunami aid, no matter alternative to globalist recovery schemes. In 2002, under the flag of a New Asian
how much the victims needed it, recharged his popularity in the closing weeks Realism, he proposed an Asian bond proj ect and an 1 8 country Asian Cooperation
before the general elections of February 2005. The TRT won 377 out of 500 seats Dialogue reaching from the Middle East to East Asia. Naturally Thailand was to be
in parliament, making it the first party in the country's history to have no need of a the locomotive driving this new Asianism, and Thaksin was to be the engineer at its
coalition to form a government. It also got by with less direct vote buying than usual, throttle. Its ultimate destination would be a pan-Asian "junker" synthesis: the worst
as it already had the election in the bag. of the old and the new.

20 See Pasuk Phongpaichit, "Thailand: Wide Angle," Keynote Speech at the 9th
International Conference of Thai Studies, University of Northern Illinois, Dekalb (April 4,
2 1 Amir Taher, "Thailand: Origami Politics Won't Do," Arab News (December 1 8, 2004),
2005), p. 9 (pp. 1 - 1 0).
[Link] 1 0&d= 1 8&m= 1 2&y=2004&hl=Th . . .
1 02 Development Without Freedom Another Thailand Was Possible 1 03

Balancing Act Laos and part of Cambodia by France, and part of today's Malaysia by Britain, but
through it all the king stayed on amiable terms with the West. By any definition short
To tap popular resentment of carpetbagger globalism, Thaksin had to make a show of complete conquest these were imperialist terms, yet the official independence of
of resistance. In fact he was simply returning to an old Thai tradition of geopolitical Siam reduced the one fringe benefit that literal colonialism afforded other Southeast
tradeoff. Myth has it that Thailand has had little direct experience with colonialism, Asian countries: a profound anti-colonial impulse. Thailand would lack the kind of
but Siam, as it was once known, had little choice but to accept an informal colonization nationalist rebound that could have stabilized its political structure. It remains to be
of mind and policy in lieu of formal colonization. From the time of Rama IV (King seen whether any Thai leader can supply such cohesion in today's globalist context.
Maha Mongkut, who reigned from 1 85 1 to 1 868), the idea was to ride the foreign That would be a world-class achievement, given the reputation of globalization for
tsunami rather than stand against it. undermining nationalism.
So, like Japan after its Meiji Restoration, Thai rulers welcomed many aspects of This is a country that has had sixteen coups, eight of them successful, since
Westernization. Unlike Japan, however, they found it necessary to surrender much the overthrow its absolute monarchy in 1 932. Indecisive leadership made Thailand
of their autonomy to avoid outright conquest. The 1 932 Thai Constitution ended 800 the perfect base camp for America's military operations in the 1 960s. Virtual US
years of absolute monarchy, but in many ways it was a hoax: less a document of occupation sowed the seeds for a possible nationalist reflex, but this rebound effect
popular sovereignty than a manifestation of "deep colonialism," to borrow Thirayuth was put on hold by the complacence money could buy. Here as elsewhere, the
Boonmi's term.22 In that same spirit, Thailand yielded without resistance to Japanese growth-first development model sponsored by Washington was a time bomb set to
occupation during World War II, and served America's needs (including the carnal explode whenever the economy faltered. Until then, Thailand remained the perfect
needs of its troops) during the Vietnam War. neocolony, the very archetype of dominated development.26 Thus America reaped
It is hardly surprising in this light that after the Crash Thailand surrendered the benefits of imperialism with few of the costly responsibilities. As of 1 959 it got
almost unconditionally to IMF strictures. At first glance Thaksin's recoil from an ideal puppet dictator in Sarit Thanarat, who proved his worth by banning strikes,
Washington's neoliberal program would seem to be an historical aberration. But the closing down unions, and paying heed to US-trained technocrats. It hardly mattered
social ramifications of this "resistance" have been vastly exaggerated. What the TRT that his successors, Thanom and Praphat, were clumsy hacks, for they were riding
challenged was not globalization's social and economic injustice but the share of the crest of an unprecedented wartime boom.
the spoils allotted to Thailand's own capitalist elite. In the name of resistance, local By the early 1 970s, however, inflation was on the rise, and everyone could see
cronies would now demand a much bigger share of the take. The TRT agenda was that the US was packing its bags. This voided the regime's social contract, whereby
one of globalist redistribution, not antiglobalist reform. political un development was tolerated in return for fast-track economic growth. Only
The question is whether the TRT phenomenon marks a major departure from then could real democracy break out, as it finally did in October 1 97 3 . Unfortunately
Thailand's foreign relations record. That tradition is rooted in the country 's location, that was the very month that the global oil crisis also broke out, compounding the
squeezed as it once was between British territory to the West and French to the East. economic slippage that was sure to follow America's regional retreat. Paradoxically,
The remarkable thing is that any trace of Thai sovereignty could survive. The deft the government was blamed for both its overdependence on the US and its failure to
diplomacy of Mongkut and his son Chulalongkorn (Rama V) made them at once, in secure lasting American commitments.27
Benedict Anderson's words, "the most dependent and the most powerful sovereigns These conditions prompted the rise of the Thai Left, which gained ground
in Thai history."23 It is telling that Chulalongkorn's choice of a modernization model even within Buddhist ranks, while the Right embraced the monarchy and struck
was not that of European nations but rather European colonies such as the Dutch with unmitigated fury against a reformism that could no longer be taken lightly.
East Indies and British Malaya.24 He improved on that model by playing colonial The democratic experiment that began in 1 973 was crushed by 1 976. The October
powers off against each other, much as Thaksin would in our time. 6 massacre at Thammasat University in Bangkok has been compared to the 1 968
Taking up where his father left off, Chulalongkorn launched such occidental massacre in Mexico City and the 1 947 "two-twenty-eight" butchery in Taiwan. In all
marvels as a railway, a police force, and the rudiments of a modem navy, with the three cases it is the subsequent silence that speaks loudest concerning the continuing
king's own yacht doubling as a gunboat.25 None of this prevented the theft of today's plight of democracy. Apart from that remarkable three year interlude, Thai politics

22 See his "Not anti-Western, rather Post-Western," The Nation (Thailand, April 1 5 ,
2003 ), [Link] org/ml/communicationl200304.monthl627 .html.
23 Benedict Anderson, The Spectre o/Comparisons: Nationalism, Southeast Asia and the
World (London: Verso, 1 998), p. 1 62. made the cut before. See Anderson, Imagined, op. cit., pp. 27-28.
24 Benedict Anderson, Imagined Communities: Reflections on the Origin and Spread 0/ 26 On "dominated development" see Daniel Bensai'd, "Theses of Resistance, "
Nationalism (London: Verso, 1 983), p . 94. International Viewpoint (December 2004), [Link]
25 He imported from the West the "civilized" principle of royal primogeniture, which iv362 1 1 .htm.
in 1 9 1 0 resulted in the succession of the mentally unstable Rama VI, who would never have 27 Anderson, Spectre, op. cit. , p. 1 54.
1 04 Development Without Freedom Another Thailand Was Possible 1 05

could be aptly described as "an old-fashioned mix of kings, coups, and generals."28 boom. A new wave of cronyism had crested by the time Chuan Leekpai took office
As Victor Mallet notes, the country has achieved neither a substantive democracy in 1 992, and subsequent Banharn and Chavalit governments offered more of the
nor an efficient authoritarianism. What it has done extremely well is sell elections. same. Under them global corporatism struck up a love affair with the old patronage
$ 800 million was spent, for example, buying votes in the 1 996 campaign.29 The networks. It was Thaksin, however, who pushed this global/local "engagement" to
leadership this purchased set the stage for the coming Crash. its matrimonial phase.
To "Asian values" hardliners, the Crash proved beyond all doubt that the halfway By the late 1 990s, in the throes of depression, the ruling Democrat Party had
house of Thai democracy was half too much. In fact there was little in the way of deservedly lost public confidence. Its failure was rooted in the economic liberalization
political development to lose. In the last quarter century ties between politicians and ofthe late 1 980s. Prevailing globalist values allowed Thailand's miracle economy to be
criminal gangs had tightened, while vote-buying had become so rampant that in one celebrated even as a third of the country's population subsisted on less than $2 per day.
province, as late as 1 996, 29% of the voters polled thought it was a perfectly legal Indeed, one in six people in the agricultural northeast survived on less than $ 1 per day.
activity.30 If this is the best that Asian democracy can offer, authoritarianism will win Neoliberal deregulation froze these conditions in place, putting local agriculture at the
by default. The Crash, in short, brought development theory to a stark crossroads: mercy of global forces. Prices plummeted after trade barriers were lifted with China,
either democratization would have to be upgraded to a first priority concern, on a par yet Thai capitalists had good reason to cheer. After its WTO entry China opened itself
with economic growth, or downgraded in the manner of Singaporean economism. more broadly to Thai products, such that by 200 1 Thailand's largest conglomerate, the
Thai "democracy" had long operated as an instrument of decentralized patronage, CP Group, was the biggest single foreign investor in China.
with public offices bought and sold like any other commodity. Most Thais simply This put Bangkok in a position to play Beijing off against Washington. By
did not care. contrast to the latter's terror-focused militarism, China could present itself to all of
The Crash woke some from their lethargy, and also made it harder for globalists Asia as an agent of commercial peace and harmony, with Bangkok as one of its key
to dodge the reform issue by way of capitalism's presumed democratic teleology. If partners. However, even as China set about building roads and railways to secure
the liberal democratic road to development was to be taken at all, it would have to be that partnership, Thaksin-in classic Thai style-redoubled his cooperation with
taken more seriously. Neoliberals who claimed to be pro-democratic could no longer US anti-terrorist programs. This traditional balancing act locked China and the US
rest content with the minimal device of elections and ballots alone. It was in this into regional competition-a clear sign that globalization, on the Rim at least, was
context that Amartya Sen's "democracy as freedom" thesis won him a Nobel Prize, entering an abrasive new phase.
for mere procedural democracy had failed miserably. Even classic modernists now
balked at giving economic growth full developmental priority.
Not-so-new Maldevelopment
To be sure, Sen's democratic axiom cuts both ways: political development is also
unsustainable without a solid economic foundation, and a fairly egalitarian one as well.
No longer does America enjoy the hegemony over Thailand that went unquestioned
That clandestine radicalism is the largely ignored side of Sen's development model.
in the Cold War and early post-Cold War eras. The ball is in a different court, and the
As in Indonesia, a lack of developmental concurrence (i.e., balanced political and
whole developing world is waiting to see how it will bounce. Thai domestic politics
economic progress) doomed Thailand's post-Crash reformism. The irony is that the
will certainly be affected as the chasm between globalization's winners and losers
Crash did release reform energies in Thailand, but like the Thai democratic experiment
grows even wider. Some still insist that globalization is fostering Thai democracy,
of 1 973, the same economic downturn that spawned democracy also thwarted it. Hence
but at best this is the kind of procedural democracy that can be bought and sold.
the Crash at once activated and deactivated the new current of reform.
Since the highest bidder is sure to be the most globally connected one, the new
The problem traces back to the 1 950s, when the World Bank set Thailand on the
"democratic" politics redounds to neocolonialism.
path of rapid industrialization and "free market" capitalism. As in Japan and Korea,
As we have seen, Thailand's economic and even political sovereignty was
Thai corporatism was not at first a political behemoth, but after the Plaza Accord
thrown in doubt after the Crash by its surrender to the IMF. This enabled Thaksin,
of 1 985 the business lobby reaped the benefits of a ten-fold foreign investment
on the rebound, to pose as both a guardian of democracy and of anti-colonialism.
Washington took his January 200 1 victory in stride, and doubtless preferred him to a
28 Pasuk Phongpaichit and Chris Baker, Thailand 's Boom and Bust (Chiang Mai,
weaker figure who could not have deflected social unrest. His anti-terrorism simply
Thailand: Silkworm, 1 998), p. 1 . sealed the deal. Solid US approbation allowed him to roll back many of the reforms
2 9 Victor Mallet, The Trouble with Tigers: The Rise and Fall ofSouth-East Asia (London: that had given Thai globalization a progressive aura. He set about solidifying his
HarperCollins, 1 999), pp. 228-29. power base through policies modeled on the infamous Internal Security Acts (ISAs)
30 James Ockey, "The Rise of Local Power in Thailand: Provincial Crime, Elections
and the Bureaucracy," in Ruth McVey (ed.), Money and Power in Provincial Thailand
(Copenhagen, Denmark: NIAS Publishing, Nordic Institute of Asian Studies and Singapore:
Institute of Southeast Asian Studies, 2000), pp. 85-86 (pp. 74-96).
1 06 Development Without Freedom Another Thailand Was Possible 1 07

of Malaysia and Singapore.3) Reversing the country's drift toward federalism, which than reform them, thus j oining the country's two main power structures: old guard
in the 1 990s had pacified the south by allowing a measure of local autonomy, he also politics and new urban capitalism.34
eliminated the "Board" (the Civil Police Military Command) and other safeguards Tension between these camps had peaked in the early 1 990s, after which the
against military abuses. forces of globalization tipped the power balance decisively toward the corporate
By 2003 , in the midst of his mounting war on drugs, Thaksin had laid the side. Much as China's booming capitalist class found itself tete-a-tete with the CCP
foundation for a virulent new strain of the East Asian security state. The idea was rank and file-such that Jiang Zemin's mediatory role became the linchpin of his
to impose permanent one-party rule, Singapore-style, but with less pretense of legal success in the post-Tiananmien era35-Thaksin played the role of bridge builder in
restraint. Security forces were given a green light to shoot anyone suspected of post-Crash Thailand. Those who refused to cross the TRT bridge would be politically
narcotics violations. No doubt many drug pushers were eliminated, along with a host banished, and most got the point. Thaksin's major political legacy is this reactionary
of political undesirables such as reformists, NGO workers, and lawyers who had bonding of old and new power elites.
the audacity to defend blacklisted clients. That of course was the main point. From Writing in 1 997, the year ofthe Crash, Paul Handley astutely recognized that while
Thaksin's vantage the program proved so effective, and so uncostly internationally, Thailand's rising economic order might be revolutionary, it was not substantially
that it was revived in 2004. Far from trying to curtail these developments, Washington different from the old ruling order in its quest for power and economic privilege. The
rewarded Thailand with a free-trade agreement. new contenders differed from the old civil and military bureaucrats only in terms
Globalization on these terms removed all doubt that democratic reform was of their strictly capitalist origins and goals. As a product of the 1 987-96 economic
expendable. Thaksin openly co-opted provincial magnates who had been the boom, their twin objectives were unfettered capital accumulation and maximal
arch-enemies of democratization. Meanwhile he turned his "CEO" tactics on the privatization of state enterprises.36 Neither the old nor new elites had any taste for
government itself. Officials became afraid to file reports that might upset the tycoon­ People Power, so globalist support was assured. While Thaksin did not initiate this
in-chief. Thus, in a perfect inversion of Sen's doctrine of informational democracy, global/local alliance, he consummated it with ruthless efficiency.
problems such as the bird flu epidemic were blacked out as long as possible. A press That rearguard drift had not been so obvious when these rival camps had their
that had once been known for its boldness and candor was now afraid of its own classic showdown in May 1 992. Writing in that same year, Anek Laothamatas
shadow. Despite its democratic cloak, Thaksinocracy was starting to bear a striking compared Thai bourgeois politics with the role assigned the middle class by Marx
resemblance to the statist capitalism of post-Soviet Russia, if not (as yet) post­ and Weber. For them modern capitalism was a positive social force when set against
Tiananmen China.32 Clearly Sen has overrated the formal apparatus of democracy a semi-feudal backdrop. Likewise, Laothamatas saw Thai politics as a zero-sum
as a guarantor of liberal reform. Dictators have less to fear from universal suffrage contest between the old military-bureaucratic establishment and the business class
than from the cultural dimensions of democracy. Thaksin set a sordid precedent for that rose to prominence since the early 1 980s. It was this bifurcated power structure
the whole developing world by turning the legitimating device of democracy against that distinguished Thai politics as of the early 1 990s,37 but that duality would not last
real reform. long. The Old Guard lost the competition after the popular uprising of 1 992,38 thus
Having solidified his domestic base, and secured his international flanks, Thaksin paving the way for almost uncontested globalization.
could now deal with the south on his own terms. Muslims began disappearing from
their homes, sparking violent resistance from a minority once known for moderation.
Whether by accident or design, this well served the TRT cause. The growing civil
34 Analysts writing in the Far Eastern Economic Review had predicted this merger as
war, which claimed over a thousand lives in 2004 and 2005 ,33 recharged the sense
early as January 200 1 . See Shawn W. Crispin, "Thailand Incorporated," The Far Eastern
of emergency that brought Thaksin to power and licensed his tactics. Apart from Economic Review (January 1 8 , 200 1 ), [Link] 1 0 1 _1 8/pO I [Link].
these Islamic "terrorists," however, his consistent strategy was to co-opt and conquer 35 William H. Thornton, Fire on the Rim: The Cultural Dynamics 0/ East/West Power
competing political factions. The idea was to enlist local patronage networks rather Politics (Lanham, MD : Rowman & Littlefield, 2002), p. 1 4 1 .
3 6 See Paul Handley, "More of the Same? Politics and Business, 1 987-96," in Kevin
Hewison (ed.), Political Change in Thailand: Democracy and Participation (London:
Routledge, 1 997), p. 94 (pp. 94- 1 1 3); and "The Secrets of Thaksin's Success," [Link]
(October 9, 2004), [Link]
3 1 Joshua Kurlantzick, "Thai Breakdown: Paradise Lost," The New Republic (February asiaiGoAsiaPacifi . . .
2 1 , 2005), [Link] 1 &s=kurlantzick022 1 05 . 3 7 Anek Laothamatas, Business Associations and the New Political Economy o/Thailand:
32 O n the fonner, see Michael McFaul, "Political Charades," The Moscow Times From Bureaucratic Polity to Liberal Corporatism (Boulder, CO and Singapore: Westview and
(September 30, 2005), http ://[Link]?aid= 1 56467. Institute of Southeast Asian Studies, 1 992), pp. xi-xii.
33 Jiirgen Kremb, "Attacks Threaten Religious Hannony in Southeast Asia," Der Spiegel 38 Ukrist Pathmanand, "Globalization and Democratic Development in Thailand: The
47 (November 2 1 , 2005), http ://[Link]. de/[Link]/spiegel/O, 1 5 1 8 .druck- New Path of the Military, Private Sector, and Civil Society," Contemporary Southeast Asia,
3 [Link]. Vol. 23, No. 1 (April 200 1 ), p. 27 (pp. 24-42).
1 08 Development Without Freedom Another Thailand Was Possible 1 09

When the seasoned activist Chuan Leekpai, leader of the Democrat Party, highly publicized anti-IMFism allowed him all the better to defuse the revulsion of
became prime minister in September 1 992, Thailand's democratic prospect seem�d the Thai public toward globalization. It took five years for the fact to sink in that his
bright. Few were bothered by the fact that everything hinged on an endless econOI�llc antiglobalist rhetoric was a hoax.
miracle. Although Chuan continued the economic liberalization of the precedmg In the name of nationalistic resistance, Thaksin had invited the return of the old
administration, which had specialized in government by and for big business, he dinosaurs, as Thais call the magnates of patronage politics-as-usual. Locally managed
seemed to offer a broader slicing of the capitalist pie. This was consistent with maldevelopment may seem preferable to globally managed maldevelopment, but
neoliberalism's democratic claims, freshly minted in Washington. for the people of Nam Khem it comes to the same thing. Their interests could
Such deference to made-in-America ideology rested on the trustful notion that only be served by a development model that reconciles economic dynamism with
what was good for Washington was ipso facto good for the Pacific Rim. But by equalitarian democracy. That is what the Senian model does when it is not hijacked
1 996, with Thai exports stagnant at a time when Wall Street was booming, doubts by neoliberals or their "Third Way" equivalents, both of whom are determined to
should have abounded. Doug Henwood (After the New Economy, 2003) makes a keep equality out of the picture. Senism is at odds with any power elite, be it the old
cogent argument that there never was an American "New Economy," at least not Thai dinosaurs, the new globalists, or a Thaksinian merger of the two.
in the sense that technophiles such as Thomas Friedman saw it. The roaring ' 90s
were not so much stoked by the celebrated Information Revolution as by the de­
Conclusion: the Road to Sustainable Cronyism
regulation of capital markets. That fostered a no-holds-barr�d comme�cialism wh ch �
seemed to favor the Asian tigers, or at least their urban elItes, as WIld speculatIOn
The real nature of that merger was fully exposed early in 2006 when Thaksin sold
pushed foreign investment far beyond productive limits. Countless warning signs
controlling interest in his telecommunications firm, Shin Corporation, tax-free for
were ignored as Thailand fell p�ey to explosive private debt and balance of payment
$ 1 .9 billion. Shin's market value had trebled during Thaksin's five years in office.
deficits. The resulting currency crisis, as in 1 980-8 1 , forced the government to seek
It did not help that the buyer, Temasek, is owned and managed by the Singapore
IMF assistance. That of course was inviting the fox to guard the chickens.
government. Nationalist outrage was thus added to a growing sense of working
The fox was on very familiar ground. Our image of Thailand's historic
class betrayal . Student-led protests, reminiscent of 1 973, brought tens of thousands
independence is shattered when we recall the steady infusion of Western capital
into the streets-l 00,000 on February 4 alone.42 By then two cabinet members had
and advisors that reaches back to 1 850. It is even arguable that "there was never a
resigned, and more were doubtless standing by their life boats.
time when Thai society was not globalizing."39 Only the deluge of American and
Government coverage of these events on state-run television and radio stations
Japanese capital since the Vietnam War makes the pre- 1 960s era seem relatively
was blocked, much as it had been in 1 992, but that only underscored the threat
autonomous.40 Nonetheless the full thrust of international hegemony was averted.
TRTism posed to democratic institutions. To confirm his populist power base,
Likewise, Thaksin's quite traditional strategy was to dance on both sides of the
Thaksin felt compelled to call for an April election, three years ahead of schedule.
geopolitical fence: indulging America's fixation on terrorism while reaping the
Though his formal victory was hardly in doubt, the solidarity of his "grand coalition"
rewards of China's commercial overtures .
was severely shaken. After all, his 200 1 victory had been built on his promise to
Undeniably this dance gave Thailand a better bargaining position than i t had i n
defend nationalist interests against the globalist inroads of the IMF. Now he had not
the sputtering 1 990s. O n Thaksin's watch Bangkok rej ected development assistance
only executed the biggest corporate sellout in Thai history, but was busy negotiating
from global titans such as Japan and challenged the IMF by establishing aid and
a free-trade agreement with Washington. The IMF could not have wished for more.
soft loan packages for Asian neighbors.41 Thus Thailand moved from the ranks
Under siege in Bangkok, Thaksin focused his campaign all the more on his
of peripheral, aid-directed development to the top of the regional pyramid. It was
. . rural constituents, handing out 1 ,000-baht banknotes from his own wallet in village
mainly Thai capitalists, however, who reaped the rewards. The reactIonary tIlt of
after village. The April election became a classic brawl between a rural maj ority
Thaksinocracy was camouflaged by the fact that its primary targets, the IMF and
that unabashedly sold its votes to Thaksin and an urban minority that demanded
the World Bank, are hardly paragons of progressivism. Rather they have propped
the removal of a vile but democratically elected leader. Whichever side prevailed,
up odious regimes and consistently impeded non-commercial reform. �o wonder democracy would be the loser.
they so easily forgave Thaksin's transgressions against them. They �
e� It was all a
. Middle-class discontent was ably manipulated by Thaksin's media rival, Sondhi
front, as he was a member in good standing of their transnational capItalIst club. HIS
Limthongkul, while craven opposition leaders stood aside.43 The military coup that
finally ousted Thaksin in September 2006, with the full approval of the king, could
39 Quoted from a Thai intellectual by Natasha Hamilton-Hart, "Thailand and
Globalization," in Samuel S. Kim (ed.), East Asia and Globalization (Lanham, MD : Rowman 42 Noknoi Daeng, "Mass Upsurge in Thailand: Students and Workers on the March,"
& Littlefield, 2000), p. 1 89 (pp. 1 87-207). MRZine (February 1 4, 2006), [Link] I [Link].
40 Anderson, Spectre, op. cit., p. 1 4 3 . 43 Veer Prateepchaikul, "Thaksin's Top Critic could Seek Dignified Exit," Bangkok Post
4 1 Pongsudhirak, op. cit. (January 23, 2006), [Link] 76 1 1 .
110 Development Without Freedom

not so easily expel the TRT machine. Thaksinocracy had taken on a life of its own
Chapter 6
apart from Thaksin. Though the TRT was disbanded by court order in May 2007, its
more stalwart members soon regrouped under the banner of a new People's Power
Party (PPP). Sino-Globalization-Part 1 :
This reincarnation marked a distinct shift to the Right from the TRT's post-coup
leadership under Chaturon Chaisaeng. The new PPP leader, Samak Sundaravel, was Politics of the CCP/TNC Symbiosis
no enemy of militarism. Having faithfully served military governments during the
bloody repressions of 1 976 and 1 992,44 he was the perfect political hybrid for the
moment: a confessed Thaksin proxy with close Army ties.45 Thus he stood a chance
of winning centrist support away from the military royalism of General Sonthi
Boonyaratglin. When the December 2007 election brought the PPP to power, thanks Line i n the Sand
largely to the poor economic showing of the junta, reactionary globalism was back
on track. The only good news was that "Dog Mouth" Samak, as the press dubbed When Fei Xiaotong died at 95 in 2005, China lost one of its last effective voices for
him, would not enjoy the political monopoly that his boss had wielded. He would democratic reform from within establishment ranks. Fei's classic, Peasant Life in
have to rule by way of a six-party coalition.46 China, reminds us of how rural Chinese paid the price for change in the formative
That ostensive blessing carries a price, however. The PPP victory restores years of Chinese communism. I Now, likewise, they are paying for Chinese capitalism.
many of the worst features of TRTism without its one positive attribute : its ability The difference is that the former gave them some actual benefits in return. They not
to overcome the leadership void that has plagued Thailand through endless regime only got minimal health care, but the psychological satisfaction of knowing that
cycles. The new constitution that was passed by referendum in August 2007 so however bad things were, the hardship was broadly distributed. Anyone who thinks
weakened the power of future prime ministers that good as well as bad executive those are insignificant benefits should consider becoming a World B ank economist.
authority would be stifled. On the zero-sum scales of Thai politics, any diminution of Having so much to like about current PRC policies, corporate CEOs and their
civilian authority will translate into permanent military supervision of the country's neoliberal scribes have developed a political double vision about this erstwhile
political life .47 backwater of the Second World. Even as they vilify Cuban communism, they refuse
The democratic prospect that seemed so close at hand with the 1 997 constitution to process the grim realities of PRC power politics .2 This double standard also
has suffered the same fate as the hopes once vested in Korean minjung, Philippine infects assessments of China's economic performance. CCP policies have generally
People Power, and Indonesian reformasi. None of these cases bodes well for the been considered beneficial for the vast maj ority of Chinese, which is a portentous
Senian model of concurrent development advanced by this study. It must be asked, myth. Deng's economic restructuration tipped China like a seesaw, with the spotlight
therefore, if Sen's "Asian strategy" is a complete delusion. Our next four chapters, aimed at the winning side. Even by the mid- 1 980s inflation of up to 28 percent
covering China, India, and Japan, will put the question of democratic efficacy front was sorely felt on the losing end of the seesaw.3 Public resentment was natural, but
and center: What is the cash value of freedom or repression in these budding Asian lacked a political outlet. Reformist officials such as Hu Yaobang struck terror in
superpowers? the CCP Old Guard by simply broaching the subject of political reform. That not
only killed Hu's chance to be Deng Xiaoping's successor, but probably killed him
literally. Many suspect Li Peng of giving the order. In any case Hu conveniently
expired on April 1 5 , 1 989.
It will be left for historians to debate how close the Hu faction had been to
effecting political reform from within CCP ranks. The Tiananmen Papers (documents
smuggled out of CCP archives and published early in 200 1 ) suggest that China's
44 Simon Montlake, "The Majority Coalition is Expected to Name a Controversial power elite was divided over the proper course of development, but the bottom line
Prime Minister," The Christian Science Monitor (January 25, 2008), http ://[Link].
com/2008/0 1 25/p04s0 l -[Link].
45 Shawn W. Crispin, "Politics by Proxy in Thailand," Asia Times (August 1 0, 2007), 1 See Anne F. Thurston, "An Optimist's Life," The Wilson Quarterly (Autumn 2005),
http ://[Link]/Southeast_Asia/IH 1 OAeO l .html. http ://www. [Link]/[Link]?fuseaction=[Link]&essay id= 1 46858& . . .
46 "Good Riddance," The Economist (January 24, 2008), http ://www. [Link]/ 2 See Michael Parenti, "The Logic o f U . S . Intervention," i n Carl Boggs (ed.), with a
opinion/PrintFriendly. cfm?story_id= 1 05667 1 O. foreword by Ted RaIl, Masters of War: Militarism and Blowback in the Era of American
47 Seth Mydans, "New Thai Constitution would Strengthen Role of the Military," Empire (New York and London: Routledge, 2003), p. 27 (pp. 1 9-36).
International Herald Tribune (August 1 7, 2007), [Link] 7/ 3 Sophia Yee, "China expert Pye examines Tiananmen massacre," The Tech. , Vol . 1 09,
news/[Link]. No. 60 (January 24, 1 9 89), [Link] 1 091N60/[Link].
112 Development Without Freedom Sino-Globalization-Part 1 1 13

was the fact that the Army answered only to Deng.4 He had never been the budding leader. To everyone's dismay, this deeply spiritual man delivered a riveting speech
liberal that neoliberal commentators like to imagine. The one who came closest to condemning Chinese oppression. He had just signed his death warrant. A few days
fitting that mold was the CCP general secretary Zhao Ziyang. Zhao did his best to later he would die under conspicuously mysterious circumstances, leaving behind
cushion the CCP crackdown that was all but inevitable by late 1 986 and early 1 987, a leadership vacuum in Tibet which remains to this day. Massive demonstrations
after Fang Lizhi (the dissident physicist known widely as China's Sakharov) lit the followed, in which the police fired wildly, killing not only dozens of demonstrators but
fuse on a string of pro-democracy demonstrations across China. also innocent people in their homes. And that was just the prelude.
It was encouraging that although Fang was thrown out of the Party (for the third In March Hu ordered full martial law, including the arrest of hundreds of Tibetans.
time), he was allowed to continue his academic career and even permitted to travel The extended sentences they got, and the unspeakable torture they suffered, had
abroad. The message this sent to his mostly silent intellectual sympathizers, inside Hu's fingerprints all over it, j ust as his Tibet assignment bore Deng's fingerprints.
and outside the Party, was almost as stunning as the crackdown itself. Even Fang The Tibetan rising was no surprise to either. It allowed the hard-liners to send a
was plainly surprised, during an interview with NBC anchorman Tom Brokaw, suspiciously well-timed message: that economic reform should not be misconstrued
when he was shown footage of an interview with Zhao the day before. Here was as a road to democracy. "People power" had recently come to fruition in the
the general secretary giving assurance that although Fang would be ousted from Philippines, and similar democratic eruptions had shaken the ruling orders of South
the Party, his freedom and that of other intellectuals would be respected in their Korea and Taiwan. Deng's circle was determined to keep China off this reform list.
capacity as citizens.s The CCP Old Guard was angered by Fang's speeches, but it Lhasa became the PLA's model for how to deal with political dissent. 7
was even more appalled by Zhao's temperate response. The decision was made to Hu Yaobang's death ignited demands for more and faster reforms, and soon
slam the door on such tolerance. Far from a panicked reaction to unforeseen events, thousands of students were converging on Tiananmen Square. As many as a million
the government's action at Tiananmen was part of a carefully scripted CCP plan to camped out at Tiananmen at one point, and by late May another three to five million
abort Zhao's reformism while accelerating GDPism. From this point on the hard­ unemployed workers were roaming the streets of Beijing protesting inflation and
liners took the offensive, or rather the counter-offensive. corruption.s Many workers joined the students in the hunger strikes that began on
A key player in this rearguard shift was the future president, Hu Jintao, who in May 1 3 . On May 1 7 several of China's top leaders visited Deng's home to get his
December 1 98 8 was appointed to the dismal post of Party Secretary of TAR (the word on how to proceed. He artfully summed it up for them: "If things continue like
Tibet Autonomous Region), replacing the relatively liberal-minded Wu Jinghua. This this, we could even end up under house arrest."9 Deng knew he could count on the
was the Chinese equivalent of Siberia, and Hu---complaining of altitude sickness CCP rank and file to back him, because the demonstrators were demanding not only
and Tibet's "lack of culture"-would avoid physical location in Tibet as much as democracy but an end to corruption. That was hitting too close to home.
possible. In retrospect it is obvious that this posting was no demotion. It put Hu in Martial law was declared at the end of May, and on June 3 Deng gave the
close working contact with the military, which was more active in TAR than in any green light for the Army to apply its well-honed Tibetan tactics on the unarmed
other Chinese province or region. demonstrators. lO The tragic events of June 4, 1 989 (the day that Polish S olidarity
This was in fact a warm-up exercise for an ominous new development strategy, won its first national election) marked the dead end of any serious hope that
fusing international globalism with domestic fascism. The day after Hu's appointment economic liberalization would foster democratic reform . Hu Yaobang and Zhao had
was announced, a large demonstration erupted in Lhasa, Tibet's capital. It was been the last direct links between those Senian twins, development and freedom. For
savagely suppressed by the People's Armed Police, which targeted Tibetans carrying advocating reform, and for opposing the use of military violence, Zhao would spend
their outlawed national flag.6 The violence so exceeded the threat that its real point
was patently not restricted to Tibet. The PLA was practicing for bigger things to
come, much as the Japanese Army once practiced in Manchuria, the German Nazis
in Spain, and the Bush administration in Afghanistan, prior to its more ambitious 7 Ibid.
Middle East incursion. 8 See "Tiananmen Square Uprising: A Perspective," Sinomania. com, [Link]
The next month, shortly after his belated arrival in Lhasa, Hu attended a meeting in [Link]/CHINANEWS/Tiananmen---'[Link].
which he sat next to the legendary Panchen Lama, the second highest Tibetan spiritual 9 Richard Bernstein, "New Window on Tiananmen Square Crackdown," The New York Times
(January 6, 200 1 ), [Link] .kenyon.edulDeptslReligionlFaclAdlerlReln270ITAM I .htm.
1 0 The Tiananmen Papers show that the five-man standing committee was deadlocked
4 William H. Thornton, Fire on the Rim: The Cultural Dynamics of East/West Power over what course to take, so it fel l on Deng to make the fateful decision. This supports the
Politics (Lanham, MD: Rowman & Littlefield, 2002), p. 3 1 . claims of Li Peng that Deng, the Paramount Reformer himself, was the prime mover. On
5 Orville Schell, "China's Andrei Sakharov," The A tlantic (May 1 988), http ://www. these papers see "The U . S . 'Tiananmen Papers' : New Documents Reveal U . S . Perceptions
[Link]/[Link]. of 1 989 Chinese Political Crisis," in Michael L. Evans (ed.), A National Security Archive
6 "Background Information on Hu JinTao," International Campaign for Tibet (October Electronic Briefing Book (June 4, 200 1 ), from The National Security Archive, [Link]
1 8, 2005), [Link] intao. php?printable=yes. [Link]/�nsarchivINSAEBBINSAEBB4 7/index2 .html.
 Development Without Freedom Sino-Globalization-Part 1 115
1 14

Peng '''engagement.'' Business was roaring by 1 992, but for added impetus China tossed
the rest of his life under house arrest. I I His top aid, Bao Tong (lambasted by Li
in prison . 12 further market reforms into the bargain. Capital inflows responded on cue.
for wearing blue j eans inside the Forbidden City), would get six years
measures There was no ambiguity in the message this sent to the developing world: the
Even at the time of Zhao's death in January 2005, extraordinary security
unreformed Chinese development model had received a green light. There would
were taken, lest his political ghost might come back to haunt. 1 3
980s be no geoeconomic penalty for the worst police state atrocity of the post-Mao era.
I t is important to realize, however, that Deng's seeming reversal o f 1
was Little international pressure would be exerted on China to add political reform to
reformism was entirely in keeping with his l ifelong habits. Much as Hu Jintao
d by the four modernizations (agriculture, industry, science and technology) set forth by
sent to Tibet as Deng's personal axe-man, Deng himself had been handpicke
flowers Deng Xiaoping and Zhou Enlai in 1 97 5 . By dropping all significant qualifiers to US
Chairman Mao for the same role in the aftermath of the 1 957 "let a hundred
rmly engagement, the Washington Consensus added its signature to the horrors of Lhasa
bloom" crackdown on reform-mi nded intellectuals. Only then, with the Party fi
1 similarly and Tiananmen.
in his grip, would Mao launch his infamous Great Leap Forward. 4 Deng
leap: On the economic side, labor reform would have been perfectly in keeping with
used Tiananmen for ideologica l housecleaning before launching another great
Deng's pledge to forge a capitalism with "socialist characteristics," whereas wholesale
China's b id for geoecono mic supremacy in Asia.
as privatization could benefit only bureaucratic elites and their cronies. 1 5 Such reform
Lhasa and Tiananmen were integral parts of that leap, sending a message
the students could also have delivered higher aggregate demand for Western products-that
unambigu ous as Truman's message at Hiroshima and Nagasaki. Finally
be being a stated goal of Washington's China agenda, as reaffirmed by Secretary of
got the point: B e ij ing was not going to be Manila or S eoul. Here there would
was how the the Treasury John Snow on his 2005 China tour. 1 6 This long-term benefit, however,
just one party, and one ruling faction within it. The only question
in the was dwarfed by the instant gratification of cheap labor and quick profits. Deng's
world community would take thi s seeming reversal. Tiananmen drew a l ine
stood for or economic reform was in fact a device to buy off the local and global forces that
sand, and global capitalism could no longer duck the issue. It either
might have pressed for matching political development. But with the carrot came the
against democracy.
stick: the rights of ordinary workers were drastically curtailed, and peasant farmers
were increasingly disenfranchised.
The C CPITNC Partnership In the early 1 980s Deng himself gave the order to limit legal appeals, thereby
freeing provincial courts to strip workers of their most basic socialist rights. One
It says much about the real priorities of neoliberal globalization that China's mega­ especially heinous result has been the rise of an Eichmann-style industry of capital
growth of the 1 990s, fueled largely by Western investors, took place under the long punishment. China issues somewhere between 1 0,000 and 1 5,000 death sentences
shadow of Tiananmen. The P RC ' s pogrom on its own best and brightest was a high­ per year. The exact number remains a "state secret," but not because the government
stakes gamble that TNCs would put profits over principles. They did exactly that, fears that a large number would spark unrest. Rather it fears the number might be too
throwing their enormous political weight behind a policy of forgive-and-forget small to contain unrest. The magnifying effect of rumor works better, yet even that
has not been enough to staunch rural protests.
No longer trusting provincial courts to do Beij ing's bidding, the People's Supreme
to Tiananmen
1 1 Zhao was never seen in public after May 9, 1 989, when he went Court reversed Deng's decentralization order as of October, 2 00 5 . This, however, only
plea for students to withdraw. When he died in January
Square and made an impassioned restored the Maoist system of judicial subordination . 1 7 The fact that Beijing deemed
secretary, Bao Tong, lashed out at the governmen t, calling their actions a
2005, his former this necessary is suggestive of how desperate matters have become. The problem
In April 2005 Ching
"showcase of shame." Zhao's daughter simply said he was "free at last." traces to the grand bargain that Deng brokered with bureaucratic and entrepreneurial
Zhao's interview
Cheong, a Hong Kong reporter, was arrested in China for trying to obtain classes at the expense of workers and farmers. Lower strata comrades are offered
, "China Ratchets up Control on Expression ," The Christian
transcripts . See Robert Marquand
much the same "trickle down" that Ronald Reagan and Margaret Thatcher promised
Science Monitor (January 3, 2006), [Link] 1 03/p06s01 -woap.
.ukJmpapps/
htm.; "Chinese reformer Zhao Ziyang dies," BBC News, [Link]
. ; and Ching Cheong, "Hong Kong journalist
pagetools/print [Link].c [Link] 1 lhi/worldlasi . .
spying," Reporters without Borders, [Link] .[Link]/article.
Ching Cheong accused of
php3 id_article= 1 3973 .
VoL 27, No. 2
1 2 Allen T. Cheng and Tim Healy, "The Ghosts of Tiananmen," Asiaweek,
lasiaweeklmagazine/nations/0.87 82.94722,0 0. 1 5 Yiching Wu, "Rethinking ' Capitalist Restoration' in China," Monthly Review, Vol. 5 7 ,
(January 1 9, 200 1 ), http ://[Link]
No. 6 (November 2005), [Link] l l [Link].
html.
4, 2005), http:// 16 Edmund L. Andrews, "U.S . Offers Plan for Open Markets in China," The New York
1 3 Isabel Hilton, "Reaching beyond the myth of Mao," Guardian (June
1 03677 ,[Link]. Times (October 1 6, 2005), [Link] / 1 0/ 1 6Ibusiness/1 [Link].
[Link]. uk/printlO,3 85 8,5208236-
(Winter 1 7 Jim Yardley, "In Worker 's Death, View of China's Harsh Justice," The New York Times
14 Bryan Caplan, "Autocratic ghosts and Chinese hunger," Independent Review
67079. (December 3 1 , 2005), [Link] 2/3 1 /internationallasia/[Link].
2000), in [Link], [Link] 1
 1 16 Development Without Freedom Sino-Globalization-Part 1 1 17
their workers. In China and America alike the effect of globalization could better be better served by slower-paced trade, which for China would mean less dependence
described as "trickle Up."1 8 on foreign capital. But there are political as well as economic reasons for the PRC 's
That is just one more reason for the loyalty that TNCs have showered o n Beijing. FDI addiction. Growing inequality-with more than 60 percent of the nation's
In tum, the Chinese handling of FDI has departed from the miracle-era formula wealth held by less than one percent of its households24-gives the CCP good reason
of the East Asian tigers by not building the Chinese economy behind a stiff tariff to fear spreading unrest. But most of all it dreads the "perfect storm" of combined
wall . Although FDI has been largely restricted to Special Economic Zones (SEZs), working class and bourgeois resistance. That partly explains why Beijing favors
Chinese capitalism has joined hands with neoliberalism in labor practices that ensure soporific SOEs on the one hand and rapacious TNCs on the other.25
a global "rush to the bottom." Much as Western workers have watched the American Beijing regards FDI as a Trojan Horse, yet cannot bring itself to close the globalist
dream slipping away from them, Chinese workers lost their grip on their "iron rice gates. It is tom between fear of domestic reformism and suspicion that the US is using
bowl." On both sides this has produced the kind of insecurity that was common foreign investment in a "war without the smoke of gunpowder," as Deng Xiaoping
throughout the Pacific Rim after the Crash . 1 9 Insecurity is what keeps wages down put it.26 Without a heavy inj ection of FDI, Chinese industrialists could quickly gain
and profits up, and that is what the CCP/TNC bargain is all about. the upper hand. Foreign capital has saved the CCP both politically and economically,
It should be noted, however, that while Chinese policies often serve globalist but how dependable is this salvation? Foreign investors stand to profit as the Chinese
interests-promoting global capitalism better than any democracy could have20- development model is packaged for transfer to other developing nations.
they have never followed the neoliberal script. China has been exempted from IMF­ Neoliberals point to China's capital dependency as reason to dismiss the dangers
style restructuration pressures. It has been welcomed into the global community of engagement. Labor is still cheap (though upward wage pressures have been noted
despite the fact that it rigidly controls capital flows, closely oversees external trade, in maj or industrial cities),27 but resource costs are not, and more resources are needed
and sustains a large state-owned system of heavy manufacturing.21 Meanwhile there here than in developed countries. Poor productivity means that to manufacture
has been only modest protest as the PRC trade surplus goes off the charts, tripling something of like value in China requires seven times more resources than in Japan,
in 2005 alone. Most of this surplus is with the United States. In fact, excluding six times more than in the U S , and three times more than in India.28 Globalists reason
America, the PRC ran a trade deficit of about $ 1 2 billion, mainly with Japan and that so long as Chinese firms remain instruments ofCCP privilege, China will require
China's oil providers.22 massive doses of foreign investment and expertise, not to mention balance of trade
There is, of course, ful l reciprocity, as China supports American consumerism as forgiveness, simply to function. This dependency permits neoliberals to imagine that
well as militarism through massive purchases of US debt instruments. The question they, not the CCP, are ultimately in charge.
is how far deficit spending can be pushed before this house of cards collapses. A U S Sino-optimists still insist that engagement is a sure route to political reform as
recession would spell a Chinese depression, for private consumer spending is too well as mega-profits.29 They see no need for contingency plans in case engagement
low in China to cushion an economic slump.23 In the long run both sides would be collides head-on with Tiananmen-style reality. What evidence is there that FDI will
favor liberal democratization and human rights, especially when foreign investors
are openly playing on the CCP team? Rupert Murdoch, for example, had no qualms
1 8 It is no surprise that Chinese workers lack the political leverage to demand a better deal,
- about banning the BBC from his Star TV network after it ran reports about human
but it is startling how American labor finds itself a political orphan. Neither the Democrats
rights violations in China.30 Such "see no evil" accommodation is a basic operating
nor Republicans will take up the working class cause. Labor leaders are telling workers that
the issue is no longer how to secure better pay and benefits, but simply how not to be laid
principle of the CCP/TNC accord.
off. They are well aware that one in five manufacturing jobs was lost between Bush's first
inauguration and September 2005, when his approval ratings finally took a dive. Unions are
either unable or unwilling to confront corporate priorities. China's rise serves as a global 24 C.T. Kurien, "Giants of the East," Frontline, Vol. 23, No. 26 (December
30, 2006 to
enforcer of neoliberal downsizing. January 1 2, 2007), http ://[Link]/storiesI200 70
1 1 20005074 [Link].
1 9 Martin Hart-Landsberg and Paul Burkett, "Introduction: China and Socialism" Monthly 25 George J. Gilboy, "The Myth Behind China's Miracle," Foreign
Affairs, Vol. 83, No.
Review, Vol. 56, No. 3 (July-August 2004), [Link] 4 (July/August 2004), p. 34 (pp. 3 3-48).
20 William H. Thornton, New World Empire: Civil Islam, Terrorism, and the Making of 26 Russell Ong, China s Security Interests in the Post-Cold War
Era (Richmond, Surrey,
Neoglobalism. Lanham, MD: Rowman & Littlefield, 2005, p. 1 09. UK: Curzon, 2002), Chapter 6.
21 Jacob Middleton, "Trading on Poverty," International Socialism : A Quality ofSocialist 27 Barboza, op. cit.
Theory, Issue 1 07 (Summer 2005), [Link] .org.uklindexlphp4?id= 1 1 8issue= 1 07 . 28 Spiegel Interview, "The Chinese Miracle Will End Soon,"
Der Spiegel (March 7,
2 2 David Barboza, "China's Trade Surplus Tripled i n 2005," The New York Times (January 2005), [Link] [Link]/cache/internationallSpiegellO, 1 5
1 8,druck-3 45694,00 .html.
1 1 , 2006), [Link] 1 / 1 1 Ibusiness/ 1 1 [Link]. 29 E.g., Gilboy, op. cit. , pp. 34-3 5 .
23 "Fearing Social Unrest, China Tries to Rein in Unbridled Capitalism," Spiegel Online 3 0 Tina Rosenberg, "Building the Great Firewall of China, With Foreign
Help," The
(January 1 8, 2006), [Link] 1 5 1 8,druck- New York Times (September 1 8, 2005), [Link] 1 8/0pinionl I 8sun3.
395833,[Link]. html.
118 Development Without Freedom Sino-Globalization-Part 1 119

"Business is Business" the South China Morning Post compared this attitude to that of the IBM executives
who supplied punch-card technology to the Nazis during the Holocaust.36
Some of the worst corporate complicity in the making of Sino-globalization now The bottom line is that the American Internet population of about 203 million
comes from that celebrated force of liberation, the Internet. In the short run it did is fast reaching its saturation point, while China's 1 03 million users represent just
show some promise. China's online generation has been quick to convert to Net a small fraction of its potential .37 Any free speech and human rights concerns that
news sources, which they trust more than state-supported print papers. Just one Bill Gates might have had are swamped by these hard facts. Instead of Western
such online source, Sina, has a readership thirty times that of the government-run corporations spreading democratic values by way of example, they are becoming
People 50 Daily,31 though obviously both are heavily censored. The biggest challenge "Sino-globalized." If such conduct can be excused by way of the bottom line­
for the authorities has been personal Internet messages. Reporter's Without Borders, "business is business"-so can prostitution, arms sales, the drug trade, and human
the Paris-based advocacy group, has designated China as the "world champion" of trafficking, not to mention the PRC 's house specialty, organ sales, whose supply
Internet censorship,32 with an estimated fifty-thousand full-time net detectives.33 tends to correlate with the frequency of Chinese executions.
Without assistance from Western firms these online police would be hunting in American arms dealers envy their European counterparts the contracts they
the dark. Firms such as Microsoft, Yahoo and Google have trashed any possible claim are ready to make with China, assuming the EU arms embargo can be lifted. The
to a higher purpose beyond profitability by signing contracts with China to actively consolation prize is that Taiwan will also have to step up its US arms purchases, but
control Internet content. While Microsoft and Cisco were selling China firewalls and clearly the Soviets and now the Europeans are fishing in a bigger sea. So far American
other security tools, Yahoo went the extra mile by helping authorities track down capitalists can enter this market only indirectly, through technological transfers that
and convict Shi Tao, a journalist who got a ten year prison sentence in April 2005 are tagged "civilian" but in fact are "dual purpose." The Taiwan government might
for exposing what Beijing calls "state secrets," which is to say any information that be expected to complain about such sales, except that their capitalists are j ust as busy
the government finds embarrassing. First Yahoo claimed that under Chinese law selling out Taiwan's national security.
it had no choice but to comply in every way with Beijing 's wishes. This turned Suffice it to say that neoliberal delusions of "peace through trade" have long
out to be an utter fabrication, since Yahoo was registered in Hong Kong, where no since lost credibility. These myths persist only as camouflage for TNC interests.
such legal obligation obtained. 34 Finally the company's chief in China, Jack Ma, Ever since Tiananmen the democratic argument for engagement has had to borrow
shrugged the matter offwith three words: "business is business."35 A commentator in heavily on the collateral of future democratization, yet nothing obstructs that future
so much as unqualified "engagement" policies : the complete disconnection of trade
and human rights that was the prime goal ofthe unregistered lobbying firm Kissinger
and Associates.
31 Weigui Fang, "Reflection on China's internet boom," Open Democracy (July 3, 2003), Are neoliberal investors oblivious to all this? The more astute ones surely know
http ://[Link]/debates/article-8-85- 1 3 [Link]. what democratic development would entail . First, it could spawn social legislation
32 Ofthe 62 "cyberdissidents" known to be imprisoned around the world, 54 are in China. that would drive up the cost of labor. To some degree that drag on profits could
See Tom Zeller, Jr. , "China, Still Winning Against the Web," The New York Times (January 1 5, be offset by a rise in domestic purchasing power. But this expanded market would
2006), [Link] coml200610 1 I 1 5/weekinreview/ 1 [Link].
probably not redound to a surge in imports from America, since Chinese nationalism
33 Kathleen E. McLaughlin, "China's model for a censored Internet," The Christian
would tilt the competitive playing field.38 Foreign firms would then lose the inside
Science Monitor (September 22, 2005), [Link] l s02-woap.
track they have enjoyed with the CCP. This is just one more reason why TNCs prefer
html; and Becky Hogge, "The Great Firewall of China," Open Democracy (May 20, 2005),
to keep democracy on permanent hold. The support they shower on the CCP makes
http ://[Link]?id=8&articleId=25 24.
3 4 Rosenberg, op. cit.
good business sense, for the same reason that American capitalists on the board of
35 William Falk, "When You Were Sleeping," The New York Times (December 30, 2005), I.G. Farben's US subsidiary found it expedient to fund the Nazis.39
http ://[Link].coml2005/ 1 2/3 0/[Link]. He might have added that business
is also geopolitics, and vice versa. Consider the case of the telecom giant, Global Crossing,
which fel l in January 2002 in the fourth largest bankruptcy in US history. Until that time
Global had been the biggest spender of them all on campaign contributions. Its board included 36 Michael Logan, "Apartheid boycott offers lessons for US tech giants in China," Asia
William Cohen, the Secretary of State under Clinton, the most pro-China president of modem Media (February 2 1 , 2006), [Link]
times; and one of its close cronies was former president and pro-China stalwart George H.W. 37 Zeller, op. cit.
Bush, who got $80,000 in Global stock options for a single speech in Tokyo. It is no accident 38 See Suisheng Zhao, "Nationalism's Double Edge," The Wilson Quarterly (Autumn
that Hutchison Whampoa Ltd. of Hong Kong, with its close ties to the Chinese Army, and with 2005), http ://[Link]/[Link]?fuseaction=[Link]&essay_id= 1 46859& . . .
commercial control of both ends of the Panama Canal, has tried to buy Global Crossing. See 3 9 Three American board members were found guilty at the Nuremberg War Crimes
Wes Vernon, "Global Crossing Tied to Clinton Defense Secretary," [Link] (February Trial, though others such as Edsel B. Ford were never brought to trial. See Antony C. Sutton,
1 6, 2002), [Link] 1 51 1 544 1 [Link]. Wall Street and the Rise ofHitler (Studies in Reformed Theology, 2000), Chapter 7 .
1 20 Development Without Freedom Sino-Globalization-Part 1 121

It should not be surprising, therefore, that US engagement policy chugs along Manichaean notion that to condemn the Washington Consensus requires categorical
as usual. Neoliberals profess to believe that the market will align China with the approval of the Beijing Consensus. Somehow it escapes notice that the two, despite
Washington agenda for democracy and human rights, a goal that until 2000 was their show of acrimony, are locked in a warm capitalistic embrace.44 The one sells
enshrined at least nominally in US tariff policy. The next year, with China's entry into out democracy while the other sells out communism, yet they are united in their
the WTO, a purely economistic agenda was unveiled, driven by the dream of double­ mutual willingness to sell out the working classes.
digit growth in a Chinese economy half-owned by US investors.4o Short of that, US Fortunately there are exceptions to the Left's inattention to this mutuality.
multinationals just want to avail themselves of low-cost production in a country David Harvey, for example, charges in The New Imperialism that the end product
that promises legions of non-unionized workers and a dearth of environmental of Sino-capitalism is class oppression. He would have us burn the infamous thing.
protection.41 Conversely, one of the most vocal proponents of the CCP/TNC partnership has been
Given this capital injection, and the geopolitical indifference that money can Henry Kissinger, who urges us to abandon any idea of reforming the Chinese junta.
buy in Washington, CCP strategists are confident of the party's staying power. This In his well-remunerated viewpoint this engine of maldevelopment is "inherent in the
was reflected in the decision of President Hu to dust off the official good name of global economic and financial processes that the United States has been prominent
Hu Yaobang. As usual, the point of this action has been misunderstood in the West. in fostering. "45 In short, it is TINAesque. When many on the Left find themselves at
Coming at a time when controls are being tightened on intellectuals, journalists, odds with David Harvey and in perfect agreement with Henry Kissinger, it is time
lawyers, and human rights activists, Hu's resurrection is anything but a backdoor for some serious reflection on their stance concerning the Great Leap Backwards
admission that he was even partially right in his stand for concurrent political and which is Sino-globalization.
economic development. Quite the contrary, this seeming exhumation is actually a
political internment. President Hu is in effect proclaiming that the gamble of 1 989
The CCP Dilemma
has been won. The Tiananmen era is history.
Neoliberals tacitly agree, since this position has enormous cash value. What is
harder to explain is why many on the Left, who would be expected to contest this For a quarter of a century the CCP governing class has stunted any kind of reform
capitalist amnesia, have been reticent about the plight of China's working classes other than raw economic growth.46 The result, in Jim Yardley'S words, is "not only
under the CCP/TNC bargain. Some go so far as to reduce the whole case against the new wealth but a legacy of blackened rivers, grossly polluted skies and dwindling
CCP to a neoconservative plot,42 on the apparent assumption that the enemy of one's natural resources."47 The distribution of that wealth, moreover, is so regressive that
enemy is by definition one 's friend: If Bush and Cheney are rotten, Hu and Wen must even the CCP's Chinese Academy of Social Sciences admits that the PRC has the
be great guys. Unquestionably they are the better propagandists. Taking a lesson world's biggest divide between urban rich and rural poor. Many African countries
from Singapore 's Lee Kuan Yew, today's CCP has learned to sugar-coat its global compare favorably with China's urban/rural income ratio of six to one.48
image, wrapping its militarism in "soft power" rhetoric and its domestic repression Nor does the new Sino-globalization have anything to do with the neoliberal
in double-digit economic growth. shibboleth of "free enterprise." TNCs only wish that their CCP cronies, as their
Joshua Ramo's conception of the emerging "Beijing Consensus" takes this domestic guarantors, could wield even more political power. As things stand,
wrapping for the genuine article43-but then Ramo is an affiliate of Goldman Sachs. provincial governments can impose protectionist fees that easily match the crony­
One would expect the Left to be more discerning, and certainly not to fall for the capitalist intrusions of a Marcos or Suharto. China's entry into the WTO has hardly
dented this fact, since local officials usually ignore national laws they find unprofitable.

40 The special target of this new agenda is China's state-owned banks. Currently foreign
investors can own no more than 25 percent of a Chinese commercial bank. Likewise the prime 44 In some sectors of the Left a more critical attitude is now emerging. See, for example,
target in Japan has been the Japanese postal service, which doubles as the country 's maj or "Growth in Chinese Inequality Leads to Rise in Protest," Socialist Worker, 2066, 1 (September
savings institution. See Edmund L. Andrews, op. cit. 2007), http ://[Link]/print_art.php?id= 1 2907.
4 1 Antonia Juhasz, "What Wal-Mart Wants from the WTO," AlterNet (December 3 1 , 45 Henry Kissinger, "China: Containment Won't Work," Washington Post (June 1 3 ,
2005), [Link] 2005), archived b y the Global Policy Forum at http ://[Link]/empire/analysis/
42 See, for example, Gary Leupp, "Cheney, the Neocons, and China: The Solution to 2005/06 1 3 [Link].
' Enemy Deprivation Syndrome. '" Dissident Voice (April 20, 2006), [Link] 46 See William H. Thornton, "Hu Goes There?: Sino-globalism and the ghost of
orglApr06/[Link]. Tiananmen," ZNet (April 2 5 , 2006), [Link]
43 Joshua Cooper Ramo, Beijing Consensus: Notes on the New Physics a/Chinese Power = 1 0 1 53&sectionID= 1 03 .
(London: Foreign Policy Center, 2004), pp. 6 and 1 3 . Note that Ramo's conception of the 4 7 Jim Yardley, "Bad Air and Water, and a Bully Pulpit i n China," The New York TImes
Beijing Consensus departs from miracle-era "Asian values" in that he sees this new pattern as (September 25, 2004), [Link] [Link].
a prototype for the whole developing world. By contrast, the Asian exceptionalists saw their 48 Richard Spencer, "China rich-poor gap is world's worst," Telegraph (February 27, 2004),
ideology as culturally unique. [Link] ...
1 22 Development Without Freedom Sino-Globalization-Part 1 1 23

US exporters soon discovered that little had changed after WTO regulations took Without democratic infrastructure in place, these reformists must approach their
effect. The actual cost of shipping an item from Shanghai to a central city could be CCP overlords with a "by your leave" attitude that clips their political wings. And
double the national import tariff. An American automaker found, in fact, that the often they end up serving as pressure release mechanisms for the Beijing elite.
cost of sending a sedan from Shanghai to Ningxia Province was more than the cost When Jiang's "third generationists" nearly sabotaged the new government's
of getting it from Detroit to Shanghai, as truckers had to pay huge bribes at every drive for national standards,55 gullible Westerners read the conflict as one between
provincial border.49 Local autocrats are all for capitalism, but strictly on their terms. regressive and progressive forces. Some even likened the Hu/Wen agenda to the
It is little wonder, therefore, that TNCs cheer for Beijing centrism. The TNC/ fleeting reformism of Zhao Ziyang prior to the Tiananmen crackdown. That reading
CCP symbiosis that defines Sino-globalization is abetted on the Western side by the is laughable in view of the fact that the Hu team hails directly from the anti-Zhao
myth that China's "fourth generation" leaders are natural-born reformists as well as camp. 56 In most respects the third and fourth generationists are birds of a feather.
miracle makers. They are seen as the best hope for expanding democratization and Reacting in horror to the Soviet collapse, Jiang Zemin and Li Peng were all the
closing the gap between urban vs. rural and coastal vs. interior economies. In fact, it more determined to return Chinese development to the same economic track that
is their brand of capitalist "reform" that in twenty years has taken China from one of Deng Xiaoping prescribed, and that Hu wholly endorses. The success of this model
the lowest income differentials in the world to the highest, with income in Shanghai in GDP terms has caught the attention of the whole developing world. This success
eight to ten times that of other areas. 50 would have been voided, Robert Kaplan contends, if the Tiananmen demonstrations
The unrest this spawns will eventually erode one of the main sources of China's had led to democracy.57 In effect he credits the "miracle" of the 1 990s to the People's
globalist appeal: its presumed political stability. President Hu Jintao and Premier Liberation Army (PLA) !
Wen Jiabao face resistance not only from agricultural and industrial sectors,5! but also In fact, as the late Gerald Segal argued, much of the PRC 's celebrated growth
from a bourgeoisie that seeks political power to match its financial status. Up against has been bogus-or would have been so if global capital had not been there to keep
this economic behemoth, whose vanguard has been former President Jiang Zemin's it rolling. Even given that exogenous boost, some economists think China's growth
"Shanghai clique," Hu and Wen tum all the more to global capital for support. Posing rate is half that reported. Thomas Rawski concludes that after 1 998 the economy
as "rule of law" activists, they do their best to court skittish foreign investors while was actually contracting. That may be overstated, but only because of extreme
suppressing local rivals, always under the rubric of anti-corruption investigations. measures taken by the Beijing high command. China's former premier Zhu Rongzi
This is the most sweeping political housecleaning China has seen since Tiananmen, confessed in a televised address that there would have been a collapse in 1 998 had
involving the arrest or sidelining of leaders from Tianj in, Fujian, and Hunan, as well the government not supplied massive stimulus spending.
as top Shanghai officials such as Party Chief Chen Liangyu, who was detained along That is exactly the kind of Keynesian rescue operation that the IMF refused in
with another Politburo member. All are charged with corruption, but it so happens the case of economies hit by the Asian Crash. Why does the neoliberal establishment
that nearly all of them are known for their loyalty to former President Jiang and their remain mute in the case of China? And why is such depression medicine required in
resistance to current President HU.52 a time of record-breaking growth? How is it, moreover, that unemployment could
A neoliberalized Western press is pleased to take Hu's anti-corruption rhetoric have risen and energy-use fallen in the midst of a boom economy?58 It is certainly odd
at face value, finding "democratic" potential everywhere, even though the "reform" that an economy growing at almost 1 0 percent for two decades would have created
he touts is a strictly intra-party affair. There are intellectuals who denounce CCP so few jobs. Through the 1 990s there was just a one percent average employment
dictates,53 but so far they are voices in the political wilderness. The same holds for increase per year. Only in the informal sector did employment actually increase.
NGOs and citizen groups, which may be on the rise, but still lack political teeth.54

49 Hannah Beech, "The Emperor is Far Away," Time Asia (July 29, 2002), [Link] W. French, "Chinese Tum to Civic Power as a New Tool," The New York Times (April 1 1 ,
[Link]/asiaimagazine/printoutll , 1 3675,50 1 020805-33 208 1 , . . . 2006), http ://[Link].com12006/041 1 1 1worldlasiail l [Link].
5 0 Richard Baum, "Where is China Going?," UCLA Asia Institute (December 1 3 , 2002), 55 Tian Jing and Wang Chu, "China power struggles: Resisting reforms," Asia Times
[Link] ucla. [Link]?parentid=2799. (July 1 6, 2004), [Link]
5 1 David Harvey, A Brief History of Neoliberalism (Oxford: Oxford University Press, 56 Thornton, "Hu Goes There?," op. cit.
2005), p. 1 49. 57 Robert D. Kaplan, "Was Democracy Just a Moment?," The Atlantic Online (December
52 Joseph Kahn, "China's Corruption Inquiry Targets Beijing," The New York Times 1 997), [Link]
(October 27, 2006), [Link] 1 0/27/[Link]. 58 Arthur Waldron, "China's Economic Facrade," Washington Post (March 2 1 , 2002),
53 E.g., essays of Wang Hui. See Jeffrey N. Wasserstrom, "Reading China," Boston http ://[Link]. org/wp-2002-0 1 .htm. Rawski notes that energy consumption dropped
Review (Summer 2004), [Link] .3/[Link]. by 1 2 .8 percent between 1 997 and 2000, though growth in energy efficiency is hardly a
54 There is a growing flow of civic information and a new class of legal advocates for hallmark of Chinese production. See Thomas G. Rawski, "What's Happening to China's GDP
the common citizen. The question is whether these tools will serve People Power or prompt Statistics?," a revised paper for China Economic Review, Vol. 1 2 , No. 4 (December 200 1 ),
more intense repression, as happened in the late 1 980s, even before Tiananmen. See Howard http ://www. [Link]-tgrawski/papers200 1 Igdp9 1 2f. pdf.
1 24 Development Without Freedom Sino-Globalization-Part 1 1 25
Somehow, against this drift, China will have to create 300 million new jobs over Given this infusion, amounting to $60 billion in 2004,65 there is no mystery as
the next decade just to stave off a social explosion.59 Faced with these disconcerting to how the Chinese economy keeps its "miracle" status afloat. It is global capital, in
facts, the neoliberal press has been quick to spotlight recent news of a "labor combination with legions of dirt cheap labor, that has turned the PRC into an export
shortage" in several leading industrial cities.60 Wages have risen somewhat in these powerhouse with a massive trade surplus. By 2004 China was already the world's
areas-and, after years of decline, the cost of goods from China is expected to rise. third biggest exporter, and the OECD predicts that by 20 1 0 it will be the biggest.66
Factories want young laborers, and usually refuse to hire others. Reluctantly they The current annual trade surplus is approaching $ 1 50 billion. A currency adjustment
are taking more workers in their thirties,6 1 and there are indications that a dearth might help restore balance, but the issue is complicated by the fact that most exports
of young applicants could push industry westward into the interior.62 These trends are actually from components underwritten by foreign investors.67 The export
bear watching, but it would be delusional to suppose that they offer an instant-mix explosion, moreover, rests not only on FDI but on a degree of labor suppression that
solution to the dilemma of a 3 00 million job deficit. To defuse this ticking social Western capitalists could not dream of emulating.
bomb, the government will have to take momentous action, yet any serious effort How long can this last? By the mid- 1 990s there were signs of rising popular
to close the urban/rural gap will reduce the rural desperation that has furnished the unrest, leading some to predict that Beijing would be increasingly besieged from
cities with a steady stream of impoverished workers. China's power elite is in trouble within.68 The challenge is not from democratic idealism but from grassroots revulsion
either way: if wages continue to rise, or if they do not. against government corruption and indifference. For the CCP center to hold, Beijing
The inescapable truth is that the Sino-globalist growth formula has largely will either have to radically reform or resort to measures so tough as to expose the
bypassed two-thirds of China's popUlation: those tied directly or indirectly to the myth of China's vaunted stability.
land. Nor does the other third merit an unqualified "miracle" rating. To see how far
off the mark that assessment is, it is only necessary to observe the marketing crisis at
the country's shimmering new shopping malls. There are depressingly few customers Hu's Balancing Act

to be seen here, and most of them are window shoppers who cannot possibly afford
the inflated price tags of branded international products.63 Little wonder there is a Presently Beijing uses both a carrot and stick to reduce social unrest. Tax increases
problem of branded fakes. Without them the malls would shut down. on farmers have negated most of the gains the rural sector made after the dissolution
The country's economic data is so inflated that the Asian Development Bank of agricultural collectives in the early 1 980s. In the midst of a general crackdown
deducts at least two percent from official reports. Another three percent is generated on dissent (the stick), Premier Wen took the unprecedented step of abolishing the
by the one-shot economic stimulus of peasants leaving the land for urban j obs, with major agricultural tax (the carrot). Unfortunately this benign action was coupled
all the social problems that entails. Even that growth which is authentic is attended with a new and even more devastating abuse: massive land appropriations by local
by ecological trauma of such a magnitude that it would deter FDI (foreign direct officials trying to profit from the real estate boom.69 Tax relief means nothing to a
investment) if it were widely reported. Once all these factors are considered, the farmer robbed of his land.
domestic side of China's economy turns out to be lackluster at best. There might In many cases farmers have been literally drowned out. Consider the human costs
even be a long-term recession in store if the economy were not being kept on FDI of China's mega-dams, starting with the prototype for all the rest: the Sanmenxia
l ife support.64 dam ofthe 1 95 0s, which did to the Yellow River what the Three Gorges Dam is now
doing to the Yangtze. Chinese statism sweeps aside the whole issue of environmental
destruction, and cares little more about social displacement. 70 More than a million

59 Guy Ryder, "Whose Miracle in China?," New Perspectives Quarterly, Vol. 23, No. 1
(Winter 2006), [Link] 6 5 Kurien, op. cit.
60 David Barboza, "Labor Shortage in China May Lead to Trade Shift," The New York 66 Larry Elliott, "China will soon be world's biggest exporter,"
The Guardian (September
Times (April 3 , 2006), http ://[Link].coml2006/04/03lbusiness/03 1 [Link]. 1 7, 2005), [Link] [Link]/printlO,38 58,528798 5- 1 0
8 1 42,[Link]
61 Keith Bradsher, "Wages Rise in China as Businesses Court the Young," The New 67 Andrew Batson, "China's Trade Surplus Continues
to Expand," The Wall Street
York Times (August 29, 2007), [Link] Journal (August 1 0, 2006).
[Link] 6 8 E.g, Arthur Waldron, "After Deng the Deluge," Foreign
Affairs (September/October
62 Peter Ford, "To China's Migrants: Stay West, Young Man," The Christian Science 1 99 5 ), [Link] [Link] affairs . orgI 1 995090 1 farevi ewessay5
0 7 1 /arthur-waldron/after­
Monitor (August 30, 2007), [Link] l -[Link]. deng-the-d. . .
63 Simon Montlake, "At China's Huge Malls, High Prices and Few Shoppers," The 69 Joseph Kahn, "Painting the Peasants Into the Portrait o f China's
Economic Boom "
Christian Science Monitor (August 28, 2007), [Link] l s0 1 -
[Link].
The New York Times
html.
(August 7, 2006), [Link]
ks/07ka . �
64 Gerald Segal, "Does China Matter?," Foreign Affairs, Vol. 78, No. 5 (September/ 70 Andreas Lorenz and Wieland Wagner, "Cheap, Cheerful and Chinese?
, " Spiegel Online
October 1 999), pp. 25-26 (pp. 24-36). (November 1 7, 2005), [Link] de/cache/intemationaVspiegeVO, 1 5 1 8,druck-
1 26 Develop ment Without Freedom Sino-Globalization-Part 1 127

people were uprooted by the Three Gorges project, which is now causing massive are said to have been killed,77 making this one of the worst government atrocities
flooding, landslides, water pollution and estuary destruction.71 These human and since Tiananmen.
natural tragedies are inseparable. Naturally there was local protest, but no politically In all likelihood the decision to open fire was made locally, for Beij ing is too
effective resistance. The last promising step in that direction was taken with the well aware of the dangers of pulling this tiger's tail . However, it is equally
aware
publication of Dai Qing's Yangtze! Yangtze! in the late 1 980s. She was j ailed after of the danger of yielding to protesters' demands. Just over a month later another
Tiananmen, and her book was banned.72 In effect, eco-resistance was banned. violent clash took place, this time in the village of Panlong, a short distance from the
It smolders out of sight, suggesting what might have transpired if a democratic economic miracle cities of Shenzhen, Dongguan and Zhuhai. 78 The question is how
mechanism had been available. much pressure the system can take before it explodes. With 8,700 acknowledged
The Chinese minister of Public Security, Zhou Yongkang, admits that tens rural "incidents" in 1 993, 3 2,000 in 1 999, 5 8,000 in 2003 , 74,000 in 2004, and
of thousands of "mass incidents" have arisen recently, with riots and protests up 87,000 in 2005, the government is understandably on edge.79
tenfold over the last ten years. The CCP is so desperate that it has begun to invoke Old Left factions within the National People 's Congress have seized on this
Confucius in an effort to instill "moral standards."73 What most concerns Beijing is discord to challenge the wisdom of market-driven development. For the first time in
that the epicenter of recent demonstrations has been shifting from the old industrial more than a decade an actual ideologica l debate has erupted in the halls of power.
"rustbelt" of northeast China to thriving export zones. Mounting political instability Hu is playing on both sides of the fence, talking constantly of the need for "social
could give the TNCs second thoughts about China, though it would take a great equity," yet insisting all the while that China must "unshakably persist with economic
deal of it to send them packing. After all, the TNCs are not innocent bystanders in reform."80 The patent fact is that Deng Xiaoping's social compact-income growth
the exploitation that sparks these protests. The wage slavery and abysmal working in return for political stagnation-is not working.
conditions in their own factories is what makes China so attractive to them. Quite It is no longer possible to hide the fact that most Chinese are losing on both
simply, they can get away with it here. With a sixth of rural Chinese unemployed, sides.8 1 Economic gains are poorly distributed, to put it mildly. This grim reality
there should be plenty of fresh applicants when present workers quit or collapse. is exposed most graphically along the socioecono mic fault lines of development
Any worker who complains, or even asks for raise, will not do so a second time.74 proj ects such as the Three Gorges Dam, which was another gift from Li Peng, the
Late in 2005 the government was caught off guard at Dongzhou, a small village infamous "butcher of Tiananmen."82 Locals uprooted here have yet to receive their
in Guangdong province, where paramilitary units opened fire on thousands of angry promised compensation, and more than half now live in abj ect poverty. This is not
but peaceful protesters. State media were not fast enough in blocking coverage of even to consider their anguish from lost homes and broken communiti es. 83
the event, which was sparked when officials appropriated the land of local villagers
for a coal-burning power plant, giving displaced families a mere pittance for their
land,75 and subjecting all residents to high pollution level s.76 Up to thirty protesters

on New York Times (December 1 7, 2005), [Link] 00S/ 1 21 1 7/

internationallasialI [Link].
385446,00.htm1. While the official figure of the Three Gorges resettlement is 1 . 1 3 million, 77 Many feel the actual number is far above the official "government figure. " See
Audra
the World Bank puts it at 1 . 2 or more, with 60 percent of the displaced locals living below Ang, "China Town Sealed After Protesters Slain," [Link] m (December 1 0, 2005),
http://
the poverty line as of January 1 99 8 . On the Chinese estimate see "Massive Resettlement out [Link]/nationworldiworldiats-ap_intI 1 2dec09.0.20 8264 1 .print.
story.
of Three Gorges Basically Ends," People 's Daily (September 6, 200 1 ), [Link] people. 78 Howard W. French, "Police in China Battle Villagers in Land Protest," The New
York
[Link]/english1200 1 09/06/eng200 1 0906_7948 [Link]; and on the Bank's data see Martin Times (January 1 7, 2006), [Link] 1 l 1 7/international/asial I 7china.
Stein, "The Three Gorges: the unexamined toll of development-induced displacement," FMR html.
Review (January 1, 1 998), http ://[Link]/text/FMRlO [Link]. 79 Dobson, op. cit. ("Quiet Riots,")
7 1 Shai Oster, "Reservoir of Fear: In China, New Risks Emerge at Giant Three Gorges 80 Joseph Kahn, "A Sharp Debate Erupts in China Over Ideologies," The New
York Times
Dam," The Wall Street Journal (August 29, 2007), p. A I . (March 1 2, 2006), [Link] 1 2/international/asial 1
[Link].
7 2 "Three Gorges Madness: A n Interview with Dai Qing," Multinational Monitor, VoL 8 1 Dobson, op. cit.
1 8, No. 1 2 (December 1 997), [Link] I [Link]. 82 In a recent essay, Li attempts to pin the full blame on his mentor Deng.
See "China's
73 "Who should own the good earth of China," The Christian Science Monitor (March Li blames Deng Xiaoping for Tiananmen," The Age (August 20, 2004),
[Link]
1 5, 2005), [Link] 1 5/p08s0 1 -[Link] com.aui2004/08/1 911 092889274 495 .html?from=storylhs. Li's third major
claim to fame was
74 "Three Gorges Madness," op. cit. his decision to ignore opposition in Hong Kong to the country's biggest nuclear
power plant
75 See William J. Dobson, "Quiet Riots," The New Republic (December 1 4, 2005), http:// at Daya Bay. See "Deng ordered Tiananmen crackdown, Li Peng says," Taipei Times
(August
[Link]. [Link]?i=w05 1 2 1 2&s=dobson 1 2 1 40 5 . 1 9, 2004), p. 5, [Link] 9/2003
1 99330.
76 Families that agree t o sing the government's song on the events of that day are now 8 3 Yingling Liu, "Missing Voices on the Nu River Dam Project," Worldwatch Institute
being promised over $6,000. See Howard W. French, "Chinese Pressing to Keep Village Silent (November 29, 2005), [Link] 1 1 29-2.
128 Development Without Freedom

Plans to harness the Nu River in Yunnan Province, involving some of China's

last pristine areas, are meeting with unusual resistance,84 yet no one seriously doubts
I Sino-Globalization-Part J 1 29

national and international stage without their puppet strings attached. Since becoming
president in 2002, Hu has worked relentlessly to restore his brand of central power.
the outcome. It was the concerted action of NGOs (almost unheard of just ten years His regime is looking more repressive than any since the Mao era.89 It is perhaps
before) that brought this issue to the fore, but that very success inspired a crackdown unfortunate that Jiang, a relative moderate, failed to retain power behind the scenes the
on NGOs. They were punished for their demand that the country's new "green laws" way Deng did in his political afterlife . On September 1 9, 2004, Hu took command of
actually be enforced. Evacuations of local villages were being scheduled even before the Army, Jiang's last political redoubt, making himself commander-in-chief as well
the required environmental impact studies had been carried out. 85 It is claimed that as president and CCP general secretary. For good reason he kept Zeng off the military
local residents will benefit from cheap electricity, but this is a hackneyed promise. commission, the Party's most crucial committee.90 With Jiang sequestered, and his
Everyone knows that most of the power will be siphoned offby Eastern cities . In the Shanghai constituents orphaned, the Hu era was effectively signed and sealed.
case of the Manwan Dam, begun in 1 986 and producing power since 1 99 3 , rates were
set according to Eastern living costs, meaning that most locals could hardly afford
them. The real beneficiaries have been power companies and local authorities,86
whose status is roughly that of landed aristocrats of the imperial past.
Somehow neoliberals manage to remain oblivious to all this. What they
conveniently read as a generational war for and against democratic reform is no
more than a power struggle between CCP factions. In their conflict with urban
entrepreneurs, Hu and Wen are forced to reach out to the rural masses for support,
much as Thaksin did in Thailand. Meanwhile they are seeking a rapprochement
with Jiang's urban power base . It is significant in that regard that Jiang's Pol itburo
understudy, Zeng Qinghong, became the vice-president and made a functional peace
with Hu. That accord marks the relative consolidation of the CCP order,87 but what
exactly does this regime stand for?
For it to stand at all requires a delicate balancing act. Hu speaks of a "new socialist
countryside,"88 yet must also placate foreign and domestic capital. Rural residents are
promised free education, bigger subsidies, better health care and public works. What
is left off the list is a farmer's right to any legal title to the land he plows. Without
that most basic right the rural sector will be locked out of the country 's celebrated
affluence. This socio-economic double standard will kill the social harmony Hu has
proclaimed as his core obj ective. The most he can hope for is enough rural pressure
release to keep the system running. To do more would be a gift, in cost of labor
terms, to China's Asian competitors.
Rival factions are of course waiting in the wings, but the new regime has no
intention of repeating Deng's mistake of the 1 980s : letting these upstarts onto the

84 "China Dam Project Tests New Environmental Policy," Planet Ark: World
Environment News (October 25, 2005), [Link]
cfm?newsid=3 3 1 39.
85 Jim Yardley, "Seeking a Public Voice on China's ' Angry River," The New York Times
(December 26, 2005), [Link] 1 2126/intemational/asial26china.
html?ei=5094.
86 Yingling Liu, op. cit.
87 Joseph Kahn, "China's Leader, Ex-Rival at Side, Solidifies Power," The New York 89 Robert Marquand, "Hu Sets out Blueprint for China's Future," The Christian Science
Times (September 2 5 , 2005), [Link] intao. Monitor (October 6, 2005), [Link] 006/[Link]; and
html. Minxin Pei, "The Chinese Communist Party," Foreign Policy (September/October 2005),
88 Jim Yardley, "China Unveils Plan to Aid Farmers, but Avoids Land Issue," The New [Link] 1 74&print= 1 .
York Times (February 23, 2006), [Link] 90 "What price reform?," The Economist (September 2 3 , 2004), [Link]
html. [Link]?Story ID=3222684.
_
 Chapter 7

Sino-Globalization-Part 2 :
S elling Chinese Maldevelopment

With Friends Like These

Much has been made ofHu's globalist tilt, and many have tried to see him as a budding
Chinese Gorbachev. ! He has graciously played along, extending the geoeconomic
policies set in motion by Premier Zhu Rongji after the Asian Crash. Zhu's crowning
accomplishment was China's entry into the WTO, emblematic of full-fledged
globalization. Hu's achievement is to have grafted that economic "miracle" to a
politics that would have met Mao 's full approval. What requires explanation is how
this renewed hard-line gets at least tacit approval in the West.
China's emerging foreign policy marches to this same drummer, and should
come as no surprise to those familiar with Hu's work in Tibet. Beij ing's direction is
suggested by the fact that it has extended economic, strategic or diplomatic lifelines
to nearly every rogue state in the world.3 Its close international friends have included
Iran's Mahmoud Ahmadinejad, Zimbabwe 's Robert Mugabe, Pakistan's Musharraf,
Nepal's King Gyanendra and Uzbekistan's Islam Karimov.4 China helped Mugabe
pull off his rigged election of 2005,5 and encouraged Karimov to stand his ground
against international opprobrium after he ordered the Tiananmen-style slaughter
at Andijan, killing hundreds of unarmed demonstrators.6 Both China and Russia
endorsed Karimov 's version of this atrocity, and tripped over each other in their
haste to sign new security treaties with him.7 No Western power could match them

1 "Hu Done It," The Economist (September 2 3 , 2004), http ://[Link]/opinion/

[Link]? Story_10=32203 1 5 .
2 Willy Wo-Lap Lam, "The Chinese Leadership: Blazing New Trails i n Reform," World
Economic Forum China Business Summit 2003 Report (2003).
3 Parag Khanna, "Waving Goodbye to Hegemony," The New York Times (January 27,
2008), http ://[Link]/2008/0 1 /27/magazine/[Link].
4 See Robert Skidelsky, "The Chinese Shadow," The New York Review ofBooks, Vol. 52,
No. 18 (November 1 7, 2005), [Link] .com/articlesI 1 8437 .
5 Joshua Kurlantzick, "The China Syndrome," The A merican Prospect (January 1 1 , 2007),
http : www. [Link]/web/[Link]?section=root&name=ViewWebarticleld= 1 23 7 2 .
6 Isabel Hilton, "Reaching Beyond the Myth of Mao," Guardian (June 4, 2005), http ://
[Link]. uk/printlO,3 85 8 ,5208236- 1 03677,[Link].
7 Joshua E. Abrams, "The Trouble with Uzbekistan," Nth Position (January 2006), http://
www. [Link]/[Link].
1 32 Development Without Freedom Sino-Globalization-Part 2 133

in this ideological race to the bottom. The question is left open as to which of them Crash and subsequent I M F restructuration made their labor much cheaper. 12 Most
will come out on top (the bottom in this case being the top) in Central Asia's new Southeast Asian countries have abundant natural resources, and are not saddled with
"great game." such insurmountable environmental problems as China suffers. Why, then, do TNCs
There is no question, however, as to who takes the prize in Africa, where flock to China?
China's comparative advantage is on graphic display. The China National Petroleum The euphemisti c answer is that Southeast Asia lacks China's vaunted "stability."
Corporation (CNPC) specializes in working with pariah regimes that Western Less tactfully put, Southeast Asia has been too prone to the pressures of democratic
companies shy away from. Naively, the international community has tried to exert reform. What China offers is an irresistible combination of commercial openness
pressure on China to assist in a solution to the genocidal crisis in Darfur. In answer, and despotic order. In his April 2006 visit to America, President Hu promised even
Deputy Foreign Minister Zhou Wenzhong replied, "business is business." In Will greater investment openness. He knew this language would overshadow nonmaterial
Hutton's view this was "an awesome warning of the future if an unreconstructed issues such as the pending show trial of New York Times reporter Zhao Yan, who as
China became yet more powerfuL"8 of Hu's visit had spent almost 20 months in prison without so much as a hearing. 1 3 It
The self-appointed despots-for-life that China courts cannot hope to modernize all boils down to the question of what counts most for today's Americans , elemental
their ramshackle authoritarianism without a great deal of technical assistance. That freedom and human rights in China or bargain prices at Wal-Mart.
is where Beijing comes in. Already the PRC is exporting its state-of-the-art phone The Zhao affair is all about civilizational clash, and the most troubling part of it
tapping and internet monitoring techniques to Mugabe, who in 2004 followed is that for so many Americans it is not more troubling. Here, and on the whole issue
China's lead by making internet companies promise censorship assistance.9 Belarus of a free press, Beijing shoots itself in the foot. A combination of media censorship
has likewise drawn on China's expertise to counter internet reform pressure, 1 0 and rampant corruption allows pressing problems to fester out of sight. In Anhui
while Iran has made good use of its special relationship with China in ignoring Province, for example, forty companies sold fake baby powder resulting in thirteen
international consternation at its nuclear proliferation. This cozy arrangement was known deaths and hundreds of chronic health problems. Only a few months after
capped in October 2004 with the signing of a $ 1 00 billion, 25-year contract for this came to light, new fakes were on the market. Worse still, officials in Henan
natural gas between Tehran and Sinopec (China's third oil giant, along with CNPC sold blood to local hospitals with full awareness that it was HIV contaminated. The
and CNOOC-the China National Offshore Oil Corp.). l 1 incident was blacked out from the media, while AIDS activists who protested the
The mystery is why China gets top geoeconomic billing from its foremost practice were arrested. 1 4
geopolitical rival, the United States. The simple answer is that TNCs are pulling Beijing i s now making a show o f combating corruption i n the provinces,
the strings in Washington. But that begs the question as to why these corporations especially where land grabs are concerned. The Ministry of Land and Resources
are so committed to this particular FDI magnet. What could it provide that its less (MLR) estimates that 80 percent of these seizures involved local governments, and
Orwellian competitors on the Rim could not, especially after the Crash? The miracle 20 percent were directly committed by them. IS Meanwhile, in Henan and Shanxi
years made Southeast Asian countries more technologically competitive, while the provinces local officials were implicated in the kidnapping of hundreds of local
residents, including children, for slave labor in coal mines and brick kilns. 1 6 The
Hu regime feigns ignorance of all this, and adroitly uses the greed and corruption of
local government as a lightening rod to deflect criticism from itself.
8 Will Hutton, "New China, New Crisis," Observer (January 7, 2007), [Link]
[Link],,329678 1 5 1 - 1 02280,[Link]
9 "Caught in the Net: Zimbabwe," Foreign Policy (January/February 2006), [Link]
[Link]!story/[Link]'?story_id=3344. 12 Consider the case of the MatteI toy company, which recently had to recall millions
10 Kurlantzick, op. cit. of toys due to a lead paint scandal in China. MatteI also owns plants in Indonesia and
1 1 Michael Klare, "The Geopolitics of Natural Gas," The Nation (January 23, 2006), Thailand, where the labor costs are even cheaper and quality control is easier to manage. See
http ://[Link]/20060 1 23/klare. It is little wonder that China has resisted "Seven Questions: China's Total Toy Recall," Foreign Policy (August 2007), [Link]
UN Security Council action against Iran 's violations of " re d line" provisions of the nuclear [Link].
non-proliferation treaty of 1 968. See Nazila Fathi and John O'Neil, "Ignoring Protests, Iran 13 "Mr. Hu and Mr. Zhao," The New York Times Editorial (April 1 8, 2006), [Link]
Resumes Nuclear Program," The New York Times (January 1 0, 2006), http ://[Link]. nytimes.coml2006/04/ 1 8/opinion/ 1 8tue l .html?
coml2006/0 1 l 1 0/internationaV I [Link]. However, in December 2006 China did join 14 Martin Vander Weyer, "Just How Miraculous is China's Economic Miracle? ," Telegraph
other U.N. Security Council members in imposing light sanctions on Iran's trade in nuclear (April 30, 2006), [Link]
and missile-related materials. Given its dependence on Middle Eastern oil, even China arts/2006/04/30Ibok. . .
recognizes that stability in the region is in its interest; and another mollifying factor is its 1 5 Candy Zeng, "Beijing Vows Crackdown o n Land Grabs," Asia Times (August 4 ,
close trade relations with Israel in military weapons and materials. See "A Quintet, Anyone?" 2007), [Link]
The Economist (January 1 1 , 2007), [Link] 1 6 Andrew Batson, "China Tightens Local Oversight," The Wall Street Journal (August
cfm?story_id=852 1 894. 1 0, 2007), p. A4.
1 34 Development Without Freedom Sino-Globalization-Part 2 1 35

The Real 'Two C hina' Divide year by spreading deserts. Most of this desertification is in north central China,
putting even Beijing at risk.23
Stamping out the problem will become harder as local magnates grow richer and forge Then there is the water crisis. With 22 percent of the world's population, China
their own global networks. For centuries the extra-legal income of Chinese officials has only 8 percent of the world's fresh water.24 As in India, China's economic
dwarfed their actual salaries, 1 7 so today's bureaucrats have tradition on their side. takeoff rested on the agricultural spike that was made possible by millions of new
Anti-corruption efforts are further undermined by the government's determination wells across the land. Now, however, the water table is dropping fast,25 threatening
to control free speech and the media. This also explains why there is little effective the very foundation of the boom economy. Moreover, at least 70 percent of China's
environmental opposition here, despite the fact that public sentiment favors reform, lakes and rivers are polluted, leaving 3 60 million rural residents without safe
NGOs are on the rise, and the media are cautiously sympathetic. 1 8 A case must reach drinking water. The government admits that over half the rural risings in 2005
crisis levels before it is even noticed. And even then the regime usually prosecutes were pollution related.26
the whistle-blowers rather than the criminals. That is not to say that cities have it so good. Urban water systems are awash in
What kind of government casually accepts the fact that in many Chinese cities oil, trash, and feces. This alone could sabotage the country's development, as could
80 percent of children suffer from lead poisoning?1 9 Answer: the kind that solves the air pollution and acid rain. Just living here is like smoking two packs of cigarettes
problem by arresting eco-dissidents. The lead poisoning issue went international in per day.27 Already 80 percent of Chinese cities have dangerously high levels of sulfur
August 2007 when the MatteI toy company was forced to recall nearly two million and nitrogen dioxide, according to a recent World Bank study.28 The Chinese are
made-in-China toys. Chinese officials seemed dismayed that other countries would literally inhaling the dark side of their growth formula.29 It says much about the
become so agitated over a little lead in the toy paint. This scandal was just the latest stultifying effect of the "Beijing Consensus" that few in government are willing to
in a series of similar recalls across a wide spectrum of consumer products: dog food, discuss these subjects even privately.
toothpaste, computer batteries, etc. The root of the crisis is not so much the technical A rare exception is Yue Pan, Deputy Minister for the Environment, who predicts
factor of quality control as the philosophical issue of the value of human life. This that in the not-so-distant future China will have more than 1 5 0 million environmental
includes the lives of Chinese workers who toil in unspeakable sweatshop conditions refugees .3o Most of these eco-vagrants will be the same ex-farmers who were left
for eighty or more hours a week. There is a profound moral paradox in having three­ behind by the capitalist transformation of the last quarter century. For them Deng's
quarters of the world's toys made in China under such torturous conditions.20 "reforms" amount to grand theft. They are witnessing, and increasingly protesting,
The West must also consider its complicity in one of the world's most horrendous the deconstruction of a socialized health care system that between 1 952 and 1 982
environmental disasters. While the Chinese population has doubled in the last fifty brought infant mortality down from 200 per thousand births to 34, while raising life
years, its usable land has fallen by half, and is under ever increased pressure from
land degradation as well as "development."21 The Global Footprint Network (GFN)
estimates that China's current growth pattern would require twice the available land 23 Joseph Kahn, "A Sea of Sand Is Threatening China's Heart," The New York Times
to render it sustainable,22 yet an estimated 1 ,500 square miles of land is buried every (June 8 , 2006), http ://[Link]. com!2006/06/08/[Link].
24 "China, India, and the ' State of the World, '" The Worldwatch Institute 's State of the
World, 2006.
25 Jeffrey Sachs, "War Climates," TomPaine. com (October 23, 2006), http ://www.
[Link]/printlWar_climates. php.

Social Origins ofDictatorship and Democracy: Lord and Peasant 26 Kathleen E. McLaughlin, "Chinese Villages, Poisoned by Toxins, Battle for Justice,"
1 7 Barrington Moore,
in the Making of the Modern World (Boston: Beacon Press, 1 966), p. 1 72. The Christian Science Monitor (June 2 3 , 2006), [Link] [Link]!2006/0623/
p0 1 s03 -[Link].
18 Ibid.
1 9 Joshua Kurlantzick, "Purple Haze," The New Republic (August 30, 2004), [Link] 27 Kurlantzick, "Purple Haze," op. cit.
[Link]?i=2004830&s=kurlantzick083 004. 28 "Coal, China, and India: A Deadly Combination for Air Pollution?," Worldwatch,
20 See Eric Clark, "MatteI's Real Toy Story: Slave Labor in Sweatshops," extract from Worldwatch Institute (December 14, 2005), [Link] org/features/

from Clark's The Real Toy Story, in The Evening Standard (August 1 6, 2007), http ://www. vsowI20051 1 2/ 1 4.

thisislondon. [Link]/article-234085 72-detailslMatte1's+real+toy+story:+slav. . . 29 As of2003 , only a quarter ofthe country's sewage was treated. It was already understood

2 1 Gross land mismanagement has accelerated desertification and resulting dust storms, that, like other dams, the Three Gorges would undoubtedly trap pollutants, resulting in a vast
such as those that blanketed Seoul, Korea in April 2002, forcing schools to close and airports toxic reservoir. See "Millions Face Water Shortage in North China, Officials Warn," The New
to cancel flights. See Lester R. Brown, "China is losing the war on advancing deserts," The York Times (June 6, 2003), [Link] .

Herald Tribune (August 1 3 , 2003), [Link] com![Link]?template=articlep html.

rinttmplh&ArticleId= 1 06062. 30 Spiegel Interview with Pan Vue, "The Chinese Miracle Will End Soon," Der
22 "ROK 'requires a Land Area S ix Times its Size ' to Sustain its Growth," Birds ofKorea Spiegel (March 7, 2005), [Link] 1 5 1 8,druck-

(November 2003), [Link] birdskorea. org!rokfootprint. asp. 345694,[Link].

136 Development Without Freedom Sino-Globalization-Part 2 137
expectancy from 35 to 68.31 The rural clinics that spearheaded this miracle are now countryside behind, post-Tiananmen globalization bypassed most Chinese. When
shutting their doors, as doctors and other health professionals flock to the cities. It that fact was advertised by husband and wife authors Chen Guidi and Wu Chuntao
is little wonder that infectuous diseases like SARS, hepatitis, and tuberculosis are their book was instantly banned by the Propaganda Department. Nonetheless it sold
turning rural China into a base camp for global epidemics of the future. seven million copies in pirated editions, and even Wen Jiabao's chief advisor on
The sad irony is that China's urban growth economy depends upon the plight of rural affairs admitted in 2004 that he kept a copy at his bedside.36
the rural masses for its labor reservoir. Migrant workers are in effect illegal aliens in What Chen and Wu dramatized was the well known fact that since 1 989 the
their own country. The hukou system of household registration has kept them out of quality of rural life has been stagnant or worse. As of 200 1 27 percent of rural
the legal labor pool,32 and any attempt to organize or strike has been treated as literal Chinese still got by on less than $ 1 per day.37 Health care needs trump education,
insurrection. For fractious workers this has meant beatings or j ailings, while real marriage, and sometimes even food, with whole families thrown into destitution
dissidents face prolonged imprisonment and torture. 33 when breadwinners fall ilp8 Increasingly the maladies of the elderly go untreated,
Behind the urban/rural divide is a two-tiered property system that denies farmers while families with more than one sick member are having to draw straws as to
legal title to, or even certain access to, the land they have tilled all their lives. which one will get even rudimentary health care. Millions must face this "Sophie's
In many cases their ancestors worked the same land in imperial times, yet these Choice" at some point, putting them among the 1 .3 billion people in the world who
holdings can be confiscated and sold at the whim of local officials who are getting have virtually no access to health care.
a fat cut of the profits. When farmers resist, paramilitary gangs are on hand to settle What makes this all the more onerous for 800 million rural Chinese is that they
the matter.34 More than 70 million farmers have had their land appropriated in the have been stripped of the socialist safety net that formerly saved them from utter
last decade, and 30 million more are on the waiting list. In one case, near the city of destitution. This is the flip side of Deng's glorious revolution. The deal he struck
Yulin, local officials offering $60 per parcel of land faced resistance from a whole was with elites who gladly accepted his dictum that "to get rich is glorious," no
village, which seized control of the local Party office. Hundreds were injured in the matter how many people might be trampled in the process. The strategic flaw in this
ensuing crackdown.35 The only remarkable thing about the Yulin incident is that it selective enrichment scheme was its assumption that the "tramplees" would lie there
was widely reported. and take it. Rising waves of protest in the countryside suggest otherwise.
It follows that the real "two China" divide is not between the PRC and Taiwan, Urban workers have usually been more tractable, but how much so is hard to
but between the rich and poor in China proper. The Taiwan issue, like the Japanese verify, since statistics on labor issues are treated as state secrets.39 Recently, in the
reparations issue, is kept on hand for diversionary purposes whenever the genuine city of Xiamen, this veil of secrecy was lifted as middle classes staged protests
two China crisis starts to boil over. It has been a quarter of a century since rural against heavy-handed government policies. Soon the Xiamen model was applied in
families received any marked benefit from the country's capitalist turn. The land Shanghai,40 where working classes joined the protests. Beijing too well knows the
reforms of 1 978, which dissolved Mao-era communes, did help the rural poor in raw significance of such broad-spectrum resistance. To avoid financial catastrophe China
income terms. But the bulk of that improvement was reaped by 1 987. By leaving the will have to completely overhaul its banking system, but doing that will leave SOEs
(state owned enterprises) and the millions they employ derelict. The result will be
massive proletarian outrage and possible insurrection.41 This unrest, moreover, will
3 1 Bashir Mamdani, "Privatization and Health Care in China," Indian Journal ofMedical
Ethics, No. 1 (January/March 2006), [Link] 1 4 1 ss03 1 .html.
not be hidden away in the countryside. Ifpart of China's comparative advantage for
32 It likewise denies them a broad range of rights and government services, and in the
Western investors has been its promise of stability, these fortune hunters could be in
judicial context it effectively treats the life of a legal resident as having several times the for a rude awakening.
value of a migrant. See Jim Yardley, "3 Deaths in China Reveal Disparity in Price of Lives,"
The New York Times (April 1 4 , 2006), [Link] 4/worldlasial
l [Link]. 36 Kahn, "Painting the Peasants Into the Portrait of China's
Economic Boom," op. cit.
33 Mark Barenberg, "The Condition of the Working Class in China," Dissent (Summer 37 Pranab Bardhan, "Does GlobalizationHelpor Hurtthe World'sP
oor? ," ScientificAmerican.
2004), [Link] com (March 26, 2006), [Link]
7FD-C4E6-
34 Land rights activists are coming under literal assault for the crime of telling the truth. l 42 l -84E683 4 l 4B7 ...
One of the most prominent ones, Fu Xiancai, will never walk again. He was savagely beaten 3 8 Howard W. French, "Wealth Grows, but Health Care Withers
in China," The New York
after he ignored police warnings to stop talking to lawyers and foreign journalists. A police Times (January 1 4 , 2006), http ://[Link].coml2006/0 1 / 1
4/internationaUasi al1 4health.
investigation concluded that he broke his own neck. See Jonathan Watts, "Chinese Police html.
Decide Paralyzed Campaigner Broke His Own Neck," Guardian (July 28, 2006), [Link] 39 Ryder, op. cit.
[Link],,329540 1 79 - 1 08 1 42,[Link]. 40 Maureen Fan, "Shangha i's Middle Class Launches Quiet, Meticulou
s Revolt," The
35 Jim Yardley, "Farmers Being Moved Aside by China's Real Estate Boom," The New Washington Post (January 26, 2008), p. AO l .
York Times (December 8, 2004), [Link] 2/08/internationaUasiai 4 1 C.T. Kurien, "Giants of the East," Frontline, Vol . 23, No. 26 (Decembe
r 30, 2006 to
[Link]. January 1 2, 2007), http ://[Link]/stories/20070 1 1 200050740
[Link].
l 38 Development Without Freedom Sino-Globalization-Part 2 139

Faith-based Globalism when i t gained power i n 1 949.41 A system that s o completely subordinates society
to the state, individuals to the mass, and law to the leader is hardly on the road to
Apart from overseas Chinese investors, who have cultural and linguistic ties with democracy, although Singapore does a better job than China of wrapping its "Asian
China, the major attraction for relocating here can only be political, or rather anti­ values" in parliamentary garb.48
political. China's cheap labor and economies of scale are a nice draw, but the clincher The Beijing elite well knows that its privileges could not survive much political
is an anti-liberal climate that makes Singapore's soft-authoritarianism look tame by development.49 Taking a lesson in how not to reform from the Soviets,50 China
comparison. China's cardinal advantage is twofold: its will ingness to use draconian has forged a democracy-free developmental model that weds the statist control of
means to remove any obstacle to Jazhan (development), and policies that would be Maoism to the economic engine of capitalism. This hybrid avoids the economic drag
impossible to implement in an even partially democratic society.42 of democracy, environmental standards, and liberal bottlenecks such as unions and
While it may be that millions of Chinese escaped "absolute poverty" after a free press. Shelving Marxism, the CCP reactivates the Confucian ideal of datong,
Deng's reforms took effect, we have already noted that most of this uplift was due or great harmony, which conditions Chinese to distrust the anomie of Western
to agricultural growth that had flattened out by the mid- 1 980s. Most Chinese were democratic processes.51 The greater the messiness of the Sino-capitalist amalgam,
then left in economic purgatory. Millions of manufacturing jobs have been lost since the stronger the urge will be to enforce datong on the political side .
the mid- 1 990s, while nearly half of the labor force remains locked in subsistence None of this bothers the purveyors of faith-based globalization . In their view the
agricultureY Jeffrey Sachs extols Beij ing's success at converting China's peasantry PRC is so deeply enmeshed in global commerce that fears of Chinese realpolitik
into a robust labor force on the coast. 44 The simple truth is that Chinese banks are are groundless.52 This explains why so few have heeded Paul Kennedy's prescient
too loaded down with bad loans to underwrite rural development,45 and in any case warning of the late 1 980s that the best military preparation for a budding Asian
CCP planners would be reluctant to fix a condition that is a prerequisite of the hegemon is precisely the growth-at-all-costs development model that China has
Chinese export boom. Reform must be limited to palliatives-j ust enough to ward implemented. 53 Neoliberal globalism takes this oversight one step further: if China's
off rebellion. As in pre-revolutionary France, where the monarchy maintained the growth is what renders it harmless, the best defense against its burgeoning militarism
illusion that it was on the side of the peasantry, the CCP elite has brilliantly cast itself is still more growth.
as the protector of the rural masses against conniving local autocrats. This is the geopolitical logic of unqualified capitalist "engagement," premised on
This inner circle has good reason to fear even pro forma democracy. One of the assumption-popularized in Thomas Friedman's "golden arches" maxim-that
its control tactics, borrowed from Singapore, is democratic inoculation: using
ersatz democracy to guard against the real thing. In a white paper issued in October 47 Martin Hart-Landsberg and Paul Burkett, "Introduction: China and Socialism" Monthly
2005 the government laid claim to an alternative "democracy" based on centrally Review, Vol . 56, No. 3 (July/August 2004), http ://[Link]/[Link].
determined goals.46 This is very similar to the propaganda line hawked by the Party 48 Likewise this voids the democratic claims of Singapore, where the emphasis also falls
on the state over the society, the group over the individual, and the leader over the law. See

42 In the mid- 1 990s, against the neoliberal grain, Gordon White posited a causal linkage Hans Andav and Tak-Wing Ngo, "Politics, Culture, and Democracy in Asia," in Hans Andav
entirely
between China's non-democratic government and its remarkable growth record. We and Tak-Wing Ngo (eds), The Cultural Construction of Politics in Asia (Richmond, UK:
White, Curzon Press, 2000), p. 9 (pp. 1 - 1 8).
agree, but challenge White's equation of growth with development. See Gordon
"Development and Democratization in China," in Adrian Leftwich (ed.), Democracy
and 49 See Minxin Pei, "The Dark Side of China's Rise," Foreign Policy (MarchiApril

Development (Cambridge, UK: Polity Press, 1 996), p. 209 (pp. 209-29). 2006), [Link] [Link]/[Link]?storyjd=3 3 73 &print= 1 . The CCP
factory
43 Yet those who escape this rural privatization may be even worse off, for cannot budge, therefore, in the face of refonnist demands, such as those of Hong Kong's pro­
most basic democracy demonstration of December 4, 2 005, when tens of thousands of protesters took to
workers-and especially illegal ones, fresh from the countryside-lack the
in Washington the streets. Although this was a smaller crowd than had demonstrated in July 2003 and July
rudiments of human rights. In March 2004 the AFL-CIO filed a petition
and their
asking that US trade representatives take action on behalf of both Chinese workers 2004, it was unique in that it was expressly aimed at political rather than economic refonn.

, who are being locked in mutually deleterious wage competition . See "Many People, Few Votes," The Economist (December 8, 2005), http ://[Link].
American counterparts
in "economic [Link]?story_id=528083 7.
The Bush administration summarily rejected the petition, calling it an exercise
isolationism." See Barenberg, op. cit. 50 See Richard Lourie, "And Now to Toast a Happy Eighty-Eighth ! ," The Moscow Times
accessed (November 7, 2005), [Link] 1 107 /006-html.
44 Jeffrey D. Sachs, "China since the late 1 970s," draft for a conference paper
8, 2007 at UN Jobs, http ://unj [Link] hors/j effrey-d.-sa chs. 5 1 Shiping Hua, "A Perfect World," The Wilson Quarterly (Autumn 2005), [Link]
on January
(October [Link]?fuseaction=[Link]&essay_id= 1 46857& . . .
45 See Pranab Bardhan, "China, India Superpower? Not so Fast!," Yale Global
rint?id=64 07. 5 2 Christopher Findlay and Andrew Watson, "Economic Growth and Trade Dependency
25, 2005), [Link] [Link].p
2005), in China," in David S.G. Goodman and Gerald Segal (eds),
46 Matt Steinglass, "Whose Asian values?," The Boston Globe (November 20, China Rising: Nationalism and
. . .; Interdependence (London: Routledge, 1 997), p. 1 07 (pp. 1 07-33).
[Link] comlnews/globe/ideas/articl es/2005/1 1 120/whose_asian_values?mode
53 Paul Kennedy, The Rise and Fall ofthe Great Powers: Economic Change and Military
and "China's Take on Political Democracy," The Globalist (November 1 4, 2005), [Link]
[Link]/printStoryId. aspx?Storyld=4899. Confiictfrom 1500 to 2000 (London: Fontana Press, 1 989), pp, 5 8 1 -82.
1 40 Development Without Freedom Sino-Globalization-Part 2 141

bourgeois affluence precludes war. The basic idea is that the rich have too much o f the ball and the United States was conspicuously uninvited.60 The summit served
to lose to make trouble. This guarantee, however, carries a limited warranty: it has notice that whatever fears the region might have regarding the PRC, they are less
full application only in the kind of plutocracy that Hu has flatly rejected. Under pressing than those generated by current US unilateralism. Faced with a choice
him the CCP yokes capitalism to nationalistic objectives that would have made between the "Washington Consensus" and the emerging "Beijing Consensus,"
Mussolini feel quite at home. It is a telling fact that the inner circle of Western developing countries are choosing the less potent devil, especially since China has
globalists also feel at home with this merger. Some, such as Jeffrey Sachs, look to wisely adopted the rhetoric of soft power that the Bush administration jettisoned
the current Chinese system as the very archetype of global development. 54 Somehow after 9/ 1 1 .61
these Sino-apologists manage to ignore the darker sides of Chinese "development,"
such as rampant corruption, unenforceable contracts, politically dependent courts,
Sino-Globalization Comes to Washington
pollution, land exhaustion, desertification, and an environmental Holocaust that by
some estimates would entail a ten percent annual GDP decrease if a full account It says much about TNC priorities that Washington will express outrage over
were given of its impact. human rights violations in Burma (Myanmar) but not in Tibet. Its occasional finger­
Finally there is China's stupendous military buildup. After 1 7 years of double- shaking over issues such as the Zhao affair are never backed up with the threat of
digit military spending, China is recognized as a major security risk by one of its sanctions.62 The Chinese know it is all window dressing, for the TNCs call the shots.
most astute observers, Japan.56 It is no secret that China's real military budget is If Tiananmen was an embarrassment for neoliberal apologists, it was a dream come
twice or even three times its official figure, and its mounting naval expenditures pose true for corporations setting up in China as foreign-invested enterprises (FIEs).63 Far
a risk to Japan 's sea lanes as well as to Taiwan's existence as an independent nation.57
The power of America's corporate lobby is well illustrated by the fact that these
60 Japan managed to get Australia, New Zealand and India invited to the December 2005
concerns, which are widely felt by the Pentagon, have hardly dented US engagement
East Asia Summit, as a counterbalance to China, which in tum treated Japan with contempt.
policy toward China. It is still an article of faith that the Chinese can be bought off
The cover story was that this diplomatic sneer was China's answer to Prime Minister
with FDI, technological transfers, and the lure of export profits. Koizumi 's recent visit to a Japanese war shrine. Clearly the bigger reason was Japan's close
The attraction this viewpoint holds for transnational investors is easy to see,58 US ties and its attempt to foil China's dominance of the ASEAN region. See Rich Bowden,
but its geopolitical justification is another matter. More and more, China's quest for "Battle Looms Over Inaugural East Asia Summit," [Link] (December 1 1 , 2005),
oil puts it in league with rogue states such as Iran and the Sudan, while its regional http ://[Link]. org/print_article. cfm?article_id=23 1 2&don·t=yes. This growing rift
saber rattling competes with North Korea's. Its rapid increase in missiles aimed at had become apparent during Bush's 40-hour visit to China the previous month, punctuated as
Taiwan speaks for itself.59 That alone should expose the lethal miscalculation of it was by a geopolitically pointed visit to Mongolia. See "Bush's Trip to China," Worldpress.
present US "engagement," but for slow learners an alarm bell was sounded by the org (downloaded December 23, 2005), [Link] orglprint [Link]?article

East Asian Summit of December 2005 in Kuala Lumpur, where China was the belle ;
id=2304&don't =yes. That divide was further confirmed when the Whit House downgrade d
the upcoming state visit of President Hu to a mere "official visit." It is not clear at this point how
effective Washington's new containment strategy will be, given its simultaneous engagement
policies. The new coolness toward China is not appreciated by some US allies. Australia has
54 Jeffrey Sachs, interviewed by Jonathan Watts, "Be Here Now," Guardian (August 26, protested Washington's containment efforts, including its recent diplomatic embrace of India.
2006), http ://[Link],,329562288- 1 0 8229,[Link]. See Peter Kwong, "Hu's ' State Visit' ," The Nation (May 1 , 2006), [Link]
55 Cao Changquing, "The West's Rosy Image of China is a Deception," Asia doc/2006050 l Ikwong.
Media-Media News Daily (December 20, 2006), [Link] 61 Ashley J. Tellis, "A Grand Chessboard," Foreign Policy (January/February 2005),
asp?parentid=59840. http ://www. [Link]/[Link]?story_id=275 1 &print= 1 . However, polls such
56 Norimitsu Onishi, "Chill Grows as Japan Calls China a Military Threat," The New as the Pew Global Attitudes Proj ect show a sharp downturn in public trust toward China
York Times (December 22, 2005), [Link] 2/22/international/asial in Europe as wen as America. Picking up on this drift, Daily Show host Jon Stewart joked
[Link] about Chinese child laborers garnishing toys with lead paint for American children to eat. In
57 Regis Arnaud, "La puissance militaire chinoise alarme Tokyo," Le Figaro (December short, human rights concerns are finally starting to register with Western pubJics, as opposed
23, 2005), [Link] 1 223 .FIG022 1 . to Western governments and corporations. See Peter Ford, "Beyond Food and Toys, China
5 8 Some, such as multinational corporation consultant Dan Steinbock, are dissatisfied Struggles with its Global Reputation," The Christian Science Monitor ( September 1 2 , 2007),
even with present "engagement" policies. Nothing less than full economic "integration" http ://[Link].coml2007/09 1 2/pO 1 [Link].
will satisfy Steinbock. See Dan Steinbock, "The Chinese Multinationals are Comin g ! ," The 62 Finally, after three years of lobbying-including direct appeals to President Hu by
Nationalinterest(Fa11 2005), [Link] [Link]/August%2020051 President Bush and Secretary of State Condoleeza Rice-Zhao was released in September
August2005SteinbockPFV . . . 2007.
5 9 "Nudging China toward World Citizenship," The Christian Science Monitor 63 How this ethical disaccord between neoliberal theory and TNC practice was resolved
(November 1 6, 2005), [Link] 1 1 1 6/p08s0 1 -[Link]. in favor of the latter is an implicit subtext in James Mann's study of Clinton's complete
1 42 Development Without Freedom Sino-Globalization-Part 2 1 43

from distressing the multinationals, China's rearguard politics was one of their main this buyout on national security grounds, which put China in the market for an ex­
attractions. Capital inflows jumped from $ 1 1 billion in 1 992 to $50 billion in 1 999.64 hawk lobbyist with insider standing. What was most astonishing about Perle's new
First the Asian Crash and then the Wall Street collapse tightened this Sino-globalist stance on China was that only three years earlier he had been a maj or signatory
bond by eliminating other claims on surplus capital. The fact that US investors need to the New American Century's call for unambiguous support of Taiwan against
China as much as it needs them has effectively turned American corporatists into Chinese aggression . He had warned that Beij ing's pursuit of regional hegemony
unpaid Chinese lobbyists. points toward a new Cold War.
The PRC has been making great strides in formal lobbying as well, assisted by Flash forward to Perle as a non-registered lobbyist for Hutchison, and thus
Washington insiders like Nancy Dorn.65 Her most notable achievement was assisting indirectly for the PLA, and you have a window on one of the major afflictions of
the pro-China billionaire Li Ka-shing to secure control of both sides of the Panama American foreign policy: it is largely contrived by people whose primary concern is
Canal. 66 She was instrumental in convincing a suspicious Congress that this venture their future marketability in the lobby industry. Global Crossing, for example, gave
posed no threat to US security,67 despite the fact that Li's company, Hutchison­ former Clinton Secretary of Defense William Cohen a $500,000 "consulting" fee
Whampoa, is a partner of the China Ocean Shipping Company (COSCO), which and put him on its board in the last year before the company folded. Clinton himself
happens to be the PLA's merchant marine branch. It should also be mentioned that received $1 million for his library, while Global got an expedited $400 million
Wang Jun, one of Li's partners in the China International Trust and Investment defense contract.
Corporation (CITIC), is China's main arms dealer to rogue states.6S Through them Perle's reversal does not rate the label apostasy, as that would suggest a shift
he is almost certainly a big source of arms to global terrorists. of real convictions. His motives were never anything but mercenary or careerist.
Dorn, however, is a small fish compared to China's biggest catch: the The PRC has never lost when betting on the capitalist greed of American leaders.
neoconservative superhawk and former China basher Richard Perle. He was retained Indeed, China hardly needs paid lobbyists when it has a phalanx of TNCs to do its
by the bankrupt telecommunications giant Global Crossing to lubricate its purchase bidding. In the last decade, US corporations have invested $42 billion in China,
by Hutchison Whampoa.69 Both the FBI and the Defense Department red-flagged from which General Motors presently rakes in 40 percent of its global profit. 70 At a
1 999 ceremony hosted by Time Warner in honor of 5 0 years of Chinese communist
rule, 3 00 of the world's leading capitalists came to pay homage. Time Warner
reversal on China. See Mann 's About Face: A History of America 's Curious Relationship
with China, from Nixon to Clinton (New York: Alfred A. Knopf, 1 999), Chapter 1 5 . At the chairman Gerald Levin introduced President Jiang Zemin as his "good friend," and
admini strative level this reversal was consummated with the policy victory of Winston Lord described their relationship as "creating world harmony." Human rights were not
(Clinton's assistant secretary of state for East Asia and the Pacific) over his more principled mentioned, and at a later conference, when the issue of democracy did come up,
boss, Secretary of State Warren Christopher. See Mann, ppO. 276; and William H. Thornton, Maurice Greenberg (chairman of the American International Group) brushed the
Fire on the Rim: The Cultural Dynamics ofEastlWest Power Politics (Lanham, MD: Rowman matter aside, saying in effect that this question was irrelevant, since China's 1 .3
& Littlefield, 2002), pp. 1 4 1-44. billion people cannot eat democracy.7 l
64 Steinbock, op. cit. The PRC 's de facto agents include not only corporate CEOs but even former
65 In February 2002 Dorn became the Deputy Director of the OMB (Office of Secretaries of State, most notably Henry Kissinger. After leaving office, Kissinger
Management and Budget). Previously she had been Vice President Cheney's Assistant for
became a media insider, first as a paid analyst of ABC News and then, in September
Legislative Affairs, before which she was a key lobbyist for corporate clients. In that capacity
1 989, as a member of CBS 's board of directors. Thus he was ideally positioned
she became a foreign agent for firms with very close ties to PLA intelligence. See "Decision
Brief," The Center for Security Policy, No. 00-D67 (July 1 7, 2000), [Link]
[Link]/papers/2000100-D67 .html. to a joint venture of Singapore Technologies Telemedia and Hutchison Whampoa. Although
66 A 1 996 report by the US Ambassador to China, James Sasser, ties Li closely to the Hutchison pulled out of the deal, its relationship with the Singapore company is such that
PLA's developing communications networks. Those ties are confirmed by Rand Corporation security concerns are still rife. At the time he was brokering this deal, Perle chaired an
reports. See Charles R. Smith, "Global Double Crossing," [Link] (February 27, 2003), important civilian advisory group to the Pentagon. He resigned the chairmanship but remained
http ://[Link]/arti cles/2003/2126/ 1 82009 .shtml. as a member of the board. Like Enron, Global had duped its investors into believing it was
67 Another of Dorn's stellar lobbying achievements was getting the Republicans to solvent nearly to the end. There was the added problem of its anti-trust status, as it held a
back away from criticizing the Clinton administration for its failure to fulfill legally required virtual monopoly in many areas of high-tech communications. To circumvent this obstacle,
sanctions against China's arms client, Pakistan, for its role in the proliferation of nuclear Anne Bingaman (former head of the Anti-trust Division of the Justice Department and wife
weapons and long-range missile technology. See "Decision Brief," op. cit. of Senator Jeff Bingaman) was hired by Global, which paid her $2.5 million for six months
68 Admiral Thomas H. Moorer, "Save Our Canal," The New American, VoL 1 5, No. 1 6 of lobbying.
(August 2 , 1 999), [Link] I 999108-02-99/vo I 5no I 6_canal.htm. 70 Harnish McDonald, "Hail to the Chief," Yale Global, from The Sydney Morning
69 Jim Lobe, "Perle: 'Prince of Darkness ' in the spotlight," Asia Times (March 25, 2003), Herald (September 1 3 , 2005), http:/[Link]?id=6259.
[Link] Global Crossing was the fourth 71 "China Fetes Capitalists, but the Air is Tense," The New York Times (September 29,
largest company to file for bankruptcy in history. It was slated to be sold in September 2003 1 999), [Link]
1 44 Development Without Freedom Sino-Globalization-Part 2 1 45

to amplify his startling support for Deng's handling of the Tiananmen crisis. It "realist" grounds, the impact of Tiananmen on US policy. So too he devoted himself
is no accident that his firm, Kissinger and Associates, has represented dozens of in the 1 990s to blocking any toughening of US China policy after the Soviet fall.
multinational corporations trying to invest in China. With partners like Lawrence It was now possible, without compromising realist objectives, to lay much greater
Eagleburger, Brent Scowcroft, and L. Paul Bremmer,72 Kissinger's operation works stress on human rights and democratization in return for China's MFN status. Rather
under cover of providing "strategic and advocacy services" rather than lobbying.73 than counter that argument logically, neoliberals wheeled in Kissinger's ex cathedra
"Advocacy" connotes more of an inside operation than most lobbyists could ever testimony. His reasoning was reducible to three words: I say so.
dream of. This is corporate diplomacy at the moral level of insider trading, with After derailing efforts to factor Tiananmen into a long-term China policy,
national interests brokered like stocks on Wall Street. Kissinger worked assiduously to cancel MFN evaluations, thereby paving the way
The same applies to Kissinger's America-China Society, whose board includes for China's WTO entry. Clintonesque liberals, in thrall to corporate globalism,
Cyrus Vance (Secretary of State under Carter), William Rogers (Secretary of State joined in this effort to divorce commercial policy from human rights considerations.
under Nixon), Robert McF arlane (National Security Advisor under Reagan), Zbigniew Though neoliberals did not officially abandon the humanistic concerns of earlier
Brzezinski (National Security Advisor under Carter), and Alexander Haig (Secretary liberals, they relegated them to the future by clinging to the notion that Chinese
of State under Reagan). It was Haig who played the key role in formulating the affluence was a factory for democracy in the making.
Chinese-American Joint Communique, whereby the United States committed itself
to a one-China policy with limited and progressively declining arms sales to Taiwan.
Haig left office early to begin cashing in on his vital contribution to the PRC.74 What Affluence versus Freedom

escapes mention i s his contribution to US insecurity, since America almost certainly

There are two reasons why CEOs can easily sell China to the American public, and
would end up supporting Taiwan in the event of an invasion.
more importantly to American stockholders, as democracy waiting to hatch. First,
Kissinger can avoid registering as a foreign agent for China because he does
we usually see only the prosperous tip of the Chinese iceberg. That tip, moreover,
not directly accept fees from Beijing. What he sells is his ardent support for high
has a soothing familiarity about it. We feel at home in Chinese gated communities
tech transfers to China, unlimited "constructive engagement," and the (pre-WTO)
with names like Palm Springs, Park Avenue and Napa Valley.77 Second, we so
promotion of China's MFN (most-favored-nation) trading status without regard to
closely associate prosperity with political progress that Chinese high-rises become
human rights.75 In 1 997, with most of the Pacific Rim reeling from the aftershocks
symbols of political progress in the making. Peter Hitchens reminds us that a visit
of the Asian Crash, the Kissinger team was busy promoting China's well-timed
to East Berlin in the 1 980s was far less deceptive than a visit to today's Shanghai.
membership in the WTO. Part of his reward would be his October 200 1 appointment
In the former, repression was served on a plate of blatant "backwardness, shortages
as advisor to CNOOC, where he joined the inveterate PRC water boy Simon Murray,
and rationing. How reassuring it was that, a couple of miles to the West, society was
a former managing director of Hutchison Whampoa. Such glaring conflicts of
both more virtuous and more rich. In Shanghai, Beijing or Guangzhou, the problem
interest did not prevent Kissinger's sway over Bush II's China policy from exceeding
is the opposite . . . "78
Secretary of State Colin Powell's.76
The real specialty of the Chinese development model is in turning affluence
This fact offers a window into two power structures that Kissinger conjoins.
against freedom. China's miracle economy bears stark testimony to what is possible
Late in the Cold War, China "engagement" became a subset of geopolitical realism,
when a giant reservoir of cheap and powerless labor is put at the disposal of global
such that Kissinger's special relationship with the PRC won him appreciation within
capital. Nevertheless there is still the question of how far Sino-globalization can be
neoliberal ranks. He became the perfect corporate vehicle for downplaying, on
pushed before it is dragged down by the weight of its byproducts: graft, waste, and
environmental spoilage, not to mention a class divide that is fast becoming a model
72 Eagleburger was Secretary of State under George Bush, Sr. Scowcroft, founder of the
for global "development."
Scowcroft Group, was the National Security Advisor to both Presidents Ford and Bush, and
Beggars used to be arrested in China's showcase cities. They were easy to
from 1 982 to 1 989 was vice chairman of Kissinger and Associates. Bremmer, the managing
prosecute because most had fled rural communities and were therefore in violation
director of Kissinger and Associates from 1 989 to 2000, replaced General Jay Gamer as
Washington ' s chief administrator in Iraq.
73 "Kissinger Associates, I nc.," Source Watch (August 2005), Center for Media &
Democracy, http ://[Link]/[Link] ?title=Kissinger_Associates%2C_Inc.
74 Richard Bernstein and Ross H. Munro, The Coming Conflict with China (New York: 77 Yilu Zhao, "Class Division Takes on a New Form," The International Herald
Knopf, 1 997), p. 1 2 1 . Tribune (March 2, 2004), [Link]
75 Ibid., p . 1 07. tmplh&Articleld= 1 32043 .
76 See Mike Schelstrate, "Henry Kissinger: Shadow Government Secretary of State," 78 Peter Hitchens, "The Danger of China: Peter Hitchens Says that the Miraculous New
Globalresearch ca (March 22, 2003), Center for Research on Globalization, [Link] Chinese Economy is Not All That it Seems," Spectator, Vol . 3 00, Issue 9259 (January 2 1 ,
[Link]/articles/[Link]. 2006), [Link] 1 4772/[Link].
1 46 Development Without Freedom Sino-Globalization-Part 2 1 47

of the hukou registration system,79 which has been aptly described as one of the most it is capitalist, is also proto-democratic. The fact that all existing democracies are
effective "apartheid" devices in the world.80 Now there are simply too many violators embedded in capitalist economies does not prove that capitalism requires democracy.
to prosecute. Thus the rural/urban divide is reproduced inside cities. Inequality shot up Chinese capitalists have no incentive to press for democratic reform. Already China
50 percent from 1 980 to 1 997, the years of China's capitalist takeoff, and is rising even has the second largest economy in Asia, and as of 2005 it became the fourth largest in
faster today. While rural Chinese worry about basic subsistence needs, their country the world, having surpassed France, Britain, and Italy.87
has become the third largest consumer of luxury goods.81 The Asian Development Could this have happened without Tiananmen? How would things have gone if
Bank traces the advance of the country's Gini coefficient from 40.7 in 1 993 to 47.3 in China had added the "fifth modernization" of democracy to Deng's development
2004. A Gini coefficient of 40 is considered a red flag for social explosion.82 formula? Given the distrust that TNCs have shown for democratic development,
CCP centrists stake everything on the ancient Mandate of Heaven: their right it is clear that a democratic China could never have received the FDI boost it has
to rule by virtue of order and prosperity. But the Mandate also entails the right to enjoyed. Liberal idealists fail to see this because they were weaned on "third wave"
rebel by reason of poverty and disorder.83 To avert insurrection, Beijing must initiate democratic teleology. They refuse to believe that the unreformed Chinese system
reforms, but ever so carefully. It is edging close to a "can't win for losing" dilemma. could emerge as a leading model of global development. 88 The slightest trace
Elizabeth Economy makes the point that Beijing can do nothing about the country's of reform on the part of the Chinese government is taken as proof that the long
environmental crisis until it gets a grip on local government. But to do so it would awaited democratic "wave" is finally breaking on China.89 Typical in this regard is
have to call in reinforcements from NGOs, a free press, and the whole panoply of a Brookings Institution study that forecasts a sweeping anti-corruption movement
democratic horrors that would tum on Beijing itself.84 Only the timely abetment issuing from special governance zone (SGZ) experiments.9o Meanwhile all across
of the TNCs has kept Beijing on the winning side of the Mandate. The Western rural China anti-corruption protesters armed with nothing more potent than placards
"free market" has shamelessly favored China over the democratic competition. This and firecrackers confront lethal riot squads.91 And the Xiamen model of urban protest
has allowed the centrists to cover up the fact that nine percent of China's annual is adding fuel to these flames. If there is any hope for Chinese democratization, it
GDP-nearly all of its professed GDP growth-is presently lost to environmental springs from this spreading resistance, not from TNC-directed SGZs.
degradation.85 The bottom line is that the CCP has been bailed out by the TNCs.
Neoliberals dodge the moral dereliction of their China policy by taking it as
axiomatic that capitalism will generate democracy as a natural by-product. In their view The Making of a Chinese Century

China's authoritarian development is transitory.86 But after three decades of Dengism,

that assumption is wearing thin. It is time to retire the a priori notion that China, because In his Planet oiSlurns, Mike Davis scrutinizes the social and political demographics
of a world which, for the first time in history, is mostly within city limits. And
79 Jim Yardley, "China is Paying a Price of Modernization: More Beggars," The New York
Times (April 7, 2004), [Link]
80 Tim Luard, "China Rethinks Peasant ' Apartheid," BBe News (November 1 0, 2005), Perspectives Quarterly (November 7, 2005), http ://[Link]/articles/global/32I 1 l -
[Link] [Link]/go/pr/fr/-12/hi/asia-pacific/[Link]. 07 /05/jehangir_s.�ocha.
8 1 Zijun Li, "Luxury Spending: China's Affluent Entering ' Enj oy Now' Phase of 87 Keith Bradsher, "Chinese Economy Grows to 4th Largest in the World," The New
Consumption," Worldwatch (December 1 6, 2005), [Link] York Times (January 25, 2006), [Link] l /25lbusiness/worldbusiness/
chinawatchlstories12005 l 2 l 6- 1 . 2 [Link]. However, in per capita terms China remains a low-income country, ranking
82 Paul Maidment, "China's Dangerous Rich," [Link] (August 8 , 2007), http:// 1 00th in the world. See Zheng Bijian, "China's 'Peaceful Rise' to Great-Power Status,"
[Link]/2007/08/08/china-wealth-inequality-opinions-cx--.pm_0808gini�rin . . . Foreign Affairs, Vol. 84, No. 5 (September/October 2005), p. 1 9 (pp. 1 8-24).
83 See R. Taggart Murphy, "East Asia's Dollars," New Left Review 40 (July/August 88 See Thornton, Fire, op. cit., Chapter 6 .
2006), 60 (3 9-64). 89 In fact, a s Orville Schell stresses, China has its own history o f democratic activism
84 Elizabeth C. Economy, "The Great Leap Backward?," Foreign Affairs, Vol . 86, No. 5 reaching from the final years of the Qing dynasty up through the Tiananmen demonstrations
(September/October 2007), pp. 3 8-59. of 1 989. See Orville Schell, "China's Hidden Democratic Legacy," Foreign Affairs, Vol . 83,
85 Jennifer L. Turner and Lii Zhi, "Building a Green Civil Society in China," in the No. 4 (July/August 2004), p. 1 1 7 (pp. 1 1 6-24).
Worldwatch Institute State o/ the World 2006: China and India (January 2006), http ://www. 90 It may be that every mighty oak began life as an acorn, but it should also be noted
worldwatch. org/node/4000. that not every acorn becomes a mighty oak. On the SGZ projection, see Shang-Jin Wei and
86 This assumption was recently called into question by Jehangir S . Pocha in an Heather Mikiewicz, "A Global Crossing for Enronities": How Opaque Self-Dealing Damages
interview with Zheng Bijian, a close advisor to President Hu. Pocha stated that if present Financial Markets around the World," The Brookings Review, Vol . 2 1 , No. 2 (Spring 2003),
trends continue, China "will soon look like a fascist state." We of course agree, except that we pp. 2 8-3 1 .
do not share the residual optimism of Pocha's "if." See Zheng Bijian, interviewed by Jehangir 9 1 Howard W. French, "Visit to Chinese Anytown Shows a Dark Side of Progress," The
S. Pocha, "Unlike Previous Powers, China's Rise will be Peaceful; Democracy will Come-in New York Times (January 1 9, 2006), [Link] 1 l 1 9/intemationaVasiai
25 years: An interview with Zhang Bijian, Chairman of the China Reform Forum," NPQ: New 1 [Link].
1 48 Development W ithout Freedom S ino-Globalization-Part 2 1 49
in coming years nearly all population growth will be urban.92 It is extremely not exist if most Chinese had any real political voice. The natural
question to ask is
unfortunate that the formative stage of this transformation has taken place under how such a seeming ly dynamic economy could produce such rotten
politics. But that
the aegis of neoliberal globalization, which has stunted the kind of urban planning is putting the cart before the horse. As Minxin Pei stresses, the Chinese
system "can
and social security that could have humanized the process. Instead, the net effect deliver robust growth year after year because it is so rotten."9 6
of international programs has often been worse than no planning at all. Global In the high tide of the Asian miracle, Japan was the undisputed
"lead goose" of
institutions like the IMF and the World Bank have struck a decisive blow against the Asian developm ent. But after the Asian Crash and Japan 's "lost
decade," the search
egalitarian potential of globalization. While the Third World has been saddled with was on for a new Asian model . China was the prime contender,
capitaliz ing (quite
crippling debt, authoritarian regimes have received the helping hand they needed to literally) on its vast reservoir of cheap labor as wel l as the kind of
political "stability"
suppress domestic reform pressures. that only a police state could achieve. Then it happened: the collapse
of the US New
There was no hiding the fact that the chief beneficiaries of this support system Economy poured doubts on the notion that the new century would
be modeled on
have been its most empowered members at home and abroad. Early apologists the Washington Consens us. This put China's rise in a new light. Now
the question is
therefore turned to the artful argument of economic "trickle down." The only things not simply whether China can become Asia's new "lead goose,"
but whether it can
that consistently trickled down were corruption and indifference. As newly uprooted challeng e America on a global scale.
rural masses poured into cities, the middle classes bought real estate and became Even if the PRC slips from its geoecon omic pedesta l, much as
Japan did in the
the new slum lords of a burgeoning urban underclass. Classic liberal policies such 1 990s, the China development model may have a life of its own.
As TNCs awaken
as Kennedy's Alliance for Progress had counted on middle classes to become the to the coming eco-soci al meltdown in China, they will exit as fast
as they fled other
vanguard for political reform. In fact they have become a vast bulwark against social Rim countries at the time of the Asian Crash. The CPP/TNC
symbios is will then
democratization. collapse , exposing the Chinese "miracle" as an archetype of
maldevelopment.
Nowhere is anti-democratic globalism more pronounced than in the PRC, where Unfortunately this revelation may not come before the Sino-glo
balist growth
it helps to suppress the more than 200 million rural Chinese who have migrated model has been embraced by much of the developi ng world. With
or without PRC
to cities since the market reforms of the late 1 970s. Another 250 to 300 million hegemony, therefore, this could tum out to be a Chinese century.
are expected to follow the same path in coming decades. Within ten years this
paradigmatically rural country will have an urban maj ority,93 and a cultural revolution
to match. Already it is undergoing a capitalistic metamorphosis that would have
been unimaginable to Mao or to Old Guard China watchers like John K. Fairbanks,
whose liberal-left credulity made him miss the fact that Mao was anything but the
agrarian democrat he imagined.94 That delusion kept Fairbanks silent while 1 00
million Chinese perished under the Maoist reign of terror.
In their own way, neoliberal China watchers are no less credulous. They willfully
ignore the horrors taking place behind the Great Wall of double-digit growth.95
China's social chasm, however, has more to do with politics than economics. It could

92 Mike Davis, Planet o/Slums (New York: Verso, 2006), pp. 1 -2 .

93 Ibid. , p. 1 2 .
9 4 Fairbanks finally had his shock o f awareness with the savage suppression o f pro­
democratic protesters at Tiananmen. He could only say that Chinese affairs were too complex
for Westerners to understand. This is the same Fairbanks who once explained America's
failure in Vietnam by the fact that it did not have academic experts on Vietnam as it did on
China. Was this to suggest that Vietnam was easier to understand than China? On Fairbanks'
reaction to Tiananmen, see Cao Changqing, op. cit., and on his Vietnam comments see Morton
A. Kaplan, "Intellectuals and Foreign Policy: From John King Fairbanks to Paul Wolfowitz,"
online in The World and I (February I , 2004), [Link]
0 1 99-3 877 1 60 ITM.
y
95 But the are not alone. Many China watchers on the nominal Left are equally mute on
human rights issues. There is some irony in the fact that the plight of China's working classes
as well as its intellectuals is usually better covered by rightwing observers like Guy Sonnan 96 Minxin Pei, "Dangerous Denials," Foreign Policy (January/February 2005), http://
(L 'annee du Coqi Chinois et rebelles) than the Left. [Link]. comlstory/[Link]?story_id=2753&print= l .
 Chapter 8

The Price of Alignment:

India in the New Asian Drama

The Sino-Indian Factor

It has been widely accepted that China will be Asia's new "lead goose." There is, 'I
!
however, a maj or rival emerging in China's own backyard. India's new star status
raises the question of how these two demographic titans will deal with one another.
Can they respect each other 's spheres of influence in a bifurcated Asia, or will they
vie for supremacy on a pan-Asian scale? Clearly S outh Block (India's External
Affairs Ministry) was alarmed by the pro-China axis that linked Pakistan, Nepal,
and Bangladesh at the 1 3th Summit of SAARC (the South Asian Association for
Regional Cooperation) in Dhaka and by China's attempt to sideline India at the
December 2005 East Asia Summit in Kuala Lumpur. l
Needless to say, a certain degree of renewed Sino-Indian animosity would be
in America's interest. Even if Andre Gunder Frank is right about the dawning of
an Asian age, and even if Paul Kennedy is right about the relative eclipse of U S
economic power, Washington can still play a pivotal role in tipping the Asian balance
one way or the other. The great enigma hanging over Indo-American relations after
the Cold War has been S ino-American relations. Washington's vision of imminent
Chinese democratization began as naivete, but lives on as dogmatic denial. Not even ,, 01
,� ,

Tiananmen could puncture this neoliberal balloon.

Indians have good reason to wonder why Americans have showered FDI and
massive technological transfers on this archetype of undemocratic development;2
yet, given the growing clout of its corporate sector, India is starting to "engage"

I Mohan Malik, "China's Strategy of Containing India," PINR-the Power and Interest
News Report (February 6, 2006), [Link]
id=434&language_id= 1 . ASEAN nations, with the exception of Malaysia, overruled China's
attempt to exclude India's EAS participation. See Lijun Sheng, "China in Southeast Asia:
The Limits of Power," Japan Focus (posted August 4, 2006), [Link] [Link]/products/
topdf12 1 84.
2 They are likewise dismayed by the munificent aid and technological assistance that has
been showered on Pakistan, even when it was known that Pakistan was doing massive black
market trade in nuclear weaponry. For thirty years India was treated as a pariah nation, yet
in all those years they never produced anything comparable to Pakistan's A.Q. Khan scandal.
See Ashton B. Carter, "America's New Strategic Partner?," Foreign Affairs, Vol. 8 5 , No. 4
(July/August 2006), p. 40 (pp. 33-44).
1 52 Development Without Freedom

China in a very similar way. By 2005 the PRC had replaced

the United Arab Emirates
I The Price ofAlignment

The weak link in this otherwise impeccable strategy was Pakistan 's slippage into
chronically failed statehood. l o It took the combined efforts of China and America
1 53

partner, second only to the United States,3 and 2006

as India's second largest trading
ian friendsh ip year. For Timothy Garton Ash these two to keep their anti-Soviet buffer afloat, but the end of the Cold War removed any
has been declared the Sino-Ind
German y and America were to Britain in 1 905 .4 US incentive to continue the bailout. Instead, Washington began cultivating better
powers are to Washington what
the FICCI (Federat ion of Indian Chambers of relations with Pakistan 's nemesis, India. Even without much US assistance, India's
Business interests such as
to see the Sino-Ind ian relations hip move toward the geoeconomic rise has been impressive enough to disturb China considerably. Beijing
Commerce and Industry) hope
s" that now locks America into full engagem ent was no doubt relieved when 91 1 1 and the following "war on terrorism" pushed
same "econom ics-driven-politic
was taken in this direction with the ratificati on of Pakistan back into Washington's good graces. In the zero-sum world of S outh Asian
with China.5 In June 2006 a step
(FTA) in the disputed border zone. And, in the same affairs this could be expected to torpedo the US-Indian reconciliation. l I Delhi did
a China-India Free Trade Area
to j oin China, Russia, indeed take it as a hard blow when Washington began praising Islamabad. 1 2
month, the corporations were delighted when India was invited
nations at a meeting of the Shangha i Cooperation However, with the Soviet factor removed, and with China moving front and
Iran, and a host of Central Asian
was conspicu ously exclude d.6 Clearly this was center on the Asian stage, India could not afford cool relations with the "world's sole
Organization (SCO), where America
encirclem ent of China that Washing ton is promotin g. A superpower." Its diplomatic opening toward China was but a mask for its underlying
an attempt to fracture the
nce would have enormou s global repercus sions, angst. There was no reason to doubt that when India showcased its thermonuclear
sweeping China-India converge
a greater concern is capabilities in the late 1 990s, the target was not Pakistan alone. And, for the same
putting 2 . 3 billion people under one geoeconomic roof. But
ons. When Chinese Premier Wen Jiabao paid a four day reason, America has looked to India as a vital part of its neo-containment strategy
its geopolitical implicati
Minister Manmoh an Singh added a disconce rting note, toward China.
visit on India, Indian Prime
j oin with China to "reshape the world order." ? While Washington tries to prevent the emergence of a peer competitor globally,
suggesting that India should
there has been striking asymmet ry in this rapproch ement: while Beij ing seeks a multipolar global world combined with a unipolar Asia, with itself as the
So far, however,
raw materials , it exports electroni cs, machiner y and other regional hegemon. India prefers multilateralism on both levels, but of course concurs
China primarily imports
8 Meanwh ile it has worked diligently to prevent India from with the US resolve to curb China's regional ambitionsY As one Indian strategist put
manufactured goods.
t seat on the UN Security Council, which would be a maj or step it, Delhi envisions a tripolar world order by 2030, with China, India and America as the
gaining a permanen
escape from the South Asian horizon of its geopoliti cs.9 None of this maj or powers. But then he added, "we don't want a China- or a US-dominated world,
toward India's
na but if we had to choose, it would be easier for us to live with the latter." 1 4
comes as a surprise to South B lock. No one has forgotten how the first India-Chi
itself a Washington certainly reciprocates those feelings, and makes Delhi a special
accord went up in smoke. After the Sino-Indian War of 1 962, China made
The exception to its nuclear nonproliferation dictum. In open violation of restrictions
key power broker and agent provocateur in South Asia by way of Pakistan.
idea was to block Soviet southward encroachm ent while pinning India down with mandated by the Nuclear Nonproliferation Treaty, 1 5 India was able to sign a nuclear
a simmering conflict at its rear. America shared that goal on the anti-Soviet side, pact with Washington in July 2005. This allows for the sale of civilian nuclear fuel
giving added impetus to an eventual thaw in US-China relations. and technology to India. 16 A year later it test-fired its first long-range, nuclear-capable

10 The heinous nature of this failure was tragically exhibited in the October 2005

3 "China, India Move Closer in Trade," Asia Times (February 1 1 , 2005), http ://www. earthquake that claimed the lives of at least 1 7,000 schoolchildren when 1 0,000 Pakistani
[Link]/html. schools came crashing down, revealing the criminal negligence of the state in its choice of
4 Timothy Garton Ash, "Stagger on, Weary Titan," The Guardian (August 25, 2005), building materials and its indifference to basic safety standards. See David Montero, "The

[Link] [Link]/story/0,3604, 1 5 55 724,[Link]. Pakistan Quake: Why 1 0,000 Schools Collapsed," The Christian Science Monitor (November
5 Swaran Singh, "China-India Economic Engagement: Building Mutual Confidence," 8, 2005), http ://[Link].coml2005/ 1 1 08/p01 [Link].
CSH (Centre de Sciences Humaines) Occasional Paper, No. 1 0 (2005), from French Research 1 1 Mohan Malik, "The China Factor in the India-Pakistan Conflict," Parameters (spring
Institute of India, New Delhi. 2003), p. 36 (pp. 35-50).
6 It is worth noting that China's willingness to include India in the Shanghai meeting 1 2 Dennis Kux, "India's Fine Balance," Foreign AjJairs, Vol. 8 1 , No. 3 (May/June 2002),
reverses its determination to block India from joining the East Asia Summit of December p. 97 (pp. 93-1 06).
2005 . Against China, Japan had called for the inclusion of both India and Australia. See Hiro 13 Malik, "China's Strategy," op. cit.
Aida, "Japanese Asianism," The Wall Street Journal (July 1 4, 2006), http ://[Link] .coml 14 Nye, op. cit.
article---'printlSB 1 1 528228 1 65 1 [Link]. 1 5 See "A Cold War China Policy," The New York Times (November 1 9, 2005), http://
7 Joseph S. Nye, "An India-China Axis?," Project Syndicate (2005), http ://[Link] ect- [Link].coml2005/ 1 1 1 1 9/opinionl 1 [Link].

[Link]/print_commentary/nye20/English. 16 These sales were discontinued in the mid-70s, when India was caught applying them
to its secret weapons program. See "Still a Bad Deal," The New York Times (July 28, 2006),
8 Malik, op. cit.
http ://[Link].coml2006/07/28/opinionl2 [Link].
9 Ibid.
1 54 Development Without Freedom The Price ofA lignment 1 55

missile, the Agni III. 17 The Western press all but ignored the event, whereas it went illiterates),21 its development model offers some uniquely attractive features . For
"ballistic" over North Korea's similar missile test of July 2006. example, its consumer-driven economy has helped it to escape global recessions.22
While India's nuclear capabilities are sure to impact the Asian balance of power, The question is how much of this autonomy can survive its current globalist "reform."
economic development could be even more decisive. Very much like US- Soviet Will India succumb to the same democratic erosion that has attended globalization in
competition during the Cold War, Sino-Indian power politics is capped by the other developing countries?
possibility of mutually assured destruction. Nuclear parity shifts the contest to the Amartya Sen holds out hope that a country can have both its democratic cake
economic sphere. The question is whether this will be a simple GDP competition, and its globalization. Against the raw economism that neoliberals share with their
marked by another "race to the bottom" and an even greater spread between haves Chinese partners, giving the boot to democratic development, Sen insists that
and have-nots. Or, with democracy on its side, will Indo-globalization take a more freedom is not only conducive to but constitutive of development.23 GNP growth
progressive path than Sino-globalization has? alone would thus be a road to maldevelopment. Realistically speaking, however,
a country that did not show significant economic growth could not be taken
seriously as a development model. Because today's India offers both developmental
"Democracy" in the New India prerequisites, economic and political, it will be the prime test site for the alternative
Asianism that Sen propounds.
Much more is at stake here than economic expedience. A core issue is whether
Not only is India light years ahead of China in terms of personal freedom,24 it
democracy will prove an asset or a liability for fast-track growth. As the world's most
even competes in economic terms, with an average growth of 6 percent a year from
populous democracy, and its twelfth largest economy, India is where this issue will be
1 980 to 2002, and 7 . 5 percent from 2002 to 2006 .25 Unfortunately China and India
decided. Could democracy be a vital feature of economic development, as Amartya
both suffer from the undertow effect of mass deprivation. The World Bank estimates
Sen contends? If so, the PRe is setting itself up for a fall. It is confident, however,
that almost 1 . 5 billion people in the two countries combined subsist on less than $2
that Sen is wrong, given the fact that its political repression is bankrolled by TNCs
per day.26 To achieve high growth under these circumstances, elites in both nations
that prefer police state protections to the turmoil and unpredictability of democracy.
have resolved to cater mainly to affluent classes, eschewing policies that would
China's continued success will shatter the always dubious presumption (based on a
distribute wealth more equitably.
tendentious reading ofthe experience of Korea and Taiwan) that commercial success
In India's case this growth strategy writes off the 300 million Indians in dire
leads automatically to democracy and human rights. 1 8
poverty, and puts at risk every postmaterial virtue that the India model has to offer.
A democratic counter-model is sorely needed. Though Japan is commonly
Sen has made much of the point that democracy, coupled with a free press, all
dubbed Asia's most ' Western' state, thanks to its economic status, India has far better
but guarantees government responsibility. But that formula is hardly confirmed in
democratic credentials. 19 It is only necessary to compare its record to that of Pakistan
the case of India, where many on both Left and Right are starting to question the
to appreciate its democratic achievement,20 and some expect that in coming years
developmental efficacy of democracy. The patent fact is that Indian democracy has
it will even surpass Japan economically. Despite India's well-justified Third World
been sleeping on the job. It has not lived up to its implicit promise of providing
image outside its globalized sector (we need only mention its three hundred million
for the health and education of all Indians, and especially those in the country's
600,000 villages. Nor has it afforded the kind of basic protection to lower classes and
1 7 "India Test-Fires Nuclear-Capable Missile," The New York Times (July 9, 2006),
minorities that even a minimalist "night watchman" state owes all citizens. Under
[Link] s. comlaponline/world/AP-India-Missile- [Link].
1 8 The China model of democracy-free development is not only gaining converts in
Asia, but throughout the global South. In Cuba, for example, Fidel Castro's brother Raul is
a convert to the Sino-globalist commitment to capitalist development without freedom. See
Carsten Volkery, "A Visit with Cuba's Persecuted," Spiegel Online (August 3, 2006), http:// 2 1 Arundhati Roy, Power Politics (Cambridge, Mass . : South End Press, 200 1 ), p. 1 4.
[Link]/cache/internationaVO, 1 5 1 8,43003 8,[Link]. 22 Gurcharan Das, "The India Model," Foreign Affairs, Vol. 85, No. 4 (July/August
1 9 Even Pankaj Mishra, a leading critic of Indian development, concedes that India is 2006), pp. 2-3 (pp. 2- 1 6) .
far better positioned democratically than post-communist or Latin American nations. See 2 3 Amartya Sen, Development as Freedom (New York: Alfred A. Knopf, 1 999), p . 36.
Pankaj Mishra, "The Myth of the New India," The New York Times (July 6, 2006), [Link] 24 There is some danger, however, that the China model could make inroads into
nytims.coml2006107/06/[Link] ; and concerning Japan and India see C. Raja democratic India. Within a week of the July 1 1 , 2006 Bombay bombings, Indian authorities
Mohan, "India and the Balance of Power," Foreign Affairs, Vol . 8 5 , No. 4 (July/August 2006), began imitating Chinese methods of blocking Internet Web sites they deemed inappropriate.
pp. 24-25 (pp. 1 7-32). See Eric Bellman and Peter Wonacott, "Indian Government Blocks Web Access," The
20 General Pervez Musharraf, Pakistan's self-proclaimed President and the country's Washington Post (July 1 9, 2006), p. DO L
fourth military dictator, does not face the democratic obstacles that even Indira Gandhi 25 Das, op. cit., p. 2 .
yielded to in India. See William H. Thornton, New World Empire: Civil Islam, Terrorism, and 26 Pranab Bardhan, "China, India Superpower? Not so Fast ! ," Yale Global (October 2 5 ,
the Making o/Neogiobalism (Lanham, MD: Rowman & Littlefield, 2005), pp. 1 04-05 . 2005), [Link]
1 56 Development Without Freedom The Price ofAlignment 1 57

the spell of globalization, India is forfeiting the living economies that are its greatest Even when this tragedy is mentioned in the major media, it is set within a
wealth.27 paradigm of progress whereby agrarian suffering is cast as sad but inevitable collateral
First there was the Guj arat meltdown under the BJP, and now, under the resurrected damage. Early in April, 2006, just as the Sensex Index crossed the 1 1 ,000 mark, and
Congress Party, an equally monstrous and utterly unnecessary economic disaster is as hundreds of journalists covered India's Fashion Week, the annual suicide toll in
unfolding. Despite the country's impressive aggregate growth, almost 3 80 million Vidarbha (in eastern Maharashtra) rose above 400. Most papers and TV stations did
Indians presently subsist on less than a dollar a day.28 Most are Adivasis (native tribal not deign to mention this dark milestone.34 It was too commonplace to count as real
inhabitants) or Dalits (formerly known as untouchables). For these unfortunates the news during Fashion Week.
only real issue is their next meal. India is bisected by an invisible line between those Such neglect is a gift to the recruitment efforts of Maoist Naxalites across
who stand to profit from globalization and those who are getting fleeced. Vandana rural India. They are fishing in the same impoverished sea as Hindu nationalists
Shiva laments how every "living resource of the planet . . . is in the process of being have been,35 but with a bigger social net. The reason so little is known about this
privatized, commodified, and appropriated by corporations."29 By no means is resistance movement is that the government and media have done a fine j ob of back­
this rabid "incorporation" being achieved by way of the "free trade" policies that paging it, along with the rural plight that stokes it. That of course runs counter to
neoliberals harp on. Actual globalist policies are enforced by statist fiat. Sen's confidence in a democratic press. It turns out that his thesis applies best where
That is j ust one more reason why India's agrarian majority has no stake in the one establishment faction finds advantage in exposing the shortcomings of another
state. How could they, asks Arundhati Roy, "when they don 't even know what faction. This informational artillery exchange may work for famines, as Sen well
the state is?"30 To them "India" is just a word they hear at election time. For the documents,36 but it grinds to a halt when the interests of all major political players
two hundred million Indians without clean drinking water,3 ! democracy is j ust a happen to coincide.
legitimating mechanism for the country's privileged and semi-privileged classes. Consider, for example, the blanket exploitation of India's farmers, millions
The latter are riding the wave of globalist upward mobility into a lifestyle of ersatz of whom are being backed into an economic comer. Outsiders are dismayed by
Westernization, epitomized by the call center. Here, on clocks set to US time, reports of thousands of farmer suicides in an economy that purports to be booming.
legions of globalized hirelings imitate the very accents of Americans calling in But the rural crisis should not be news at all, as it has been brewing for decades.
with problems ranging from computer crashes to lost credit cards.32 The notion that Already in 1 967, when the Naxalites made their debut, Prime Minister Indira Gandhi
this subculture of bogus identity is the hallmark of a "New India" is too ludicrous acknowledged that the movement was but the tip end of a horrendous "socioeconomic
to warrant further comment. problem."37 The fact that this problem has been left to fester ever since says much
about the nature of Indian democracy.
The apathy of India's governing class has all but handed the Naxalites an
Rural Crisis invitation to expand their operations, recruiting villagers once known for political
passivity. Now the movement is active in 14 states, from the coastal South to the
What marks the New India, rather, is the slippage of a broad strata of the rural middle
Nepal border in the North.38 What must be recognized is that the current violence on
class into penury. Much of this downward mobility involves landed farmers who
the Naxalite side is largely reactive. Consider the case of twelve Adivasis killed in
were respected members of their village communities until globalist restructuration
January 2006 by police in the Jaipur district of Orissa. The local Adivasi population
broke on the countryside. With at least 1 00,000 farmer suicides between 1 993 and
was being forced to evacuate its ancestral land in order to make room for industrial
2003 ,33 India is in a crisis that its leaders hardly register. The proximate reason for
"development." Hundreds were fired on when they marched in peaceful protest.39
these deaths is a credit crunch and crashing produce prices, but the deeper cause is
gross indifference on the part of the power elite.
34 P. Sainath, "India Shining meets the Great Depression," The Hindu (April 2, 2006),
[Link]
27 See Vandana Shiva's concept of living economies and their relationship to Earth 35 Somini Sengupta, "Hindu Nationalists Are Enrolling, and Enlisting, India's Poor,"
Democracy in her Earth Democracy: Justice, Sustainability and Peace (Cambridge, MA: The New York Times (May 1 3 , 2002), [Link] l 3/intemational/asia/
South End Press, 2005), p. 5. 1 [Link].
28 Mishra, op. cit. 36 Sen, op. cit. , Chapter 7 .
29 Vandana Shiva, India Divided: Diversity and Democracy under Attack (New York: 37 Ramachandra Guha, "People vs People," Hindu Times (June 4 , 2006), [Link]
Seven Stories Press, 2005), p. 1 3 . [Link]/[Link]?article=[Link] 0. 1 8. 1 4 1 . 1 22/n . . .
3 0 Arundhati Roy, The Cost ofLiving (New York: The Modem Library, 1 999), p . 1 1 6. 3 8 Jason Overdorf, "India's Maoists Step Up Rebellion," Globe and Mail (June 8,
31 Ibid. 2006), [Link]
32 See Shashi Tharoor, "India Finds its Calling," Foreign Policy (March/April 2006), BNStor . . .
[Link] [Link]/[Link]?story_id=33 78&print= 1 . 3 9 '''Development' Aggression against the Indigenous in India," Analytical Monthly
3 3 Mishra, op. cit. Review editorial (February 1 8, 2006), [Link] [Link].
158 Development Without Freedom The Price ofAlignment 1 59
The victims' low status ensures that the event will soon be forgotten. Later, when the structural inertia of rural India precluded mass peasant rebellions like those of
some of them join the rebel cause, their actions will be reported as unprovoked acts China.45 The absence of that risk factor left urban elites secure enough that they felt
of aggression. free to quarantine the rural sector politically. For all practical purposes postcolonial
At one point the epicenter of this resistance was Andhra Pradesh, but presently India remained two nations, one urban and one ruraL
there is equal strife in the hills and valleys of Chhattisgar� , whe�e state pohce fea� to
.
patrol . Either to avoid the appearance of another KashmIr, or SImply to economlz� ,
the government has opted for a less formal counter-insurgency. As of Jun� 2005 It In Gandhi's Footsteps

unveiled a paramilitary program known as Salwa Judum, whose purp � se IS �l� too
clear. With the encouragement of Raman Singh, Chhattisgarh's BJP ChIef MInIster, That is exactly the outcome that Gandhi tried so hard to avoid. His Sarvodaya
approximately 3,000 "special police" were issued arms and licens� d to fi ght terror (uplifting all) principle sought to integrate India by closing the gap between urban
.
with terror. Unfortunately they got little or no training in how to dlstmgmsh arm� d
. dynamism and rural stagnation. Mistaking Gandhi's defense of rural heterodoxy for
foes from locals whose alleged support for the Naxalites was extorted. Qmte anti-modernism, Moore missed the fact that Gandhi's village-centered ideology,
predictably this "fire with fire" strategy has backfired, producing a cycle of violence much like Shiva's "earth democracy," not only offered a holistic vision of India's
verging on civil war. In the first year of Salwa Ju �um ope��ti�ns a� out a th�usand polity but a practical blueprint for genuine democratization. This was the only social
innocent civilians were slain and another 40,000 dIsplaced, WIth tnbals gettmg the strategy that had any hope of bringing the rural masses into the new democratic
worst of it. mainstream. Though Gandhi was no pastoral retreatist, his respect for the core values
The rebels, likewise, are drawing a non-negotiable line in the sand. One � s elt�er
. .
of rural life lay at the heart of his principle of Swadeshi (local self-sufficiency).46
with them or against them, and the latter can be a death sentence. A case m pomt Nehru's macro-modernism, by contrast, sacrificed those values in favor of the
was the April 2006 abduction of 40 tribal villagers in Chhattisgarh, 13 of whom had urban hubris that marked his vaunted Planning Commission.47 This elite was only
their throats CUt.41 One sees less and less of the former Naxalite effort to support too pleased to take up where the British left off. It is almost comical that some
local struggles for social justice. Instead of reform, with its focus on incre �e�tal neoliberal pundits charge Nehru with killing growth by keeping Gandhism at the
.
goals, the rebels now concentrate on violent revol�tion.42 Es�ablishment polItICians heart of his program.48 To the degree that it was diplomatically possible, Nehru did
grab this up as vindication of their own brutal tactI:s. Chhattisgarh Home Secret�ry everything within his power to relegate Gandhism to the museum of ancient history.
B.K.S. Ray points to the extremist turn ofthe Naxahtes as proofthat they are nothmg Blaming Gandhi for the Congress Party's bad governance is rather like blaming
but "goonda" thugs or terroristsY But the fact remains that the government �ad forty Jesus for the Inquisition or Marx for the Gulag Archipelago.
years to redress the underlying conditions that draw the local poor to t�IS cause. What Gandhi and Nehru did share, to their lasting credit, was a commitment to
. . . keep India free from the clutches of international powers. That resolve did not result
Indeed, without the Naxalite rising this social injustice would stIll be mVIslble to the
world and even to many Indian urbanites. in the complete economic dysfunction that neoliberals allege. One of the biggest
V;ndana Shiva stresses that rural indigents have not so much been "left behind" contributors to India's "Hindu rate of growth" was the Planning Commission's
as robbed. What is pushing them to the brink of despair is much the same economic bureaucratic ineptitude. Nor was that growth rate so negligible when it is born in mind
restructuration that is bankrupting small farmers throughout the developmg worl�.
. that most of the country's agriculture production has remained invisible to standard
The irony is that well-meaning economists like Jeffrey Sachs now offer thIS economic analysis. As Shiva notes, household and local work hardly registers as
same globalist package as a blanket cure for global povert�.44 Almost in:ariabl� productive activity, and seeds saved from previous harvests are not counted as a
such programs are run by urban elites who have far mor� m common With their productive investment. Thus a large component of the nation's rural economy has
counterparts half a world away than with the farmers at theIr back door.
. .
This urban-rural divide, however, is hardly the original product of globalIzatIOn.
45 Barrington Moore, Jr., Social Origins of Dictatorship and Democracy: Lord and
It is rooted in decades of Indian maldevelopment, whereby rural Indians got l �ttle Peasant in the making of the Modern World (Boston: Beacon Press, 1 966), p. 3 1 5 .
more from independence than domestic colonialism. In Barrington Moore's VIew, 4 6 Ela Gandhi, "Gandhi and Development," Resurgence, Issue 2 1 4 (September/October
2002), [Link] 1 [Link].
47 See Sudipta Kaviraj , "Dilemmas of Democratic Development in India," in Adrian
40 Overdorf, op. cit. Leftwich (ed.), Democracy and Development: Theory and Practice (Cambridge, UK: Polity
.
4 1 "Indian Maoists Slit Throats of 1 3 Hostages," Reuters (Apnl 29, 2006), [Link] Press, 1 996), p. 1 1 7 (pp. 1 14-38).
[Link]/thenews/[Link]. 48 Val MacQueen holds, for example, that for "70 years Mohandas Gandhi's myopic
42 Overdorf, op. cit. vision of backward-looking socialism . . . was accepted as revealed wisdom by a string
43 Ibid. of Indian prime ministers, starting with his acolyte, Nehru." Val MacQueen, "The Most
44 See Vandana Shiva, "Two Myths that Keep the World Poor," Canadian Dimension Optimistic Country in the World," TCS (Technology, Commerce, Society) Daily (June 28,
(November 29, 2005), from [Link] 1 92 . 2006), [Link]
1 60 Development Without Freedom The Price ofAlignment 161

been virtually erased from its official GDP. Worse still, policies that are designed to carry stock market ticker updates at the right hand comer o f the screen, which for
accelerate GDP growth often do grave injury to hidden economies ofthe rural sector, most viewers can only have a "let them eat cake" connotation. A large part of the
as when biotech firms push for agricultural mono cultures at the expense of local millions applying for the National Rural Employment Guarantee Programme are
diversity and sustainability. landed farmers who would have been men of some status a decade ago. With this
Shiva reminds us that before the Green Revolution introduced its agricultural supplement they are trying desperately to hold onto their rural world. Less fortunate
straitjacket, more than 200,000 kinds of rice were cultivated in India.49 These ones who give up entirely on rural life and flee to the cities may be jumping from
had proven their survivability in the face of floods and draught, pestilence and the frying pan into the fire, for plant closings and rising urban unemployment have
every manner of disease. On top of that, these indigenous strains were cheap, not been the curious byproducts of India's New Economy. Cities such as Mumbai put on
requiring special seeds and fertilizers available only from TNCs . Capital-intensive a shining global face by way of thousands of shanty-town demolitions. 55 Where are
agribusinesses brought in "Golden rice" to combat vitamin A deficiency, while the these outcasts to go, back to the countryside?
dozens of natural greens that produced a surplus of Vitamin A were forced out of The fact is that-with the notable exception of the socialist-leaning state of
production, all in the name of progress. 50 Kerala-Indian democracy has been an appalling failure in terms of distributive
Prior to its globalist tum, India's economic growth was low but steady,51 justice. That exception, as Sen duly observes, is crucial to any assessment of
and came with no strings attached. It was obvious after the Asian Crash that the where Indian development went wrong. Gunnar Myrdal got to the heart of India's
country's avoidance of export-driven growth had been prudent, if excessive. Its developmental dilemma by noting that while few nations in the modem era have
global alignment since the early 1 990s has brought high growth (even comparable to been launched on such high progressive hopes as this one was, the bottom line was
China's, once Chinese statistical juggling and environmental rape is discounted) but that all the new leaders were drawn from the upper class. Most flatly equated their
has also widened the already vast chasm between haves and have-nots. This should own good fortune with the nation's.56 Vote or no vote, the great majority of Indians
come as no surprise. That is what globalization does. were as divorced from the policy concerns of the new regime as they had been from
Clearly India's greatest economic problem is distribution rather than growth. the Raj .s7
Those who are most at risk are never the ones reaping the profits. Four decades Gandhi stood up for these invisible people, beseeching Indian leaders-as he
of macro-planning evaded the most rudimentary needs of the general population: expressed it in his memoirs-to "recall the face of the poorest and the weakest man
a decent supply of food, clothing, housing, health care, sanitation, and primary whom you have seen and ask yourself if the step you contemplate is going to be
education. In rural and urban areas alike, these public goods were distributed on the of any use to him." This pre-Rawlsian injunction was too much for even the more
basis of political patronage, with women getting the worst deal of all. By the late scrupulous leaders of the fledging democracy_ Much as most American revolutionary
1 9 80s one fifth of the urban population and a third of the rural population had fallen leaders were arch-conservatives, and even Simon Bolivar was a political regressive
below the poverty line, defined in the strict sense of caloric intakeY except for his anti-Spanish animus, nearly all of India's independence leaders were
Even today half of all Indian children suffer malnutrition. S3 One might ask how wolves in sheep's clothing where village India was concerned.
this is possible in a booming economy, where growth rates have risen to 7 or 8 In his sincere but misguided progressivism, Nehru thought it necessary to
percent per year, and are expected to exceed 1 0 percent in the near future. 54 The real purge Gandhism from Indian modernism. This set the stage for a tragic sundering
question, though, is "booming for whom?" Even non-business TV channels often of the entire nation: not just between Hindus and Muslims, or city and country,
but ultimately between haves and have-nots. As the Dalit Panther Manifesto put
it in 1 97 3 , the "present legal system and state have turned all our dreams into
49 Vandana Shiva, Stolen Harvest: The Hijacking ofthe Global Food Supply (Cambridge,
MA: South End Press, 2000), p. 84.
50 Bengal women commonly cultivate more than 1 50 such greens. See Vandana Shiva, 55 Sainath, op. cit.
"Globalization and Poverty," Resurgence, Issue 202 (October 2000), [Link] 56 Gunnar Myrdal, Asian Drama: An Inquiry into the Poverty of Nations, Vol. J (New
orglresurgence/issues/shiva202. htm. York: Pantheon, 1 968), p. 273.
5 1 The Indian economy grew at an average annual rate of 1 .7 per capita from 1 950-5 1 to 57 On this much Myrdal and Sen can concur. Where they split is on the remedy. Having
1 990-9 1 , as compared to a 0 to 0.4 rate from 1 880 to 1 947. And in the period ofthe most intense little of Sen's faith in social democracy, Myrdal could only hope for a better model of
government planning, from 1 950 to 1 964, there was a significant acceleration in industrial enlightenment elitism, closer to Nehru than Gandhi. If that was still possible in India, it was
growth. See Jayati Ghosh, "Development Strategy in India: A Political Economy Perspective," extremely unlikely in Pakistan, which Myrdal saw as its culturally handicapped. Like Sen,
in Sugata Bose and Ayesha Jalal (eds), Nationalism, Democracy and Development: State and Myrdal underscored the non-economic determinants of development, but he was more prone
Politics in India (Oxford: Oxford University Press, 1 999), p. 1 66 (pp. 1 65-83). to see these determinants as permanent barriers to development. And the case of Pakistan,
52 Ibid., p. 1 69. as Mohammad Omar Farooq observes, seems to validate this judgment. See Mohammad
53 Mishra, op cit.
. Omar Farooq, "Development Experience of Bangladesh in Gunnar Myrdal's Asian Drama
54 Girish Mishra, "Infatuation with Economic Growth," Znet (January 2, 2006), http:// Perspective," presented on May 6, 2000 at the Bengal Studies Conference, [Link]
[Link].orglContentlprint_article.cfm?itemID=9445&sectionID= 1 0. [Link]/writingslq-academic/[Link].
1 62 Development Without Freedom The Price ofAlignment 1 63

dust."5 8 From this desolate vantage the only remaining road to emancipation would Clearly more is involved here than a simple quest for hydraulic power. As Karl
be through some form of revolution; but since India had never had an industrial Wittfogel argued in his classic 1 957 study of hydraulic oppression, the control of
revolution, it lacked the proletarian solidarity that urban-based popular resistance irrigation systems can be an all too potent political device. However, as Shiva points
would require. Meanwhile caste prej udices dissolved any possible rural solidarity. out, traditional irrigation systems in India were remarkably free of the centralized
Under these circumstances the full politicization of the countryside would almost power politics that Marx and Wittfogel associated with hydraulic societies.64 Far
certainly have moved the country in a reactionary direction. from being liberatory, Nehruvian centralism and now globalization have imposed
Only Gandhi had the wherewithal-the cartographic skills, so to speak-to put the the hydro-centralism that traditional India managed to avoid. Following in Gandhi's
rural masses on India's political map in a non-reactionary manner. He well understood footsteps, Medha Patkar (founder of the Narmada Bachao, or Committee to Save
that simple rural empowerment could backfire. What he called for, therefore, was the Narmada) has fought indefatigably to halt dam projects on the Narmada River.
not just nonviolent revolution but also a multicultural Renaissance. That is why In the spring of 2006 she went on a long hunger strike to protest the displacement
many are now re-discovering in Gandhi a way to bridge the ethno-religious divides of another 3 5 ,000 farmers along the river.65 What Narmada Bachao is ultimately
that threaten India's political integrity. Some believe that this Gandhian heritage contesting is the belated "hydraulization" of Indian culture and politics. Wittfogel 's
holds vital lessons for the West as well.59 Rajeev Bhargava rightfully complains that argument may not have applied to traditional India, but it perfectly fits the ravages
Western scholars such as Will Kymlicha date the origins of multiculturalism from of current Indo-globalization.
Canada's experiment of 1 97 1 , totally ignoring the Indian experience.6o Moreover,
I��

under the spell of globalization, India's own leaders ignore Gandhi's contribution. ' lUi
�,

Indo-Glob alization and the BJP/Congress Pact "

The irony is that these self-described cosmopolitans are too parochial to grasp the ..
, �,
global significance of Gandhian pluralism-this at a time when, as Bhargava notes, I R'�

�Il
This village-be-dammed policy is tantamount to class war, but by no means are its
all societies are "becoming like India. "61
victims limited to the countryside. Lower class urban communities can also have a
Suffice it to say that Gandhi was far ahead of his time. Even Moore had to
"village" character, and they are equally at risk, especially when their inhabitants
grant that Gandhi's theoretical stance was not regressive in the usual sense, as it
happen to be Muslim. The host of "Chota Pakistans" that dot India's cities are
was implicitly anticapitalist and patently anti-imperialist. Where everything that is
now under full assault. Such Muslim ghettos once blended easily with their Hindu
not "modernist" (where "modem" connotes opposition to India's village world) is
counterparts, sharing festivals and public celebrations, but increasingly they are
defined as backward, Gandhi could only be classified as "conservative. " Even today
sequestered and pushed into abj ect poverty. Bullied by Hindu police, and denied
70 percent ofthe Indian population lives in the countryside, 1 1 0 million being farmers
basic municipal benefits such as running water, these urban "villagers" are cast as
and another 500 million having their livelihoods tied to agriculture less directly.62
dirty people who deserve their lot.
Millions of farmers are now cast as regressives because they have no place in
Theirs is simply the most glaring case of Muslim disempowerment. The average
the capitalist agribusiness that the WTO calls India's future. Gandhi opposed such
Muslim income is 1 1 percent below the national average, and that gap widens when
macroism, both foreign and domestic, whereas Nehru officially opposed foreign­
government services such as education are added to the scales. Part of the problem
dominated development but in practice mimicked Soviet macroism. So it was that
is that Muslims are so poorly represented in politics and public administration,
over 30 million people were displaced over a fifty year period as hundreds of village
including the police and armed forces, that their legal rights are all but nullified.66 The
worlds were inundated by mega-dams.63 The process continues unabated.
BJP has turned this bigotry into a basic operating principle, but that only amplifies an
injustice that the Congress Party has quietly condoned for decades.67
58 Quoted in Gail Omvedt, Reinventing Revolution: New Social Movement, and the
Socialist Tradition in India (London: M.E. Sharpe, 1 993), p. 47.
59 Several of these revaluations are contained in D.P. Chattopadhyaya (ed.), Vol. 1 0, Part
7 of Political Ideas in Modern India (New Delhi: Sage India, 2006). Concerning the Gandhian ultra-conservative side, she more than halves that number, settling on the figure of 33 million
model of transculturalism see especially Rajeev Bhargava's contribution. displacements in the last 50 years. See Roy, Cost, p. 1 7.
60 Rajeev Bhargava, "India's Model: Faith, Secularism and Democracy," Open 64 Vandana Shiva, Water Wars: Privatization, Pollution and Profit (Cambridge, MA:
Democracy (November 3, 2004), [Link] South End Press, 2002), pp. 1 22-2 3 .
j sp?id= 1 &articleID=2204. 65 Scott Baldauf, "Gandhi Evoked for All Manner of Causes," The Christian Science
61 Ibid. Monitor (April6, 2006), http ://[Link]/2006/0406/p07s02-w [Link].
62 Mishra, "Myth," op. cit. ; and Scott Baldauf, "Soft spot in India's boom: the 60 66 Dionne Bunsha, "Living through Horror," The Hindu (July 20, 2006), http ://www.
percent tied to farms," The Christian Science Monitor (June 27, 2006), http ://www. csmonitor. [Link]/thehindulbr/2006/06/20/storiesI2006062000 54 1 5 00 .htm.
com/2006/0627/pO 1 [Link]. 67 There are, however, huge differences in the two parties' degrees of discrimination.
63 David Harvey, The New Imperialism (Oxford: Oxford University Press, 2003), p. 1 7 8. In May 2006, for example, the BJP staged marches in Delhi to protest the Congress Party's
The real number, as Arundhati Roy notes, is probably around 70 million, but to err on the attempt to increase the number of Muslims in the armed forces, and more generally to contest
1 64 Development Without Freedom The Price ofAlignment 1 65
In 1 995, when the Hindu nationalist Shiv Sena Party gained power in the state of resistance in the nonviolent tradition of Gandhi. Given their chronic desperation,
Maharashtra, it promptly renamed Bombay as Mumbai, symbolically expelling the the apparent passivity of India's rural masses seemed to confirm Marx's disparaging
transculturalism that the word Bombay signified. But the vortex of anti-Muslim hostility verdict on them. With certain rare exceptions, such as the Telangana rebellions of
would be the state of Gujarat, where the radical Hindu BJP holds complete sway. the late 1 940s,7 1 the story has been one of acquiescence in the face of monumental
After the infamous riots of 2002, Muslim ghettos sprang up as a desperate defensive poverty and exploitation. Although Barrington Moore recognized the revolutionary
measure, their inhabitants being afraid to return to their native villages. Gujarat is potential of the Indian peasantry, their actual conduct earned them a place in his
simply the most exposed crag of a national crisis. Reputable sources report that the classic study of peasant resistance only as a negative case . Not surprisingly he
country's new anti-poverty program-promising up to 1 00 days of employment per blamed much of this passivity on Gandhi.
year to the rural poor-is in practice excluding many of those who need it most, such Without defending Gandhi, subaltern scholars have challenged Moore's negativity
as the Muslims who already face discrimination from every side.68 on the question of rural rebellion. Michael Adas counters such revisionism by noting
This systematic suppression of Muslims has a functional purpose beyond its the paucity of full rebellions in India.72 His argument made sense at the time of his
religious motives. As poverty deepens across rural India, the Hindu majority, which writing, in the late 1 980s, but has been negated by the recent Naxalite explosion.
could easily j oin the Naxalite cause in full revolution, is adroitly diverted. The Another side of his thesis, however, has even greater application today. Adas astutely
hostility of the Hindu-underclass is sated at the expense of helpless Muslims.69 For concluded that the relative absence of violent protest is best understood not in terms
all its public aversion to the BJP, the Congress Party elite is in fact a beneficiary of of rural idiocy (Marx) or Gandhian passivity (Moore), but as evidence of a system of
the BJP 's Hindutva (Hindu fascist) politics. The Congress is made to look benign ongoing negotiation that reduced the pressure for rebellion or revolution.73
by comparison, while in fact its neoliberal program of dispossession through The current breakdown of this mediatory system goes far to explain the kind of
privatization, which is the real source of the new sectarian warfare, proceeds apace. resistance we are now seeing. The increasing potency of the Naxalite movement bears
Like the British before, the Congress elite has defined progress as profits flowing testimony to globalization's impact on the rural heart ofIndia by way of agribusiness,
to a privileged c lass. When the end of the Cold War deprived this elite of its Soviet dam financing and the WTO-directed forfeiture of trade protections, especially where
prop, the way might have been paved for a "Senian moment," when domestic as well agricultural products are concerned. Adding insult to injury, the corporate take­
as foreign colonialism could at last be expelled. To avert that dread outcome India's over of rural India is proceeding under the ironic guise of "eliminating poverty." In
power elite once more looked outside itself for a prepackaged development model, Arundhati Roy's words, this subterfuge is "a mutant variety of colonialism, remote
this time on the capitalist side. As it had in China and Southeast Asia, globalization controlled and digitally operated."74
came to the rescue of the Old Guard.
Again the rural masses found themselves political exiles, and this time their
very livelihoods were under siege. Agro-industry has little need of them, but the "ReOrienting" India

urban New Economy has even less. Out of 400 million workers nationwide, only 1 .3
That remoteness removes the last shred of ethical restraint from the macroism that
million have any place in the new info tech and busines s services . Other developing
Nehru implanted at the expense of Gandhism. This virtual war on "small things" (to
countries have created labor-intensive industries that can absorb surplus labor,7° but
borrow Roy's terminology) has enjoyed the ful l approval of world opinion on both
India, modeling itself on the American New Economy of the 1 990s, has opted for
Right and Left. Only now is a theoretical foundation taking shape that could put
high-tech development. Rural refugees and urban indigents are left in the lurch.
Gandhism in a positive light; for the modernism that declared Gandhism defunct is
Having slammed the developmental door on most of its citizens, India's ruling
steeped in the same orientalist bias that Andre Gunder Frank traces from Marx to
classes cannot risk the repercussions of genuine democratic politics. The more they
Huntington. Frank's determination to "ReOrient" social thought affords theoretical
globalize, the more they will have to dismantle the nation's democratic foundations.
space for the retrieval of non-Western visions of the good society, free at last from
Thus India is already gravitating toward the i lliberal devices of Sino-globalization.
the modernist prism that treats not only Gandhism but most of Indian culture as an
In the absence of any democratic recourse, the Naxalite upsurge is not surprising,
yet it is an aberration in terms of Indian social history. For decades theorists of
rebellion and revolution have taken a dismissive attitude toward Indian social
7 1 See Michael Adas, "South Asian Resistance in Comparative Perspective," in Douglas
Haynes and Gyan Prakash (eds), Contesting Power: Resistance andEveryday Social Reactions
the present government's "soft" approach to terrorism. See Scot Baldauf, "Gandhi Evoked for in South Asia (Berkeley, CA: University of California Press, 1 99 1 ), p. 292 (pp. 290-305).
All Manner of Causes," op. cit. 72 Ibid. , p. 296.
68 Anuj Chopra, "Hindu, Muslim Ghettos Arise in Guj arat," The Christian Science 73 Ibid. , p. 302.
Monitor (July 5, 2006), [Link] 74 Roy, Power Politics, op. cit. , p. 1 4.
69 Ibid. 75 Andre Gunder Frank, ReOrient: Global Economy in the Asian Age (Berkeley, CA:
70 Mishra, "Myth," op. cit. University of California Press, 1 998), pp. 15 and 1 9.
1 66 Development Without Freedom The Price ofAlignment 1 67

obstacle to development. Nehru's approach to modernization has amounted to an waiting arms of Naxalite resistance. The unintended effect of the Naxalite upsurge
orientalist war on India itself. could be a more egalitarian democratic politics. Only this threat, it seems, can relieve
Sen notes how that same prismatic distortion led to a gross misinterpretation the social pressures that are pushing India toward a civil war that could make the
of his mentor Rabindranath Tagore. Like Gandhi, Tagore was either dismissed as Hindu/Muslim conflict seem almost tame. This is hardly the route to democratic
un-modern or lauded for his primitivism. Either way he is pressed into a convenient development that Gandhi would have chosen, but is there any other?
orientialist stereotype. Gandhi and Tagore were either vilified or valorized for the Force alone will never suffice. Sen and Mishra, the pluralist heirs of Gandhi, look
wrong reasons, the one being regarded as a charka-obsessed traditionalist, while the to the richness of India's multifarious traditions as the ultimate safeguard against
other was taken for a classic Asian mystic or wizard.76 the ravages of globalist integration.78 To achieve Indo-globalization by sacrificing
The same procrustean logic that mistook these alter-modernists for anti-modernists the best of India's traditions would be a very hollow accomplishment. There is still
wrote off India as a whole. Urban elites in both India and the West treated rural India hope, however, that India can j oin the world on its own terms. In that case Indo­
as a cultural backwater that was best swept away, or sunk behind Nehruvian mega­ globalization would bear little resemblance to S ino-globalization, and developing
dams. But Nehru was right on one point: there was no way to reconcile Gandhi with countries would finally have an authentic democratic role model.
ordinary development. Any return to Gandhism, which is to say Indian pluralism,
must be premised on some form of postdevelopment. So too, Sen's "development­
as-freedom" thesis will be a hard sell in the Third World without a democratic case­
in-point. India will be either the proving ground or the disproving ground for neo­
Gandhism and Senism alike.
There is no question that India is now making its mark on the world, but which
India is this? Pankaj Mishra points out how middle-class India likes to cast itself as
the one and only voice of the future, with all other Indias declared moribund.77 It is
this bourgeois monolith that has given India the bomb and is fast indenturing it to the
global market. Like the agro-industrial monocultures that Shiva deplores, the nation
is being streamlined. At first glance this growth engine may seem impressive, but
India's astonishing cultural variegation, like its 2000 strains of indigenous rice, has
no place in current Indo-globalization. Agrarian biodiversity is simply the canary
in India's developmental mine shaft. The biggest loser of all will be democratic
pluralism, which is fast giving way to the political equivalent of TNC rice.
Oddly this transformation poses no problem for the radical Right. BJP Hindutva
has no trouble reaching an accommodation with global capitalism, just as CPP elites
in Beijing have had no trouble striking a symbiotic accord with capitalist elites in the
West. In this sense Sino-globalism and Indo-globalism are on the same track. The
difference is that India still possesses the formal apparatus of democracy. Once before,
when Indira Gandhi overlooked this fact, the Indian equivalent of People Power came
out of hibernation and struck down the tyranny she clearly had in mind.
Again, in May 2004, a unexpected popular recoil against Hindutva and fascist
globalism threw the BJP out and restored the Congress Party. The fact that the
anti-Hindutva side of that popular reaction has been honored does not mean that
its antiglobalist side has been put to rest. Tragically it has been pushed into the

76 Amartya Sen, The Argumentative Indian: Writings on Indian History, Culture and
Identity (New York: Farrar, Straus and Giroux, 2005), Chapter 5 .
7 7 Pankaj Mishra, " A New Sort o f Superpower," New S ta tesman (January 3 0 , 2006),
[Link] newstatesman.coml20060 1 3 000 1 5 . From this vantage, Indian history is something 7 8 Concerning the cultural side of this pluralism, see especially Amartya Sen, The
to escape, which is exactly how Fukuyama saw history in general. Unlike Fukuyama, Argumentative Indian: Writings on Indian History, Culture, and Identity (New York: Farrar,
however, India's anti-historicists of the Right see democracy as an invitation to disorder and Straus and Giroux, 2005), and Pankaj Mishra, An End to Suffering: The Buddha in the World
mismanagement. (New York: Farrar, Straus and Giroux, 2004).
 Chapter 9

The Japan Model Goes Global :

A New Reverse Course

Sanpo I I : T h e Tyranny of Managed Consent

The statist ideology that came to be known as "Asian values" had its trial run in
postwar Japan. Any attempt to cast this illiberal growth model as "nonnal" for Japan
will run aground on the nation's labor history. Activistic unions staged more than
250 strikes per year in the 1 920s. Even the military dictatorship that took over in
1 93 8-disbanding all unions and funneling workers into Sanpo, the all-embracing
Industrial Patriotic Society-could not extinguish the spirit of social democracy that
drove unionization. Its robust survival was demonstrated by the tidal wave of re­
unionization that swept Japan after its surrender in September 1 94 5 . Within four
months twelve hundred independent unions had enlisted nine hundred thousand
members, and by the end of the 1 940s that number had swelled to 6.7 million, or 5 6
percent of the workforce. ! Any political process that did not reflect this liberal-left
voting bloc could hardly be called democratic.
For a fleeting moment Japan did have its "Tokyo Spring," the liberal democratic
interlude that showed how different Japanese development could have been. The
1 947 "reverse course" erased all that, restoring much of the same power structure
that had taken the nation to war. This reactionary tum was in line with America's
geopolitical agenda, and could be described as the indigenization of US policy; but
even more so it was spawned by a Japanese elite that was more threatened by "Tokyo
Spring" refonnism than by US hegemony. This resurgent ruling class successfully
enlisted America in its private war on democratization.
Shigeru Yoshida (who became prime minister in May 1 946 and again in October
1 948, remaining in office until December 1 954) traced the tragic blunder of the
war to the failure of Japan 's prewar leadership to march in step with prevailing
international power relations. Yoshida's grand strategy was to couple conservative
elitism with Washington-directed internationalism. By focusing all its energy on
economics and very little on defense, Japan could tum the tenns of defeat into
victory. The advent of the Liberal Democratic Party (LDP) in 1 95 5 put the old
warlords in control of a new model of authoritarianism: the tyranny of managed
consent. By the late 1 95 0s some Americans already thought the postwar econo­
state of Japan was getting too good a deal, and the Eisenhower administration

1 Patrick Smith, Japan: A Reinterpretation (New York: Pantheon Books, 1 997), p. 23.
1 70 Development Without Freedom The Japan Model Goes Global 171
was starting to regret the inclusion of Article 9 (which de-militarized Japan) in the Compared to Kishi, Yoshida could pass for a moderate.8 Kishi
's attempt to run
1 947 Constitution.2 the country the old fashioned way made him a lightning rod for
mounting opposition
In fact, as Francis Fukuyama observes, the legitimacy ofAmerica's vanguard role after his election in 1 95 8 . By the spring of 1 960 hundreds of thousan
ds of protesters
in the Far East rested largely on Article 9. Japan's interests were also well served, were demonstrating against his pet project, the revised U S-Japan
Security Treaty. To
since its neighbors would never have flocked behind the Japanese "lead goose" if its get it ratified, the Diet had to meet late at night with no oppositi
on members present,
wings had not been clipped militarily.3 Thus Washington and Tokyo struck a wi�/win an action that helped solidify resistance across class lines. When
violent mine strikes
alliance with the Yoshida Deal. This " 1 955 system" not only turned Japan mto a erupted that summer, they were j oined by thousands of Security
Treaty protesters.
permanent military garrison on Russia's eastern flank, but provided a blueprint for It took 1 5 ,000 police to crush these demonstrations, which targeted
the same Mitsui
another kind of containment: the supplanting of liberal Left reformism by "Asian Corp. coal mine that 1 5 years before had played host to thousan
ds of Kishi's slave
values" economism. This dual containment, whereby "stability" became a codeword laborers, including allied POWs.9
for US-sponsored repression, would be duplicated throughout the Asia Pacific in Continued unrest forced Kishi 's resignation. That would be the
last significant
coming decades. The apolitics of the Japan model-with oppositional democracy barrier to the " 1 95 5 system." From then on the undertow effect
of econom ic growth
suspended and national security outsourced to the United States-remained in place would doom all real resistance.l O Henceforth the Japan model
could operate more
throughout the recovery era and the subsequent "miracle" years.4 on the side of carrot than stick, since by 1 960 the Japanese
were the best fed, best
Stability on these terms was of course unpopular in many quarters, and would be housed and best clothed populace in Asia. II This de facto political
bribe was effective
fiercely contested. The elites' first impulse was to get tough. The infamous Nobusuke so long as the economy was booming, and the boom would last
so long as Japan was
Kishi, grandfather of the recent prime minister Shinzo Abe, was brought in by high­ an essential piece on the Cold War chessboard. It is no accident
that the 1 95 5 system
placed members of his family as conservatism's pit bulJ.5 He had the perfect resume started to unravel as the Cold War waned. Without this geopolit
ical buttress , the
in terms of both nationalist zeal and sheer ruthlessness. During the war he had Japan model was on borrowed time. Prolonged recessio n would
shred the econom ic
directed the abduction and mass transport of Chinese forced laborers to Japan. A carrot that kept the system running .
large percentage of them would die en route, and over one in six who survived the That unraveling has been the nightmare of all export-driven "miracle
" regimes
transit would perish in the slave labor camps that awaited them.6 on the Pacific Rim. Japan's brand of repressio n has been different
only in that it
For this, and for his "Albert Speer" role as Commerce and Industry Minister in has been less centered, not bearing the stamp of any single dictator.
Thus LDPism
Tojo's war cabinet, Kishi spent three years in prison awaiting trial as a class A war was better camouflaged than most authoritarianisms . Ironically it
was Kishi's ouster,
criminaL Yet, by order of US intelligence, he was summarily released and planted into which seemed to be a victory for the liberal Left, that entrenched
the power of the
the thick of postwar politics. Part of his task was to marshal the support of Old Guard Right by concealing its total triumph. Although the Japan model
was mimicked
elites for the LDP agenda. Within this recycled "Tojo club" he passed for a man of throughout the Rim, this degree of manufactured consent was an
act other Asian
reason, if only because in 1 944 he had finally resigned from Toj o 's cabinet over his nations could not follow. Japan would have no political equivale
nt to Chiang Kai­
insistence that Japan should sue for peace if American forces reached Saipan.7 shek, Marcos, Park Chung Hee, Lee Kuan Yew, Suharto or Mahathi
r, not to mention
Mao or Deng.
To snuff out liberal oppositi on, LDPism had no need of dictators
2 Michael 1. Green, "Japan is Back: Why Tokyo's New Assertiveness is Good for . It could buy
the votes it needed through a combination of high growth and sweepin
Washington," Foreign Affairs, Vol . 86, No. 2 (MarchiApri1 2007), p. 1 43 (pp. 1 42-47). g j ob security.
Ordinary workers and middle class salarymen were seduced by
3 Francis Fukuyama, "Abe's Nationalism Continues a Troubling Trend," Taipei Times a system that by
every non-poli tical measure was moving Japan into the First
(March 28, 2007), p. 9 . World. Hereafter
4 The Yoshida Deal, culminating i n the security treaty of 1 95 1 , essentially made Japan an popular resistance was out of the question. Japan 's democratic
fayade would meet
American military outpost, while the Ikeda deal of 1 960 saved the Yoshida Deal from hostile no serious challenge so long as the Cold War lasted. Sanpo was
effectively reborn
critics on both the Right and Left by buying off their constituencies with the promise of fast­ under a democratic cloak.
track economic growth. See Ian Buruma, "The Japanese Malaise," The New York Review of
Books, Vol. 48, No. 1 1 (July 5, 200 1 ), p. 39 (pp. 39-4 1 ) .
5 Yoshida's daughter was married to Kishi's cousin, and his brother, Eisaku Sato was the 8 Kishi wanted an all-out war on the Left by a recycled
hard Right, and saw Yoshida as an
Secretary-General of Yoshida's cabinet. See "Bonus to be Wisely Spent," Time (January 25, obstacle in that path. The irony is that to defeat Yoshida
he first had to enter an alliance with
1 960), [Link] 1 7 1 ,939094,[Link] the Socialists . See "Bonus to be Wisely Spent," op. cit.
6 William Underwood, "Chinese Forced Labor, the Japanese Government and the 9 Underwood, op. cit.
Prospects for Redress," ZNet (July 7, 2005), [Link] zmag.orglcontentlprint_article.cfm 1 0 Yoshikazu Sakamoto, "Coming to Grips with Japan's History
and Role in the World,"
?itemID=8245&sectionID= 1 . History News Network: HNN Article Archive 2005 (week of November 2 1 , 2005),
http://
7 " A vigorous Visitor with an Urgent Message," Time (June 24, 1 957), [Link] [Link]/articlesI1 [Link]
corn/time/magazine/artic1e/0,9 1 7 1 ,824999,[Link]. 1 1 "Bonus to be Wisely Spent," op. cit.
1 72 Development Without Freedom The Japan Model Goes Global 1 73

A New Reverse Cou rse The ensuing slump and deflation suspended Japan's geopolitical aspirations,
paving the way for China's emergence as the region's economic and military
By the late 1 980s the idea of "Japan as number one" had started to wash over debutante. And what did America get for its effort to curb Japanese excesses? Briefly
from economic into geopolitical discourse. Increasingly there was talk of Japan's the strategy did seem to work. In the late 1 980s Japan began to open itself up to
ability to say 'no ' to its US guardian. Deputy Finance Minister Eisuke Sakakibara higher imports and lower trade surpluses. But these gains quickly disappeared once
spoke for much of the nation's elite when he proclaimed that Japan had "surpassed the bubble broke. Trade surpluses returned with a vengeance in the 1 990s . 1 9 The
capitalism" 12-meaning Western liberal capitalism. The Japan model took false unequivocal winner in this post-Cold War reshuffling would be China, and that
consciousness to such heights that class divisions lost their political edge and would mean a geopolitical as well as geoeconomic sea change.
labor/management disputes became tea parties. Not even Huxley or Orwell could Japan, however, was still the world's second richest country and its largest exporter
have imagined a more compliant working class, or a country happier to be kept on of capital. It continued to play a huge role in global development,20 and its role in Asia
another's geopolitical tether. When Japanese talked of saying "no" to America, what would actually be greater as a result of its domestic woes. This is because its post­
they actually wanted was a more cushy Yoshida Deal, as opposed to no Deal. They bubble banking crisis (some estimates put the bad loans held by Japanese banks as
wanted to have it both ways: global primacy without much military spending. high as $1 trillion) prompted investment in Asia's "tiger" and "tiger cub" economies,
At that very moment, however, Japan began the slide that would suspend all talk where labor costs were low and currencies had the advantage of being pegged to the
of economic preeminence. This timing was no accident, for Japan was becoming US dollar. More and more Japanese exports also went to Rim neighbors.
geopolitically expendable. In 1 99 1 , when it grudgingly and belatedly donated $ 1 3 This set Japan up for another fall. The Asian Crisis of 1 997-98 threatened to tum
billion to the Gulf War coalition, Japan found it could not buy international respect. prolonged stagnation into full-fledged depression.21 Meanwhile Japan's integration
Having contributed no manpower to the cause, it was seen as little more than a camp into an increasingly neoliberal global order produced much social trauma, as �II
followerY Nor would the world forget that Tokyo's original offer of assistance was evidenced by a rising suicide rate. Nonetheless the general economic malaise has been
a piddling $ 1 0 million. 14 exaggerated. If the economy had suffered as much as is commonly reported, there
Japan's economic slump can be traced to the G-7 Plaza Accord of 1 985, where would have been more pressure for sweeping political change. The largely cosmetic
the Bank of Japan was pressured to shift its monetary policy dramatically, raising the reforms that were ushered in by Junichiro Koizumi could not have sufficed.
yen's value against the US dollar. The idea was to force Tokyo to reduce its reliance It must be asked why, in stark contrast to China, Japan has tended to underscore
on exports while expanding domestic demand.l s Interest rate cuts and currency its problems and understate its economic might. Likewise it must be asked why
appreciation would theoretically encourage purchases of US goods. By 1 987 the Bank Western observers would fall for this subterfuge. The answer to the first question is
of Japan's rate had dropped to 2.5, where it remained until May 1 989. But things did that Japan 's glittering image as "number one" was becoming a liability. Without any
not go as planned. Taking advantage of easy credit, export industries hiked capital Cold War rationale, American tolerance for Japan's export engine was bound to wear
spending.16 This compounded the dilemma of overproduction that haunted all Asian thin. As for the second question, neoliberalism's claim to being the only sure path to
"miracle" economies, but Japan most of all. Meanwhile low interest inflated stock prosperity inclined the mainstream media to accept Japan's self-inflicted demotion
and property prices, which were expected to stimulate domestic consumption. What it in global standing. The highly regulated and centrally-planned Japan model-which
mainly stimulated was inflation, property speculation and a stupendous market bubble. accomplished many of the things that overt fascism had vainly attempted-gave the
Too late the Bank of Japan tried to cool the market,17 raising rates from 2.5 to 6 percent lie to the incontestable superiority of so-called free markets.22
in 1 990. Soon the banking sector found itself inundated with non-performing loans, The real issue no longer seemed to be which was a better growth engine,
and was all but forced to seek more lucrative investments in Southeast Asia. 1 8 neoliberalism or "Asian values" economism. The salient question had become which
Asian economism would take the lead. There is no denying that compared to China's
1 2 Green, "Japan i s Back," op. cit. boom, or to Japan's own "miracle" years, the 1 990s were lackluster for Japan. The
13 Bennett Richardson, "Japan Redefines 'Self-Defense, '" The Christian Science Monitor root of the problem, however, was more political than economic. The diffuse power
(February 6, 2004), [Link] l -[Link]. structure that had served Japan so well in masking its authoritarian elitism now
14 Tomohito Shinoda, "Ozawa Ichiro as an Actor in Japan's Foreign Policy Making," IUJ prevented it from executing a concerted strategy for economic reform.
(International University of Japan) Research Institute Working Paper-Asia Pacific Series,
No. 1 7 ( 1 999), http ://[Link] .[Link]/researchlwpapO I [Link].
1 5 William Engdahl, A Century of War: Anglo-American Oil Politics and the New World 1 9 "Japan-International Trade," from the Encyclopedia of the Nations (downloaded
Order (London and Ann Arbor: Pluto Press, 2004, revised edition), p. 226. June 2, 2007).
16 Rob Hoveman, "Japan Sinking Fast," Socialist Review, Issue 227 (February 1 999), 20 Robert Locke, "Japan, Refutation ofNeoliberalism," Post-Autistic Economic Review,
[Link] [Link]. Issue No. 23 (March 2 1 , 2005), [Link] .htm.
1 7 Engdahl, A Century of War, op. cit. , p. 226-27. 2 1 Hoveman, op. cit.
1 8 Hoveman, op. cit. 22 Locke, "Japan, Refutation o fNeoliberalism," op. cit.
1 74 Development Without Freedom The Japan Model Goes Global 1 75
Koizumi's predecessor, Yoshiro Mori, epitomized the country's bureaucratic substantive creativity the LDP establishment turned to a man who epitomized the
morass, and Koizumi did not depart from him nearly so much as his hair style would creative "look."
suggest. Aside from his " cool biz" look, Koizumi was little more than a paper henjin In foreign as well as domestic affairs, Koizumi was part of a new reverse course.
(maveri ck). The real thing, Ichiro Ozawa, had been expelled from the party long This Elvis-loving prime minister was walking a political tightrope as the Yoshida
before. Likewise, when Koizumi chose Makiko Tanaka (daughter of the ex-prime Deal entered its sixth decade. To do Washington's bidding he of course would have
minister Kakuei Tanaka) as his foreign affairs minister, it was not so much to chart to affirm Japan's US alliance. It was Washington's paradoxical wish that Tokyo prove
a new foreign policy as to tap the popular appeal of her acerbic style. Like her its fealty by breaking free of the abj ect military dependence that had been imposed
boss, she seemed refreshing after the humdrum 1 990s. But she lacked experience in 1 946 by Article 9. Although Japan had begun rearming in the early 1 95 0s, its Self
in world affairs, and will be remembered primarily for her penchant for breaking Defense Forces (SDF) had been too tightly fettered by Article 9 and the Yoshida
appointments with top foreign diplomats, including the US Deputy Secretary of Deal to allow much geopolitical maneuvering or real political discourse, those being
State Richard L. Armitage, who at that moment was carrying an urgent message on two sides of the same "abnormal" coin. Dissident voices were muzzled on both
security strategy from President Bush.23 While Koizumi himself was less abrasive sides of the political spectrum : left pacifists as well as nationalist reactionaries. Far
than Tanaka, he was also less iconoclastic. He rose out of Mori 's LDP faction, and from being a manifestation of native Japanese values, this bracketing of democratic
stayed within its orbit. For him the word "reform" meant little more than a neoliberal discourse was a bargain struck between elites on both sides of the Pacific.
shedding of government social responsibilities. The "abnormalization" of Japanese foreign policy had its flip side in an equally
Ian Buruma suspected from the first that Koizumi was not so much primed to be truncated domestic politics. Until the 1 990s the LDP system had kept its end of
a Japanese Gorbachev as a Berlusconi.24 Hope for more egalitarian reform would the Yoshida bargain: affluence in return for silence . That silence was finally broken
have to come from outside the LDP network. By 1 998, deepening economic crisis when the post-miracle malaise combined with a major scandal to suspend the
had inspired a merger of previously independent parties under the DPJ (Democratic LDP's thirty-eight year grip on power. Meanwhile the Gulf War put a spotlight on
Party of Japan) label. But it was not until 2003, when the DPJ incorporated Ichiro the dysfunctional side of the whole econo-state concept. The Japan Renewal Party
Ozawa's center-right Liberal Party, that it gained enough seats to pose a real threat to temporarily took the helm in the early 1 990s, but cracks soon began to form in
the LDP establishment. While this might give Japanese voters a two-party choice,25 its ruling coalition. The 1 95 5 system was back on track by 1 996, after the Japan
it also diluted DPJ progressivism. The contest would now be between the LDP Right Socialist Party showed its true colors by cutting a deal with the LDP.
and another Right-that of Ozawa's more ardent remilitarization. Only after his The only lasting benefit from this oppositional interlude was the electoral
efforts to reunite with the LDP were spumed did Ozawa merge with the DPJ. reforms of 1 994, but neither they nor Koizumi's later revisionism would do much
This dismal choice was still an improvement over the 1 95 5 system, and the LDP to remedy the political inertia that has been the bedrock of the Japan model. Indeed,
was determined to roll back the clock. It turned to a man who had what it took to it is arguable that Koizumi's success in renovating the political decor of the LDP
look radical without threatening the system nearly so much as Ozawa did. Koizumi constituted a democratic setback by giving one-party rule a new lease on life. His
convinced the public that he was at odds with the LDP establishment when in fact he landslide victory in the snap election of S eptember 2005 gave him a mandate to
was its chosen savior. Though he took office in April 200 1 on the promise to break refreeze the system, putting the DPJ out to pasture. As Brad Glosserman wryly put
Japan's political deadlock, his real mission was to prevent the kind of substantive it, Japan was going boldly backwards.27
reform that had been in the air in the early 1 990s. In education, for example, the idea
had been to boost Japan's competition within the New World Order by stressing
creativity and individualism. After the lost decade, however, more and more parents The Japan That Still Says Yes

and politicians blamed "individualism" for an ongoing decline in test scores. To

them "creativity" simply meant a lack of discipline.26 The irony is that to bury Two opposite forces propelled Japan's foreign relations under Koizumi. After
the very unmiraculous 1 990s, more and more Japanese shifted their focus to the
simple enjoyment of life. Many began to look back on the feudal past as a time of
23 Calvin Sims, "Japan Finds Diplomacy Can Tum a But Unruly," The New York Times enviable stability in contrast to a capitalism where "all that is solid melts into air."
(May 23, 200 1 ), [Link] 1 l05/23/worldl23JAPA. . html. This reversion could take two antithetical forms : the apotheosis of nihonjinron (the
24 Ian Bumma, "The Japanese Berlusconi?," The New York Review of Books, Vol . 48, innate superiority of all things Japanese), much like the ethos celebrated in The Last
No. 12 (July 1 9, 200 1 ), p. 42 (pp. 42-44). Samurai, or a more pastoral, flower-child-like retreatism.
25 Norimitsu Onishi, "Japan's Voters Have Actual Choice Tomorrow at the Polls," The
New York Times (November 8, 2003), [Link] 1 10S/intemationallasial
[Link]
26 Norimitsu Onishi, "Japan's Conservatives Push Prewar 'Virtues' in Schools," The New 27 Robert Marquand, "Koizumi's Revolution Gains Momentum," The Christian Science
York Times (June 1 1 , 2006), [Link] 1 1 1worldlasial l l [Link]. Monitor (September 29, 2005), [Link] l [Link].
1 76 Development Without Freedom The Japan Model Goes Global 1 77
In the latter case, the reigning cultural icon would no longer be the salaryman, events such as the Chechen Holocaust. The same president who famously screamed
but rather the "freeter," a youth who is content to take odd j obs to sustain an easy "evil" whenever he encountered global friction was in this case determined to "see
lifestyle.28 Where international commitments are concerned, the "freeter" attitude no evil." This ghastly indifference was reinforced by the President's ever-expanding
discourages international commitments. This collides, however, with rising defense "war on terrorism," which ironically moved him closer to many of the world's worst
imperatives in East Asia. While the Chinese threat looms l arger in the long run, state terrorists.
North Korea takes center stage in terms of sheer bluster. Either one, however, is Had Russia and the US continued their romance, Japan could have been
enough to give policy-minded Japanese second thoughts about Article 9. pushed even further off the geopolitical map.34 But Putin's growing animosity, plus
Koizumi had little choice but to return nationalism to mainstream Japanese the geopolitical bonding of China and Russia within the Shanghai Cooperation
politics. His inflammatory visits to the Yasukuni war shrine, which did so much to Organization (SCO), forced a tacit reassessment in Washington. For once America
antagonize China and South Korea, were mere window dressing. A more substantive and Europe were moving in the same direction. Even France came on board this
nihonism was broached in December 200 I when the Japanese navy trailed a time, as Chirac's pro-Russia tilt was replaced in 2007 with the unabashed pro­
suspicious "fishing" vessel bearing Chinese markings out of Japanese territory and Americanism of Nicolas Sarkozy. These tectonic shifts put Japan closer to the
"I
deep into Chinese waters. When the boat opened fire, Japanese naval vessels returned epicenter of Asian power politics. 'I'
"

fire and sank it, killing all its crew. This was the first time Japan had sunk a foreign Along with Russia's rogue-state assertiveness, China's rise challenges Japan as
ship since World War II, and Japan watchers took note of the fact that such an action nothing has since World War II. Beijing used Koizumi 's visits to the Yasukini Shrine
would have been unthinkable ten years before.29 as an excuse for rejecting Tokyo's repeated invitations for high level talks. But the
This "Chinese" boat turned out to be a North Korean spy ship, and the next real issue was geoeconomic competition. Deng-era terms of endearment no longer
year North Korea gave Japan a much greater jolt by announcing its intention to applied. Japan had been giving Official Development Assistance (O .D.A.) to China
develop nuclear weapons. Early in 2003 Tokyo reciprocated by threatening a since its opening in 1 979, a time when China was a net oil exporter. Buying from
preemptive strike, and added that it might also develop its own nuclear weapons.30 China was a way of reducing Middle East energy dependence. Now, however, China
The then Deputy Chief Cabinet Secretary Shinzo Abe put himself on the short list has become a major oil importer and Japan has been reducing its O.D.A.35
for Koizumi's successor by announcing that it would not be unconstitutional for During Japan's miracle years and before China's rise, it was easy for radical
r.I'1 1
Japan to use tactical nuclear weapons if need be. Just two years before Japan's No. nationalists like Shintaro Ishihara-the testy author of The Japan that Can Say :,:J I
2 defense chief had been fired for simply mentioning nuclear weaponsY Since the No ( 1 989) and later the governor of Tokyo (reelected in 2007)-to broadcast a III� I
200 1 incident, the Japanese navy has fired on other North Korean ships, and has double-barreled strategy for Japanese supremacy. Ishihara stood ready to confront
confronted Chinese naval vessels in a conflict over oil reserves in the East China Washington and Beijing alike in the name of a Japan that dared to stand alone. But
Sea.32 Only the far Right would have advocated such behavior in the past. The after the deflated '90s, and under the shadow of a fully awakened Chinese dragon,
shifting public attitude is suggested by the curious spectator cult that arose as 1 0,000 few Japanese could muster such hubris . Ishihara, however, has not budged an inch.
Japanese a day went to ogle at the salvaged North Korean spy ship.33 He sees the overheated Chinese economy as a disaster waiting to happen, and still
Notwithstanding these rumblings, most analysts still view China and Russia I!I'I
considers Japan the real sleeping dragon. His case for Japanese re-militarization is
as the big players in Asia's emerging "great game," giving Japan little more than based as much on America's relative decline as on China's putative clout. In his view
honorable mention. Japan did gain some regional standing in zero-sum terms when the US is not the reliable guardian it once was.36
a newly elected President Bush took a relatively tough stance toward China, but 9/ 1 1 Either way-whether because China is a greater danger or because America is
changed that in a flash. And Russia was never put under much scrutiny. Early in his a lesser protector-the case for Japan's "normalization" is now front and center.
administration Bush lavished praise on Putin and refused to be distracted by local F or this task the next prime minister, Shinzo Abe, came ill prepared, having had
little foreign affairs experience. What swung the public behind him was his tough
28 Norimitsu Onishi, "This 21 st-Century Japan, More Contented Than Driven," The rhetoric concerning North Korea's ballistic missile tests early in 2006.37 He followed
New York Times (February 4, 2004), http ://[Link].coml2004/02/04Iintemationallasial
[Link].
29 Eugene A. Matthews, "Japan's New Nationalism," Foreign Affairs, Vol . 82, No. 6 34 Howard W. French," Setting Sun? Japan Anxiously Looks Ahead," The New York
(November/December 2003), p. 74 (pp. 74-90). Times (August 1 1 , 2002), [Link] 1 weekinreview/l I [Link].
30 Ibid. , p. 75. 35 Adam Wolfe, "The Potential Deterioration of Sino-Japanese Relations," PINR: The
3 1 Robert Marquand, "Pacifist Japan Beefs up Military," The Christian Science Monitor Power and Interest News Report (December 6, 2006), [Link]
(August 1 5, 2003), [Link] 8 1 5/[Link]. 36 Shintaro Ishihara, "Japanese Passivity," Foreign Policy (September/October 2005),
32 "Japan's Leap to be a 'Normal' Nation," The Christian Science Monitor (September [Link] [Link]/story/[Link]?story_id=3 1 64&print= 1 .
1 3, 2005), p. 8 . 3 7 Chris Hogg, "Japan's Political 'Blue Blood,'" BBe News (September 26, 2006),
33 Marquand, "Pacifist Japan Beefs up Military," op. cit. [Link] uk. go/pr/fr/-/2Ihi/asia-pacific/[Link].
1 78 Development Without Freedom The Japan Model Goes Global 1 79

in Koizumi's footsteps-not to mention his grandfather's-by raising the Japan Nihonism Goes Global
Defense Agency to ministry status and announcing plans to revamp its whole concept
of security. Japanese and US interests are so tightly intertwined that both sides see The payoff for this transformation could be enormous. First, Japan's offer of $5
Article 9 as redundant and obstructive. The key point is that a remilitarized Japan billion and 2,000 peacekeeping troops in support of the Iraq occupation bought it
will still say "yes" to America. cover for a currency policy that was sure to dent US exports. The tactic worked:
It has little choice, given its regional situation. Abe 's staff made it clear that the Bush administration fel l silent on the whole issue.42 Second, part of Japan's
Japan was ready to play "a huge great game" in resource competition with China geopolitical normalization is the likely lifting of its self-imposed ban on arms
and Russia; and in January 2007, while visiting Europe, Abe drove home the point sales. That restriction-invoked by Prime M inister Takeo Miki in 1 976-43made
that under him Japan would be a steadfast partner on NATO 's Eastern flank. So too Japan's arms production extremely costly in per unit terms. However, this and other
he sought closer security ties with democratic India and Australia. Accordingly he normalization measures carry the risk of unnerving Asian neighbors. Such "2 plus
spoke of an "arc of freedom and prosperity" extending from Japan through India and 2" logic can therefore equal "5," by de-stabilizing rather than balancing the Rim.
into Europe.38 And in the case of arms sales , there is a further domestic risk: since this military­
Abe recognized that the global competition is dividing between camps of industrial upgrade requires no constitutional revision, it could be slipped through
development with and without freedom. The question was which side Japan would without much democratic input.
take. For years Abe himselfhad supported nationalist propagandists who pushed for Beneath the surface of"2 plus 2" parity, Japan is fully aware that it cannot afford
revising textbooks to deemphasize Japan's wartime horrors,39 and later he drew fierce to say "no" on any issue that Washington deems vital to its interests. A repressed
criticism from South Korea by questioning the degree of coercion that was used in need to say "no" to something may account for Japan's opprobrious practice of
recruiting "comfort women" for Japan's wartime brothels.40 Given his grandfather 's whaling. E ssentially this is an emotional escape mechanism that lets Japan say
record, he had a stake in this national amnesia, which is akin to European Holocaust "no" without maj or repercussions. So long as the international community is not
denial. But none ofthat concerned Washington, since Abe had no problem reconciling prepared to spill geopolitical capital over whales, Japan can have its whale meat
radical nationali sm with a sweeping affirmation of America's strategic vision. and its "normality" also .
Koizumi set the stage for this Yoshida II hybrid with the December 2003 creation Nonetheless there is a hidden price to pay for this atavistic indulgence, and for
of the U S-Japanese Security Consultative Committee. Its "2 plus 2" meetings the sake of the whales one hopes Japan's elite will get the point. As a New York Times
(involving US secretaries of state and defense and their Japanese counterparts) have editorial put it, the protection of whales is "one small, bright spot of global consensus
moved the security alliance beyond Cold War asymmetry, whereby Japan served • • . "44 Stepping outside that ethical boundary will label Japan a pariah nation at heart.
as a passive "shield" for America's Asian "spear." A common liberal argument for If it is utterly untrustworthy on this rare common ground of international decency, its
keeping Article 9 is that it helps Japan resist pressure to join America's infamous reliability on other issues will be thrown into doubt. The moral high ground that Japan
"coalitions of the willing. "4 1 However, by sending Japanese support forces to Iraq, seeks by supporting the Kyoto Protocol (as of 2002) and by encircling China and
Koizumi had already broken that taboo. Japan was now more of a spear carrier. All Russia with a professed arc of democracy is sacrificed with every whale it kills.45
that remained was to give its participation some real teeth. That would mean a Japan The most pressing issue of normalization, however, is undoubtedly the repeal
that can and will say "yes," but as a full-fledged spear thrower. or substantial rewrite of Article 9. The critical question is whether this will be
accomplished through democratic or semi-authoritarian means. Under Abe serious

38 "Abe Blows Japan 's Trumpet, Cautiously," The Economist (May 3, 2007), http ://
[Link]/[Link]?story_id=9 1 1 679 1 . Clearly this ran against 42 Alexandra Starr, "Beware a more Muscular Japan," The Christian Science Monitor
the grain of elitist Japan's perennial resistance to Western norms. It hardly needs to be said (October 30, 2003), [Link] 030/[Link].
that Abe's personal concern for freedom was purely instrumental. By family tradition his 43 Dan Blumenthal and Chris Griffin, "Japan: A Liberal, Nationalist Defense
position on any issue was for hire. Like his grandfather he stood in a long line of "Choshu Transformation," AEI: American Enterprise Institute (November 1 7, 2005), [Link]
men," who have a reputation for doing anything for profit. It was the Choshu clan that first org/include/pub-'[Link]?pubID =23464.
fired on foreign ships passing through the Shimonoseki Strait at the entrance of the Inland 44 "Japan's Whaling Obsession," The New York Times (April 1 , 2007), [Link]
Sea. But seeing the military might of these invaders, Choshu leaders "reversed course" and nytimes.coml2007/04/0 1 1opinioniO 1 [Link].
fraternized with them unabashedly. See "Bonus to be Wisely Spent," op. cit. 45 The truth is that few Japanese even like whale meat. Its everyday consumption in the
39 Norimitsu Onishi, "Japan's Likely Next Premier in Hawkish Stand," The New York early postwar era was strictly due to its low cost. The practice came to be associated with
Times (September 2, 2006), [Link] the pre-miracle era when the label "made-in-Japan" was synonymous with cheap, mediocre
40 "Abe: Japan Won 't Apologize Again for WW2 Sex Slaves," Chinadaily (March 5, exports. As the nation's economy burgeoned, its whale-eating habit declined, and died away
2007), [Link] chinadaily.comlworldl2007-03/05/content_8 1 9776 .htm. almost completely after the 1 960s. The government's reembrace of this ersatz tradition is a
4 1 Joseph S. Nye, "The Rise of Liberal Japan," The Chosun Ilbo (updated June 1 5, 2007), moral outrage that reveals as much about Japan's political climate as the Gulf War did about
[Link] 1 500 1 O. its geopolitical "abnormality."
1 80 Development Without Freedom The Japan Model Goes Global 181
debate on the matter has been discouraged,46 which was probably unnecessary, since In j ust three weeks in May and June 2007 Abe's ratings fell 1 7 percent, to a
some polls showed a large majority of Japanese in favor of revising Article 9.47 Abe 's disconcerting 32.9. This was fast approaching the critical 30 percent line where
reactionary tilt fits a pattern: the rising current of Japanese thought-capsulated in a normally diffident Japanese press tends to go on the offensive. 53 In an effort to
Masahiko Fuj iwara's bestselling novel of 2005 , The Dignity of a State-that denies ensure LDP consensus on postal reform, Koizumi had expelled dissenting politicians
the value of Western-style democracy for Japan and Asia in general. Fujiwara wants from the party. Abe let them back in, thus advertising himself as a faithful LDP
to restore Japan's ebbing social capital by way of samurai "deep emotion" and a de­ functionary. 54 Even the US trade representative Susan Schwab, a neoliberal who
emphasis on Western reason. would be expected to applaud the privatization of Japan Post, openly lambasted the
This militant nihonism is obviously not the way of the "freeter," and will not get proj ects' lack of transparency. 55 This shady operation was conceived and executed
rave reviews from neighboring Asian countries. They too well remember Japan's by Koizumi, yet Abe took the heat. The good news was that his political bungling
last attempt to de-Westernize the region, by way of conquest.48 Yet in Japan, as re-opened the door for opposition politics. After the LDP lost the upper house in the
Fukuyama observes, there is a thriving market for right-wing fantasies about Japan's July 2007 elections, Abe was at risk of being remembered as the prime minister who
"liberation" of Asia. Watanabe Soichi, a collaborator of Shintaro Ishihara, draws won the game for the opposing team.
large audiences to hear him relate how grateful Japan's wartime neighbors were This brought the country close to the point Richard Katz had predicted in a 2003
for being included in the Greater East Asia Co-Prosperity Sphere. Manchurians, he Foreign Affairs article. Katz sounded a long overdue death knell for the LDP. In
declares, wept when the Japanese pulled OUt.49 his view Japan's protracted economic debility was first and foremost a crisis of
While the new LDP brought nihonism in from the cold, Western media took little governance. 56 He could be optimistic about the country's economic prospect only II
1-
,
I'
interest. They remained as oblivious to this unsavory side ofKoizumi's administration because he saw no hope for continued LDP hegemony: "Just as the Soviet Communist
as they had been to the dark side of Yeltsin 's. They cheered his weakening of Party could not be the vehicle of reform, even with Mikhail Gorbachev at its head,
traditional factions within the party, overlooking the fact that for decades those intra­ neither can the LDP. "57 But Koizumi faired much better than Katz expected. By
LDP divisions were the closest thing Japan had to effective political opposition.50 It tying nihonism to the new forces of globalization, he unleashed a new Japan model
remains to be seen if Koizumi's successors can match his democratic machinations. on the 2 1 st century.
Just as Grandfather Kishi went too far in exposing his real agenda, Abe consistently It would be bad news for Japan and the whole region if this model were to void
mangled his image politics. Managed consent requires a better cover. In 2004 Katz's prediction by giving the presently constituted LDP a new lease on life. There
Koizumi had faced a maj or pension scandal, but was able to extricate himself by are other possibilities, however. The Democrats ' triumph in the elections for the
posing as an anti-establishment revolutionaryY In 2007, in the throes of yet another Upper House thrust Ichiro Ozawa back into the limelight after years in the political
pension scandal, Abe came across as a business-as-usual LDPer.52 wilderness. His resurgent power is such that Abe's stated reason for resigning was
that Ozawa refused to meet him. Once again, as in 1 993 , Ozawa is pulling strings
behind the scene to end the LDP system.
46 The West is so glad to see Article 9 up for revision that it has underreported the How this could affect relations with the US remains to be seen. For PR purposes
manner in which this is being pursued. At Abe's behest, the Japanese parliament passed a Ozawa made a great show of renouncing Japan's anti-terrorism law, which was
bill mandating a referendum on the issue, but it also took steps to manage the outcome. It
imposed as a diplomatic sop for the Americans. Ozawa's obvious intention was to
banned political advertising on TV and radio for two weeks prior to the vote, silenced school
teachers on the issue, and required no minimum turnout, so that passivity would work in
favor of the amendment. See Bruce Ackerman and Norikazu Kawagishi, "Japan 's Revolution
is Far Too Quiet," Foreign Policy (May 2007), [Link] [Link]/story/cms. life] to Prime Minister Abe." See "Minister Says ' Banzai' to Japan, Abe in Suicide Note," The
php?story_id=3844&print= I . Hindu (May 3 1 , 2007), [Link] 1 0341 .htm.
47 Blumenthal and Griffin, op. cit. However, it should be noted that different polls on the 53 A Jiji Press poll taken in mid-June 2007 put support for Abe's government at 28.8.
subject report widely divergent results, depending on the wording of the questions. See "Support for Japan's Abe Plunges Below 30 Percent," The Nation (June 1 5 , 2007), http://
48 Harold James, "The Return of 'Asian' Values," Project Syndicate (May 2007), http:// [Link]![Link]?newsid=3003 6957.
[Link] [Link]/commentary/james I 3 . 54 Jason Miks, "Despite Some Foreign Policy Success, Japan's Abe Faces Problems at
49 Francis Fukuyama, "The Trouble with Japanese Nationalism," Project Syndicate Home," World Politics Review (June 1 4, 2007), [Link]
(March 2007), [Link] aspx?id=849.
50 See Shin'ichi Kitaoka, "Japan's Dysfunctional Democracy," Asia Program Special Report 55 "US Calls for More Transparency in Japan's Postal Privatisation," The Financial
from Woodrow Wilson International Center for Scholars, No. 1 1 7 (January 2004), pp. 6--8. Express, No. DA 1 5 89 (June 8, 2007), [Link] .asp?cnd=6/
5 1 "Japan's Politics," The Economist (June 1 4, 2007), [Link] 812007 &section_id=22&newsid =6 . . .
agendalPrinterFriendly. cfm?story_id=93404 1 8. 56 Richard Katz, "Japan's Phoenix Economy," Foreign Affairs, Vol . 82, No. 1 (January/
52 This followed in the wake of a lurid agricultural scandal that led to the suicide ofJapan's February 2003), p. 1 1 6 (pp. 1 1 4-28).
Farm Minister. He did his boss no favor by leaving behind a suicide note saying "Banzai [long 57 Ibid. , p. 1 1 8 .
1 82 Development Without Freedom

cast the LDP as Washington's puppet party.58 But at a time when China and Russia are
Chapter 1 0
laying claim to geopolitical primacy at Japan's doorstep, it is doubtful that the DPJ
will want to distance itself from the US. Abe's resignation lent hope to those seeking
a democratic transformation, though (with Fujiwara in mind) the key question is After the New World Order:
what direction this will take. The lesson of Kishi's fall should not be forgotten:
what looked like a democratic milestone turned out to be a triumph of the Right. The Rise of S econd Way Globalization
Likewise, the choice of LDP stalwart Yasuo Fukuda as prime minister looks like an
improvement over Abe, but in the face of Japan's reactionary tum, Fukuda's very
moderation indicates that he will do little or nothing to buck the trend.
The mounting storm clouds are well exemplified by the new wave of textbook
revisions that has inflamed Chinese and Koreans and now is roiling Okinawans. Near Second Way Redux
the end of World War II, as America launched its invasion of Okinawa, Japanese
soldiers forced the island's natives from shelters and effectively used them as human In his infamous Munich speech of February 1 0, 2007, Russian President Vladimir
shields. Moreover, they convinced them that suicide would be preferable to the fate Putin effectively took Russia out of the New World Order. If this was not quite a
awaiting them under the Americans. Thousands killed themselves, and many killed declaration of renewed Cold War,l it at least made official the cold peace that Putin
their own mothers and siblings as delusive acts of mercy. For decades these horrid had crafted out of Russia's post-Soviet wreckage. The end of the old Cold War could
facts were at least fleetingly mentioned in Japanese school books, but now, in the no longer be viewed as the full or even partial eclipse of Second World ways and
name of a new patriotism, they are being airbrushed out of history. 59 means. There was to be no instant-mix global harmony. It finally had to be recognized
Meanwhile, on similar patriotic grounds, Japan's Defense Agency is being that Putin's increasingly bellicose nationalism was a world class problem.
upgraded to full ministry status. With Japan reasserting itself militarily and If geopolitics had never been entirely expelled from the First World's "end
geopolitically, it matters more than ever what kind of country this is. As did other of history" teleology (NATO's eastward expansion testified to that), the chosen
Rim nations after the Asian Crash, Japan is reviving its economy at the expense mechanism for post-Cold War relations had been commercial engagement. Now, after
of political reform. All that remains, in order to complete a Marxian passage from Munich, a balance would have to be struck between geoeconomic and geopolitical
tragedy to farce, is for the new Japan model to be declared a democratic success priorities. Once more power politics was front and center. This was much to the
story. What it actually represents is a new reverse course. relief of Europe's less secure regions, such as the Baltics,2 which abut Russia and
This applies to foreign as well as domestic affairs. In place ofAbe 's Eurasian "arc well know that trade deals are no substitute for tangible security measures. The
of freedom," Yasuo Fukuda is reviving the coldly pragmatic "Fukuda Doctrine" set MarsNenus dichotomy that Robert Kagan drew between America and Europe had
forth by his father Takeo Fukuda (prime minister from December 1 976 to December also divided Europe's newcomers from its Old Guard. The Munich speech gave
1 978) . 60 Whatever position Japan may take with regard to China's Asian hegemony,61 "Old Europe" a badly needed refresher course on geopolitical realities, pushing the
the Fududa Doctrine will pose no ideological challenge to Sino-globalization. Both two Europes together while moving both closer to America . NATO, accordingly, got
growth principles are recipes for development without freedom. a new lease on life.
True as the world harmony myth might have been in terms of Russia's openness
to global capital, no such transition was possible where governance was concerned.
Soviet communism had been as much a means ofsocial order as a mode ofproduction,
and its premise was the elimination of competing values and institutions. Russia
and much of the ex-Soviet sphere had accomplished that feat so well that they now
faced the dark choice between anarchy and hyper-statism. As in China, the erasure of
58 Wieland Wagner, "Japan's New Strongman: Opposition Leader Ozawa Eyes Power competing social structures ensured that, with or without "communism," some form
in Tokyo," Spiegel Online (September 1 7, 2007), [Link] of authoritarianism would be necessary for the foreseeable future.
world/O, 1 5 1 8,506 1 [Link].
59 Norrnititsu Onishi, "Okinawans Protest Japan's Plan to Revise Bitter Chapter of World
War II," The New York Times (October 7, 2007), [Link] 1 While insisting that there was "no confrontational bias" on Russia's part, and "no
asia/[Link]. talk of any kind of a new Cold War," Foreign Minister Sergei Lavrov adumbrated Russia's
60 "The Return of the Fukuda Doctrine," The Economist (December 1 3 , 2007), http:// intentions to counter Washington's global power with its own. See "Lavrov Criticizes U.S.
[Link]/[Link]?story_id= 1 0286958. Unilateralism," The Moscow Times (March 1 9, 2007), p. 5 .
6 1 It is hardly a secret that Japan's plan to install a missile defense shield and to equip its 2 See "A Cool Peace," The Economist (March 1 , 2007), [Link]
warships with similar anti-ballistic capabilities is not inspired by North Korea alone. world/[Link]?story_id=87756 1 0.
 T
i

1 84 Development Without Freedom After the New World Order 1 85

Boris Yeltsin, accordingly, did his best to impose a new Kremlinism even as The region's autocrats had less to fear than they imagined. Much as Russia's
he rammed through capitalist privatization. As in post- Tiananmen China, the West Yeltsin was forced to tum on his own parliament to secure his reforms, so too
chose to register only the economic side of this coin. Yeltsin's authoritarian halfway Ukraine's President Yushchenko found it necessary to dissolve parliament when
house fell so far short of Russia's authoritarian need that the public would thereafter anti-reform opposition grew too powerful. The country's "blue flag" anti-reformists,
welcome any leader who could restore social stability and a modicum of economic unlike Russia's pro-democratic opposition, command a sizable and growing
hope. The argument can be made, paradoxically, that some ofthe most geopolitically following in free elections. The paradox is that to suppress these anti-democrats is
ominous policies to come out of Russia under Yeltsin-such as the invasion of itself an anti-democratic action.5 The ex-Soviet world cannot seem to escape this
Chechnya and the almost indiscriminate arms sales to China-were the result of authoritarian Catch-22.
inadequate Kremlinization.3 Putin came prepared to finish the j ob, removing any Beijing, however, is taking no chances. For it the Kyrgyz rising was one
ambiguity as to Russia's neo-authoritarian drift. revolution too many, and too close. President Hu Jintao issued a report titled
The looming chaos that invited Putinism in Russia haunted most of the former "Fighting the People's War without Gunsmoke," which outlined the Party' s strategy
Soviet empire, and was greater where ethnic conflict was a factor. In Yugoslavia, for for preventing similar insurrections within Chinese borders. Bulletin boards would
example, the collapse of "communist" cohesion released centrifugal forces that Tito be closed or tightly regulated and websites forced to register. But the main thrust of
himself would have found daunting. When it became clear that national unity would Hu's neijin waisong (tight inside with lax looking outside) formula has been aimed �: I
redound to Serbian supremacy, Slovenian and Croatian declarations of independence at NGOs, which Beijing regards (not without some justification) as Washington's II

were sure to follow. These in turn pushed Bosnian Muslims in the same direction, "black hands." All prominent NGO activities would be frozen, while high profile
since life under a rump Yugoslavia dominated by Serbs was unthinkable. The mere groups like the Empowerment and Rights Institute (supported by America's National
mention of the names Slobodan Milosovic, Radovan Karadzic, and Ratko Mladic Endowment for Democracy) have been subjected to police investigations and raids.6
reminds us what little choice there was. China packaged this crackdown as anti-terrorism, the same label Russia would apply
Even Milosevic, however, paled in comparison with some of his authoritarian to its unrelenting state terrorism in Chechnya. In both cases the Western press took
counterparts in Central Asia. In Turkmenistan, for instance, the ex-Soviet puppet the bait, giving minimal attention to either horror story.
Saparmurat Niyazov (aka Turkmenbashi, or leader of all Turkmen) cast himself as It is now painfully obvious that the Cold War victory of the West was not nearly
a virtual God. By official edict his book, the Ruhnama (book of the soul) had to be so definitive as neoliberal pundits once imagined. It turns out that the First World
regarded on a par with the Koran. A grand Mufti who disagreed was still in prison had been heavily dependent on the Second for its moral and political bearings.
when Niyazov died in December 2006. So were countless others who publicly Minus its bipolar sparring partner, America no longer felt much need for the soft
questioned any part of the official creed. We can never know how many, like the power tactics that once put a good face on First World hegemony. Post-Cold War
Radio Liberty j ournalist Ogulsapar Muradov, were tortured to death in prison. globalization became so relentless in its quest for cheap labor that not even the state
Niyazov's chosen successor, Berdymukhamedov, the former commander-in­ terrorism of Tiananmen could hamper the process. Raw capitalist economism now
chief of the armed forces, is not going to make human rights reform a top priority. stood unrivaled on the global stage.
Nonetheless opinion polls will confirm that almost everyone is "happy" here, Nevertheless, even in the glory days of the American New Economy, more
and of course there is no hunger in Turkmenistan, for to say otherwise would be astute neoliberals recognized the need for a "Third Way" repair kit to reduce class
suicidal. Meanwhile foreign nations will court any leader who gives them a ticket to tensions at home and restore soft power abroad. Unfortunately this was a case of
Turkmenistan's massive gas reserves.4 too little too late. Whereas the Cold War non-aligned movement had afforded a
Suffice it to say that the Second Way-the domestic and foreign policy orientation Third Way for the Third World, C linton and B lair offered at best a Third Way for
of the erstwhile Second World-more than survived the Soviet fall. Outrage against the First World. Their neoliberal development formula was fast losing credibility
this fact (along with munificent financial assistance from the West via oil-fueled in the global South. By hollowing out democracy and converting "development"
NGOs) helped to inspire the series of "democratic" insurgencies that began with the into an engine for profits over people, First World intransigence paved the way for
Serbian revolt of 2000 and culminated in a spate of "color revolutions": Georgia's Second World resurgence.
Rose Revolution of 2003, Ukraine 's Orange Revolution of 2004, and Kyrgyzstan's
Tulip Revolution of 200 5 . Together these uprisings raised hopes of a renewed
democratic "Third Wave."

3 See Stephen J. Blank, "The Dynamics of Russian Weapon Sales to China," Strategic 5 See Anne Applebaum, "A Tale of Two Cities," Slate (April l 7, 2007), [Link]
Studies Institute of the US Anny War College (March 4, 1 997). [Link]?action=print&id=2 1 643 33.
4 "Turkmenistan still in Shadow," Guardian Weekly (downloaded March 1 8, 2007), 6 Yongding (pseudonym), "China's Color-Coded Crackdown," Yale Global Online
[Link] [Link]!guardianweekly/stroy/0,,20292 1 9,[Link]. (October 1 8, 2005), [Link] 76.
1 88 Development Without Freedom After the New World Order 1 89

Oxfam International, the aid provided by rich nations is half what it was in 1 960. 15 belief in the near inevitability of globalization to deep uncertainty about the very
Even inside developed countries there has been a frontal assault on welfare benefits. survival of our tenuous global order."20
This is happening at a time when working class incomes are stagnant at best, and real The "globalization" that Annan denounced is the triumphal mode that held sway
job security is a thing of the past. 16 throughout the 1 990s under the auspices ofthe so-called Washington Consensus. This
In all these respects the lower classes of the global North and South have begun ideology swore fealty to democracy, yet neutered democratic values by surrendering
to share a common predicament. The trick is getting them to see it. This startling them to the dictates of the market. The flagship of this First Way restructuration was
convergence gained recognition at the activist level during the 1 999 Seattle protests, the US New Economy, which seemed all but invincible before the tech crash of2000.
after which globalist institutions scrambled to improve their public relations on both Even China's stupendous rise seemed secondary by comparison, and its ideological
sides of the SouthlNorth divide. This tacit admission that the system needed a major implications were hardly considered. Globalists clung to the glib assumption that
overhaul was absent just two years before, at the time of the Asian Crash. Apart China, through the osmosis of trade relations, would be transformed into a docile
from a few voices in the wilderness, the blame for this very unnatural disaster was American clone, as would Europe, India or any other player in the global system. It
laid squarely on the Asians themselves, with most of the punishment laid on workers was all part of the neoliberal teleology that emerged as the globalist reversal of the
who had nothing to do with the bad decisions that triggered the Crash. Cold War domino theory.21 Capitalism was on the offensive, and from now on would
Only gradually was it admitted by a small number of global technocrats that take its marching orders from Washington.
systemic reform was imperative-e.g., the free flow of short-term financial capital Despite mounting ethnic and nationalist strife in much of the world, and the
must be curtailed, and displaced workers must be given prompt and sustained cultural retrenchment of Islamism, neoliberal globalists saw no serious obstacles in
assistance. 1 7 This minority opinion gained credibility as it dawned on the power their path until September 1 1 , 200 1 . Only then did they realize that the world was
elite that their hegemony was in jeopardy if they did not show some "Third Way" not going to surrender to them by dent of commerce alone. It would need a little help
concern for underprivileged classes. By the time of the Cancun WTO meeting of from the Pentagon. The shotgun marriage of neoliberalism and neoconservatism­
2003 there was broad agreement that affluent countries must stop subsidizing their or, more broadly, power economics and power politics-gave rise to the neoglobalist
farm products and elemental manufactures such as textiles and clothing. Unless militancy that took America into Iraq and declared a borderless "war on terror" that
First World markets are opened to agricultural imports from developing nations, 1 8 was in fact an endless war on Islamism.22 These actions have done much to unravel
globalization will remain just another name for economic imperialism. the putative victory of the First Way after the Cold War.
Despite his dependence on First World funding, former UN Secretary General The chief beneficiary of 9/ 1 1 was definitely not Al Qaeda. Curious as it may
Kofi Annan joined the ranks of the alterglobalists at Cancun. As he put it, "We seem, the real victor could well be the PRC. China's star is rising over the whole
are told that free trade brings opportunity for all people, not just a few. . . . Sadly, developing world and much of the developed world as well. With $ 1 trillion in
the reality of the international trading system today doesn't match the rhetoric . . . . foreign exchange reserves, Beij ing is a power to be reckoned with both economically
Instead of fair competition, there are subsidies by rich countries that tilt the playing and geopolitically. In October 2003 , when President Bush visited Australia, he was
field against the poor."19 In another speech Annan went even further, voicing doubts pilloried in the streets and even shouted down by Senators while addressing the
not only about First Way TINAism (the conceit that "There Is No Alternative" to parliament. Yet when China's President Hu lintao visited a few days later, he got
neoliberal globalization) but about the whole globalist order, including Third Way an unprecedented red carpet in both spheres. No doubt some of this contrast was
TINA-lite: "In just a few short years, the prevailing atmosphere has shifted from Iraq-related, but that is just the tip of the globalist iceberg. Hu's visit not only laid
the foundation for a free-trade deal, but signaled what the polls had already detected:
China's former ill repute was fast shifting to America.23

15 Elizabeth Becker, "Number of Hungry Rising, U.N. Says," The New York Times 20 Kofi Annan quoted in John G. Ruggie, "TINA and Global Responsibility," The
(December 8, 2004), [Link] 2/08/international/[Link]. Globalist: For Global Citizens, by Global Citizens (September 6, 2004), [Link]
16 Steve Early, "Democracy Matters," Labor Forum: A Journal of Ideas, Analysis and [Link]/[Link]? Storyld=4054.
Debate (Spring 2004), [Link] 3 1 [Link]. 21 William H. Thornton, Fire on the Rim: The Cultural Dynamics of East/West Power
1 7 Pranab Bardhan, "Protesters Greet Yet Another WTO Meeting," Yale Global Politics (Lanham, MD: Rowman & Littlefield, 2002), p. l 34.
(September 8, 2003), [Link] 22 William H . Thornton, New World Empire: Civil Islam, Terrorism, and the Making of
1 8 John Audley, "The CandID circus: A worn-out act by rich nations," The International Neoglobalism (Lanham, MD: Rowman & Littlefield, 2005), p. 48, and passim. By late 2006
Herald Tribune (September 1 8, 2003), [Link] even Tony Blair had tacitly admitted this error by dropping the term "war on terror" from all
[Link]&Articleld= 1 10274. official communications.
1 9 Kofi Annan quoted in Kevin Sullivan, "Annan Decries Trade Policies," The Washington 23 Joshua Kurlantzick, "China's Charm Offensive," Commentary (October 2006), p. 35
Post (September 1 1 , 2003), p. A 1 5. (pp. 3 5-39).
1 90 Development Without Freedom After the New World Order 191

This reversal is all the more astonishing in view of the Second Way development has backed his sham reelection of 2005 . Along with trucks o f campaign T-shirts,
model that China epitomizes, marked as it is by a dearth of even marginal concern technical assistance was provided for blocking opposition radio broadcasts and
for democracy, human rights, or environmental sustainability. China's economic internet communications.29 Furnishings for the presidential mansion were thrown
"miracle" is used to legitimize a degree of repression that neoliberal pundits could in as a goodwill gesture. One can well understand why Mugabe would encourage a
not have imagined in a country with double digit growth. While Hu's regime has Chinese culture cult among his entourage.30
cracked down on dissent more than at any time since Tiananmen, China has made In the Sudan, likewise, China has used the leverage of a $2 billion oil deal to
trade relations with rogue states its comparative advantage. Under its "go global" undermine international sanctions on behalf of Sudan's internal refugees . Human
policy, unconditional soft credit has been extended to disreputable governments all Rights Watch and other NGOs inform us that Chinese investment is financing
across Asia, Latin America, and especially Africa. Sudanese arms imports and exacerbating the genocidal crisis in Darfur. 31 When
Often Beijing will take a net loss economically in order to win geopolitically. Washington imposed anti-terrorist sanctions against Sudan in 1 997,32 China seized
Chinese companies capitalize on government largesse and cheap labor (often the chance to replace departing Western oil companies with its own; and more
including prison labor) in order to outbid foreign firms on construction proj ects. recently it has impeded US and British efforts to impose UN sanctions. To avoid
Forging regime alliances is frequently more important to China than making profits.24 a Chinese veto, the Security Council had to choose between a much compromised
And this is a two-way street: African dictators who play along get China's diplomatic proposal and no action whatsoever. A watered-down version was finally passed by a
cover and copious military assistance.25 China's every success amounts to a victory vote of 1 1 to 0, with China, Russia, Pakistan and Algeria abstaining.33
for the Second Way, and so far most of its ventures have been successful in terms of Surprisingly, some progress seemed to be taking place on the issue by April 2007 ,
its zero-sum contest with Washington. though not through ordinary governmental channels. Oddly, this reversal began with
the indefatigable efforts of a literature professor named Eric Reeves, who single­
handedly pressed NGOs and private citizens to join him in branding China's 2008
Into Africa: The Second Way Goes on Safari Olympics the "Genocide Games," on the model of Hitler's infamous Berlin games
of 1 93 6.34 The torch then passed to the actress Mia Farrow and (however grudgingly)
Africa is no longer the sideshow that it was during the Cold War. It is now at the the director Steven Spielberg, who was an official artistic advisor for the upcoming
heart of a mounting trade war that pits a relatively reformed First Way against an Olympics. F arrow warned Spielberg that ifhe did not press China to stop obstructing
utterly amoral Second Way. The key to China's prime mover status in African affairs action on Darfur he could "go down in history as the Leni Riefenstahl of the Beijing
is its perfect match with the authoritarian style of most African regimes. Consider Games."35
the case of South Africa, reputedly the most liberal of African states. The bottom line A few days later Spielberg dispatched a letter to President Hu Jintao, and shortly
is that South Africa is China's biggest trade partner in Africa,26 and it also happens afterward a senior Chinese official, Zhai Jun, was in route to Sudan to push the
to hold the rotating presidency of the UN Security Council. Sudanese government to accept a UN peacekeeping force to protect refugees and
President Thabo Mbeki resists putting UN reform pressure on any regime, such aid agencies that had been forced to withdraw.36 Already as many as 450,000 people
as Burma's, that China wants left alone. This helps to explain Mbeki 's support of had died after a government backed militia, the Janj aweed, began their atrocities
President Robert Mugabe of Zimbabwe, a brutal dictator that only China could court in 2003 .37 Millions more could perish if action is not taken soon. Moral persuasion
at this point.27 Beijing has not only shielded this despot from UN sanctions,28 but

24 Louisa Lombard, "Africa's China Card," Foreign Policy (April 2006), [Link] 29 Kurlantzick, "China's Charm Offensive," op. cit.
[Link]/story/[Link]?story_id=34 l 9&print= 1 . 30 Ben Schiller, "The China Model of Development," Open Democracy (December 20,
25 Craig Timberg, "In Africa, China Trade Brings Growth, Unease," The Washington 2005), [Link]
Post (June 1 3, 2006), p. A 1 4. 3 1 Kurlantzick, "How African Leaders," op. cit.
26 Tangpua Siamchinthang, "China's Influence on Myanmar: Casting the Shadow of 32 See "Background Note: Sudan," Bureau ofAfrican Affairs (March 2007), [Link]
Darkness, Not Peace," Wordpress. org (March 1 , 2007), [Link] [Link]/r/[Link].
[Link]?artic1e_id=28 1 9&dont=yes. 33 Paul McLeary, "A Different Kind of Great Game," Foreign Policy (March 2007),
27 See Joshua Kurlantzick, "How African Leaders Appease Robert Mugabe," The [Link] [Link]/story/[Link]?story_id=3 744&print= 1 .
New Republic Online (March 2 1 , 2007), [Link] 1 9&s= 34 See Kevin Cullen, "Genocide Games," [Link] (March 25, 2007), [Link]
kurlantzick032 1 07. Only after Mugabe's ruthless crackdown of March 2007 drew intense [Link]/news/globelideas/artic1esI2007/03125/genocide_game?mode=PF.
international attention did Mbeki issue a very mild rebuke. See Michael Wines, "In Zimbabwe, 35 Helene Cooper, "Darfur Collides with Olympics, and China Yields," The New York
Mugabe Critics Face Beatings," The New York Times (April 8, 2007), [Link] Times (April 1 3, 2007), [Link] 3/washingtonJ 1 [Link].
com/2007/04/08/[Link]. 36 Ibid.
28 Joseph Khan, "China, Shy Giant, Shows Stings of Shedding its False Modesty," The New 37 Edward Cody, "China Given Credit for Darfur Role," The Washington Post (January
York Times (December 9, 2006), [Link] 1 3 , 2007), p. A 1 3 .
1 92 Development Without Freedom
T After the New World Order 1 93

could never work with the Chinese, but as Reeves and Farrow have proved, there are 1 77 on the UN's Human Development Index, and rests content with an average life
other ways to motivate a mercantile dragon. expectancy of 38,43 unconditional loans serve only to freeze the status quo.
Unfortunately such tactics can only work where an intense and sustained The same reactionary tum was seen recently in the Central African Republic
international spotlight is available, as in Darfur. That is not the case in Nigeria, where (CAR) after Franyois Bozize seized power in a violent coup. To its credit, the African
gross social injustice has generated a huge amount of anti-government resistance but Union dropped CAR from its membership list, signaling to the developed world
little international attention. With almost no outside support, rebel fighters have shut that this rogue government should not be assisted in any way. Within a few weeks
down a fifth of the country 's oil production. The US has reacted with characteristic Beijing extended CAR a $2.5 million interest-free loan and invited Bozize for an
ambivalence, first providing limited military assistance to the government, but then official visit. Soon new buildings were springing up, telecommunications equipment
yielding to the decision of Congress to halt further aid due to the Nigerian military's was arriving, and more millions in interest-free loans and grants were pouring in to
record of corruption and human rights violations. It is well known that military solidify Bozize 's presidency.44
personnel are themselves deeply involved in the selling of stolen oil. Again China is These cases are windows on a fast emerging global pattern. Wherever there
stepping in to fill the void. It will sell arms to any state, and especially to those with is a conflict between profit and principle, China is likely to appear, intervening
the right resources for export.38 Already the PRC is a heavy supplier of Nigerian aggressively in the name of "noninterference ." Having grown 700 percent in the
arms and military equipment, including dozens of fast boats for fighting insurgents 1 990s,45 China's Africa trade has since quadrupled, rocketing from $ 1 0.6 billion
in the Niger Delta. Meanwhile China is investing $2.3 billion in a local oil firm in 2000 to $40 billion in 2006.46 But more is involved here than fast bucks, and the
owned by a former Nigerian defense minister.39 neocolonial onus cannot be pinned on China alone. Both the IMF and the PRC have
There can be no doubt that this Sino-globalist option is a strong factor in President geopolitical closet agendas, the one First Way and the other Second. The problem
Olusegun Obasanj o 's willingness to jeopardize close relations with the United States is that antiglobalists have been so focused on combating the inroads of First Way
and the European Union by subverting free elections and democratic processes in globalization that they have given a virtual free pass to the Second Way. Only now
general. Granted, Nigeria's peacekeeping assi stance in Somalia and Darfur (not to is China's foreign policy, which in many ways is the mirror image of its domestic
mention Nigerian oil) has made Washington and London reluctant to take a firm repression,47 getting its due from progressive circles. Human rights groups are finally
stand on Obasanjo's dictatorial turn.40 Without his China card, however, he could not starting to spotlight Beijing's role in sustaining tyranny and genocide.
afford to slam the door so tightly on democratic reform. So far, however, these efforts are trumped by China's commercial clout. As part
All this belies Beijing's highly advertised principle of noninterference in other of its "year of Africa," Beijing sponsored 1 700 delegates from 50 African nations
nations' domestic affairs. Second Way globalization is still in its infancy, but is at its November 2006 Africa summit. Pushing aside all non-economic development
already making it difficult for the IMF and the World Bank (however belatedly) issues, President Hu announced his offer to double aid to the region and to extend
to attach "good governance" conditions to their loans. In March 2002 the IMF $5 billion in unconditional loans and credits. Thus the Cold War struggle between
issued a report slamming the Angolan government for its almost perfect record of First World capitalism and Second World communism has given way to a contest
unaccountability and corruption. The United States and Britain then withdrew from between rival capitalisms. Being far less burdened with moral baggage, China 's state
an upcoming donors' conference, leaving the Angolans to stew over their limited capitalism is winning the new "great game" in Africa.48
options.41 They had little choice but to capitulate, such that in 2004 they were close This is China's second full-scale excursion into African affairs. In the 1 960s
to sealing a conditional loan with the IMF. and 1 970s it advanced a Cold War agenda that included construction proj ects all
Suddenly, however, they dropped this negotiation in favor of an unconditional loan across the continent: roads, railways, hospitals, stadiums, etc. This public relations
from China's Exim Bank.42 With an annual oil revenue of $ 1 0.6 billion in 2005 , double program atrophied in the 1 980s as China concentrated on its domestic agenda of
that of 2004, Angola's corporate class has every reason to adore the People's Republic, "socialism with Chinese characteristics. "49 But now, given its mounting economic
but this can hardly be said of ordinary Angolans. In a country that ranks 1 60 out of
43 Traub, op. cit.
38 Esther Pan, "China, Africa, and Oil," Council on Foreign Relations (January 26, 44 Louisa Lombard, op. cit.
2007), [Link] 45 Esther Pan, op. cit.
39 Dino Mahtani, "Nigeria Turns to China for Defense Aid," Financial Times (February 46 Craig Timberg, op. cit.
27, 2006), http ://[Link]/cms/s/ef8dbc30-a7c6- l 1 da-85bc-000077ge2340,dwp_uuid= 47 Jean-Jacques Mevel, "Pekin, Capitale de l 'Afrique Pour Trois Jours," Le Figarofr
9c33700c-4. . . (November 3, 2006), [Link] 1 1 [Link] I 48-pekin_
4 0 "Nigeria'S Imperiled Elections," The New York Times (April 1 1 , 2007), [Link] capital_de_l_afrique-pour_trois_ [Link].
[Link]/2007/04/ 1 11opinionll l wed3 .html. 48 Paul McLeary, "A Different Kind of Great Game," Foreign Policy (February 2007),
41 James Traub," China's African Adventure," The New York Times (November 1 9, [Link] [Link]/story/cms. php?story_id=3 744.
2006), [Link] I I / 1 9/magazine/ 1 [Link]. 49 Paul Mooney, "China's African Safari," Yale Global Online (Janurary 3, 2005), http://
42 Schiller, op. cit. [Link]?id=5 1 06.
1 94 Development Without Freedom After the New World Order 1 95
might, China's return to Africa is much more forceful than its original foray. The Bush praises as a "man of action" who "gets things done."56 Such action heroes were
only political condition that China attaches to its trade is that Taiwan must be de­ once called fascists, but now-so long as they bow to global capital-they get state
recognized. A measure of its success is the fact that only seven African nations-one visits. Bush has welcomed Kagame to the White House three times.57
fourth of the total-presently have formal relations with Taiwan. 50 NGOs such as Amnesty International and Freedom House confirm that Kagame
This honeymoon may not last long, however. Familiarity with China's ways does indeed get things done-things like murder and mounting repression. He has
and means is already breeding wariness and even contempt in some places. The camouflaged all this, however, by adroitly playing his anti-genocide card. His cover
corporate social responsibility that was forced on US firms in the 1 970s and 1 980s story is that too much democracy would reignite genocide and upset the economic
has become one of their best selling points. Proletarian issues like working conditions stability that foreign investors demand. 58 In this regard there is no ethical disparity
now redound to their favor, while Chinese trade patterns send an even more effective between First and Second Way capitalists. Neither is averse to the authoritarian
message to producers: the flood of Chinese textile imports into countries like South drift of organizations like the Southern African Development Community (SADC).
Africa and Nigeria is giving local entrepreneurs second thoughts about putting too Its shift from economic to military cooperation wears a rule-of-Iaw veneer, but in
many eggs in the Chinese basket. 5 1 places like Zimbabwe it stands ready to define democratic opposition as illegal
These misgivings went public during President H u' s Africa tour o f early February insurrection. 59
2007 . Staged as a postscript to China's Africa Summit, the tour became bumpier the Democratic reform in Africa will have to issue from the kind of grassroots
further south it went, and in Zambia Hu hit a brick wall of opposition. Michael Sata, resistance that we see in the copper fields of Zambia, not from the top-down
the runner-up in the country's September 2006 presidential elections, had gained remedies that neoliberal cronies like Jeffrey Sachs concoct. Such "adopt a dictator"
popularity among the urban poor with his pledge to kick the Chinese out and (as the development schemes were used throughout the Cold War, and always with the same
coup de grace) to recognize Taiwan.52 In the last decade over 30,000 Chinese had dismal results. It is time to face the fact that sustainable economic development
poured into Zambia, where low pay and abysmal working conditions give Chinese­ requires concurrent economic and political development.
run operations the look of penal colonies. Chinese mining operations in Zambia
and the Congo make heavy use of child labor, and often assign children the most
dangerous j obs of all, such as hauling out ore and rock from small hand-dug shafts The SeQ as Second World Prototype
in hillsides. After rains these mini-tunnels are highly prone to collapse, claiming the
lives of dozens of miners every month. 53 Chinese nationals were the target of riots Much as the United States has claimed semi-official hegemony over Latin America
that broke out in Lusaka in October 3, 2006,54 and fears of renewed protests forced with its Monroe Doctrine, China has been laying de facto claim to a broad swath of
Hu to cancel his planned visit to Zambia's copper belt. underdeveloped Asia. This could be called hegemony-by-default, for the French and
In Gabon, similarly, a Chinese energy company was forced to shut down due American defeats in Indochina left a "great-power" vacuum in the whole region.
to its reckless environmental practices.55 But so far such resistance is still the When the Chinese attempted to fill this void militarily in 1 979-ostensibly in
exception to China's more general red carpet reception. Anti-Chinese sentiments response to Vietnam's invasion of Cambodia, but in fact as a geopolitical probe-a
have had little or no impact on policy, for the simple reason that most African rulers newly unified Vietnam repelled them with surprising ease. In that very year, however,
share the slash-and-burn "development" mentality of their Chinese partners. First China began the economic transformation that would shift the entire Asian balance
Way economism, moreover, is more than ready to j oin in the neocolonical party. A of power, especially in less developed areas such as the Mekong River B asin.
case in point is Rwanda, where the neoliberal exemplar Jeffrey Sachs has set up a With biodiversity comparable to the Amazon's, the Mekong region is oddly
"Millennium Village" as a laboratory for his anti-poverty theories. Once Russia was ignored by the international community. Chinese engineers are hard at work
his laboratory, and it still is suffering the consequences. True to form, Sachs has little erecting giant dams, blowing up rapids, and clearing irreplaceable forests. Other
but praise for China's domestic growth model. He j oins neoliberals like Bill C linton maj or players in this ecological and cultural apocalypse are the Asian Development
and Bill Gates in lauding the GDPism of Rwanda's President Paul Kagame, whom Bank (ADB), the Mekong River Commission, and the region's own S econd Way
regimes: Laos, Cambodia, Vietnam and Burma, plus an increasingly authoritarian

50 Ibid.
5 1 See Paul McLeary, op. cit. 56 Stephen Kinzer, "Big Gamble in Rwanda," The New York Review of Books, Vol. 54,
52 Scott Baldauf, "Chinese Leader 's almost Triumphal Trip to Africa," The Christian No. 5 (March 29, 2007).
Science Monitor (February 9, 2007), [Link] 1 [Link]. 57 Ibid.
53 "Zambia & Congo: China's African Takeover," aired on Britain's Channel 4 News on 58 Ibid.
April 7, 2007, 7 : 3 5PM.
59 James Kirchick, "Would South Africa Send Troops to Help Mugabe?," The New
54 Siamchinthang, op. cit. ("China's Influence on Myanmar,") Republic Online (April 1 0, 2007), [Link]
55 McLeary, op. cit. ("A Different Kind of Great Game,") 4 1 007.
1 96 Development Without Freedom After the New World Order 1 97

Thailand. 60 The impact all this will have on the 60 million inhabitants of the Basin of Nursultan Nazarbayev in Kazakhstan (he got 95 percent of the vote in what an
can only be imagined. Their voices will not be heard, but amphetamine traffickers OSCE report flagged as a rigged election )65 gave China a new lease on its strategic
will be well served. relations in the region.66
In the Middle East, also, China is challenging the F irst Way competition. It The most crucial Second Way shift, however, came with the Andijan massacre
helps that Washington is closely identified with Israeli hard-liners while the PRC is of May 2 005 in Uzbekistan. President Islam Karimov found himself branded by
on good terms with every country in the region. Nonetheless China would not risk the West as the region's chief pariah. When the European Bank for Reconstruction
confrontation with America in this oil zone without Russian backing.61 These two and Development (EBRD) withdrew its support, Uzbek officials turned to Russia,
contrarians have joined hands in resisting the imposition of strong UN sanctions signing a strategic partnership that boded well for Moscow's re-entry into Central
to contain Iran' s nuclear threat.62 Their common cause, combined with Europe's Asia. Not to be outdone, the Chinese rushed to offer a similar agreement. By j ointly
general revulsion against America's Iraq war, marks the beginning of the end of declaring Andijan "an internal affair of Uzbekistan,"67 the two Second way titans
US unipolarity. effectively turned back the geopolitical clock to the "domino" days before Mao split
It is in Eurasia, however, that the raw essence of Second Way globalization is on the Second World by breaking with the Soviets.
full display. As of 2005 it was still not clear which direction this region would tilt This newfound togetherness forms the axis of the Shanghai Cooperation
ideologically and geopolitically. Recent popular revolts in Ukraine and Georgia were Organization (SCO), which links Russia and China with like-minded authoritarians
reputed to have been heavily influenced by the West. 63 To counter this suspicion, in Central Asia.68 Initially promoted by Beijing as an "anti-terrorist" organization,69
Viktor Yushchenko, President of Ukraine, stresses that the nation 's democracy and the SCO has expanded the definition ofterrorism to include almost any de-stabilizing
freedom movement is in fact a revival of its own democratic tradition, which reaches action, such as a peaceful pro-democracy march or the dissemination of information
back to its first constitution of 1 7 1 0. This would mean that his country's de facto that could discomfit a dictatorial regime. Needless to say, this definition has long
"return to Europe" is in fact a return to itself. obtained in China itself, where independent religious organizations, or even exercise
In any case, the US push for NATO membership for both nations underscores clubs like the Falun Gong, are considered subversive.
the geopolitical issues at stake. The March 2005 Tulip Revolution suggested that Apart from Tibetan Buddhists, the Muslim Uighurs of Xinj iang have been the
Kyrgyzstan might also be leaning toward the West, but reforms stalled as the main victims of China's war on religious affiliation. The government 's "strike hard"
new president, Kurmanbek Bakiev, quickly pledged to continue former President policy has subjected Uighurs to secret trials and summary sentences for "separatism,"
Akayev' s close relations with Beij ing.64 So too the December 2005 "re-election" with the death penalty often being imposed for simple religious expression.70 This
so closely parallels Karimov's anti-Islamism that the two regimes were almost sure
60 Denis D. Gray, "Asia's ' Last Frontier' Poised for Irrevocable Change," New Frontiers,
Vol. 1 0, No. 3 (May/June 2004).
61 "A quintet, anyone?" The Economist (January 1 1 , 2007), http ://[Link]!
[Link]?story_id=852 1 894 . The Economist (April 1 2, 2007), http ://[Link]!worldiasiaiPrinterFriendly.
62 See Nazila Fathi and John O ' Neil, "Ignoring Protests, Iran Resumes Nuclear cfm?story_id=90 1 3 602.
Program," The New York Times (January 1 0, 2006), [Link] 1 l w/ 65 "The Land that Time Forgot," Sunday Herald (Scotland, March 1 9 , 2007), [Link]
internationaII l [Link]. However, in December 2006 China joined other U.N. Security sundayherald. com!arts/display. var. l 2 1 7740.0.the_land_that_time_forgot.php.
Council members in imposing moderate sanctions on Iran's trafficking of nuclear and missile­ 66 Zamir Chargynov, "Revolution, Repression and Re-election in 2005 : China's Response
related materials. China recognizes that stability in the region is in its interest, and another to Political Developments in Central Asia," China and Eurasia Forum Quarterly, Vol . 4 No.
mollifying factor is its close military trade relations with Israel. See "A quintet, anyone?," 1 (2006), pp. 3 1 -36.
op. cit.; and in March 2007 Russia likewise called a halt to its nuclear fuel shipments to 67 Craig Murray, "Karimov Looks to China and Russia for Support" (May 28, 2005),
Iran, in accord with UN sanctions. Iran, however, claims that Moscow, far from acting on http ://www. [Link]/archives/2005/0Slkarimov_looks_t.html.
principle, is simply trying to bargain for a better fuel deal. See "Russia Moves Away from 68 In addition to the SCO, Russia's Central Asian presence is also being felt in the
Iran and Cuts Nuclear Fuel Shipments," Pravda (March 1 3 , 2007), [Link] Eurasian Economic Commonwealth (EEC) and the Collective Security Treaty Organization
printlrussialpolitics/8 825 1 -russia_bushehr-0; and meanwhile China continues to supply Iran (CSTO). The latter, which is more security oriented, overlaps with the SCO in providing
with conventional arms. See John Garver, "Close, But Not Too Close," Asia Times (April 1 6, a counterbalance to NATO. The difference, however, is that Russia dominates the EEC
2007), [Link] .htmL and CSTO. See Sergei Blagov, "The Geopolitical Balance in Central Asia Tilts toward
63 See Viktor Yushchenko, "Ukraine has to be Realistic," The Moscow Times (March 16, Russia," Eurasianet (June 7, 2005), [Link]
2007), p . 8. [Link].
64 Bagila Bukharbayeva, "Kyrgyzstan Faces Unrest 2 Years On," The Moscow Times 69 Rene Wadlow, "The Shanghai Cooperation Organization: A Balance of Opportunity,"
(March 23, 2007), p. 4. Rule by Akayev's family was simply replaced with rule by Bakiev's. World Affairs, VoL 1 0, No. 2 (Summer 2006), p. 58 (pp. 56-59).
Street protests in November 2006 briefly led to a new constitution, clipping Bakiev's 70 Human Rights Watch, "Overview: Human Rights Issues in China," Human Rights
wings, but within a month he had managed to regain his lost powers. See "Wilting Tulips," Watch (January 1 8, 2006), [Link] 1l1 8/china1 1 2270_txt.htm.
1 98 Development Without Freedom After the New World Order 1 99
to join hands at some point. And like Karimov, China has tried to dupe the West into Obviously the "BRIC" formula locks Russia and Brazil into the permanent role
believing its noxious measures are part of a seamless "war on terrorism."7 l of commodity vendors for their "Chindia" superiors. It is unlikely that Russia will
Russia j oined the SCO as part of its "look East" policy. Like China it seeks in the accept that role for more than ten years or SO.77 Meanwhile, though, it has much to
SCO a firewall against American encroachment as well as Islamic j ihad. The latter gain from the SCO compact. Gazprom, Russia's chief energy firm, is well along
is kept front and center for public relations purposes, but clearly the organization's toward becoming the biggest oil and gas pump in the world, with the SCO serving
more important function is its budding role as a "NATO of the East." Being an as its body guard and veritable wholesale broker. A ten-year SCO alliance should be
emerging energy superpower, and the world's second biggest arms exporter, Russia enough to dislodge the First World's grip on globalization.
is no diplomatic lightweight. But to tap this potential it has needed multilateral This is happening faster than anyone could have expected. In the last four years
channels that the West refused to offer. Thus Russia turned East. All that is lacking oil prices have trebled, accelerating the shift from the global petro-dominance of the
for the return of geopolitical bipolarity is a firm strategic alliance between Russia original "seven sisters" (compressed in the 1 990s into four: ExxonMobil and Chevron
and China.72 If Iran, Pakistan, and Afghanistan can be brought in,?3 the groundwork on the American side and BP and Royal Dutch Shell on the European side) to seven
will have been laid for a resurgent Second World.74 new challengers: Saudi Arabia's Aramco, Russia's Gazprom, China's CNPC, Iran's
Granted, Russia's commitment to the SCO is tenuous. Russian officials have NIOC, Venezuela's PDVSA, Brazil's Petrobras and Malaysia's Petronas. All ofthese
steadfastly opposed China's attempts to establish a military presence in Central Asia. are outside the OECD (Organization for Economic Co-operation and Development),
They may even prefer American bases to Chinese ones.75 Moscow is certainly aware and hence outside the flagging dominion of Washington-directed globalization.
that Beijing will be the prime beneficiary as the SCO matures, just as it will gain These predominantly state-owned upstarts are already the rule makers of the
more than India in the emerging "Chindia" alliance. The union of these geopolitical energy world, dwarfing their Western rivals in oil and gas production as well as
atavisms in a possible "Ruchindia" will only heighten China's power. But Russia's reserves. It is the greater breadth of the old firms, which also sell gasoline, diesel
weak domestic economy relative to China's will prevent it from challenging this and petrochemicals, that keeps their revenues higher. The newcomers already have
arrangement any time soon. F or now it will continue providing oil, gas, and other the upper hand in geoeconomic terms,78 and are proving very adept at translating
raw materials in exchange for Chinese manufactured goods. That is the assumption that advantage into geopolitical clout. The strategic stakes were underscored in 2005
behind the much discussed "BRIC" thesis, set forth by financial pundits at Goldman with the first Russian and Chinese joint military exercises in forty years.79 By then
Sachs. Presently the economies of Brazil, Russia, India and China (hence "BRIC") Russia was the world's maj or supplier of arms to the Third World, with contracts at
weigh in at about 1 5 percent of current G6 worth, but Goldman Sachs futurology around $7 billion.80 Although it keeps its ethical image polished by not selling arms
puts them at 50 percent by 2025 and over 1 00 percent within four decades.76 to any country under UN sanctions, its Security Council veto allows it to have the
last word on where sanctions can be applied.
The stark fact is that neither the UN nor any other global institution is in a position
to block the export of the Second Way. The New World Order that Fukuyama saw as
71 "In the Name of Counter-Terrorism: Human Rights Abuses Worldwide," Human the end and pinnacle of history is now just another historical artifact. The new Second
Rights Watch Briefing Paper (March 25, 2003), [Link]
Way gives the memory of post-Cold War triumphalism a darkly comic aspect, much
[Link].
as the phrase "war to end all wars" had become a bad joke by the 1 940s. Historians
72 Paul Dibb, "The Bear is Back," The American Interest Online, VoL 2, No. 2 (Novemberl
December 2006), [Link] 1 87 &MId=6.
will debate whether a better outcome was ever possible. The patent fact is that the
73 See Qudssia Akhlaque, "Pakistan, Russia Agree to Expand Relations," Dawn, Shawwal new Second Way is here to stay, and will be harder to contain than the non-capitalist
24, 1 427 (November 1 7, 2006), [Link] 1 1 l 7/top l [Link]. Second Way of years past.
74 Despite the intense international opprobrium leveled against Iran's nuclear buildup, Those on the Left who celebrate America's relative decline should take a closer
it was invited to join India, Pakistan, and Mongolia as observers at the 5th SCO summit in look at what is replacing it. Instead of globalization under the management of a highly
2006. This was hardly a surprise, as China has $ 1 00 billion in long-term oil and gas contracts
with Iran, while Russia has contracts worth billions to build Iranian nuclear reactors. See John 77 Yevgeny Rendersky, "Intelligence Brief: Russia in the S .C.O.," PINR (November 3 ,
Chan, "Shanghai Summit: China and Russia Strengthen Bloc to Counter the US in Asia," 2005), [Link] 1 &language_id= 1 .
The World Socialist Web Site (June 23, 2006), [Link] un2006/shan- 7 8 Caroia Hoyos, "The New Seven Sisters: Oil and Gas Giants Dwarf Western Rivals,"
j23 �[Link]. Financial Times (March 1 1 , 2007), [Link] 1 ae lb8-d00 1 - 1 1 db-94cb-
75 Stephen Blank, "China Joins the Great Central Asian Base Race," [Link] 000b53 4 1 062 1 ,dwp_uuid= Obda728c- . . .
(November 1 6, 2005), [Link] 1 1 1 605_ 7 9 Marcel de Hass, "Russia-China Security Cooperation," PINR (November 27, 2006),
[Link]. [Link] [Link]?ac=view�rintable&report_id=588&language_id= l .
76 Dominic Wilson and Roopa Purushothaman, "Brazil, Russia, India and China in 8 0 Richard Weitz, "Russian Arms Trade with Developing World Continues to Grow,"
2050," Private Sector Development (PSD) Blog-World Bank Group (January 1 1 , 2006), World Politics Watch (November 30, 2006), [Link]
[Link] 1 lbrazilJussia_i.htm1. aspx?id=376.
200 Development Without Freedom

defective yet democratically reformable First Way, Second Way globalization is Conclusion
unabashedly authoritarian. Regimes that cannot rise to the challenge of fair elections
or elemental human rights are now in possession of nuclear arsenals, and that is not to
mention the weaponry at the disposal of non-governmental terrorists. Their power is The Crisis of Asian Globalization :
multiplied by the fact that they are outside the "rational" domain of mutually assured
destruction. Moreover, at a time when environmental degradation eclipses even the Toward a Senism of the Left
threat of war and global terrorism, the Second Way ignores ecological imperatives.
That is not, however, an argument for the unreformed First Way ofthe Clinton and
Bush years. While promising higher living standards for all, First Way globalization
gave us a planet of slums. 8 1 Poverty on such a scale redounds to anarchy. In the
The Re-Politicization of Development
absence of any better solution to this global meltdown, the Second Way has the edge
over the liberal competition, at least in the short run. It promises a government capable
One of the central pillars of Cold War international relations was the solicitude
of keeping a lid on the social chaos that capitalism generates. Senian "development
shown by the world's most "liberal" capitalism for the most illiberal capitalism of
as freedom" will not work here, as it presupposes a level of social and moral capital
the time, that of the Asian tigers. There is no sufficient economic explanation for
that globalization fast erodes. The grim choice, it seems, is between sheer anarchy or
this American support system. Being primarily a product of power politics, it lasted
Second Way development without freedom.
so long as the Pacific Rim was needed as a vital geopolitical buffer. The Soviet fall
cleared the way for full-thrust economic globalization on Washington's terms.
It was not immediately apparent how onerous those terms would be. At first,
post-Cold War foreign investment and financial speculation stoked what looked like
a new super-miracle on the Rim. Few took serious notice of how the lending binge of
the mid- 1 990s recklessly expanded foreign debt relative to reserves. When the bubble
finally broke in 1 997, massive capital exodus sent the region into a ruinous plunge.
The IMF took its time responding, and finally applied a "rescue" formula that quite
predictably (after many hard lessons, such as the Mexican Tequila Crisis of 1 994-
95) turned the Asian Crash into the Asian Crisis, effectively converting a recession
into a depression. To add insult to injury, the globalist fire sale that followed was
broadly self-described as economic therapy rather than the socioeconomic pillage
that it was.
This protracted Crisis put globalization on trial, but more specifically it put
politics back into development discourse. Not since the glory days of Third Worldism
had politics held the developmental spotlight. I The direction this restoration took
owed much to Amartya Sen, who not only re-politicized development discourse,
but did so from within the inner sanctum of the world system. Though Senism is
not ordinarily associated with radical critique, its egalitarian focus is loaded with
oppositional portent. It follows from Sen's axiom of "concurrence," as we term
it,2 that democratization is central at all stages of development. In his view the
Asian Crisis confirmed the high cost of undemocratic governance. While Asian
exceptionalists hold that liberal democracy is not needed on the Rim, and indeed
would be a hindrance, Sen foregrounds the instrumental as well as intrinsic value of

1 Forrest D. Colburn, "Good-bye to the ' Third World,"'Dissent (Spring 2006), http://
[Link] .orglartic1e/?artic1e=446&print= 1 .
2 See Songok H an Thornton, "Postmaterial Development: The Search for a New Asian
Model," Development and Society, Vol. 33, No. 1 (June 2004), p. 32 (pp. 25 38) .
-
81 See Mike Davis, Planet o/Slums (New York: Verso, 2006).
202 Development Without Freedom The Crisis ofAsian Globalization 203

the freedom factor in all real development.3 His outlook, moreover, is deeply rooted becoming a hot political issue.4 The norm throughout Asia, however, is an almost
in Asian axiology. In lieu of the statist economism that monopolized the term '''Asian exclusive focus on the profits that are once more rolling in for those who really
values" during the "miracle" years, Sen proposes an "Eastern strategy" that draws count in globalized economies. For them post-Crash Asia is better than ever, as the
on the deeper and more humane traditions of Asia. working classes have been put in l ine, and democracy put on ice.
From this vantage it is obvious that development reaches far beyond the GDPism As more and more Asian leaders j oin the transnational capitalist class (TCC), the
that dominates the standard discourse of growth. What has passed for development typical Asian state is transformed into a globalist instrumentality.5 Those citizens who
in much of Asia is mere profit-taking, and when the social and ecological costs of do not enjoy TCC status, and have yet to reap any benefit from the "Asian miracle,"
that taking are weighed in the balance, the result is often a net loss. Sen's focus on are effectively rendered stateless. For these invisible people the pro forma voting
human capabilities points toward more sustainable development, but also collides rituals that pass for Asian democracy are almost meaningless. Senism attempts to
with current power structures in the East and West alike. In short, despite S en's rectifY that, but very timidly. It is, we hold, a necessary but insufficient first step
reluctance to face the fact, his work is inherently oppositional, especially on the toward the repatriation of this "other Asia." Sen gives democracy some symbolic
Eastern side. His critique of Singaporean "Asian values" has been incisive, yet he teeth, but no real fangs.
stops short where neoliberalism is concerned. Thus his work has been far better Crucially, however, he regards democracy as a prerequisite rather than
at dealing critically with the "Asian miracle" than with the inroads of neoliberal consequence of development. This "concurrence model" integrates economic and
globalization after the Asian Crash. political goals at all stages of development. That is a start, but there is still the danger
In fact, both "Asian values" and neoliberalism lost credibility in the post­ that democratization could end up legitimizing the extant power elite. How can
miracle years. By the mid- 1 990s the specter of cultural anarchy haunted much of the we be sure that the outcome will not be another case of democratic minimalism?
developing world, with the conspicuous exception of the Rim. By eliminating that Developmental "concurrence," we suggest, must be coupled with the kind of active
exception, the Crash and subsequent Crisis put the socioeconomic efficacy of the resistance that Sen's own politics eschews. It is well to march to Sen's drummer,
whole capitalist system on trial. Stricken countries reacted to the Crash according to including his post-Western view of democratization, so long as we register the
their very different cultural and political contours. One thing they shared, however, fact that he has paid scant attention to the TNCs that monopolize today's global
was the undertow effect of Washington-directed globalization. economy.6 Nor can we fail to note his neglect (until quite recently) of vital issues of
At this of all times their autonomous modes of development and social security environmental and cultural sustainability. "In short, the Senian model is very much an
were gutted. Structural adjustment conditions attached to international loans all but unfinished product, and at some point must be liberated from S en's own politics.
precluded Keynesian recovery procedures, while IMF and World Bank recovery It is this more radical Senism that should be applied to the question of Asian
schemes bailed out the financiers who had been most responsible for the Crash. The maldevelopment. In many Rim countries a crossroads was reached with the capitalist
moral hazard this entailed was not the worst of it. These programs also constituted "setback" of 1 997. For all its social trauma, the Crash did have a silver l ining: the
a bailout of pre-Crash power structures that had lost their economic foundations. In enormous emancipatory potential of "unguided" political reformism. Globalization
a complete inversion of reality, this reactionary "recovery" operation was hailed by worked against that potential by seizing control of the post-Crash "reform" process.
neoliberal pundits, such as the swaggering globalist Thomas Friedman of the New Equating development with pure economism, it snuffed out the grassroots democracy
York Times, as a factory for democratization. that the Crash had unleashed. The signature feature of globalist "reform" was what it
Many believe the Asian "miracle," now fully globalized, is back on track, did not include. While new deals were struck with domestic power elites, the broader
relegating the Asian Crisis to history. But for broad sectors of the working classes issues of political development were jettisoned.
the social and cultural meltdown of the Crisis never ended. The elemental security Globalization should be put on trial for two developmental crimes : first, for
that workers once knew is still melting away, though this hardly registers on the funding many of the region's most oppressive regimes during the miracle years, and
radar screen of our mainstream media. We are assured that the Rim has more than second, for thwarting the democratic resistance that the Crash unleashed. Walden
recovered from its little setback of 1 997. Even where that is patently not the case­ Bello was right to dub the Crash and its aftermath the "Stalingrad" of prevailing
where, for example, thousands of children still dig in garbage pits for their daily globalization. Never was there a greater need for an international community of
bread-the problem is attributed to insufficient neoliberal restructuration. Stellar conscience rather than capital. Sending in the IMF was like sending the fox to save
"reform" cases such as Korea and Thailand are contrasted with relative laggards the chickens.
such as Indonesia and the Philippines.
This dichotomy holds up only insofar as lower class privation in those
flagship states has gone unreported. Even in Japan-long famous for its relative 4 "The Rising Sun Leaves Some Japanese in the Shade," The Economist (June 1 5 , 2006),
egalitarianism-the divisive impact of neoliberal restructuration is only now http ://www. [Link]/worldiasia/[Link]?story_id=70662 97.
5 See Remy Herrera, "The Neoliberal ' Rebirth' of Development Economics," Monthly
Review, Vol. 5 8 , No. 1 (May 2006), [Link] [Link].
3 Amartya Sen, Development as Freedom (New York: Alfred A. Knopf, 1 999), p. 3 7 . 6 Ibid
204 Development Without Freedom The Crisis ofAsian Globalization 205

The carpetbagger mentality that the IMF exhibited in that dark hour sent a strong breakthrough of the late 1 980s was the simple product ofthe economic "miracle," and
cautionary message to Asians about Washington-directed globalization. The most 2) that the "miracle" itself was the product of a faithfully applied Japan model. Much
vocal remonstrance came from Malaysia's Mahathir, who upbraided the IMF and as classic modernization theory applied a one-size-fits-all model of development to
financial speculators such as George Soros. At first Thailand was the model of the Third World, the Pacific Rim possessed its own one-size model whereby NICs
globalist cooperation, but eventually it too recoiled from IMF dictates. Under Thaksin were expected to fly in line with the Japanese "lead goose." To casual observers it
it pointedly paid back its rescue loans early, symbolically declaring its economic seemed that Korea, first among the geese, was doing exactly that. Nothing could be
independence. The last Rim nation to pay off its emergency loans was Indonesia. farther from the truth. At every stage Korea's capitalist development was conditioned
By deciding to pay back its $7.8 billion outstanding debt four years before the 20 1 0 by its unique political culture, including a strike-prone oppositionalism that could
due date, Jakarta will save $200 million in interest. But, like Thailand, its primary not be farther removed from the authoritarianism of Singapore-school "Asian
purpose is to free itself from Washington's neoliberal grip.7 values." This working class recalcitrance all but compelled the overt repression
This same geoeconomic rebound is a factor in the growing tendency to exclude that distinguished Korea's Parkian development model from Japan's more subtle
Washington from regional meetings such as the East Asian Summit of December mechanisms of control .
2005 in Kuala Lumpur. One should not assume, however, that this blow to U S So too, Korean democratization was marked by a grassroots dynamism that was
hegemony signals a categorical retreat from globalization, for new modes o f globalist nowhere to be seen in "miracle" era Japan. Sen's generic principle of democratic
maldevelopment are waiting in the wings. The Senian model is at best a weak player development neglects this sui generis factor, especially where political resistance is
in this new Asian drama. concerned. Although Sen is less prone than most European Third Wayers to reduce
democracy to parliamentary terms, his approach still misses the subversive element
that sparked Korea's democratic takeoff. That oppositionalism had survived years of
Korean Social Democratization : A Good Idea While it Lasted
real repression, only to wither away in the early 1 990s as public interest shifted from
street demonstrations to sports events and the latest bargains in department stores.
Consider the case of South Korea, where all the ingredients for Senian success seemed
This apolitical tum set the stage for the more pronounced de-radicalization of
to be in place by the early 1 990s. This serves warning that democracy cannot rest
a presumed "reform" administration after the Crash. The very word "reform" was
content with material goals alone. To do so will over time (in this case a very short
restructured as the country surrendered to the strictures of IMF ism. There were
time) hollow democracy out to the point that even material growth is at risk from
street protests, of course, but they had more of a pressure-release than a subversive
government corruption and unaccountability. What looms large here is the challenge
quality. Their maj or effect was to divert public wrath from Korea's nascent TCC
of sustaining, not j ust launching, democratic development. For one brief moment
establishment to the foreign devil, the IMF, which was conveniently immune to
Korea nearly met our "concurrence" criteria of economic and political simultaneity
democratic resistance. Not having to stand for elections, it did what it does best:
for sustainable development. What went wrong?
measuring progress on the scale of profits over people.
Long before the Crash, Korean development had slipped into a shallow
Tellingly, the thrust of Kim Dae Jung's "reform" was toward even stronger ties
consumerist ethos that tipped the balance of concurrence toward pure economism.
between government and corporate enterprise.8 Companies that had long dreamed
The formal apparatus of democracy continued to function, but served mainly as a
of shedding the excess baggage of workers ' employment entitlements would now
legitimating device for a new set of power elites. With the generals out of the Blue
get their wish, with full government approval, while their extravagant borrowing
House, the competition now centered on the question of which civilians would take
habits-with debt ratios often reaching 3 5 0 percent-were tacitly pardoned.9 Fueled
their place, and in whose interest.
by corruption and cronyism, total external debt had mushroomed in the 1 990s. But
In large part this was a question of funding, and after the Crash the major source
those same defects had prevailed throughout the "miracle" years when the Asian
of funds would be recovery loans from the IMF. Domestic corporatists were pleased
system was praised as the rising star ofglobal capitalism. It was financial liberalization,
to play along, not only because the IMF was bailing them out, but equally because it
mandated anti-labor policies which they were delighted to implement. Now, as they
blended into TCC ranks, Korean corporatists began a sweeping rollback of the gains
that the working classes had made in the later "miracle" years. To call this a "full
recovery" requires a social conscience somewhere between Hayek and Ayn Rand.
The impact of globalization on Korean democratization cannot be brought into 8 "Declaration of Present Situation in Korea," Civil Society, Vol., 3 5 , No. 45 (October­
focus until we get past two common misperceptions: 1 ) that the Korean democratic December 200 1 ), provided by CCEJ News (Citizen's Coalition for Economic Justice), http://
[Link]/eng/ngos. html.
9 See "WSSD [World Summit on Sustainable Development] Stand for the ' World Summit
7 "Indonesia IMF Payback is End of Key Chapter for Asia," Turkish Daily News (June on $hameful Deals ' ?," The Green Korea Report (October 28, 2002), [Link]
1 5, 2006), [Link] org/English/gkreportlgkreport I I .htm.
206 Development Without Freedom The Cr isis ofAsian Globalization 207

rather, that precipitated the Korean Crash by reducing the relative power of the B lue with all their economic might, would be replicated throughout the region after the
House, the one brake that had always constrained Korean corporatism. ) O Crash. No Asian NIC accepted neoliberal principles willingly. The Philippines took
Thus the social democratization that Korea initiated in the late 1 980s was a l l but this tum earlier than its more affluent neighbors because it saw no way around it.
extinguished by the commercialism that followed. Corporations emerged as the real The paradox is that its two-decade economic slump made it the lead goose in terms
victors in Korea's "democratic" revolution. The Crash of 1 997 simply entrenched of globalization, which is to say neocolonization.
this cultural transformation. Here there would be no flood of grassroots political Taking this globalist "reform" path pushed the Philippine small-farm sector
reform, as in Indonesia and Thailand. Korea's political inertia of the late 1 990s was even deeper into recession or outright destitution. This laid the foundation for
closer to that of the Philippines, but for very different reasons. another generation of militant resistance. When the rural insurgency happened to be
Muslim, it could easily be tagged terrorism, but its real source was still government
corruption and ineptitude. The Crash did nothing to correct that. Having suffered far
Inertia as Usual: The Fall of Philippine People Power less capital exodus than the top Asian "tigers" would, the Philippine power structure
was unfortunately not exploded by the Crash.
Having barely participated in the "Asian miracle," the Philippines did not have so
far to fall in 1 997. Its before-and-after transformation was blunted, moreover, by the
fact that it had "been there before. " Full-thrust globalization had been a big factor in Neocolonial Indonesia
the restoration of "booty capitalism" in the post-Marcos years, I I albeit with greater
international access to the booty. Hence globalist "reform" had a decade-long head Indonesia would be more fortunate in that respect, but ingrained habits have proven
start here. Corazon Aquino's rising dependence on US-directed globalization, still much harder to remove than a dictator. As in Singapore, economic dynamism had
in its late Cold War infancy, pushed her away from "people power" and into the long been used by Suharto's Golkar regime as its stamp of legitimacy. Nonetheless
waiting arms of old power structures . 1 2 This outraged the Left, making peace with the country's reformist tradition was so deeply rooted that extreme measures were
the National Democratic Front (NDF) impossible. necessary to keep it in line. These bore testimony not to the Golkar Party's hegemonic
The administration had little choice but to re-embrace the military, which did strength, but to its weakness. Real hegemony, as Antonio Gramsci understood it,
not hesitate to tum its newfound powers against human rights activists and NGOs as would not require such flagrant domination.
well as NDF insurgents. 13 Aquino was too busy trying to satisty Washington's agenda To attract foreign investment it was necessary for Jakarta to create the illusion
for economic liberalization to give much thought to the promises she had made her of national stability, which required that repressive mechanisms be kept out of view.
supporters. The consternation many felt toward her US tilt gave nationalist elites a With the ghost of Marcos ' ouster in the Philippines haunting all Rim regimes in the
new base of mass support. Thus she found herself at the crossroads of nationalist late 1 980s and early 1 990s, the had to be proj ected that the government could
versus internationalist interests. More successful Asian "miracle" economies could offer investors a reasonable degree of systemic reliability. Marcos had gone too far
avoid this fateful choice until the Asian Crash forced it on them, but Aquino got to in flaunting his cronyism and nepotism. Golkar cronyism was of course no secret,
that j uncture a decade before, and ended up a more obliging US puppet than Marcos but Suharto employed a phalanx of Western-trained technocrats to paper over the
ever was. arbitrary nature of his rule.
The combined force of populist and Old Guard nationalism brought promises of Unlike Thailand, where the problem was chronic indecision, Indonesia's power
change in the 1 992 elections. It was not long, however, before Fidel Ramos also forgot structure was strong on decisive action but weak on the predictability that investors
his campaign pledges and pushed for trade liberalization. The pattern established demanded . 1 4 It was this chronic uncertainty that finally, a full decade after the fall
here, at a time when other Asian NICs were still resisting globalist restructuration of Marcos, convinced the international community that Suharto also must go. Since
international support had sustained Suharto's New Order after its bloody rise to
power, the removal of that exogenous crutch doomed the regime's inner circle, if not
10 The Japanese system, by contrast, had depended upon the less statist mechanism of the Golkar Party as such. Not even the technocrats could save Suharto at that point.
MITI to accomplish this function. See Chalmers Johnson, MITI and the Japanese Miracle: Political reform would obviously have to issue from within Indonesia itself. Its
The Growth ofIndustrial Policy, 1 925�1 9 75 (Stanford, CA: Stanford University Press, 1 982)
maj or source was the country's unique tradition of civil Islam. Suharto had done
concerning MITI; and concerning the Korean Blue House see Gregory Henderson, Korea:
everything within his power to repress Islamism (political Islam) or, failing that, to
The Polit ics ofthe Vortex (Cambridge, Massachusetts: Harvard University Press, 1 968).
co-opt it. For decades reform energies had simmered within the Muslim community.
1 1 Alasdair Bowie and Danny Unger, The Polit ics ofOpen Economies: Indonesia, Malaysia,
the Philippines and Thailand (Cambridge: Cambridge University Press, 1 997), p. 1 00. The Crash of 1 997 broke the hegemony that had locked those energies outside
12 W. Scott Thompson, The Phil ippines in Cr isis: Development and Security in the
Aquino Era, 1 986-92 (New York: St. Martin's Press, 1 992), pp. 52-3. 14 Andrew MacIntyre, "Political Institutions and the Economic Crisis in Thailand and

1 3 Gerald Clark, The Polit ics ofN G Os in South-East Asia: Partic ipation and Protest in Indonesia," in T.J. Pemple (ed.), The Polit ics o/the Asian F inancial Crisis (Ithaca: Cornell

the Phil ipp ines (London: Routledge, 1 998), p . 82. University Press, 1 999), p. 1 44 (pp. 1 43-62).
208 Development Without Freedom The Crisis ofAsian Globalization 209

the political process. Here, far more than in Korea or the Philippines, the Crash Thaksin and other post-Crash authoritarians are mindful of the fact that even
constituted an unprecedented political opportunity. the worst abuses of the Chinese Communist Party (CCP) have met no serious
US engagement could have brought these hopes to full fruition, but, as in the criticism from neoliberal quarters. Indeed, the arch-globalist Jeffrey Sachs now
Philippines long before, neoliberal globalization threw its weight on the opposite side sings the praises of the unreformed Chinese system as a model for Third World
of the scales. This reactionary pressure was redoubled after 9/ 1 1 , with the "war on development. Breaking with the democratic teleology that neoliberals have clung to
terrorism" used as an excuse to restore military as well as economic assistance to the since the late 1 980s, Sachs j oins Hu Jintao in spurning charity and human rights in
Jakarta regime. The most resistant anti-Jakarta zone, Aceh, held out until the tsunami favor of unqualified national and personal self-interest. Pollution, exploitation, and
of December 2004 took it out of action. After that the most active resistance has a complete dearth of democracy are accepted as price tags of progress: "It's ugly,
been from West Papua, where a virtual civil war continues. Unfortunately the natural but-in terms of incomes-it works," Sachs gushes. 1 5
resources of this area ensure that Washington and the international community will He especially recommends the China model for Latin America, which h e takes
all the more side with Jakarta's militarists. as a foil for comparison with East Asian dynamism. The chasm between the two
Nowhere is globalization more nakedly exposed as a neocolonial force. The outcomes, he believes, is due to Asia's embrace of globalization. 16 In fact it has more
recent death of the country's leading dissident writer, Pramoedya Ananta Toer, to do with Asian statism, on the one hand, and the early surrender of most Latin
seems emblematic of the demise of the resistance he pushed for all his life, much of nations to neoliberal restructuration, on the other. Ironically Sachs himself helped to
which was spent in the Indonesian equivalent of the Soviet Gulag. While academic frame the terms of that surrender, j ust as he is now framing the terms of an even more
"postmodernists" drone on about cultural difference, there is little interest shown invasive and illiberal globalization. In his capacity as special advisor to the former
in the actual fighting fronts of difference, such as Aceh and West Papua. This is UN Secretary General Kofi Annan he recommended Sino-globalism as the model for
especially the case after 9/ 1 1 , when Islamist resistance can so easily be cast as African development as well. 1 7
terrorism. Under this guise the newly "reformed" Jakarta is emerging as an even The American public shows no more concern than Sachs does about the spreading
more potent colonial force than the New Order was under Suharto. influence of the China modeL When it comes to a choice between human rights
and "everyday low prices" at Wal-Mart, Hu Jintao knows how little he has to fear
from ordinary Americans. The only question is whether the center will hold in China
Reactionary Globalization
itself. Much depends on investor confidence. There may still be hope for a Chinese
century if the CCP can weather its domestic storms. But that is a big "if." Overseas
Like Russia's Putin, Thailand's Thaksin contested one side of globalization:
the inadequate spoils allocated to his domestic cronies. Under the flag of a new Chinese investors may fee l enough affinity toward Mother China to cut it some

nationalism these domestic elites set a ghastly precedent for the whole developing slack, but Western investors will not. Just as China has been able to turn Western
world by turning the legitimating device of democracy against democratic freedom. technology against the West, other developing regions will turn the Sino-globalist
model against the PRC.
The result, in Thaksin's case, was a virulent new strain of the East Asian security
The good news for China's power elite is that the country's rural crisis, which
state. This was the antithesis of the hopes raised by post-Crash reformism, as
capsulated in the new Thai constitution. The contest of two Asianisms, Sen's radical has been the mainspring of its economic advantage, will be there for the foreseeable
democratism and Thailand's corporate statism, harbingers the mounting global future to safeguard low wages and protect against capital flight. The bad news is

struggle between development with or without freedom. Sadly, the neoliberal politics that the basic elements of the Chinese development model are already taking flight.

of globalization favors the latter. This de-liberalization is carried out in the name of They are no more country-specific than Fordism was for Americans. The difference
is that Fordism soon bonded with democratic politics to produce the New Deal and
security imperatives, but the ones calling the shots are precisely those who stand to
profit by greater insecurity, which inspires public surrender to authoritarianism. the liberal model of "free world" development, whereas Sino-globalism can only
produce a socioeconomic race to the bottom. Wherever it reaches, the China model
Those who thought Thaksinocracy was history j ust because the tycoon himself
will spel l the end of democratic development, streamlining capitalism by stripping it
was ousted, should have rememberd the reformist expectations that attended the
of its liberal baggage. Fukuyama's "end of history" thesis is thus turned on its head.
exits of Marcos and Suharto. What distinguished Thaksin's political machine from
Joshua Kurlantzick stresses how China's increasingly contentious foreign policy,
theirs was his greater globalist connectivity. Contrary to neoliberal preachment,
that is not a politically liberatory bond. Its true face was revealed years before in
the globalist tilt that Aquino gave the Philippine model. And it is on even more 1 5 Jeffrey Sachs, interviewed by Jonathan Watts, "Be Here Now," The Guardian (August
graphic display in post-Tiananmen China, which Thaksin certainly took note of in 26, 2006), [Link] 2 8 8- 1 08229,[Link].
constructing his model of de-liberalized globalism. Unbeknownst to most power 1 6 Jeffrey Sachs, "Lessons for Brazil from China's Success," transcript posted on
brokers in Washington, these regional hybrids have already supplanted neoliberalism November 5, 2003.
as the cutting edge of Asian power economics. 1 7 "UN Sees China as Model for African Development," [Link] (August 1 6, 2006),
[Link] 1 5/[Link].
210 Development Without Freedom The Crisis ofAsian Globalization 211
combined with this seemingly unbeatable growth model, suggests to authoritarian protector and trading partner. This puppet state is now a staging ground for Sino­
regimes from Vietnam to Cuba that they have no reason to budge in the face of globalist expansion throughout the region.
democratic reform pressure. 1 8
The rise of China was not due to its own actions alone. Ironically, the China model
could never have thrived without assistance from Washington on a scale reminiscent The Senian Moment

of the Marshall Plan. Much as capital once poured into the Philippines after Marcos
Si �o-globalization is simply the latest and most virulent strain of the prevailing
ousted his political opponents and declared martial law in 1 972, global capital found
the "stability" ofpost-Tiananmen China irresistible. It is time for Americans to make ASian growth model. Sen's Development as Freedom ( 1 999) is a frontal assault on
the Singapore-school tenet that political repression is necessary for Asian economic
up their minds as to what kind of China policy they want. The choice is not between
growth.20 The region's power elites have long dismissed liberal concerns such as
containment or engagement, but rather what kind of engagement, corporate or
human rights and environmental protection as luxuries to be deferred until after
democratic? The myth that these are one and the same has too long voided the Senian
development reaches a point they deem adequate. That point is of course forever
question. Facing that question would be a moral imperative even if it concerned only
postponed. The 1 99 7 Asian Crash put this delaying tactic under suspicion even
China, but now the entire global South confronts the Senian choice of development
among hard-line technocrats who felt no intrinsic affection for democracy. The long­
with or without democratic input. The TNC establishment would have us believe
term efficacy of authoritarianism could no longer be taken for granted.
that the only choice is between stagnation and a corporate-dominated growth that
This was the Senian moment, the start of a paradigm shift that sent Western
ensures union-free factories and subsistence wages.
capitalists rushing to construct a fire wall between their own ("liberal") and Eastern
In fact, even in terms of economic efficiency, Sino-globalization would be a loser
("crony") capitalism. That orientalist gambit lost its fire power, however, in the wake
in any fair contest of development models. Its social and ecological unsustainability
of the Enron scandal and a multitude of similar revelations concerning Western
will finally catch up with it, and its ruthless tactics could also backfire politically.
cronyism.2 1 This paved the way for a full antiglobalist critique, equally applicable to
That is what happened when Mali's military dictator imitated Tiananmen, killing
the East and �est. Although Sen has denied his place in the pantheon of antiglobalism,
hundreds of protesters in March 1 99 1 . This copy-cat crime spawned one of Africa's
he has contnbuted as much as anyone to the movement's intellectual foundations.
most promising democratic transitions. 1 9 One reason there was no such political
His refusal to endorse this critical discourse marks the point where Senism takes
rebound in China after Tiananmen is that the Washington Consensus, cheered on
leave of Sen's own politics.
by Henry Kissinger, came to the aid of the Beijing Consensus. This could be the
The same "resistance to resistance" can be seen in Sen's long neglect of
greatest blunder of recent American foreign policy.
environmentalism.22 There is a deep affinity between Senism and the eco­
It is odd that Sen, in setting forth his dichotomy between development with
egalitarianism of Arundhati Roy, or even the more radical Vandana Shiva. Sen of
or without freedom, neglects to mention that freedom has its worst enemy in the
all people should not have missed the complementarity of environmentalism and
geocorporatism that propels Washington-based globalization and abets Sino­
democratization, which African activists like Ken Saro-Wiwa and Wangari Maathai
globalization. There is no place for substantive democracy where politics is scripted
have dramatically demonstrated (the price, in Saro- Wiwa's case, was his Shell­
by either of these illiberal capitalisms. It is a question of which subsumes which.
condoned execution).23 Only after Suharto 's expulsion did ordinary Indonesians
If the American public cannot get its democratic priorities straight, taking back the
political sphere from Washington's K Street lobbyists, the China model will continue start to learn the details about the ecological pillage of the New Order. Clearly
environmental consciousness requires democratic openness, and it is doubtful that
to enj oy the full faith and confidence of US power brokers.
democracy can be sustained in an ecological disaster zone.
That alone may not guarantee Beijing's global primacy, for there are too many
While cracking the door for revisionist Asian values, the Crash also invited the
developing countries waiting in line to tum the China model against China. Beijing
revival of an earlier Asian modernism. It is often forgotten that the "Asian model"
knows it cannot put all its eggs in the economic basket. To fulfill its great power
ambitions it must move quickly to translate its budding economic clout into military
and geopolitical might. While most of its saber rattling has been directed at Taiwan,
it has quietly expanded its sphere of power into the soft underbelly of Southeast
Asia: Burma and the underdeveloped Mekong region. Western sanctions against 20 Sen, op cit. , p. 1 5 .
.

Burma (Myanmar) have given China a virtual free pass as the Burmese junta's major 2 1 See Seth Mydans, "In a Contest of Cultures, East Embraces West," The New
York Times (March 1 2, 2003), [Link] l 2/international/asiaJ
1 2LETRhtml?pagewanted=print& position . . .
1 8 Joshua Kurlantzick, "The China Syndrome," TheAmerican Prospect (January 1 1 , 2007), 22 See Akash Kapur, "A Third Way for the Third World," The Atlantic Monthly (December
http: www. [Link]/[Link]?section=root&name=ViewWebarticleId= 1 23 72. 1 999), p. 284 (pp. 1 24-29), [Link] 1 [Link].
19 Robert Pringle, "Miracle in Mali," The Wilson Quarterly (Spring 2006), [Link] 23 "Ken Saro Wiwa and 8 Ogoni People Executed: B lood on Shell's Hands," Greenpeace
[Link]/[Link]?fuseaction=[Link]&essay_id= 1 7866 1 &stoplayo . . . (November 1 0, 1 995), [Link]
2 12 Development Without Freedom The Crisis ofAsian Globalization 213

of the 1 960s and early 1 970s found room for equity along with growth.24 This became the salient model o f development. It i s now largely forgotten that in the late
accords with the thrust of the Economic and Social Council (ECOSOC) meeting 1 95 0s and early 1 960s Singapore had been remarkably open and democratic.29 By
of 1 972, which endorsed balanced growth and the reduction of inequality as prime smothering this tradition, Lee Kuan Yew's cohorts gave Singapore its image as a
developmental concerns. That egalitarian factor would be aborted by Singapore­ stable commercial hub,30 the jewel in the crown of Asian globalization.
school Asianism and neoliberalism alike. No wonder the two got along so well for Current globalist theory, by contrast, has sidestepped democracy in favor of the
so long. For all its trauma, the Crash had the salutary effect of putting equality and "free market" as the alpha and omega of development.3 ! The Crash brought Asia
other progressive concerns back on the developmental map. to a fateful crossroads between these two priorities-the market vs. democracy.
Being universal in nature, these concerns run against the grain of Asian Sen 's development-as-freedom model is essentially a map of the road not taken.
exceptionalism. We should bear in mind that before the Asian "miracle" many Latin Once economism is accepted as the prime mover of all development, it is a short
American and African countries had been on an economic par with future Asian step to the acceptance of political repression as a price worth paying for economic
dragons. South Korea and Ghana, for example, had been at roughly the same level progress. China's renewed hardline is the harbinger of a developmental paradigm
of development in the early 1 960s.z5 The subsequent Asian "miracle," however, shift whereby globalization has exactly the opposite effect of what Huntington
explained itself in sui generis terms that not only discredited "dependency" theory and Fukuyama predicted in the late 1 980s. Massive infusions of global capital are
but camouflaged the enormous economic advantage that accrued from America's putting some of the worst regimes in Asia out of reach of domestic reform. Thus
geopolitical commitment to the Pacific Rim. globalization turns out to be a rescue operation for endangered authoritarians. Deng
Faith in global capitalism had eroded during the stagflated 1970s, and Latin Xiaoping's genius was to see that potential early enough to save the most dreadful
America's "lost decade" of the 1 980s dealt it another blow. With the whole world and decrepit Asianism of them all : the Chinese Communist Party, to which he gave
system on trial, the East Asian contrast was more than welcome in the West. So long new life by way of capitalist resuscitation.
as the Cold War lasted, Western capitalists were inclined to tolerate and even applaud Two of the most central claims of neoliberal globalism are hereby exploded:
"Asian values."26 The official lesson in the Asian/Latin American contrast was that the notion that globalization is fundamentally pro-democratic and anti-nationalistic.
capitalism could fail only when infected by Left policies. Asian governments might By no means is China the only locus of this dark truth. The "black-van" side of
radically depart from the precepts of liberal capitalism, but all was considered well Japanese political culture has been the LDP's ever-present shadow, and most Asian
on the Eastern front so long as the Asian tigers were solidly on the Right. Ironically governments have their equivalent of Yakuza (Japanese mafia) politics. Both maj or
their quasi-exceptional success story revived confidence in capitalism as the universal parties in Taiwan accuse each other of such ties, and both are telling the truth. If
path to development. Senism is the sunny side of Asia's internal politics, this is its sinister side, and it
Nonetheless there was a problem connecting the global to the local, as Eastern hardly needs to be said which of the two is closer to the halls of power.
and Western capitalism were in many ways incommensurable. It was the task of The brazen oppression of Asia's newly globalized regimes is startling even to
Western-trained technocrats to close this gap. In Indonesia they worked closely with seasoned realists. Neoglobalists such as Thaksin and Hu Jintao have not simply
the Army to anchor Suharto's New Order and hence to repress democracy, though recycled the old Asian statism. Pre-Crash miracle-mania went far toward reducing
they called the process anti-communism.27 Here and in most Rim NICs, S ingapore's development to economic growth, which in tum was used to justify political
soft authoritarianism (which was only soft for those who submitted to its dictates)28 stagnation.32 Yet through it all a rule-of-Iaw veneer was usually applied, if only

24 Jack Donnelly, "Repression and Development: the Political Contingency of Human

Rights Trade-Offs," in David P. Forsythe (ed.), Human Rights and Development (London: 29 Cho-Oon Khong, "Singapore: Political Legitimacy Through Managing Conformity,"
Macmillan, 1 989), p. 307 (pp. 305-28). in Muthiah Alagappa (ed.), Political Legitimacy in Southeast Asia: The Quest for Moral
25 Samuel P. Huntington, "Foreword: Cultures Count," in Lawrence E. Harrison and Authority (Stanford: Stanford University Press, 1 995), p. 1 09 (pp. 1 08-35).
Samuel P. Huntington (eds), Culture Matters: How Values Shape Human Progress (New 30 Sometimes they went too far even for their own good. The result was such a dearth of
York: Basic Books, 2000), p. xiii (pp. xiii-xvi). interest in politics among Singaporean youth that it became hard to recruit fresh talent for the
26 William H. Thornton, Fire on the Rim: The Cultural Dynamics of East/West Power People's Action Party (PAP). Prime Minister Goh Chok Tong was forced to raise salaries to
Politics (Lanham, MD: Rowman & Littlefield, 2002), p. 1 2 . attract even marginally qualified government functionaries. See Trish Saywell, "Singapore:
27 Dewi Fortuna Anwar, Indonesia in ASEAN: Foreign Policy and Regionalism (New the Young and the Restless," The Far Eastern Economic Review (December 2 1 , 2000), http://
York and Singapore: St. Martin's Press and Institute of Southeast Asian Studies, 1 994), [Link].comf_001 2_2 1 /[Link]
p. 279. 3 1 Jan Aart Scholte, "The Globalization of World Politics," in John Baylis and Steve
28 Real resistance was never easy in Singapore. An old joke was that communists in Smith (eds), The Globalization o/ World Politics: An Introduction to International Relations
Malaysia could hide in the jungle, but in Singapore they could only take cover in the Botanic (Oxford: Oxford University Press, second edition, 2001 ), p. 1 4 (pp. 1 3-32).
Gardens. See Chia Thye Poh, "Singapore," in Chee Soon Juan (ed.), To be Free (Clayton, 32 Surin Pitsuwan, "The Asian Crisis, Good Governance and the Tsunami of
Australia: Monash Asia, 1 998), p. 245 (pp. 24 1 -86). Globalization," in Charles Sampford, Suzanne Condlln, Margaret Palmer and Tom Round
214 Development Without Freedom The Crisis ofAsian Globalization 215

to placate Western allies. Now, under the tutelage of Sino-globali� ation, n� thing much care, so long as the economy stayed on track; and i t soon became apparent that
matters except the economic bottom line, which doubles as the official party lme. Thaksinocracy epitomized a pan-Asian trend.
This second phase of post-Crash politics is comparable to Japan 's "reverse
course" of the late 1 940s, which likewise had Washington's tacit blessing. Both
Conclusion: Toward a Senism of the Left
paved the way for a rearguard acceptance of growth at all costs. The 2006 coup that
ousted Thaksin had less to do with moral revulsion at his corruption than with the
The Crash led many to demand more and better politics,33 but no ASEAN country
fact that he did not push the new Asian developmentalism far enough. Like an Asian
was willing to forfeit even a fraction of its GDP growth for �on-material goals. !f
Juan Peron, he diverted too much revenue to the purchase of rural and working class
Rim governments could not deliver a full and speedy economlC recovery, the pubbc
support. Urban entrepreneurs wanted a less compromised economism of the Right.
would soon give up on the democratic side of reform. The departures of Suharto
The bland acceptance by ASEAN neighbors first of "democratic" Thaksinocracy and
and Mahathir left a regional leadership vacuum that any human rights or democratic
then of a patently anti-democratic post-Thaksinocracy says much about the drift of
activist would have to welcome. But a prolonged economic slump invited a reversion
Asian globalization. This should hardly come as a surprise after ASEAN extended
to old voting habits, or worse.
. membership to the brutal Burmese j unta in 1 997.
Washington had good reason for keeping its silence concerning the reactIOnary
Repression was systematized after General Than Shwe took command of the
tilt of globalized regimes such as India's BJP and Thailand's TRT-now reborn as
Burmese military government in 1 992. Since 1 996, when total war was declared on
the PPP. Right populists, after all, were considered more pliable �ha� � eft ones.
minorities such as the Karen and Shan, 2 ,700 villages have been destroyed and over a
Thaksin became the archetype of "glocal" (global/local) authontanamsm. The
million people uprooted. The last hope for reconciliation died in 2004 with the arrest
paramount fact from Washington's perspective was that capitalism was safe on his
. of the relative "reformist" prime minister Khin Nyunt.35 In 2007 the world watched
watch. Propelled by a resurgent economy, in growth terms second only to Chma,
in horror as this same brutality was turned on Burma's most intrepid champions of
Thailand's corporate poster boy was instantly recognized by global power brokers
democracy-its Buddhist monks. Protests that began that summer in reaction to huge
as a formidable agent of de-radicalization.
price hikes for subsidized fuel morphed into a full-fledged democracy movement
The White House took Thaksin and India's Vajpayee as members in good standing
when thousands of monks joined the demonstrations. Troops accustomed to the
on the "us" side of Bush II's us/them global divide. Like Bush they voided the
slaughter of helpless minorities did not balk at shooting unarmed monks. Thousands
pluralist meaning of democracy while milking its populist appeaL Thai democracy
were rounded up in late night raids on temples, despite the valiant effort of local
was welcomed precisely because it was a sham. Real democracy was dangerously
citizens to protect them.
unpredictable. Over the last quarter century the bond between Thai politicians and
Even crusty ASEAN leaders were shaken by this display of Tiananmen-style
criminal gangs had tightened, while vote-buying became so rampant that many
repression. It was tacitly conceded that the ASEAN policy of unqualified engagement
voters saw it as a legal entitlement. 34 If this is the best that Asian democracy can
toward B urma-motivated in part by wariness toward China's increasing grip on the
offer, authoritarianism will win by default. At least it makes the trains run on time,
region-had been a dismal failure. They had little or no diplomatic leverage to show
and keeps the unions in line, or in China's case nonexistent.
. for their concessions to Than Shwe's regime in the face of Western censure and
The Crash, in sum, brought development theory to a stark crossroads: elther
sanctions. This craven approach epitomizes the so-called "Asian values" mode of
democratization would have to be upgraded to a first priority issue, on a par with
ASEAN policy.
economic growth, or downgraded in the manner of Hindutva, Singaporean Asianism,
In recent years, in subtle but deliberate contrast to China's utter amoralism,
Thaksinomics, or Sino-globalism. Thailand epitomized the "glocal" turning of the
ASEAN had been edging toward a policy more geared to democracy and human
tide so far as reform is concerned. Thai "democracy" had long operated in a gray zone
rights. The case of Burma would answer the question of whether ASEAN's new
of decentralized patronage, whereby public office was a purchasable commodity and
rhetoric had any teeth. Likewise, Japan 's highly advertised promotion of an "arc of
effective leadership was all but impossible. It turned out that most Thais did not
freedom and prosperity" would be put to the test here.36 Burma was the point where
authoritarian and democratic Asianisms collided categorically, and at the ASEAN
(eds), Asia Pacific Governance: from Crisis to Reform (Aldershot, UK: Ashgate, 2002), p. 26 Summit of November 2007 the Burmese junta went on triaL In short, the politics
(pp. 25-30). of "Asian values" went on trial with it, and in short order the definitive verdict
. . . . .

33 See Allen Hicken, "The Politics of EconomIC Reform In Thailand: CnSlS and came back: innocent of all charges. Until then the proj ect of post-Crash reform had
Compromise," William Davidson Institute Working Paper, No. 63 8 from The William
Davidson Institute (January 2004), p. 24 (pp. 1 -30).
34 James Ockey, "The Rise of Local Power in Thailand: Provincial Crime, Elections 35 Michael Green and Derek Mitchell, "Asia's Forgotten Crisis: A New Approach to
and the Bureaucracy," in Ruth McVey (ed.), Money and Power in Provincial Thailand Burma," Foreign Affairs (November/December 2007), [Link]
(Copenhagen, Denmark: NIAS Publishing, Nordic Institute of Asian Studies and Singapore: 2007 1 1 Ofaessay866 1 O/[Link]
Institute of Southeast Asian Studies, 2000), pp. 85-86 (pp. 74-96). 36 Ibid.
216 Development Without Freedom The Crisis ofAsian Globalization 217

smoldered out of harm's way. Now, once and for all, it was smothered, so far as the crucial "swing state," a s C . Raja Mohan calls it,37 but at present it i s clearly swinging
region's actual governments were concerned. Constitutional reform-from-above was in China's direction. The difference between Indo- and Sino-globalism will blur over
defunct. Any substantive change would have to issue from grassroots sources, and time unless India can reclaim the twin pillars of its distinctly Asian democracy: its
would have to be powered by more radical ends and means. Democracy was not Gandhian commitment to the underprivileged masses and its Nehruvian determination
going to unfold by itself. to preserve nonaligned independence.38 Current globalization nullifies the former
Neither, however, could it unfold through political reform alone. The genius of and seriously weakens the latter.
Senism lies in its implicit thesis of political and economic concurrence. The Crash It hardly needs to be said which side of the Asian values debate gets the support of
brought Senism out of its academic closet. It had become much harder for globalists the World Bank, IMF and WTO. This conflict will be familiar to those who remember
to dodge the issue of political reform by way of a presumed democratic teleology. If the political schism within Western countries during and after the Great Depression,
the liberal democratic road to development was to be taken at all, it would have to be as depicted by Karl Polanyi in The Great Transformation ( 1 944). Our sense of deja
taken more assertively. More would be needed for political reform than the minimal vu is no accident, for the Asian Crisis-which in fact has never ended, but in many
device of elections and ballots. It is little wonder that Sen's "democracy as freedom" respects is expanding beyond the Rim to all of Asia-is the Asian equivalent of the
thesis earned him global credibility and a Nobel Prize at this time, for pro forma Depression so far as the working classes are concerned. Once again the issue is more
democracy had patently flunked the test in "miracle" era Asia. Even some c lassic political than economic, for the real problem is not so much underdevelopment (where
modernists finally wavered in their belief that economic growth is the last word on the solution could be economic growth alone) as politically guided maldevelopment
development. It was time, they thought, to give substantive democracy a chance. (requiring social democratic rather than neoliberal restructuration).
Senism was no longer a fringe model, but would it be anything more than a F or several decades "Asian values" have been defined by a power elite that would
passing fad? To be sure, Sen's democratic axiom cuts both ways: if economic seem never to have heard of social or ecological accounting, much less accountability.
growth is not sustainable without political development, so too democratization is If the "other Asia" that Senism addresses was never a prominent feature on the Cold
unsustainable without a solid and well distributed economic foundation. Sen may War map, globalization is making it all the more obscure. What is needed is a new
be at heart an egalitarian-as his praise of Kerala, India's most socialistic state, political cartography. Simply to have "democracy" or not is beside the point. It is
amply proves-but he is still a mainstream economist. If democracy is one engine easy to set up a pro forma "democracy" that keeps socially significant choices off
of his development model, its twin engine is still economic growth. Having almost the ballot.
sputtered out in the post-Marcos Philippines, that second engine went entirely dead The post-Senism we advance takes democracy to the antiglobalist barricades,
in Indonesia after the Crash, leading in both cases to a lack of Senian concurrence. which may be the only place where an effective "vote" can be cast. Under the throes
Likewise, Thailand's democratic reformism died of economic inertia, giving rise of current globalization, democracy has two basic choices: to be oppositional or to
to Thaksinocracy. The irony is that the Crash at once activated and deactivated this be cosmetic. The latter serves the interests of present power structures, while the
political reformation. The economic downturn that spawned democracy could also former moves Senism to the Left. It is unfortunate that today's Left so often sidelines
kill it. Just as it had in postwar Japan, US foreign policy played the role of axman. democracy as a first priority issue. This allows the Right to seize the moral high
America's distrust of grassroots democratization was never more fully exposed. ground of "freedom," which in its hands becomes a formula for economic serfdom.
What US-led globalization has fostered is the kind of procedural democracy that can Having so egregiously ignored the democratic movements in Eastern Europe
be bought and sold, Thai-style. And since the highest "democratic" bidder is sure to that precipitated the fall of the Soviet empire,39 the Left now equally ignores the
be the most globally connected one, it is not hard to see how neocolonial globalism democratic and human rights imperative in China and much of Asia.
operates, turning the very word "reform" into a geocorporate wish list. It is hoped that this study can encourage a fecund exchange between Senism and
Clearly Sen has overrated the formal apparatus of democracy as a guarantor of the Left, with the latter taking a Sen ian turn and the former a Left turn, even without
real and sustainable development. Dictators have less to fear from universal suffrage Sen's approval. Let us close, though, on a point of total agreement with Sen: the
than from the social and cultural resistance that globalization voids. This takes us recognition that simple economic growth is not development, and certainly it is not
into the thick of the new Asian drama, where incommensurable Asianisms are facing
off in a climactic developmental value war. The Left-Senian model we adumbrate
is fighting on two fronts: with neoliberal globalization on the one hand and Asian 37 C. Raja Mohan, "India and the Balance of Power," Foreign Affairs, Vol. 85, No. 4
authoritarianism on the other, though often the two work in tandem. (July/August 2006), pp. 24-25 ( 1 7-32).
Despite their profound contextual differences, Thai globalism and Sino-globalism 38 See William H. Thornton and Songok Han Thornton, "The Price of Alignment: India
in the New Asian Drama," Journal ofDeveloping Societies, Vol . 22, No. 4 (December 2006),
are alike in their anti-Senism. Both are globalized nationalisms with an abiding
pp. 40 1 -20.
commitment to development without Senian attributes . The question is how far the
39 See Andrei Codrescu, "Liberalism, not Interventionism, will Work in Iran," The
rest of Asia and the whole developing world will follow them. India may be the Villager, Vol . 76, No. 32 (January 3-9, 2007), [Link] 92/
[Link].
218 Development Without Freedom

Asian development. To freeze development in this reactionary mode (which by the

way was imported from the West) would spell the end of the democratic hopes that
the Crash engendered. This would kill the nascent Asian Renaissance in every non­
material sense, and finally in the material sense as well. Index
Perhaps the worst case scenario at this point is the possibility that Asians, for
lack of an effective political map, will not even know they are approaching an epic
developmental crossroads. They could pass right through it without realizing that
once upon a time they had a choice. Senism holds up a warning sign that there is
grave danger ahead, and in this respect Asian development is no exception. The Abe, Shinzo, Prime Minister: grandson Anderson, Benedict: on "cacique
of Nobusuke Kishi 1 70; and the democracy" 5 8 ; his return to
whole global South is fast approaching this same crossroads of development with
new militarism 1 76; his tough Indonesia 85; on Thailand's Rama
or without freedom. Rhetoric aside, the Washington Consensus leads us to the same
rhetoric toward North Korea earns V 1 02
illiberal destination that the Beijing Consensus does. What is needed, we argue, is a
him popularity 1 77 ; and national Andijan Massacre: as crucial Second Way
real Third Way, which is to say a Senism of the Left. amnesia 1 78 ; and the Choshu tradition milestone 1 97
for accommodation 1 78 (n38); as Angola: and China 1 92
business-as-usual LDPer 1 80, 1 8 1 ; Annan, Kofi: UN Secretary General: sides
agricultural scandal 1 80 (n52); falling with protesters at Cancun 1 8 8
ratings 1 8 1 ; this bribery re-opened the anti-democratization: American 3 9
door for oppressive politics 1 8 1 ; his anti-globalism 5, 6, 1 7, 1 9, 3 3 ; and Sen 1 7
resignation raises democratic reform APEC Summit of 1 993 : Washington
hopes 1 82 demands open financial markets 33
ABRI (Indonesian Armed Forces, see under Aquino, Corazon, President: converts
TNl) People Power into a hegemonic
Accra Conference of Independent African device 60; comparison with Korea's
States, 1 95 8 25 Kim Dae lung 60; chooses fidelity
Aceh: TNI stokes violence there 89; still to international capital over reform
colonized 90; political impact of the movement 6 1 . 208; swings toward
December 2004 tsunami 9 1 , 208; the military 62; ends up more a U.S.
history as a sovereign state 9 1 ; partial puppet than Marcos 63, 73, 206; forced
autonomy not likely to be honored 92 to embrace the military 206
Adas, Michael: India's rural negotiations "arc of freedom": Japan's democratic power
preclude rebellion 1 65 politics 1 78
AFL-CIO: failed petition on behalf of both Arroyo, Gloria Macapagal, President:
U.S. and Chinese workers 1 3 8 (n43) as agent for vested interests in the
Africa: China's "year of Africa" and its Philippine Senate 64; cheerleader
Africa Summit of November 2006 1 93 , for U . S . after 911 1 67, 73 ; her war on
1 94; China's return t o 1 94 dissidents and activists 69; scandals
AID S : China's policy towards 1 3 3 of and mutiny against 69, 7 1 ; her 91 1 1
Akayev, Askar, President: close relations card 70; weak popular base 72
with Beijing 1 96, 1 96 (n64) Article 9 : clips Japan's wings militarily,
Albright, Madeleine, Secretary of State 1 thus securing America's vanguard
(n l ); 2 1 role in the Far East 1 70; and new
Almonte, Jose: lends Ramos the look of "normalization" 1 7 5, 1 78, 1 80, 1 8 0
progressivism 64 (n46)
Al Qaeda: as alterglobalist NGO 3 6 Ash, Timothy Garton: compares China
alterglobalization 3 3 , 1 8 8; reactionary and India to Germany and America in
types 3 6 1 905 1 52
America-China Society: a s Kissinger's pro­ Asia, the other: made all the more obscure
China club 1 44 by globalization 2 1 7
220 Development Without Freedom Index 221
Asian Crash 1, 2, 3, 8, 30, 32, 45, 149; Bakiev, Kurmanbek, President: renews Budiono: Indonesian technocrat, banker, and China National Offshore Oil Corp.
reform hopes of 36, 203; preceded Akayev's close relations with cabinet member 87, 93 (nl13) (CNOOC) 132
by lending binge from 1993 to Beijing 196, 196 (n64) Burma (Myanmar) 141; war on minorities China National Petroleum Corporation
1996 80; political malady behind the balance of power: America's role in and Saffron crackdown 215 (CNPC): specializes in working with
Crash 88; blame put on Asians, with Asia 151 Bush, George W., President: cronyism of 9 pariah regimes 132
the cost laid on workers 188; as Senian Bali bombings: foreign and local factors (n29); contradictions of his foreign China Ocean Shipping Company (COSCO):
moment 211; both activated and de­ in 90 policy 177 the PLA's merchant marine branch 142
activated reform 216 Bandung Conference, 1955 25 Bush, George H.W., President: pro-China China, People's Republic of (PRC) 1
Asian Crisis 1, 5, 13, 32; and IMF 6, 22; Bauer, P. T.: assault on economic equality 6 attitudes and Global Crossing 118 (n3); competition with other Asian
as political opening 7, 201; Sen on 9; (n20) (n35) economies 2; FDI in 2 (n8), 4, 31;
neoliberalism 31; political erasure Beijing Consensus 4, 36, 120; departs compared to Kerala 12 (n53), 14;
of most interpretations 75; U.S. from Asian exceptionalism 120 (n43); Canct'm WTO meeting of 2003: phalanx of capitalist but anti-democratic 32, 133,
opposes proposed "Asian Monetary like the Washington Consensus, its resistance at 33; 188 138 (n42); economic restructuration
Fund" 80; its impact on Japan 173; victim is the working class 121; Henry capitalism: monolithic 5; Cold War 5; of Il l ; exempted from IMF-style
confirms the high cost of undemocratic Kissinger its cheerleader 210 saved from serious examination by reform processes 116; trade surplus
governance 201; for working class it Belarus: friendship with China 132 Asian miracle 30; booty capitalism and foreign exchange reserves of 116,
did not end 202; expands to the rest of Bello, Walden: on the Crash 32, 203; of Marcos 59; Schumpeterian 189; favors TNCs over SOEs 117;
Asia 217 blames Asia's fall on deregulated "creative destruction" 187; Cold capital dependency of 117; online
Asian Development Bank (ADB): question's capital 52; on fall of People Power 71 War struggle has given way to a police in 118; its W TO entry ends
China's economic data 124; ADB Bhuminol Adulyadej, King: and Thaksin 95 contest of rival capitalisms 193; reform pressure 120; Left's misreading
complicity in eco-cide 195 BJP (Bharatiya Janata Party): for decades comparison of First and Second Way of 120; its banking policies compared
Asian exceptionalism 5, 10, 29, 30, 37; its bigotry was quietly condoned capitalists in Africa 195; "booty to Japan's 120; biggest divide between
fall of 5, 10; turned on its head after by Congress Party 163; hold on capitalism" of the Philippines 206; the rich and poor 121, 122; the Left
Crash 31; politics of 32; compared Gujarat 164; blendsHindutva and incommensurability of many aspects on 121, 121 (n44); myth of China's
to Beijing Consensus 120 (n43); globalization 166; its fascist vision of Eastern and Western capitalism was "fourth generation" reformists 122;
ironically Asia's exceptional rise is foiled by democratic rebound 166 bridged by technocrats 212 its growth questioned 123, 124;
taken as proof of capitalism's universal Blaine, James, Secretary of State: Castells, Manuel: on Asian vassel states 41 needs to create 300 million jobs in
values 212 imperialist thought of 23 (n9) CCP: see Chinese Communist Party next decade 124; two-thirds of its
Asian miracle: saves global capitalism Blair, Tony, Prime Minister: and Third CCP/TNC symbiosis 4; 101, 146, 149; population left behind by China's
from serious examination 30; second Way 34 importance of insecurity in 116; and miracle 124; trade surplus of 125;
miracle of China and India 186; hidden Boonmi, Thirayuth: sees Thaksin as a "see no evil" engagement 117 protests in 127; new aristocracy
defects of 205 "monster" 97; on Thailand's quasi­ Central African Republic (CAR): and of 128; "new socialist countryside"
Asian tigers 1, 6 constitutionalism 102 China 193 to offer pressure release 128; its
Asian values 7, 11, 27, 96, 139; and Borneo 90 (n100) Central Intelligence Agency (CIA) 58 rogue friends 131, 190; trade deals
neoliberalism 2 (n5), 187; and Botswana: as growth model 10 Chavez, Hugo, President 5, 21 with Iran and Israel 132, 132 (nl l ) ;
"miracle" economies 4, 8, 9; full Bozize, Franvois, President: his regime Chechnya: holocaust in 22 desertification 134 (n21), 135; sewage
eclipse of 6; and IMF 6, 22; and saved by China 193 China development model 35, 149, 186, crisis in 135 (n29); rural China as
authoritarianism 7; breaking out "BrokenHearts": Indonesian technocrats 189; paradox of toys made under base camp for global epidemics 136;
of quagmire 32; Sen on 32; Sen's who broke with the New Order by torturous conditions 134; praise of land appropriations 125, 136, 136
alternative to 155, 202; trial run in demanding political reform 84 from Jeffrey Sachs 138, 194, 209; (n34); mounting class divide 136;
postwar Japan 169; in 1960s and early Bremmer, L. Paul, chief administrator in framed with Russia in mind 139; Xiamen protest model 137, 144;
1970s, Asian development still had Iraq: and China 144, 144 (n72) turns affiuence against freedom 145; crisis of SOEs 137; agricultural
room for equity 212; the new Asian "BRIC" thesis 198, Russia and Brazil as bankrolled by TNCs 154; 154 (n l 8) ; stagnation in 138; military buildup
statism of the CCP and TRT drops old junior partners in 199 inroads into India 155 (n24); eco­ of 140; Western public's trust in
rule-of-law veneer 213 Bruntland Report (U.N.) 34 cide of 195; could be turned against PRC falling 147 (n61); could its
Australia: pro-China leaning of 141 (n60) Brzezinski, Zbigniew, National Security China itself by other developing economic success have happened
authoritarianism 5, 6, 17, 19, 33, 76 Advisor: and China 144 countries 209; Marshall Plan for the without Tiananmen? 147; its urban
Budiman, Arief: called for Indonesian China model 210 cultural revolution 148; will this be
Bagir Manan: Indonesian supreme intellectuals to take decisive reform China-India Free Trade Area 152 a China century? 149; as new "lead
court justice under Suharto, kept in action 87 China-India relations 151; 153; asymmetry goose" 151; ties with Pakistan 152;
Megawati's cabinet 87 of 152 its attitude toward multilateralism
222 Development Without Freedom Index 223

compared to India's 153; color crackdown on unions 80; the most Dai Qing: jailed after Tiananmen for his ideological housecleaning 114; brokers
revolutions inspired Hu Jintao's "anti­ pro-China president 118 (n35); and eco-resistance 126 a grand bargain with bureaucrats and
terrorist" crackdown 185; its armies Global Crossing 143; lauds Rwanda's Darfur: China and 132 entrepreneurs at the expense of workers
of migrant workers 186; as chief President Kagame 194 Davis, Mike: and global urbanization 147 and farmers 115; his social contract­
beneficiary of 9111 189; as champion Cocks, Joan: on Rosa Luxemburg 26 debt, foreign: Rim as compared to Latin economic dynamism in return for
of Second Way 190, its economic grip Cohen, Gerald: vs. freedom mantra in Sen America 71 political capitulation-is failing most
on South Africa 190; and Sudan 191; and Rawls 16 democracy: Sen on 12; alternative 13; Chinese 127; retained power behind
and Nigeria 192; and Angola 192; Cohen, William,Secretary of Defense: pro­ capacious meaning of 17; as the scenes 129
and CAR 193; end of its African China actions of 118 (n35); and Global proceduralism 18; activistic 19; democracy as freedom: see under Sen
honeymoon 194; its Middle East Crossing 143 Asian 36; decline of democratic reform Denmark: egalitarianism of 14; "Danish
policy 196, 196 (n62); duped the West Cold Peace 183 (n1); unofficially declared in Korea and the Philippines 62; lesson" of 14 (n64)
with its "anti-terrorist" rhetoric 198; by Putin's Munich speech of February destabilizing force of 72; dependency: reverse form in Rim
knows it cannot win Asia with 10,2007 183 neocolonial 73; pro-democratic countries 27; delayed-action 31;
economics alone 210 Cold War 1, 5; political nondevelopment 6; movements in Indonesia 83; subverted geopolitical 41; 212
"Chindia" 187; and "Ruchindia" 198 nostalgia for 21; and "miracle" by Thai TRTism 98; neo-colonial 105; dependency theory 5, 27,29; victim of
Chinese-American Joint Communique: economies 26, 27; its end spells end of Thaksin turns democracy against Asian "miracle" economies 26; 212
commits America to a one-China policy Japan's 1955 system 177; and adopt­ reform 106, 208; the question development: of TINA 5; pluralistic 7;
and declining support of Taiwan 144 a-dictator development schemes 195; of democratic efficacy 110, 154; modernist theory of 10; post­
Chinese Communist Party (CCP): as and America's support for Asian economic disadvantage compared development theory 10 (n36);
governing class 3; compared to tigers 201 to Chinese authoritarianism 116; beyond economism 12; post­
Thailand's TRT 101; saved by Collective Security Treaty Organization ersatz democracy as inoculation Keynesian 14 (n66) ; democratic 18,
FDI 117; as ultimate guarantor of (CSTO): overlaps with SCO in against the real thing 138; 201; "inside track" 29; politics
TNCs 121; for its center to hold, it countering NATO 197 (n68) democratization thwarted by new of 32; sustainable 34; China
must either reform or suppress 125; colonialism: Thailand's informal middle classes 148; democratic model 35; without freedom 39;
retrieves Confucius in effort to stanch experience 102; deep type 102; lack of credentials of India and Japan Asian model praised by World
protests 126; old Left fires back within anti-colonial rebound in Thailand 103; compared 154; Indian democracy Bank 41; authoritarianism 76;
the Party 127, 139; Hu's consolidation Thailand as the perfect neo-colony 103 sleeping on the job 155; limits of economic development precludes
of 128; CCPism compared to the Communist Party of the Philippines Sen's informational democracy 157; political development in Indonesia 81;
monarchy in pre-revolutionary (CPP) 67 renewed ''Third Wave" fuels renewed crossroads of liberal and authoritarian
France 138; resuscitated by global concurrence model 7, 17, 201, 203; Second World 184; in Ukraine, anti­ development 95; maldevelopment
capitalism 213 importance confirmed by Philippine democratic action taken to suppress in Thaksin's Thailand 97; without
Cho YangHo: vs. President Kim Dae and Korean cases 18; and South anti-democrats 185; democratic freedom 200
Jung 48 Korea 204; concurrence lacking in minimalism 203; myths of Korean Dongzhou Incident 126
Chaturon Chaisaeng: TRT leader after Philippines and Indonesia 216 democratization 204; corporations Dorn, Nancy: as China lobbyist 142, 142
Thaksin's exit 110 Confucius: retrieval of by CCP 126, 139 were the real winners of Korea's (n65), 142 (n67)
Christopher, Warren, Secretary of State: his Congo: and China 194 democratic revolution 206; and dwifungsi: the Indonesian military's dual
attitude toward China 142 (n63) Congress Party (oflndia): quietly condoned ecology 211; Washington distrusts real function in security and politics 77;
Chuan Leekpai: Prime Minister, globalist Indian bigotry for decades 163 democracy 214, 216; failure of pro rapidly restored by Megawati 88
captivity of 98; seemed to mix consumer spending: limits of in China 116 forma democracy in Asia's "miracle"
globalism and democracy 108 corporatism: of two President Kims 48; era 216; must either be oppositional or Eagleburger, Lawrence, Secretary of State:
Chulalongkorn, King (see Rama V ) weds old Thai patronage system 105; cosmetic 217 and China 144, 144 (n72)
Chun Doo Hwan, President 43, 46; and corporations were the real victors of Democratic Party of Japan (DJP): poses East Asia Economic Summit 2002 (World
"regulator" approach 44; favors Korea's democratic revolution 206 a political threat to LDP after Ozawa Economic Forum): Thaksin's keynote
SMEs 45 (n33) Cox, Robert: critique as opposed to problem joins it in 2003, but at the price of speech declares independence from
Chung Ju Young 39; compared to Ross solving 34 diluted reformism 174; cannot afford Washington Consensus globalism 10 1
Perot 54 crony capitalism: Asian 2,8, 9, 19, 41; to alienate Washington 182 East Asia Summit of December 2005 at
civil Islam: see Islam, civil Western 9, 9 (n29); Indonesian 78; Deng Xiaoping: supported by Lee Kuala Lumpur (ASEAN) 140, 141,
Clifford, Mark: on Korea's social global/local cronyism in Thailand and Kuan Yew 3; his economic 141 (n60); China's attempt to sideline
militarization 41 India 100 restructuration 111; never was India 151
Clinton, William, President: his the budding liberal that the West
administration ignores Jakarta's imagined 112; used Tiananmen for
224 Development Without Freedom Index 225

East Timor: U.S. complicity in the Fordism: its democratic element contrasted dismissed by revolutionary theorists: globalization theory: naively dismisses
invasion 77 (n13), 89; global with Sino-globalization 209 165; Frank's "reOrientation" thesis geopolitics 29
community's belated support 92 foreign direct investment (FDI): saves affords space for Gandhism 165; and Global Footprint Network (GFN):
eco-cide: in the Mekong region 195 the CCP 117; China on FDI life Tagore 166; Sen and Mishra are his dire estimates of China's growth
ceo-resistance: effectively banned in China support 124 pluralist heirs 167 effects 134
after Tiananmen 126 foreign invested (FIEs) 141 Garnett, Mark: liberalism as unsustainable 4 global South 13
ecology: China's ecological trauma negates Frank, Andre Gunder: on dawning of (n16) Goh Chok Tong, Prime Minister 213 (n30)
its vaunted growth 124 Asian Age 151; his "reOrientation" Gates, Bill 194 Golkar Party (Indonesian): corruption of 29
econocide 8 thesis affords theoretical space for Gates, Robert M., Secretary of Defense 21 Gray, John 7; vs. liberal narcissism 4 (n16)
Economic Planning Board (of Korea) 44 Gandhism 165 Geertz, Clifford 86, 87 great game 132
Economy, Elizabeth: local government Free Aceh Movement (GAM): 88; portrayed Georgia 196 Green Belt Movement 24 (n19)
the key to China's environmental as violent and oppressive 91; its Ghana: compared to South Korea in the Greider, William: predicts America's
crisis 146 resistance sapped by the 2004 early 1960s 212 decline 2
engagement: illusions of in the case of tsunami 92 (nl 09) Giddens, Anthony: and Third Way 34 G-20 33 (n77)
China 117; 139, 140; corporate or Free Papua Movement (OPM) 90 Global Crossing: pro-China activities guanxi 3 (n12); Chinese compared to
democratic 210 Free Trade Area for the Americas of 118 (n35), 142, 142 (n69), 143 Southeast Asian 3
Mark: on the disjunction (FTAA) 29 globalism: definition of 6 (n21); Gujarat disaster 156; 164
between Clinton and Bush styles of freedom: instrumental value of 10 legalism 18; booty type chapter GulfWar 21
corporatism 33 Friedman, Thomas: fallacy of his globalist 3; Indonesian 78; globalists ignore
Enrile, Juan-Ponce (defense minister under democratization thesis 202 Muslim persecution in Thailand Habibie, B.J., President (and Vice President
Aquino): aborted coup of 61 Fujiwara, Masahiko: his nihonism and Aceh 101; carpetbagger habits under Suharto) 80; technocrat put in
Enron: collapse of 9 and samurai rejection of Western of 102; Thai globalism co-exists charge of ICMI 82; moderate reformist
Environment and Rights Institution 4 values 180; and the triumph of the with dire poverty 105; and appeal of who stuck with the geriatric New
environmental destruction: in China 140, Right 182 political stability 122; Hu's globalist Order 84; lacked broad power base 85;
146, 149 Fukuda, Takeo, Prime Minister: his nationalism 140; failure of "trickle squandered reform chance 86
Escobar, Arturo: postdevelopmentalism pragmatic doctrine revived by his son down" theory 148; Sen's 155; and Haig, Alexander, Secretary of State: and
of 15, 16; his activism as corrective for Yasuo Fukuda 182 Japanese nihonism 181; Thaksin's China 144
Sen's bland politics 15 (n73) Fukuda, Yasuo, Prime Minister: his de-liberalized globalism compared Harrison, Benjamin, President: imperialist
Estrada, Joseph, President: his victory made moderation and revived "Fukuda to that of Marcos and Suharto 208; president and his "new diplomacy" 23
possible by post-Crash turmoil 66; he Doctrine" dims hopes for democratic neocolonial globalism 216 (n9)
too sells out to globalist interests 66; reform 182 globalization:2, 20 l ; as economic Harvey, David: his rare warning from the
sets stage for People Power II 67 Fukuda Doctrine: its revival will pose no imperialism 16; armed 33; Left on Sino-globalization 121
Eurasia: ground zero for Second Way serious challenge to Sino-globalization, reactionary 36; Asian 39; global/local HCI (Heavy and Chemical Industries)
globalization 196 since both are recipes for development cronyism in Thailand and India 100; plan 42, 43; technocrats vs. 43
Eurasian Economic Commonwealth (EEC): without freedom 182 "trickle up" effect and "rush to the Hefuer, Robert: civil Islam thesis 82
Russia's domination of 197 (n68) Fukuyama, Francis 1, 19; 166 (n77), 209 bottom" labor practices 116; China's Henderson, Gregory: his "politics of the
entry into WTO as pentacle of vortex" misses Korea's rebellious
Fairbanks, John K.: saw Mao as an agrarian Gabon, and China 194 globalization 131; mutually deleterious undercurrent 53
democrat, even as 100 million Chinese Gaddis, John Lewis 1 (n1, n3) wage competition 138 (n43); faith­ Himmelfarb, Gertrude 15 (n22)
perished 148; Tiananmen brought him GAM: see Free Aceh Movement based 139; enforced by statist fiat 156; Hindutva: Hindu fascism's appeal to Hindu
his belated shock of awareness 148 Gandhi, Indira, Prime Minister: on globalization rescues the power elite, underclass 164
(n94) Naxalites 157; her despotic plans as in China and Southeast Asia 164; Hitchens, Peter: on the deception of
Falun Gong 4 foiled by democratic People Power 166 cutting off the exit door for half the Shanghai's familiarity 145
Fang Lizhi: "China's Sakharov" 112 Gandhi, Mohandas Karamchand world's workers, who earn less than $2 Hu Jintao, President: posted to Tibet
fascism: with a democratic face 18 (Mahatma Gandhi): Third Worldism per day 187; Second Way globalization as warm-up exercise for coming
FDI: see foreign direct investment and eco-social austerity of 24; and promises to control the chaos created domestic crackdowns 112; and
Fei Xiaotong: old-school reformist 111 the rural-urban divide 159; pre­ by First Way 200; snuffs out reform Tibet crackdown in wake of People
Fine, Ben 16; underscores Sen's linkage of Rawlsian vision of 161; his ideas hopes after Asian Crash 203; provides Power elsewhere 113; versus Jiang's
ethics and economics 15 (n71) purged by Nehru 151; Gandhism as artificial resuscitation for failing "Shanghai Clique" 122; his reform
First World: dependence on the Second cure for reactionary inclination of authoritarianisms 213 is a strictly intra-party affair 122;
World for its moral bearings 185 rural masses 162; pluralism of 162; his team hails from anti-Zhao
226 Development Without Freedom Index 227

camp 123; plays on both sides of democratic credentials compared conformity to IMF strictures proves Islam, civil 82; importance of in
ideological debate 127; forced, like to Japan's 154; its Third World lethal 76; "Berkeley mafia" 76; Indonesia 89; versus jihadic
Thailand's Thaksin, to reach out to majority 154; hidden advantages of political-security and techno-military Islamism 92; versus ICMI-style
rural masses 128; makes functional its consumer-driven economy 155; mergers in 77; nationalism of 78; politicization of religion 93; as hub of
peace with Jiang's representative, as test site for Senism 155; growth international liberalism vs. nationalist Indonesian reformism 207
Zeng 128; the Hu era signed and of 155; living economies of 156; protectionism 79; bailout package Islamism, Indonesia 81; traditionalists
sealed 129; Hu pictured as a Chinese poverty in 156; ersatz Westernization for 81; economic development versus modernists 82; extremist
Gorbachev 131; feigns ignorance of in 156; downward mobility of middle precludes political development 81; Islamists lose popularity in late
local corruption 133; his globalist classes 156; rural crisis and farmer centrifugal force of the country's 1990s 83 (n52); used as cover for
nationalism 140; slighted during U.S. suicides 156, 157; rural-urban divide geographic expanse and ethnic repression 92
visit 141 (n60); his blighted African in 159; agricultural monocultures diversity 81; mid-1980s fall in oil Israel: military trade with China 132 (n11);
tour 194 versus traditional diversity 160; prices and neoliberalization 83; rise 196 (n62)
Hu Yaobang: his reformism terrified the absence of export-driven growth of pro-democracy movements 83;
CCP Old Guard 111; his death ignites renders it immune to Asian Crash 160; global capitalism supports Jakarta's Japan: human development in 11; defeat
Tiananmen Incident 113; his good its biggest problem is distribution rather iron grip 92; wilting of egalitarian of Russia 22 (n5); reverse course
name dusted off by President Hu so as than growth 160; growth statistics reform 93 (n113); revival of U.S. of 39; Yoshida plan 39; its banking
to close the Tiananmen era 120 of 160 (n51); rural employment military relations 93 (n115); chronic policies compared to China's 120;
hukou system 136, 146 program 161; class problem of its uncertainty of 207; its post-Crash lost decade of 149; its democratic
Human Development Index (U.N.) 8 leadership 161; hydraulization of reform possibilities greater than in credentials compared to India's 154; its
Huntington, Samuel 19 its culture and politics 163; Muslim Korea or the Philippines 208 "reverse course" as the indigenization
Hutchison W hampoa: ties to Chinese ghettos no longer blend into urban Indonesian Association of Muslim of US policy 169; its 1955 bargain
Army 118 (n35); 142 scene 163; lacks labor-intensive Intellectuals (ICMI): co-opts Islamism dies with the Cold War 171; LDPism
Hutton, Will: his warning concerning industry to absorb surplus labor 164, for Suharto's needs 82 better camouflaged than most
China's future 132 186; corporate agribusiness and inequality: rising in China 146 authoritarianisms 171; "Japan as
Naxalism 165; modernist war on International Covenant on Economic, number one" goes geopolitical 172;
!braham, Anwar 36 Indian culture 165; as proving ground Social, and Cultural Rights (ICESR) tum to Southeast Asia 172; its slump
Ikeda deal of 1960: saves Yoshida Deal for Senism 166; modernists see its of 1976: broad sense of development kills its geopolitical aspirations 173;
with promise of fast-tract growth 170 history as something to escape 166 of 17 the diffuse power structure that
(n104) (n77); looks to China as development International Monetary Fund (IMF}-see served it well in masking miracle-
IMFism (see also International Monetary model 186; as swing state 217; its also IMFism 1, 13, 192; and Asian era authoritarianism prevents
Fund) 5, 97; widely recognized twin pillars in Gandhian egalitarianism Crisis 6, 22, 33, 201; "reform" it from executing a recovery
unsustainability of 101; applied and N ehruvian nonalignment 217 idea 18; rescue package of
·

after its slump 173; Koizumi's

to Thailand 102; not applied India-China Free Trade Area 152 Korea 49; structural adjustment secret conservatism and Ozawa's
to China 116; moral hazard of India-China relations 151; asymmetry in the Philippines 59; bailout of challenge 174; geopolitical
bailouts 202; carpet bagger mentality of 152; angst underlying the new investors 75, 80; cases of Malaysia normalization 175; the new
of 204 accord 153 and Indonesia prove its deleterious nihonism 176; under pressure from
imperialism: American 22; Java replaces indigenous rights: violations of in effects 76; and Thaksin 72; $40 billion China and Russia 171; Yoshida II
Holland 90 Malaysia 90 (nlOO) bailout package for Indonesia, without hybrid of Koizumi and Abe 178;
income gaps: in China 121, 122; admitted Indo-globalization 154; Pankaj Mishra's political strings attached 81; IMF "2 plus 2" approach to diplomatic
by World Bank 186 (n10) criticism of 154 (n19); threat to strictures pave the way for Thaksin 97; symmetry 178; Japan buys U.S.
India: trade liberalization of 13 (n60); needs democratic erosion 155; only 1.3 Mahathir's blast at the IMF 97; Korean silence on currency issue with Iraq
to retrieve its Gandhian heritage 20; million out of 410 million workers elites used the IMF 204 assistance 179; whaling as geopolitical
limiting global capitalism and militant are part of the new globalist Iran: $100 billion oil deal with China 132; save-face mechanism 179; new
nationalism 36; new star status 151; economy 164; and Naxalism 165; gets U.N. protection from China 132 opposition politics in wake of Abe's
starting to "engage" China 151; India kills diversity 166; former apparatus (n11); China and Russia reluctantly bungling 181; its economic woes
wonders why U.S. FDI is showered on of democracy separates it from Sino­ agree to moderate sanctions from crisis of governance 181; new
undemocratic China 151; treated as globalization 166; distress migration against 196 (n62); invited to 2006 SCO patriotism irritates Chinese, Koreans,
pariah nation for thirty years 151 (n2); and jobless growth 186, 187 meeting 198 (n74) and Okinawans 182; threat of new
nuclear pact with Washington 153; Indonesia: pre-Crash 9; post-Suharto Irian Jaya: see Papua reverse course 182, 215; MITI did
its attitude toward multilateralism reformism 18; FDI 31; neoliberalism Ishihara, Shintaro: his case for re­ for Japan what centrist statism did for
compared to China's 153; its the Indonesian norm by 2004 75; militarization 177
228 Development Without Freedom Index 229

Korea 206 (n10); its "black van" sub­ Kim Dae Jung,President: for pan-Asian corporations were the real victors of the had to real democratic opposition 180;
culture 213 democratic reform 36; corporatism democratic revolution 206 Abe's business-as-usual LDPism 180;
Japan, Inc. 40 of 48,205; his massive layoffs 49; Korean development model 40, 41; LDPism as source of Japan's economic
Japan model 39; apolitics of 170; after fleeting popularity of 50; comparison contrasted with Taiwan 41 (n13); stress woes 181
1960, more carrot than stick 171; with Corazon Aquino 60 on Heavy and Chemical Industries Li Kai-Shing: pro-China billionaire 142,
"surpassed" Western liberal Kim Jae Ik: and Korea's technocratic (HCI) 42; and technocracy 43; 142 (n66)
capitalism 172; gives lie to "free struggle with the Blue House and corporate departure to Southeast Li Peng: may have ordered Hu Yaobang's
market" mythology 173; Koizumi's chaebols 44 Asia 46; IMF used as excuse for death 111; and Three Gorges Dam 127
new Japan model ties nihonism to Kim Jong 11 49, 50 corporate takeover 48; inordinate Long Term Capital Management (LTCM) 8,
forces of globalization 181; new model Kim Young Sam, President 44 (n30); economic liberalism treated by more 9
as new reverse course 182 as anti-Park dissident 46; his liberalism 49; oppositionalism in 205; Lord, Winston: attitude toward China 142
Japan Renewal Party: temporary reform agenda as pressure-release the Crash of 1997 only entrenched its (n63)
empowerment of 175 mechanism 47; corporatism of 48 defects 206 lost dacade 30
Jemaah Islamiyah 88, 89 Kishi, Nobusuke: his "Albert Speer" Kosovo 21 Luxemburg,Rosa: her suspicion of
Jiang Zemin, President: his mediatory function during the war and his postwar Krugman, Paul: on New Economy 2, 9; on nationalism 26
role compared to Thaksin's 107; role as conservatism's pit bull 170; the politics of the Crash 32
Hu and Wen versus his "Shanghai drew Old Guard elites into the LDP Kurlantzick, Joshua: on danger of China Maathai,Wangari Muta 24 (n l 9), 211
Clique" 122; his "third generationists" "Tojo Club" 170; his ouster looked model's proliferation 209,210 MacArthur, Douglas, General: and postwar
versus Hu agenda 123; fails to retain like a victory for the liberal Left, but in Kwangju massacre 43 Philippine war on the Left 58
power behind the scenes,as Deng fact entrenched the Right 171; versus Kyrgyzstan: reforms stall in 196 Magsaysay,Ramon,President: as U.S.
did 129; close corporate ties of 143 Yoshida's relative moderation 171 puppet 58
Junker synthesis 99; 101 (n8); clumsily exposed his real labor, migrant: Philippine dependence Mahathir, Mohamad, Prime Minister: warns
agenda 180; lesson of his fall 182 on 71 Thaksin 95; his caustic statements
Kagame, Paul, President: lauded by Kissinger, Henry, Secretary of State: and the labor suppression: in China 125, 126 after 9/11 100; upbraids the IMF and
neoliberals and Bush alike 194, 195 invasion of East Timor 77 (n13); super­ Lal,Deepak 5; new imperialism of 23 (n8) speculators 204
Kagan, Robert: his Mars/Venus dichotomy lobbyist for the Chinese junta 121, Lansdale, Edward, Lt. CoL: versus Mahbubani, Kishore 3
also relates to Old and New 143, 144; downplays Tiananmen 145, America's former Huk allies 58 Malaysia: FDI 31; escapes IMF undertow
Europe 183 210; works to cancel MFN 145 Laskar Jihad (Army oflslam) 88 effect 76
Kaplan, Robert: effectively credits the PLA Kissinger and Associates: China Latin America: versus U.S.-directed Mali: political rebound after its 1991
for China's success 123 engagement of 119, 144 globalization 22; why it fell behind "Tiananmen" 210
Karimov,Islam,President: China and Koizumi, Junichiro,Prime Minister: and East Asia 209 Mann,James: on Clinton's China
Russia back him after the Andijan Chinese regional hegemony 141 Lava, Jose 58 reversal 141 (n63)
slaughter 131, 197 (n60); as paper maverick 174,180; Leahy Amendment: provisions of Mao Zedong: mistaken as a democrat 35;
Katz, Richard: sees Japan's economic marries neoliberalism to Mori's ignored 70 seen by Fairbanks as an agrarian
dilemma as a crisis of governance 181 LDPism 174; as savior of the LDP Lee Hahn Been (Korean Deputy Prime democrat 148
Kazakhstan: and China 197 establishment 174; his new reverse Minister) 44 (n29) Marcos,Ferdinand, President: martial
Kennedy,Paul: predicted China's military course 175; compared to Yeltsin 180 Lee Hoi Chang 50 law of 58; his popularity in the early
empowerment through economic Korea, South: democratization of 36, Lee Hu Rak 43 1970s 59; non-recycling corruption
growth 139; on relative eclipse of U.S. 39, 205; Korea, Inc. 39,44, 47; Lee Kuan Yew: vs. Western liberalism 11; of 60 (n30); pushed his cronyism and
power 151 U.S. aid to 40; "self-reliance" supports Deng's crackdown at nepotism too far 207; his exit evoked
Kerala: as development model 12; in 42; debt of 43; giganticism Tiananmen 3; his thesis not Asian 4; high reformist expectations 208
compared to China 12 (n53),14; of 43,46; economism and political draconian advice to Ramos 65; warns Marcuse, Herbert 19
cultural openness of 13; importance underdevelopment 46; Carter promotes Thaksin 95 Marx, Karl: his rural idiocy thesis 165
of equality in 14,216; global crossing dissidents in 46; democratic revolution Lee Myung Bak: his landslide victory marks Mattei toy case: lead paint scandal from
of 14; Sen on 161 of 47; debt of 48; $60 billion IMF the triumph of Korean corporatism 52 China-made-toys 133 (n12), 134
Khan, A.Q.: scandal of 151 (n2) rescue package 49; tum of middle class Liberal Democratic Party (LDP): and McFarlane, Robert, National Security
Khin Nyunt, Prime Minister: arrest of toward reform 53; capital won the war Japan's new tyranny of managed Advisor: and China 144
this relative reformist ends hope for that labor fought 54; de-radicalization consent 169; Koizumi saves Megawati Sukarnoputri, President (daughter
Burmese internal reform 215 of 55; what went wrong? 204; Blue LDPism as a well-camouflaged of Sukamo) 92; her lack of a power
Kim Chong Yom: and technocrats under House as brake on corporatism 206; authoritarianism 174; its intra-party base leaves her at the mercy of the
Park 43 divisions were the closest thing Japan military 85; has no idea what to do
230 Development Without Freedom Index 231

with her victory 86; her fusion of multilateralism: Indian and Chinese attitude neoglobalism 36, 72; and continuity Pacific Rim: economism of 5; end of Cold
technocracy and populism slams the compared 153 between Clinton and Bush modes War advantage 28; "inside track"
door on more substantive reform 87; Mumbai (Bombay): ghettos of 161 of globalism 33; as union of power development of 29
gives military more independence than Musharraf, Pervez, President: such a economics and power politics 189 Pakistan: ties with China 152; 9111 returns
even Suharto did 88 dictator not possible in India 154 (n20) New American Century: support of it to Washington's good graces 153;
Mekong region: its biodiversity threatened Myanmar (see Burma) Taiwan 143 as failed state 153, 153 (n lO);
by Chinese development 195 Myrdal, Gunnar: on class problem oflndia's New Economy 2, 14; Washington and Musharraf's dictatorship not possible in
Mekong River Commission: its complicity leadership 161; and Sen 161 (n57) Asian values 2 (n5); ended truce with India 154 (n20)
in eco-cide 195 Asian developmentalism 29; Paul pan Arabism 24
Mendiola Incident 61 Narmada Bachao (Committee to Save the Krugman on 2 (n6); seemed invincible Pancasila 81
Merton, Robert 8 Narmada): versus the "hydraulization" before 2000 189 Panchen Lama: his murder 112, 113
Mexico: deficit of 30; tequila crisis 30; of Indian culture and politics 163 New International Economic Order (NIEO): Papua, West (formerly Irian Jaya): still
its political suppression compared to National Endowment for Democracy 4 decline of 13; 25 colonized 90; the curse of its natural
Thailand's and Taiwan's 103 nationalism: Third World 24; African 25; New Order: Suharto's political machine, resources 208
middle classes: now a bulwark against reactionary 28; Hu's globalist including some moderate reformists Park Chung Hee, President 40;
social democratization 148; downward nationalism 140; comparison like Habibie 84 Bonapartism of 44
mobility of in India 156 of Thai and Chinese globalized New People's Army (NPA) 67; control of Park Geun Hye: President Park's
Middle East: China's policy in 196, 196 nationalisms 216 8,000 villages 68 daughter compared to Megawati
(n62) Naxalites: competing with Hindu new world order 33 Sukarnoputri 50 (n67)
MILF (Moro Islamic Liberation Front) 70 nationalism for loyalty of victims of Nigeria: and China 192 Park Jie Won: arrest of 51
militarism, crony 29 urban/rural crisis 157; Indira Gandhi nihonism 176, 177, 178; of Jujiwara, Park Tae Joon: and the Korean
Millennium Challenge Account (MCA) 7 on 151; largely reactive 157; renders Soichi, and Shihara 180; Koizumi ties technocrats 42
Mindanao: Left and Islamic resistance in 65 the rural crisis visible 158; Naxalism it to forces of globalization 181 Pax Americana: conflates democratic and
minjung movement 53; its fall 54, 55 an aberration in rural India 164; 9/11: its chief beneficiary was China 189; capitalist values 23
"miracle" economies: product of Naxalism fills void left by the eclipse of used as excuse to return military aid to Pei, Minxin: on China's rotten politics 149
Cold War 26, 27; haunted by rural mediatory mechanisms 165 repressive regimes 208 People Power 18, 60; orphaned by
overproduction 172 Nazarbayev, Nursultan, President: gives Non-Alignment Movement (NAM): new 1991 62; People Power II 67, 70; as a
Mishra, Pankaj: his criticism of middle class China a new lease on strategic relations and expanded 21; Third Worldism populist instrument of hegemony 72;
India compared to Shiva's criticism of in the region 197 of 24 (n14); African 25; does not ersatz 73
agricultural monoculture 166; as the Nehru, Jawaharlal, Prime Minister: eco­ survive end of Cold War 26 People's Action Party (PAP): becomes
pluralist heir of Gandhi 167 imperialism of 24; unity through non-governmental organizations (NGOs): too dull to attract Singapore's more
Mobutu Sese Seko, President: World Bank diversity 25; his macro-modernism Chinese 4; in Africa 195 qualified youth 213 (n30)
loans to 26 versus Gandhism 159; purges North American Free Trade Agreement People's Liberation Army: practiced in Tibet
modernism: orientalist bias of Indian anti­ Gandhism in general 161; centrality (NAFTA) 29 for Tiananmen 112
Gandhism 165 of his system 163; his war on Indian Nu River Dam: to ravage the last of China's People's Power Party (PPP) of Thailand:
modernization: Korea's compressed culture 166 pristine areas 128 picks up where the TRT left off after it
(large scale) 42; classic, one-size neo-colonialism 23, 58; Philippines Nussbaum, Martha 15, 16 was banned in May 2007 110; comes
formulas fail to explain the Korean as neocolonial puppet state 57; to power in December 2007, restoring
experience 205 democratic 73; Chinese 194 Obasanjo, Olusegun, President: his China Thaksin's reactionary globalism 100
Mohan, C. Raja: sees India as crucial swing neoliberalism 1, 2, 4 (n16), 18, 33, 186; card played against the West 192 Perle, Richard: former China-basher turned
state 217 neoliberalization oflndonesia 83; its Official Development Assistance (ODA) 62 advocate 142, 142 (n69), 143
Mongkut, King: see Rama IV "peace through trade" delusions 119; (n43) Philippines 6; communism spurs strategic
Monroe Doctrine 23, 195 misreading of China 148; and Organization for Economic Cooperation reversal 57; U.S. undermines
Moore, Barrington: on the structural inertia Asian values 187; teleology of, as and Development (OECD) 29; and the Philippine democracy 57; missed land
of rural India 158; misunderstands reverse of the domino theory 189; flagging institutions of Washington­ reform obstructs development of a
Gandhi 159, 165 Sen soft on 202; no Asian country directed globalization 199 strong middle class 58; the geopolitical
Mori, Yoshiro, Prime Minister: as typical ever accepted neoliberal system Organization of Petroleum Exporting and geoeconomic advantage of the
LDP bureaucrat 174 willingly 207; neoliberal globalization Countries (OPEC) 27, 28 1950s 59; Marcos opts for booty
Mugabe, Robert: friendship with proves neither pro-democratic nor anti­ Ozawa, Ichiro: his challenge to standard capitalism 59; debt of 60, 63, 65, 71;
China 131, 132 nationalistic 213 LDPism 174; back from the political foreign aid to 62 (n43), 68; loss of
wilderness 181 farming jobs after joining WTO 64;
 l
I
232 Development Without Freedom Index 233

never joined "miracle" club,so did not Rama V (King Chulalongkom): foreign on Middle East issues 196; its "look to be tested in India 155; limits of his
�
have so far to fall 65,206; on different dependence of 1 02 East" policy 198; the major supplier of informational democracy 157; and
cycle of political hope than other Rim Ramo,Joshua: 3; his "Beijing Consensus" arms to the Third World 199 Myrdal 161 (n57); India as proving
nations 66; cumulative disillusion glorifies Chinese development 120 Rwanda: its GDPism lauded by Bill Clinton ground of Senism 166; as a pluralist
kills People Power 71; indigents Ramos,Fidel,President: his pretence of and Bill Gates 194 heir of Gandhi 167; re-politicizes
in 71; globalist "reform" had a decade progressivism reversed after taking development discourse 201; inherently
head start here 206; its globalization office 64; later blames globalist trade SAARC (the South Asian Association for oppositional 202; weakness of his
amounted to neocolonization 207; for rural crisis 65; 206 Regional Cooperation),13th Summit democratization formula 203; his geo­
its power structure survives the Rawski, Thomas: questions China's growth of: pro-China axis of 151,195 corporate blind spot 210
Crash 207; Jakarta now more colonial story 125 Sachs,Jeffrey 6,31,158; praises China Senism: must be liberated from Sen's
than ever 208 reformasi: Indonesian reformists who model 138; sees China as archetype for politics 203,211; seemed perfect for
PLA: see People's Liberation Army opposed Suharto and Habibie 84 global development 140,194,209 South Korea by the early 1990s 204;
Planning Commission,India: Nehru's white restructuration 22 Salwa Judum: its tactics producing civil as a model of the road not taken in
elephant 159 "reverse course": restored Japan's war 158 Asia 213; the Asian Crash brings it out
Plaza Accord of 1985 104; impact of on undemocratic power structure after its Sanpo (Industrial Patriotic Society): Japan's of the academic closet 216; overrates
Japan 172 "Tokyo Spring" 169 pre-war union 169; reborn under formal apparatus of democracy 216;
pluralism,Gandhian 162 Riau: still colonized 90 democratic cloak 171 our Left-Senism and its enemies 216,
plutocracy: of Thaksin 72 Robertson,Julian 33 Samak Sundaravel: new PPP leader and 217
Polanyi,Karl: on the political schism of the Rodrik,Dani: on economics of Thaksin proxy with military ties 110 "Shanghai Clique" 122
Great Depression 217 authoritarianism 10 (n41) Sarit Thanarat: U.S. puppet dictator 103 Shanghai Cooperation Organization
pollution: and protest in China 135 Rogers,William,Secretary of State: and Saro-Wiwa,Ken 211 (SCO): India invited but America
populism,plutocratic 98 China 144 Scholes,Myron 8 excluded 152; India's invitation
postdevelopment: and the return of Roh Tae Woo,President: inherits Chun's Scowcroft,Brent,National Security reveals China's position at the East
Gandhism 166 legitimacy problem 47; surrenders to Advisor: and China 144,144 (n72) Asian Summit of 2005 152 (n6);
postmaterialism: Asian 8 (n25); 17 (n89) reform demands 54 Seattle W TO protests of 1999 188 conveniently expands the definition
postmodemism: political inertia of 10 (n36) Roo Moo Hyun,President: his anti­ Second Way 35,200; globalization of terrorism 197; as "NATO of the
poverty: undertow effect of in India and American card 50; like Kim Dae and 192; the new Second Way will be East" 198; Iran invited 198 (n74);
China 155; in India 156,160; World Jung,he abandons workers' cause harder to contain than the old one 199 dislodging the First World's grip on
Bank shifts perspective to long-term once in office 51; saved by his Second World 22,35,198; renewed globalization 199
alleviation 187; global aid is half that impeachment 51 democratic "Third Wave" fuels Shiv Sewa Party: anti-Muslim hostility
of 1960 188 Roosevelt,Theodore,President: his tum resurgent Second World 184 of 164
power politics: return of 183 away from imperialism 22 Segal,Gerald: questions China's growth Shiva,Vandana 15,156,158,159; and
protests: in rural China 127,137; China's Roy,Arundahati 156; her eco­ story 123 green revolution 160; and hydraulic
pollution-related unrest 135 egalitarianism compared to Senism 211 Sen,Amartya: versus Lee thesis 4 (n17), power relations 163; her criticism of
PPP: see People's Power Party of Thailand Rubin,Robert,Secretary of Treasury: 211; beyond Left and Right 5; Senian agricultural monoculture compared
Prestowitz,Clyde: his grim picture of the initially rules out Asian bailout after model 5,6,7,14,19; "development to Mishra's criticism of middle class
"Chindian" future 184 Thai Crash 80 as freedom" axiom 6,10,35,37,104, India's biases 166; and Senism 211
Putin,V ladimir V. 21; proposal for global rural crisis: and farmer suicides in 154,155; his egalitarianism 6 (n20), Sin,Jamie,Cardinal: role of People Power I
New Deal 22; takes Russia out of the India 156,157; India's crisis rendered 216; Senian model,modified 8; Nobel and II 67
New World Order 183 visible by Naxalite insurrection 158; Prize of 8; on Asian Crisis 9; Eastern Singapore: FDI in 31; does a better job than
Putinism 35,36; 184 agricultural monocultures 160; lack of strategy 11,19,36,202; on social China of wrapping its "Asian values" in
rural solidarity 162; village-be-damned well-being 11; on democracy 12; parliamentary garb 139; equity snuffed
Quezon,Manuel Luis,President: ordered policies in India 163; India's rural capabilities 12 (n51),202; and out of its growth formula by late
Philippine cooperation with the masses politically exiled yet again 164; environment 15; ignores TNCs 15,19, 1970s 212; its soft authoritarianism as
Japanese 57 and Marxist rural idiocy thesis 165 203; and Rawls 15 (n73); Sen's Third Asian model 212; resistance in 212
rural resistance: in India 165 Way 15 (n73); not fully Senian 16, (n28); its democratic past 213; its PAP
Raimondo, Justin: versus democratic rural-urban divide 158,166; Gandhi 19; antiglobalists 17; Sen's clandestine becomes too dull to attract qualified
fascism 18 and 159 radicalism 1 04; overrates formal youth 213 (n30)
Rais,Amien: supported by urban,moderate Russia: Bush's romance towards 177; democracy 1 06; tries to have his Sino-globalization 4, 19, 37; 73, 154;
Muslims 85; leadership of 86 its dark choice between anarchy and democratic cake and globalization corporate complicity in via the
Rama IV (King Maha Mongkut) 102 hyper-statism 183; stands with China too 155, 211; his alternative Asianism internet 118; the Sino-globalization
234 Development Without Freedom Index 235

of TNCs 119; as Great Leap cronyism 207; his exit evoked high the military 110; vote buying in 214; the 1997 Constitution 95; "junker
Backwards 121; advantage of 138; reformist expectations 208 the urban Right wanted a bigger cut synthesis" of 99; Thaksin's "grand
not seriously challenged by Japan's Suharto, Tommy: shady operations of 79 of the globalist pie than Thaksin was coalition" 100; corporate statism
revived Fukuda Doctrine 182; this (n25), 80 giving it 215 of 208; and China model 209; as
model moving into India 186; joins Summers, LawrenceH. 16 Thai Rak Thai (TRT) Party 95; usurped pan-Asian trend, comparable to Japan's
Schumpeterian "creative destruction" Susilo Bambang Yudhoyono, President democracy 98; TRTism accepted reverse course 215
with Maoist permanent revolution 187; (known as "SBY") 86; as security by U.S. after 9111 99; needs no Than Shwe, General: victory over ASEAN
Fordism contrasted with Sino­ minister he approved crackdown in coalition to form a government 100; at 2007 Summit 215
globalization 209; ineffectiveness Aceh 89; his equally vile record in compared to China's CCP 101; its Tharmangalam, Joseph 13
of 210; cares only about economic East Timor 89; his return to Suharto­ agenda one of globalist redistribution, Thatcher, Margaret: on "TINA" 32
bottom line 214 era habits attracts global capital 93 not reform 1 02; political bridge­ Third Way 34; economism of 17; Third
Sino-Indian War of 1962 152 Swedish mode 14 building of 107; regroups under PPP World 24; as band-aid 35; as repair kit
Sinopec: $1 00 billion deal with Tehran 132 banner 110, 214; as agent of de­ for New Economy 185; Senism of the
Sklair, Leslie 3 Tabb, William 17 radicalization 214 Left as New Third Way 218
SOEs (state owned enterprises): crisis of in Tagore, Rabindranath: Sen defends him Thaksin Shinawatra, Prime Minister: Third Word: debt of 27, 28, 31, 76
China 137 against modernist distortion 166 versus the King on rural policy 73 Third Worldism 24, 25; non-alignment
soft power: eschewed by Bush and Taiwan: emphasis on SMEs 41 (n13); its (n130); his CEO style contrasted movement 24 (n14); under assault by
embraced by China 141 long political suppression compared to with standard Asianism 95; as international capital 26
Snow, Edgar: accepted Mao as Thailand's and Mexico's 103; China's neoliberal populist 96; as traditional Three Gorges Dam 125, 125 (n70), 126;
democratic 35; finally saw his error 35 push for de-recognition of 194 Thai "action man" 96; compared to another gift from Li Peng 127; as toxic
(n93) Takahashi Kamekici 41 Putin 96; compared to field marshal reservoir 135 (n29)
Socialism: African 25; crony 41 Tanaka, Makiko: Koizumi's foreign Sarit Thanarat and Peru's Alberto Tiananmen Incident: fuse lit by Fang
Sontag, Susan 18 affairs minister, whose acerbic style Fujimori 97; pan-Asian ambitions Lizhi 112; part of carefully scripted
Soros, George 6, 33 complemented Koizumi's "cool biz" of 97; his economism without liberal CCP plan 112; ignited byHu
Sourkov, V ladislav 27 iconoclasm 174 baggage 98; his anti-IMFism 99, Yaobang's death 113; used by Deng
South Africa: China's grip on 190 Taylor, Lance 31 204; an ideal CEO for Thailand, for ideological housecleaning 114;
South Korea: FDI in 2 (n8) technocrats, Indonesian: their power varies Inc. 99; a useful instrument of corporations give their green light
Southeast Asia: dwarfed by China 2; power inversely to oil windfalls 77; limits globalist de-radicalization 100; by 1992 115; Li Peng as "butcher
vacuum filled by China 195 of 79 declares independence from U.S.­ of Tiananmen" 127; made China's
Southern African Development Community Telangana rebellions: exception to India's directed globalization 101; his "New economic success possible 147; forces
(SADC): its rule-of-law veneer 195 rural passivity 165 Asian Realism" to forge pan-Asian Fairbanks to recognize his China
Soviet Union (U.S.S.R.) I; enforced free terrorism: war on 70 junker synthesis 101; his China/U.S. fallacies 148 (n94); influence on Asian
world cohesion 1 Thailand: FDI 31; slow getting assistance balancing act 105; his new Asian leader like Thaksin 208; the "stability"
special governance zones (SGZs): in after the Crash 80; tsunami of security state 106; drops previous it produced proved irresistible for
China 147 2004 96; fear tactics against legal restraint 106; turns democracy global capital 210
Stalin, Joseph 1 (n2) Muslims 100; Tak Bai massacre 101; against genuine reform 106, 208; Tiananmen Papers: show that the Army
Stiglitz, Joseph 6, 9; blames IMF and U.S. informal colonialism of 102; lack his mediatory role compared to answered only to Deng 111; 112;
Treasury for Asian crisis 52 of anti-colonial rebound 103; the Jiang Zemin's 107; as member in points to Deng as the prime mover
Stockholm Consensus 14 pacifist neocolony 103; democratic good standing in the transnational behind the Tiananmen crackdown 113
structural adjustment (and experiment of in the 1970s 103; capitalist club 108; brings back (nlO)
restructuration) 202 crackdown at Thammasat University patronage politics 1 09; his Shin Tibet 141; Deng andHu Jintao engineered
Sudan: and China 191 compared to Taiwan and Mexican Corporation scandal and September crackdown as answer to People
Suharto, President of Indonesia 7; massacres 103; the halfway house 2006 ouster by military coup 109; his Power 113; close linkage of Lhasa and
bank holdings of his son Bambang of Thai democracy 104; Thai Old reactionary globalism restored by the Tiananmen crackdowns 114
Trihatmodjo 80 (n33); his regime's Gurard weds global capital 105; new PPP 110; compared to China's Timsco Group: the center ofHabibie's
absolute power ebbs after mid- Bangkok plays Beijing off against Hu 128; compared to Marcos and business empire 84
1980s 81; his shift on lslamism 81; Washington 105; Old Guard loses to Suharto 208; his populism compared to TINA and TAMA 5, 34; Annan speaks out
turns technocrats into reactionary globalism after 1992 107; Thailand to that of Vajpayee and Bush 214 against 188
modernists and Islamists into the top of the regional pyramid 108; Thaksinocracy 36, 72, 73; turns democratic TNCs: see transnational corporations
cronies 82; versus civil Islam 83; used weakened executive of August 2007 reform on its head by exploiting TNI (Indonesian Armed Forces, formerly
technocrats to cover the tracks of his Constitution effectively shifts power to the executive privileges built into ABRI) 77; double function of 77; in
236 Development Without Freedom
l Index 237

politics and security 77; fanning flames urbanization 147; misfortunate that the World Trade Organization (WTO) 13; Yue Pan, Deputy Minister for the
of dissent in Papua 91; funding directly world urban transition took place 2001 Doha Conference 15; China's Environment: predicts 150 million
from Freeport McMoRan 91 under the aegis of neoliberal non­ entry ends tariff-related reform environmental refugees in China 135
Todd, Emmanuel 1 (n l ) planning 148 pressures 120; U.S. exports got little Yugoslavia: centrifugal forces and ethnic
Toer, Pramoedya Ananta: an d Indonesian Uzbekistan: as Second Way benefit from China's W TO entry 122; political meltdown 184
resistance 208 battleground 197 China's entry into 131 Yulin Incident 136
Tokyo Spring: Japan's postwar liberal working class: global exploitation of 121; Yushchenko, Viktor Andriyovych, President:
democratic interlude 169 Vajpayee, Atal Bihari, Prime Minister: his stagnation of 188; Korean elites used to suppress Ukraine's anti-democrats he
transnational capitalist class (TCC) 3, 203; populism compared to that of Thak:sin IMFism to roll back working class must resort to anti-democratic action:
in the Philippines 71 and Bush 214 gains 204 185; defends against charge of undo
transnational corporations (TNCs) 3, 35, Vance, Cyrus, Secretary of State: and Western influence in Ukraine 196
121, 122, 146; ignored by Sen 5; China 144 Xiamen protest model: spreads to Yushin Constitution: blueprint for Korea's
and political control 34; their Vietnam: war with China 195 Shanghai 137, 147 militant economy 43
readiness to put profits over principles Xinjiang: genocidal religious repression
Wahid: Abdurrahman, President: versus in 197 Zambia: and China 194
after Tiananmen 114; favored by
ICMI 82; Islamic power base of 85; Zeng Qinghong, Vice-President: makes
China 117; Sino-globalization of 119;
political vacillations of 85; his motley Yeltsin, Boris, President: compared to functional peace with Hu 128
their support of the CCP compared to
cabinet reflects his indirection 86; Koizumi 180; his new Kremlinism as Zhao Yan: New York Times reporter arrested
corporate support of the Nazis 119;
squanders his reform chance 86 authoritarian halfway house 184 for reporting 133; finally released in
courted by Hu and Wen 122; the
Wal-Mart: and the question of American Yoshida Deal (or "1955 system"): contains September 2007 141 (n62)
Chinese know that the TNCs call
values 133 liberal Left reformism and turns Japan Zhao Ziyang, CCP General Secretary: tried
the shots 141; as de facto China
Wang Jun: China's main arms dealer with into a permanent U.S. garrison 170, to cushion Tiananmen crackdown 112;
lobbyists 142, 143
rogue nations 142 170 (n4); updated 172 intense security measures at the time
triumphalism, America 1, 2, 21
war on terrorism: as de facto war on Yoshida, Shigeru, Prime Minister: coupled of his death in 2005 114; never seen in
TRT: see Thai Rak: Thai Party
Islamism 189 Japan's conservative elitism with public after May 9, 1989 114 (nl l)
Truman Doctrine 23; counterrevolutionary
Washington Consensus 1, 6, 9, 14, 35, 189; Washington-directed internationalism Zhou Wenzhong, Deputy Foreign Minister:
politics of 23 (n9)
like the Beijing Consensus its prime and economism, so as to tum defeat his response to Darfur 132
Turkmenistan: politics of the country's gas
victim is the working class 121 into victory 169; a moderate compared Zhu Rongji, Premier: and China's W TO
reserves 184
Wen Jiabao, Premier 122; and removal of to Kishi 171 (n8) entry 131
Tutut (Suharto's daughter): and her political
the agricultural tax 125
entourage 84
whaling: Japan's ersatz tradition,
Uighurs: China's "strike hard" repression of as geopolitical face-saving
Uighur Muslims in Xinjiang 197 mechanism 179, 179 (n45)
Ukraine: its long democratic tradition 196 White, Gordon: posited causal link between
underdevelopment 5, 27, 28 Chinese growth and its authoritarian
unilateralism, U.S. 141 government 138 (n42)
unipolarity 1, 21 Wilson, Woodrow, President: renounces
United Nations Development Program imperialism 22; his sense of
(UNDP) 11 restraint 23
United States, debt of 2 (n4) Winata, Tony 18
United States, foreign policy of: Wiranto, General 92; his even worse record
simultaneous containment and helps SBY's image 89
engagement of China 141 (n60); Wittfogel, Karl: on hydraulic
Japan's "reverse course" as the oppression 163
indigenization of U.S. policy 169; World Bank 13, 192; praises Asian
reversal towards China after 9/11 176; development model in its 1993
buys Japan's Iraq assistance with report 41; trumpets Third World
silence on currency issue 179; plays growth 186; admits spreading income
role of axman in the face of Asian gap 186 (n10)
democratic reform 216 World Development Movement (WDM) 34
World Social Forum (WSF) 35