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Ladies and Gentlemen, good morning.

I would like to express my deepest and sincerest condolences to the good

people of Thailand on the passing of His Majesty the King. Coming from another

monarchical country, I am very much aware of the rhythm of life and expectations

characteristic of the monarchy. I know what it feels like to experience the end of an era,

while anticipating the beginning of another. I hope you achieve this transition peacefully

and that Thailand will begin an era of stability, democracy, and prosperity under the new

reign.

My assignment for this conference is to address the issue of democratization

in Southeast Asia. I believe I was given this assignment in part because I am a Southeast

Asianist by training and because I serve as president of the National Graduate Institute

for Policy Studies or GRIPS, whose mission is to train future political leaders and

policy professionals in democratic governance.

To be honest, however, I wish I had been given this assignment twenty years

ago. Back in the early 1990s, when I was based in the U.S. and living in a small town

in the state of New York called Ithaca, in the middle of nowhere, and teaching at a

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university, people such as Francis Fukuyama were talking about the “end of history” in

the Hegelian sense, and proclaiming the victory of liberal democracy over other

political ideas and forms of government—Communism, Socialism, Totalitarianism, and

Authoritarianism, all lumped together now as non-democratic and undemocratic.

Those were the heady days when the Cold War had just ended, unexpectedly

as a matter of fact, with the revolutions, largely peaceful, in Eastern Europe and the

collapse of the Soviet Union. But even earlier, already in the second half of the 1980s,

our own region had undergone largely peaceful and democratic transitions, first initiated

in the Philippines in the form of the People’s Power Revolution of 1986, followed

immediately--and to some extent influenced by developments in the Philippines—by

the democratic transition in South Korea and Taiwan. Democratic aspirations were

voiced but later stifled in Myanmar in 1988. In the wake of the Tiananmen massacre in

June 1989, which put into question the legitimacy of the party-state regime in China, it

looked—for a while at least--as if China might follow the paths taken by the East

European socialist states and the Soviet Union, though ultimately this did not come to

pass. And I still remember vividly what happened here in Bangkok in the early 1990s,

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when royal intervention by the late King led to the restoration of democracy. I will

always remember the euphoria with which my Thai friends and colleagues embraced

their newfound freedom.

These developments in Europe, Asia, and elsewhere were what led Anthony

Lake, National Security Adviser to President William Clinton, to redefine the Clinton

administration’s grand strategy, no longer in terms of containment, but rather, in terms

of democratic enlargement. In the American perspective, widely shared across the

political spectrum, democratic enlargement would go hand-in-hand with so-called

“globalization,” meaning free trade, free movement of capital, and empowerment of

international organizations that supported the integration of the global economy. The

terms “good governance,” “transparency” and “accountability” gained wide currency as

a way to link economic globalization with political democratic enlargement. In other

words, a free market would promote democracy and democratization would lead to

economic growth. The ideology of globalization appeared new in a post-Cold War era

of closer economic integration, large-scale movements and flows of people, goods,

capital and information, and advances in science and innovation, and transportation and

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communication technologies that brought people, communities, and nations ever closer

to each other. At the same time, globalization revived the ideas that were associated

with so-called modernization theory, which assumed that expanding middle classes

through economic development would in turn provide impetus for democratization. In

some ways, American policy professionals envisioned the end of history in terms of all

societies coming into alignment and refashioning themselves in the American image. In

a nutshell, Americans thought and expected that the rest of the world would become

“like us.”

But times have changed. Social scientists now question the validity of the

modernization theory that Samuel Huntington propounded. They now argue that the role

of middle classes in spearheading democratization is highly contingent. This means that

depending on the larger political, economic, and international contexts, middle classes

may behave differently and call for, and support, different forms of government in times

of crisis. Some social scientists even question the basic assumptions of globalization,

arguing that globalization, democracy, and national autonomy do not necessarily go

together, and might come into conflict with each other. The Harvard professor Dani

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Rodrik famously argued that this trilemma of incompatible global economic integration,

democracy, and national sovereignty forms an “impossibility theorem” which cannot be

resolved because countries need to choose at most two out of the three principles. So,

if you choose democracy and global economic integration, then you give up on national

determination. And if you choose national sovereignty and global economic integration,

you give up on democracy.

More importantly, it looks as if the tide of world history is shifting and

democracy is in retreat, to quote from the statement of this conference. To put it in a

different way, nationalism of different types is resurgent, in both benign and nasty forms,

while areas in which attempts at building national states have run aground have

provided fertile ground for new types of community-building (for example in the name

of religion and ethnic self-determination) and state formation.

If you think that resurgent nationalism and calls for new types of

community-based state formation are happening in so-called marginal areas of the

world, think again. In a few days, we will know who will be the next president of the

United States of America. The emergence of Donald Trump as the Republican

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presidential candidate, along with the rise of a very inward-looking, virulently racist and

chauvinist (including male chauvinist) nationalism, is deeply unsettling, given the fact

that as much as 30 to 40 percent of American voters support Trump. We should be

thankful that Trump is a political novice and buffoon, for a more politically adroit,

rightwing populist Trump would have stood a far better chance of taking over the White

House and wrecking American democracy.

But Trump is not alone, for that matter. The United Kingdom has voted to

leave the European Union. Former Prime Minister David Cameron, intent only on

prioritizing his own political survival as well as the survival of his Conservative party,

sought to gain tactical advantage in his country’s general election by calling needlessly

for a national referendum, as if national strategic choice were simply an extension of his

political ego and career. And we know that Marine LePen is positioning herself for the

coming presidential election in France, the Freedom Party is gaining influence in the

Netherlands, and so on.

No doubt there are many reasons for the shift in the tide of globalization and

democratization. But I believe that one factor goes a long way toward explaining the

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phenomenon that we might call “retreat of democracy,” and the rise of anti-globalism,

anti-liberalism, racism, right-wing and inward-looking nationalism, and fascism. If we

look at the per capita GDP over the last twenty years, we see that the U.S., Canada, and

European countries did very well in the first ten-year period from 1995 to 2005, but

poorly in the ensuing ten-year period from 2005 to 2015. In the first ten-year period

from 1995 to 2005, countries such as the U.S., , Britain, the Netherlands, and Spain saw

their per capita GDP expand from 100 to 125 to 130, while France, Germany, Italy and

others did reasonably well, with their per capita expanding from 100 to 115 to 120.

Japan’s per capita GDP, in the same period, expanded from 100 to 109, the most dismal

performance among all the OECD countries. This is the reason Americans and

Europeans talked about the “Japan Disease”, holding Japan up as an example of

unsound economic management and a cautionary tale of what not to do when running

the macroeconomy.

But in the following ten-year period from 2005 to 2015, the picture changed

radically. Germany was able to maintain its steady performance, with per capita GDP

expanding from 100 to 115, in part because the Euro zone of currency stability allowed

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the German economy to exploit its competitive advantage vis-à-vis the other European

countries. But Germany was the exception. In such countries as the U.S., Canada,

Britain, the Netherlands and France, the per capita GDPs only expanded on average

from 100 to 103, at most 105, while countries such as Italy and Spain actually saw their

per capita GDPs shrink. For that matter, Japan’s performance remained steady, with

per capita GDP expanding from 100 to 105, on a par with the U.S., Canada, Britain and

the Netherlands. We have thus seen the Japanization of the North American and West

European countries in terms of economic performance, and the Japan Disease is no

longer confined to Japan.

There is one important difference, however. The Japanese economy has

remained stagnant for almost a quarter of a century. Its population is ageing. But its

social safety net is still good enough to support the poor and the aged, and Japanese

business has done its best to keep jobs, even redundant ones at the expense of efficiency,

in the interest of maintaining social stability. This means Japanese no longer have

much expectation for further improvement of their standard of living, but the great

majority of them remain comfortable enough, even if life will not be easy for their

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grandchildren. Governments came and went in the 1990s, with prime ministers

changing on average every one-and-a-half years. A six-year period of relatively stable

government under Junichiro Koizumi was followed by yet another round of rapid

government turnover, occurring practically every year, with the Liberal Democratic

Party losing power for three years to the Democratic Party of Japan, and then regaining

power under the current Prime Minister Shinzo Abe, who has managed to lead a stable

government in the last three-and-a-half years. The point is that despite this oscillating

cycle of government instability and stability, social peace has been maintained and

extreme right-wing and left-wing nationalisms have remained for the most part under

control.

In contrast, precisely because the U.S. and Western European countries

experienced an economic boom in the immediate post-Cold War years from the 1990s

to the mid-2000s, their peoples had higher expectations for bettering their living

standards. When their expectations were not met, they became unhappy, sometimes

angry, at their governments. Hence the rise of anti-globalism, inward looking

nationalism, racism, fascism, etc.

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What about Asia? As a matter of fact, the countries in East Asia—the region

encompassing Northeast and Southeast Asia—have done very well over the last

twenty-five years since the end of the Cold War. It is true that we had the East Asian

economic crisis in 1997-1998, when some of the East Asian countries, including

Thailand, were devastated. And yet, if we look at the ten-year period from 1995 to

2005, per capita GDPs expanded from 100 to 120-125 in Thailand, Malaysia and the

Philippines, to 175 in Vietnam, and more than 200 in China. Even Indonesia, the

country hardest hit by the 1997-1998 crisis, saw its per capita GDP expand from 100 to

115.

More important, all these countries did even better in the next ten-year period

from 2005 to 2015. Per capita GDPs expanded from 100 to 130-160 in Thailand,

Indonesia, Malaysia, the Philippines and Vietnam, while China’s per capita GDP more

than doubled again in the same period. To put it in a different way, the standard of

living in all these countries has improved enormously within the space of a generation.

This has understandably given rise to optimism, people taking it for granted—or at least

hoping--that their lives will be better tomorrow and that their children’s lives will be

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even better than theirs. Of course we don’t know what the future holds for us, but it is

reasonable to expect that the kind of economic performance many countries in the

region have experienced will be very hard to repeat in the coming years. There are signs

that the Chinese economy has been slowing down, while the economic performance of

Southeast Asian economies has been uneven. The point is that the government will be

held responsible if it cannot meet the kind of expectations its people have for improving

their lives.

This is the reason the middle-income trap is now being debated in many

countries in East Asia. Economists offer us advice on how to avoid the middle-income

trap, telling us that human-resource and infrastructural development and inclusive

growth are the way to go. I do not have any problem with these prescriptions, but I

would also like to point out that many societies in East Asia are aging over the coming

fifteen to twenty-five years, if not earlier, and with only a few exceptions, they are aging

without first having achieved high-income status. If we look at the timing in which

each person belonging to the non-working-age population needs to be supported by less

than two persons in the working age population, we see that Thailand is expected to

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cross this threshold in fifteen years, while China, South Korea and Vietnam will do so in

twenty years. This means that social safety nets need to be put in place in the coming

decade, and a lot more resources need to be invested to secure a minimum level of

social safety for the aging population.

Resources are always limited, however. Government resource allocation--the

issue of how and how much a government can allocate its resources to which sectors--

is not a simple question of economic planning and policy-making. This issue is always

and everywhere intensely political. This leads us to the main point I would like to

make today. Politics, which is sometimes defined as the authoritative allocation of

scarce resources, is by definition messy, and it is impossible, indeed futile, to remove

that messiness, which is the hallmark of politics, from the political process, whether

democratic or authoritarian.

This has long been pointed out by Joseph Schumpeter in his book, Capitalism,

Socialism and Democracy. The classical doctrine of democracy often assumes that there

exists a Common Good, which is always simple to define and which provides definite

answers to all questions in public policy. This doctrine holds that democracy is the

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institutional arrangement for arriving at political decisions which realize the Common

Good and that if people do not see it, this must be because of their ignorance, stupidity,

anti-social interests and other reasons, and people therefore need to be made to see the

Common Good, either through persuasion, education, coercion, or a combination

thereof. But Schumpeter rightly argues that there is in fact no such thing as a uniquely

determined Common Good that all people can or will agree on or be made to agree on

by force of education or by force, period.

This leads us to three related questions. First is how to live with this

messiness, the hallmark of politics. Schumpeter gives us an intelligent answer.

Democracy is not the institutional arrangement to arrive at political decisions to realize

the common good. It is, rather, an arrangement to arrive at political decisions in which

individuals acquire the power to decide by means of a competitive struggle for the

people’s vote. In other words, the role of the people is to produce a government or an

intermediate body which in turn will produce a government. Here I would add in haste

that democracy does not necessarily produce a good government – I can easily come up

with the list of not a few prime ministers who did poorly in Japan’s recent past. But

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the point is that the calendrical rhythm of electoral politics ensures that those

governments would come and go in due course and the public has no one else but

themselves to blame for any government that they put in power. Democratic electoral

competition ensures that players who lose will have another chance in the coming round

of elections, and political leaders cannot question or undermine the legitimacy of the

very institution of democracy.

History tells us that any political order, whether democratic or authoritarian,

whether national or international, can only be sustained long-term if it is built on

legitimacy. Legitimacy is not the same as constitutionality and legality. Power may

dictate whatever constitutional order it deems suitable for its needs, but it cannot dictate

legitimacy, because legitimacy has to be earned and accepted broadly by the general

population. Legitimacy is embedded in the norms and mores by which people make

their own judgements about what is right, what is not, what is just and what is not, what

to expect of the government and what not to expect, and what should be done and what

should not. This does not mean there is a consensus on such norms and mores. Nor

are norms and mores immutable. Shaped by history and contested by people, they

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change over time, all the more so at a time when people communicate and move across

boundaries and are aware that their lives, both public and private, can be radically

different. This is the reason that a democratic system has more staying power:

democracy manages, not abolishes, the messiness of politics while respecting the right

of the people to debate freely the issues that most concern them and to elect the

government that they expect to help them achieve their aspirations. Traditional ruling

monarchy aside, no system other than democracy has managed to produce a stable

succession of governments. Governments may change, sometimes rapidly, but the rules

for doing politics remain the same and predictable. At the end of the day, political

leadership must always be tested and its performance assessed critically, for therein lies

the legitimacy of the government, and there can be no escaping the judgment of history

and posterity.

No democratic system is perfect. Nor does democracy necessarily produce

good government. What democracy does is to allow the coming and going of successive

governments in accordance with a set of rules the public accepts as legitimate and in

accordance with a reasonably predictable electoral calendar. If the public is unhappy

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with their leaders, they can at least count on their fingers how much time they have to

wait to throw the government out. This is the reason the rise of Donald Trump is deeply

troubling. A cardinal rule of democratic politics is that you follow the rules of electoral

competition if you enter the game. Trump’s stated refusal to accept any election

outcome other than his own victory is a sure way to undermine American democracy.

To live with the messiness of democratic politics, it is also important to keep

identity politics under control. Any society is divided along such lines as ethnicity,

class, religion, and ideology. These divisions won’t go away. You may suppress those

divisions for some time, as President Suharto did in Indonesia, banning the public

discussion of ethnicity, religion, and class, but those divisions come back with a

vengeance once the lid is lifted. Here again the challenge is not to suppress or gloss

over the messiness of the political system, but to manage it. The Indonesian experience

is instructive in this respect. Confronted with the threat to national unity by rising ethnic

separatism and religious strife in the wake of the fall of President Suharto, Indonesia

underwent democratization and radical decentralization. This worked even beyond the

expectation of those who designed the new system of decentralized democracy.

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Despite defects that Indonesians readily admit about their democratic system—above all,

the money politics and dynastic inheritance of political power—Indonesia’s

democratization combined with decentralization has been highly successful in allowing

ethnic minorities and Muslim communities to participate in creating and running local

governments, a move that allowed the management and negotiation of the identity

politics of ethnicity and Islamism at the local level.

Finally, the performance of the government in meeting the expectations of its

people matters a lot. This is the main challenge of democratic governance. As I

mentioned earlier, people now expect their lives to improve in the coming years and

they expect their children’s lives to be far better than theirs. All governments will be

held responsible if these expectations are not met. Public policy requires a lot of

expertise, all the more so now when globalization is a fact of life, and money, goods,

information and people move across national boundaries faster and in increasing

quantities. Some social scientists talk about the trilemma of globalization, democracy

and national sovereignty, arguing that you have to sacrifice democracy if you want to

maintain national autonomy and achieve national prosperity and stability in this age of

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globalization. I do not agree. Technocracy is often seen as an answer, a way to bring

economic and technical rationality to policy making. Technocrats want to remove

messiness from the political process, arguing that if there were no politics, their policies

would work. But we know by now that experts do not agree among themselves on

many important policy questions – and here it is useful to remind ourselves how much

macro-economists disagree over Bank of Japan governor Haruhiko Kuroda’s qualitative

and quantitave easing. It is more useful to allow experts to express and explain their

often conflicting views openly so that the government and the public can be aware

of—and intensively debate—the policy alternatives. The trilemma of globalization,

democracy and national sovereignty is a wrong theorem because it lays out the question

in the wrong way. The question is not either/or, but a question of degrees—namely, how

much liberalization of flows and movements of capital, goods, service, information, and

people, and how much national determination can or cannot be sacrificed, while

maintaining a democratic system, so that the government will be held responsible and

its performance judged critically and regularly by the people.

I readily admit that there is nothing original about what I am saying. But we

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all need to be reminded that maintaining the trust of the great majority of the people

remains the most important foundation of any legitimate political system. We need to

live with the messiness of politics, while guarding against any attempt to use this

messiness to poison and undercut the system. We must allow the public to form their

own opinions about whether the government is meeting their expectations and to have

the say in the coming and going of government itself.

I say again: No democracy is perfect. Democracy does not necessarily

produce good government. But because democracy provides an opportunity at

reasonably regular intervals for the public to have a say in the coming and going of

governments, this makes the public also accountable to, and responsible for, their

government. Democracy is a learning process, not a goal or objective. We need to learn

from our own and other peoples’ histories and experiences in order to create a better and

more legitimate system for governing ourselves. Only when people feel a sense of

ownership of their own governments can people work together, in the face of deep

disagreements, for the sake of their countries and for the world. Thank you.