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The rich are different to us…..they have more money
Yesterday I talked about the importance of democracy and inclusive political institutions to ensure inclusive economic institutions and prevent the adoption of policies that only benefit a narrow elite. These days one cannot pick up a government-owned newspaper or turn on the TV without being told that PAP’s goal is to build an inclusive society. However we will find it difficult to build an inclusive society whilst we continue to have non-democratic and non-inclusive political institutions.
The last few weeks we have been treated to tantalizing revelations about how important dynasties and family relationships are in China. In today’s FT there is an article about the downfall of Bo Xilai (Bo’s Downfall Sheds Light on Nepotism, http://www.ft.com/intl/cms/s/0/6be8993e-8962-11e1-bed0-00144feab49a.html#axzz1sUTm09iB). Both Bo Xilai and Gu Kailai are children of revolutionary generals and Bo’s father, Bo Yibo, was one of the “eight immortals” who ruled China behind the scenes in the 1980s and 1990s. Their other siblings all hold important posts in state-owned companies or have control companies that do business with the Chinese government. While Bo Xilai was the General Secretary of Chongqing his wife was a lawyer who set up and benefited from a number of business ventures both inside and outside China. In fact it was the threat that her financial dealings were to be exposed that allegedly led Gu Kailai to kill the British businessman Neil Hayward.
It is ironic that the Chinese Communist Party, which like the Soviet Communist Party, seized power with the tacit consent of the majority by promising to raise the masses out of poverty and eliminate inequality should be captured by a group of elite family dynasties. Recently Bloomberg reported that the 70 richest delegates to China’s National People’s Congress were worth an aggregate of $89.8 billion, or more than a billion dollars each.
“In other countries children of politicians often get opportunities that others don’t but the problem in China is there is absolutely no transparency and there is also a strong sense of entitlement, that this money is their birthright,” said one person with close ties to top political families in China.
“The problem for the Party is that exposing the Bo family businesses makes people realize that this is how it works for everyone.” (FT)
The importance in business of having family ties to or friendships with politicians is of course not a phenomenon that is confined to China. In Africa, Uhuru Kenyatta is reported by Forbes to be owner of Kenya’s biggest dairy company and one of Africa’s 40 richest residents. He served as deputy prime minister of Kenya and is the son of Kenya’s first president, Jomo Kenyatta. In the Mideast, the Bin Laden family made its riches through construction contracts for the Saudi government derived from the close relationship of Mohammed bin Laden and his sons with the Saudi royal family.* The former President of Egypt Hosni Mubarak’s family are reported to have accumulated a fortune of US$80 billion. The family of the deposed Tunisian strongman are estimated by Al-Jazeera to have taken US$17 billion with them when they left the country while the Gadhafi family wealth is estimated at a seemingly implausible $200 billion by the new regime.
However one should not be surprised at this. After all non-democratic political institutions tend to be extractive and frequently serve just to maintain the power and privileges of an elite, whether a group of families as in China or a hereditary aristocracy as in Europe. A vicious circle develops in which dominance of political power helps the elite to increase their economic power which in turn reinforces their political power. They have some interest in economic growth as long as it raises their wealth and they have to keep living standards for the masses either rising or not deteriorating enough to pose a threat to their rule. In this North Korea appears to be an exception, as the Kim dynasty is now into its third generation despite having reduced the bulk of the people to starvation and absolute destitution.
Here in Singapore “Inclusivity” will remain just another buzzword without full democratic institutions to back it up. As a former colony there was already a history of extractive political institutions. The struggle to build new democratic ones was not helped by one party walking out and handing a walkover to the other so early in our post-independence history.
Our new buzzword should be transparency. While we have a Code of Conduct for Ministers that requires them to disclose their income, assets and liabilities to the PM upon taking up office – this does not go far enough. I propose that we need to move to full annual public disclosure including the property and incomes of spouses and dependents. The same rules should be extended to senior civil servants, judges and senior management and directors of GLCs. This would only bring us in line with what public servants are required to do in democratic countries. For instance in the US, the Ethics Act requires annual disclosure of financial information by the president, vice president, members of Congress, federal judges, presidential appointees, and other officials and employees earning at or above a specified pay-scale or with policymaking responsibilities. There are similar laws in Canada and many European countries while the UK has announced plans to make public ministers’ tax returns.
* http://dealbook.nytimes.com/2012/04/04/to-do-deals-nothing-helps-like-friends-in-high-places/
Dear Santa, I don’t like the cadre and secret cabal I got last year. Next year I’d like some openness, competition and democracy instead.
Recently the PAP held their first Party convention post election allowing us to scrutinise the cadre system and the iron grip on power that it provides for. AlexAuwrote about it in his blog (http://yawningbread.wordpress.com/2011/12/03/four-barriers-to-remaking-the-pap/) where he highlighted his opinion that the cadre system is one of four main reasons why the PAP would fail to learn any lessons from their setback in GE 2011. The rest of his reasons would be worthy of discussion in a separate article in their own right. However as we look back at 2011 I will concern myself with a closer look at the cadre system and how it affects your ricebowl.
It is of course not only the PAP who employs the cadre system. For the benefit of those who may be unfamiliar with the term, a cadre system is one in which the leadership of the Party selects certain members to be cadres. The cadres are then the only members who have voting rights and they elect the leadership. It is of course a completely closed system in which the leadership ensures its position by only selecting as cadres people who will be loyal to them. The cadre vote the leaders who select the cadre who vote the leaders who select ………………..and so on.
In her 1971 political science thesis, “Singapore’s People’s Action Party: Its History, Organisation and Leadership (Oxford University Press)”, Ms Pang Cheng Lian, who sits on the board of Temasek Cares, describes elections to the CEC by the cadres as a “closed system”, in which “the cardinals appoint the pope and the pope appoints the cardinals”. Most of us Singaporeans know this system is employed by the men in white. Sadly, as far as I am aware, every other political party in Singapore employs a variant of the cadre system. This includes the Workers Party, the SDP, the NSP and the SPP. I have no information about the other new parties, the Justice Party the USD (does anyone remember them? ) and the new parties still to come in 2012 but I believe it is safe to assume they all employ or will employ the same system.
Just as Alex believes the cadre system may explain why the PAP is incapable of learning new lessons so I believe that adherence to the cadre system may be partly responsible for the agonisingly slow progress of the Opposition parties and the dearth of new ideas or renewal. It is certainly the culprit behind the endemic Party hopping which discredits all Opposition equally and has nothing to do with renewal of ideas. Party hopping is the same old faces, with the same old ideas but with new titles. It would take a visionary to develop a party with a radically different structure. Or maybe a democracy veteran with no time left to lose who, looking back on his life’s work, realised that closed organisations can’t give birth to Open Societies. Yes, The Reform Party is the only political party in Singapore which is a democracy since it alone does not have a cadre system to protect the leadership and all members have voting rights.
The cadre system has its origins in the Marxist concept of the “dictatorship of the proletariat” and the “vanguard”. This meant that only a small elite group of individuals were fit to lead the Communist Party and the nation. The masses were not ready for democracy and it was better that they be led by those who knew best. The Communist ideal was one of eventual full democracy once the masses had been educated enough. Leninargued (Wikipedia, http://en.wikipedia.org/wiki/Vanguardism) the ideal vanguard party would be one where membership was completely open and its workings transparent, the “entire political arena is as open to the public view as is a theatre stage to the audience” (from What is to be Done?). He seems to be acknowledging the benefits of competition though cannot speak its name when he goes on to say that a party that supposedly implemented democracy to such an extent that “the general control (in the literal sense of the term) exercised over every act of a party man in the political field brings into existence an automatically operating mechanism which produces what in biology is called the “survival of the fittest”.” This party would be completely open to the public eye as it conducted its business which would mainly consist of educating the proletariat to remove the false consciousness that had been instilled in them.
The cadre system went on to be adopted by both the Kuomintang and the Chinese Communist Party and by many other Maoist revolutionary parties throughout the world. Lenin originally intended it to deal with the problems of controlling and maintaining the secrecy of the Bolshevik party which was seeking to overthrow the Czarist regime in Russia, in the face of infiltration by the Okhrana, the Czar’s secret police. Ironically the goal of preventing infiltration, this time by Communist agents, is the oft-cited justification given by the PAP leadership as to why the cadre system was introduced. If so it does not justify its retention today when there is no longer a Communist threat. Even if there were the ideal way of combating it would surely be through more democracy not less.
Of course the Communist roots of the PAP are not a secret. This is why the arbitrary arrest and detention of certain individuals on the grounds that they were Marxists and that they represented a secretive organisation is particularly ironic.
The fact that the PAP continue to maintain a cadre system shows how out-of-step they are with modern democratic parties and how little understanding they have of the benefits of competition and transparency and accountability. While they maintain a closed system which ensures that only people, who hold the leadership’s views, whether out of principle or self-interest, get to vote, it is difficult to see how any renewal can take place. Perhaps it is too much to expect the ordinary people of Singapore to understand the need for multi-million dollar salaries for ministers. They are afflicted with the false consciousness of a belief in democratic values and the equality of individuals. You need elite (the cadres) who are sufficiently intelligent not to fall prey to false consciousness to understand why servant leaders need millions of dollars as remuneration. Hopefully the review board will be able to explain it to us shortly.
However the other parties inSingaporeclearly feel the same way as the PAP that democracy is a dangerous idea and power should not be entrusted to the ordinary members. Or they merely aspire to be the PAP and adhere slavishly to their ideas and methods-PAP LITE, if you will. Whatever the motivation, all of them maintain some sort of cadre system. The argument often given for the necessity of this is that it leads to “stability”. This is just another facet of the argument that democracy leads to gridlock and that the people are too short-sighted or stupid to exercise power responsibly. Even if a so-called extreme faction managed to be elected to the leadership, like the AWARE situation, ultimately democracy ensures competition. If the new leadership fails to reflect the will of its members or is unsuccessful at winning electoral office then it can be replaced.
It is genuinely worrying that so much of the Opposition shares the same mindset as the PAP. This begs the question as to whether their leadership are genuinely interested in change or representation or whether it is merely power that they seek.
To recap on what I said earlier, the only party that does not have a cadre system is the Reform Party. The RP is thus the only genuinely democratic party. Instead of a closed system, the RP CEC is elected by the Party Conference which is made up of delegates. Everyone, provided they fulfil basic criterion, gets a vote. As a result the Party is the purest expression of the will of its members. The Party Conference promotes a free market in ideas as any member can put forward a motion. As it forces anyone running for office to be responsive to the views of the members, it represents the implementation at the Party level of the principles we are fighting for at the national level. We refer to this as Conference being Sovereign. It is clear that when JBJ set up the RP he wanted to have nothing to do with secretive cabals and backroom deals and start a party that would exemplify the virtues of democracy. He learnt from bitter experience, when he was ousted as SG of the WP, how dangerous an unrepresentative clique is. In a way a genuinely democratic party was his legacy to the nation and serves as a model of what we need to see at the national level.
Many are scared away from joining the RP because of the lack of a cadre system which they feel makes it inherently unstable. Certainly its first three years have not been an easy ride. But if democracy itself is something we seek and value then a truly democratic Party is a necessity. As the RP is not a good long term bet for ironclad power, it is less attractive as an option to those who are power hungry or egotists. Why go to all that trouble to infiltrate a party to make it less radical, less viable as an agent of change, when you may be voted out in 2 years time and the Party may simply revert to its former state? This is what we saw happen with Aware. A group of women cleverly saw that getting like minded members in the organisation in sufficient numbers was key to changing its identity. But ultimately Aware was strong enough and its original ideology and had been in existence long enough to shake off that challenge.
No doubt many initially joined RP in error not clearly realising the ramifications of the democratic nature of the constitution. What a shock it must have been to them to realise that Conference is Sovereign and yes, they would actually need to get a majority vote from ordinary members to change the constitution and bring in a cadre system. How much easier it was to simply do a deal for power and leadership elsewhere in exchange for sabotage. And how much more effective to do it in collaboration with the State media, ever hungry as they are for dirt.
But here is the surprising thing. RP as an organisation , as Aware did before them, similarly survived with its democratic nature intact and went on to field 11 candidates in GE 2011. So maybe democracy is not the greatest weakness of a political party but its greatest strength in the long term. Certainly many commentators like Alex are now seeing the cadre system as responsible for hampering progress within the PAP and its greatest obstacle going forward.
What next in 2012? Well the PAP cadres have concluded their convention and business goes on as usual within their closed circles. There has been a lot of talk of Opposition parties joining forces in a grand coalition as well as of new parties being set up. However the important question for voters should be whether any of the parties are genuinely democratic. I would not wish the RP to merge with another party for example, unless that party were also to adopt a democratic constitution and abandon the cadre system. My fervent wish for 2012 is that any new party set up will be Democratic and that through openness and with competition fostering progress we will go forwards as a Nation and not backwards. We need to change the old Singapore/PAP influenced Model so that we can have a better future. As always I am daring to imagine a new rice bowl for an advanced Asian nation.
