| The Miami Herald, Friday, May 29,
1998 TRADING WITH DICTATORS ONLY STRENGTHENS THEM SEBASTIAN A. ARCOS, Special to The
Herald SUHARTO is gone. The dictator of Indonesia for more than 32 years was forced to end his rule by the financial crisis that has swept Southeast Asia. Once a poster boy of anti-communism -- his suppression of a 1965 coup resulted in the murder of 500,000 alleged communists -- Suharto became a model for economic reformists when he transformed Indonesia into one of the Asian Tigers. But the Indonesian Tiger was hollow. Now the world is discovering that Suharto's economic system, based on cronyism and nepotism, was corrupt to its marrow. That should not have come as a surprise to anyone, considering that Suharto was, until his resignation, a ruthless dictator. But Suharto played the Cold War game brilliantly. He knew that the West was concerned with communist infiltration of Southeast Asia and was willing to settle for long-term political stability over democracy. The West pumped billions of dollars into Indonesia, a considerable amount of which ended up in the pockets of Suharto's family and friends. What else would you expect from someone who, after killing half a million people, remains in power for 30 years? Even after the Cold War ended, Suharto faced no pressure to democratize. By 1990 a new paradigm was in place, one that supersedes ideological -- or moral -- considerations for economic ones. Suddenly trade became the magic wand to dissolve dictatorships around the world, and the new paradigm -- constructive engagement -- was endorsed enthusiastically, not only by the left but also by many financial and industrial interests on the right. This is the paradigm used to rationalize Western investment in China, Libya, Iran, Indonesia, and Cuba. The crisis in Indonesia proves one very important point: There is no empirical evidence to support the assertion that economic reforms are followed by political reforms and democracy. If the assertion were true, Suharto would have resigned several years ago -- when Indonesia's economy was at its strongest -- and not now, when Indonesia is in a deep economic crisis. The state of the economy is an extremely important legitimizing factor for any government, as Presidents Bush and Clinton can attest, although for opposite reasons. Watching a live broadcast of Suharto's resignation, another island nation -- this one in the Caribbean -- comes to mind. Like Indonesia, this nation has been ruled for decades by one man as his personal property. As Suharto's was, this dictator's Cabinet comprises army generals, cronies, and family members. Like Suharto, he has implemented economic reforms -- though far-less comprehensive -- designed only to maintain his personal hold on power. Much more than Suharto, he controls every penny that goes in or out of his family business: a nation of 11 million souls. Those who propose that unrestricted trade with Cuba's dictator will accelerate the end of his regime are wrong. * Unrestricted trade now will only prop up the dictator without any significant -- or sustained -- improvement in the population's welfare. * Investment now will only legitimize and strengthen an inefficient, corrupt, and unfair economic system, where political loyalty is rewarded while entrepreneurial capacity is punished, where doctors and teachers leave their jobs to wait tables at a restaurant, and where theft and prostitution are socially accepted practices. Those who want to promote political reforms in Cuba first should cultivate the political will for those reforms. As long as potential reformists feel that their welfare depends solely on the dictator's survival, there will be no reformists. On the other hand, once the dictator becomes the sole obstacle to his cronies' welfare -- as Suharto can attest -- the dictator is gone. |