Update X: Benign Dictatorships - Does Power Always Corrupt?

Half a century ago, Singapore and Zambia had several commonalities: they had recently transitioned into peaceful independence from Britain; they were led by strong men who would hold power for more than two decades; and they were dirt poor, with annual GDP per capita around $500 in today’s money. Today, Singapore is the third richest country in the world, more than 30 times richer than Zambia, its gleaming skyscrapers and efficient infrastructure a stark contrast to the pot holes and dirt roads we experienced in Zambia. Many credit this progress to the late Lee Kuan Yew (or ‘LKY’), Singapore’s Prime Minster until 1990 but well involved in the running of the country until his death last year. His model of ‘benign dictatorship’ certainly worked - perhaps it shouldn’t be ruled out as fast as it in the humanities classrooms in the West. 

 

Singapore’s skyline is very much 1st world; Kids in Singapore go to school rather than sell Charcoal...

Dictators have of course been around  for several thousand years and it is no surprise that the word comes from Latin meaning a chief magistrate, someone who can dictate or prescribe. Roman dictators were appointed by the senate for a finite period, usually to conduct a war. Julius Caesar is probably the most famous example of an early dictator, before his tenure was cut short by his assassination in 44BC. Although the modern academic definition ('where there is no turnover of power in the executive') has evolved, many dictators in recent time have also had their lives ended prematurely! Moreover, they are more common that one might think: according to Freedom House, a non-governmental organisation headquartered in Washington DC, about two-thirds of the world’s population in over 100 nations live under dictatorships, or partial dictatorships. Certainly, of the 10 African & Asia countries we’ve cycled through so far, at least 6 would fit such a definition.

Students in the West, at least those of us enjoying our formative education in the 1990s UK, were encouraged (by the new national curriculum) into thinking them much inferior to democracies, as the Berlin Wall fell exposing totalitarian regimes full of corruption and repression. But at the same time that the likes of Nicolae Ceausescu was getting his 1989 Christmas present (execution by firing squad after 24 brutal years leading Romania), LKY was rapidly making Singapore a first world country. More recently, the failure of the Arab Spring in the Middle East, spawning the worse refugee crisis since World War II, and the success of China have made observers question the merits of democracy and become more open to ‘benign' dictatorships.

LKY’s reign certainly falls into this category. The Cambridge educated lawyer had experienced life under British and Japanese rule and was both passionate and well equipped to make independence a success, despite the failed integration with Malaysia immediately after the British left.

Helped of course by Singapore's location (a gateway between Asia & Europe for trade, in contrast to Zambia which is 2000km from the nearest port) and a small population, he set about turning Singapore into a united country with an excellent education system, state of the art infrastructure and strong institutions: i.e. a place where  businesses, especially foreign ones, would look to invest. "Key legislation in this regard were the employment and industrial relations acts in the 1960s", muses Wei Zheng Kit, Citi economist for Singapore and Malaysia when we met for coffee in Singapore's impressive financial district.

However, he arguably wouldn't have been able to achieve all this with genuine political opposition, especially from the left. In 1963, for example, more than 100 opposition politicians and union leaders were deemed a threat to national security and arbitrarily detained. Nonetheless, as Tom Plate, an American journalist who interviewed Lee in 2009, said, “We in the West may quarrel with the way [Singapore’s prosperity] was achieved, but the achievement somehow seems to dwarf the critique.”

Singapore - a success story since independence, compared to both Africa and Asia rivals

Other examples of 'benign dictators' on my route so far have been Paul Kagame in Rwanda, who has helped to steer his country in the right direction since the terrible genocide in 1994 and the late Shaikh Zayed from the UAE. The latter oversaw an incredible and very visible economic growth story that has been beneficial for Emiratis and skilled immigrant workers, although not so much for those who built the desert cities.

Dubai 1980 v 2010 - it couldn’t happen in a democracy….

Certainly, however, history is littered with plenty of bad examples - the ones we were taught at school. Ceausescu was angelic relative to Stalin and Hitler and perhaps more on par with Robert Mugabe, whose decimated country we rode through in November. 

Next month, we'll be heading into Cambodia, former home of the infamous Pol Pot and will finish in China. Strong leadership there has recently helped bring millions of its citizens out of poverty but it also tragically failed during Chairman Mao's 'great leap forward' in the 1970s, causing many observers to see him as the dictator that caused the most deaths.

Chairman Mao wins this prize although his intentions were arguably ‘benign’

So should economists welcome dictators with benign intentions?  Like most questions, there is no right or wrong answer and it depends on many variables. Certainly both LKY in Singapore and Kenneth Kaunda (his equivalent in Zambia) were both well intentioned but their policies and outcomes were very different. 

Even in Singapore, the model is now changing. "The easy (economic) gains have gone and a move to a more pluralistic system makes sense in the 21st Century" concludes Kit, who worked for the government before joining Citi. "The next 5-10 years is going to be interesting."

For me, who left the world of finance after the 2008-09 crisis, it seems that it has not spawned a crisis of capitalism as many thought, but rather crisis of capitalist democracy.  The American election cycle is entering its final straight, with the equivalent of the GDP of many small countries being spent on the various campaigns.  If Mr Trump makes it to the White House (with Boris in Downing Street?), I think the western political textbooks that our children study might well tell a different story from the one we were sold in the 1990s!