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12 July 2006 

Is neoliberalism anti democracy?

Martin Manurung, Norwich

The Jakarta Post
Opinion and Editorial - July 08, 2006

"The third wave of democratization", that is how Samuel Huttington describes the current trend of democratization. Like the blossoms in springtime, new democratic countries finally awake after a long nightmare under authoritarian regimes.

Indonesia, which ousted the dictator Soeharto in 1998 and East Timor, which achieved full independence in 2002 are often cited as examples of the triumph of democracy.

However, democracy in East Timor is challenged by the recent political turmoil following an insurgency by a group of dismissed military personnel. President Xanana Gusmao then asked Prime Minister Mari Alkatiri to step down.

Alkatiri is considered the source of problems and grievances and should therefore take responsibility for the turmoil and leave office accordingly.

We rarely find analyses that try to disclose the relationship between what is happening in East Timor and neo-liberalism that is now dominating our social and political economic landscape.

Alkatiri is known for his policies against the interests of western capitalism on East Timor's domestic economy. He is against various liberalization programs imposed by international financial institutions, such as the IMF and the World Bank.

He also applied agricultural protections to reduce East Timor's dependency on imports of rice. Furthermore, he is also not in favor of Australia's proposal for offshore exploitation of oil in the Timor Gap.

These policies obviously are not in favor of the western capitalism. Therefore, various international financial institutions expressed their concerns and suggested that Alkatiri should be replaced by a more "cooperative" figure.

Looking back at history, this is not a new incident. Hugo Chavez of Venezuela had to deal with two coups supported by the United States (although, of course, the superpower denied its involvement) in 2002 and 2004.

A more blatant example can be found in the infamous coup against President Salvador Allende of Chile in 1973 that was backed by a foreign intelligence operation coded Operation Jakarta following a similar operation that happened earlier against President Sukarno in the 1960s.

By looking at these examples, one can ask: Is it true that the third wave of democratization is happening now?

The answer is dilemmatic. In the general definition of democracy as "a political society that allows (or encourages) the direct or representative participation of its citizens in the political process, through representation that is either direct or indirect", perhaps the answer is "yes".

By this definition, one of the conditions to allow participation is free elections. Indonesia, for example, has implemented two free elections in 1999 and 2004 the latter of which was more progressive by implementing a direct presidential election.

The ideal picture would be that after free elections are held, democratically elected leaders would have space to implement their policies as promised during the campaign. All decisions should involve broad participation from the people and should aim only at the people's welfare.

Nevertheless, neo-liberal globalization in many ways has shrunk the scope and space of policies for democratic leaders to fulfill their people's aspirations. Ha-Joon Chang (2004) of Cambridge University notes that global neo-liberalism threatens democracy by granting global investors and corporations veto power over domestic policy choices that they oppose.

In addition, the increased frequency of financial crises under neo-liberalism has greatly increased the power of the International Monetary Fund (IMF) vis-a-vis national governments.

In a nutshell, neo-liberalism thus undermines pluralism and policy independence in developing countries.

Hence, the next question is what can be learned from Alkatiri, Chavez and Allende? They are democratically elected leaders, but democracy has to be sacrificed in favor of the western capitalism.

Democracy in its general definition is no longer relevant to mark the "third wave of democratization", because, in practice, democratically elected leaders can be ousted if they do not serve the interests of western capitalism.

What enabled Chavez to survive the coups was that he had relatively more significant control of and influence on the military. Unfortunately, Alkatiri, Allende and Sukarno did not have this advantage.

This is not an era of the third wave of democratization. Perhaps, this is just an era of the triumph of the Anglo-American neo-liberalism that makes the spring of democracy fade prematurely. Neo-liberalism that elevates the role of global investors and corporations has murdered democracy. ***


The writer earned a British Chevening scholarship and is now in the postgraduate program at the School of Development Studies, University of East Anglia. He can be reached at martinmanurung@yahoo.com.

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