THE BLOG
11/17/2014 11:02 am ET Updated Jan 17, 2015

People's Power Coming to Asia

Over recent weeks the agenda about Asia has been suffused by summit meetings -- APEC in Beijing, ASEAN plus partner countries in Naypyitaw, Myanmar, and G-20 in Brisbane. All interesting, yes, fascinating. But behind the veil a much larger and more captivating issue lurks: What happens inside Asia's three most populous countries -- China, India, and Indonesia.

China's President Xi Jinping, India's Prime Minister Narendra Modi, and Indonesia's President Joko Widodo (Jokowi) are all redrawing the political landscape of their countries. Nothing like this has been seen since Deng Xiaoping's reforms in 1979, India's independence 1947, and the shift in the mid-1960s from President Sukarno to President Suharto in Indonesia. The change is momentous, yes, gigantic.

All three countries (India and Indonesia more than China) discard a political system where small elite -- even families -- select political leaders among their own to preserve privileges. Now the people select political leaders in a fierce battle against candidates put up by the elite. What's more the new leaders are coming out of nowhere genuinely men of the people not at all belonging to the elite breaking its monopoly to lead. The people for once see one of their own invested with power and expect things to happen. They will closely watch to prevent the elite from stealing 'their' victory. People's power is coming to Asia!

Xi Jinping's father, Xi Zhongxun, belonged to the elite of the Communist Party of China (CPC) from the revolutionary era making this swing less visible in China, but it's there. Since taking over from his predecessor Xi Jinping has done nothing else than demolishing well-known and well-established power structures inside CPC. Our knowledge of what happens in the inner circle is limited, but the drive against corruption is unique in China's post-1949 history. The demotion of the former security czar Zhou Yongkang has sent shock waves through the system. He is the first member of the Standing Committee of the Politbureau to be investigated for corruption. At the fourth plenary session of the 18th Communist Party of China Central Committee -- October 2014 -- the role of law was the main almost the sole issue. It is difficult to gauge what the communique means, but a fair guess is that the law, rules, and regulations passed under the watchful eyes of the CPC must be obeyed by everybody -- also high officials inside the CPC. It does not signify rule of law in a Western context (all are equal to the law). CPC has not been made subordinate to the law, but laws passed and implemented must be obeyed also by the cadres of the party.

For Westerners this may not sound of much, but in China's political landscape it comes close to an earthquake. For decades party leaders have grown accustomed to do what they wanted to do and line their own pockets without fear of being caught. The message is that from now on their actions are scrutinized. Simultaneously news came out that Australia has agreed to assist China in the extradition and seizure of assets of corrupt officials who have fled to Australia with illicit funds running into the hundreds of millions of dollars. There is even talk about extradition of former high ranking Chinese fleeing to Australia to avoid investigation into graft and corruption. This is only one of many activities under operation fox hunt.

Some observers see this as a veil for an internal power game with President Xi Jinping going for his political enemies, but when the President of China speaks his audience is the people of China -- not Western commentators. He raise expectations and will be held accountable for reducing corruption and stopping party officials' abuse of power -- two issues that for long have been a scourge in their daily life. President Xi Jinping knows that. August 2014 he allegedly stated in a speech that the destiny of the Communist Party was at stake.

Prime Minister Narendra Modi once sold tea at railway stations and has climbed up the greasy pole through sheer persistence, determination, competence, and not the least political adroitness. His landslide victory spring 2014 has been followed by victories in state elections. He is intellectually capable while at the same time endowed with the gift of communicating with voters. What he is communicating is a fundamental change removing archaic labour laws and similar obstacles to turn the country into a manufacturing economy. Demographics augur a rising labour force until around 2050 making this policy a perspicacious reading of comparative advantage. Furthermore he also seems to be aware that the money for investment in infrastructure, education, and production facilities can only come from one source: China. Among the countries joining China's initiative for an Asian Infrastructure Investment Bank (AIIB) we find India. He is a no nonsense person throwing away ballast and outmoded prejudices. No room for shallow or petty minded thinking. It's about India! So he also goes to the US and Japan to woo investors. It is still early days and much can happen -- certainly will -- but momentum has been created and that may prove decisive in the battle to transform India and cut through the maze of bureaucracy, privileges, stolidity and outright opposition.

Indonesia got a new President 20. October 2014. Joko Widodo (Jokowi) is the fifth president since the Asian financial crisis 1997/98 forced President Suharto to resign. His four predecessors all belonged to the elite governing Indonesia since The Netherlands recognized independence in 1949. Jokowi was a carpenter building his own business to produce and export furniture. He does not need to read about obstacles for doing business; he has encountered them himself. As Governor of the nation's capital Jakarta he displayed extraordinary political skills combined with a clear eye for what needed to be done and ability to engage with the people. What faces him is a gargantuan task, but not impossible. The economy is reasonably good running at a growth pattern of 5-6%, but not good enough in the long run. Like India manufacturing is imperative, but unlike India Indonesia used to do well until about a decade ago when deindustrialization set in. A reversal to reindustrialize is a must for offering jobs to a growing labour force. Investors are inhibited by red tape, inept officials, corruption and unfortunately a growing sense of feeling unwelcome amidst nationalistic talk among top leaders. The largest challenge is lack of majority in parliament giving the opposition among who is the loser from the presidential election, Prabowo Subianto, power to block him. Jokowi has so far tried to lure maybe even ensnare MPs to shift allegiance, but so far the opposition have ensconced themselves in an apparently unassailable position only allowing him to nipple at the their numbers.

Admittedly all three countries confront challenges of a magnitude rarely seen. Compared to the situation a few years ago optimism is, however, justified. The leaders have done their homework. They do not try to ingratiate themselves with the electorate being profuse of empty promises or resorting to fluffy talk; on the contrary they raise the hard issues promising to deliver solutions. They realise that their political future stands or falls with success in tackling domestic issues. Maybe they read Speaker Tip O'Neill's dictum from the 1980s 'all politics are local'. Ask them about foreign- and security policy to discover that this is an item far down the list of priorities if there at all.

This is genuinely positive because it augurs a peaceful Asia over the next decade. The three giants and their leaders will not be derailed from their domestic agenda; nor will they be tempted to fall back on fuelling nationalism to tie them over political threats. They have opted for bread and butter not guns and butter.

Joergen Oerstroem Moeller
Visiting Senior Research Fellow, Institute of Southeast Asian Studies, Singapore.
Adjunct Professor Singapore Management University & Copenhagen Business School.
Honorary Alumnus, University of Copenhagen.