Speech by Lim Guan Eng at the Asean Demoracy & Economic Development Forum in George Town, Penang on Friday, 9^th March 2012: 

The fourth wave of democracy 

It is generally accepted that the world has seen three waves of democracy. The first began with the adoption of democracy in early 19th century America and Europe, while the second wave occurred following the end of the Second World War through decolonisation and the restoration of democracy in many European countries. The third wave began in 1974, encompassing the democratic transitions of Southern Europe and Latin America all the way to the collapse of the Iron Curtain and the subsequent democratisation of the Eastern European countries.

In recent times, and certainly in the aftermath of the historic events now known as the Arab Spring, the world is once again undergoing a period of democratisation. In the Middle East, a region which has hitherto escaped democracy's attention, totalitarian regimes and once-untouchable dictators such as Tunisia's Ben Ali, Egypt's Hosni Mubarak and Libya's Colonel Ghadafi have been unseated and overthrown by their own people. The uprising of the Arab populace has spread like wildfire throughout the region, with many other regimes now under threat, most recently Syria's President Bashar Al-Assad.

This current wave of democracy, which many have appropriately termed as the "fourth wave",is not merely confined to the Middle East. In fact, we are now seeing repercussions and democratic assertions taking place in our own region, Southeast Asia. From the muted protests of the Singaporean people,to the Yellow Shirt Bersih movement in Malaysia, to the ground-breaking democratisation process in Myanmar, it is clear that the next decade or more in Asean will be an extremely interesting period.

I also feel that these events could not be happening at a morefortuitous time. With the decline of the 20th century economic powerhouses, a new global paradigm is emerging. As the United States, Europe and Japan, the traditional engines of global consumption, find themselves in a quicksand of long-term unemployment and underemployment, we in Asean find ourselves facing a serious challenge.

Ever since the end of the Second World War, emerging economies have been designed around an export-led production model to support these three major consumer markets. But now, with the Americans increasingly turning inward and with the debt crisis threatening to unravel the European economies further, the old model will no longer be tenable. With consumption power set to decline, who is going to buy our goods? In essence, we have to ask ourselves: who will be the consumers of tomorrow?

The answer is obvious. With more than 600 million people or around 9% of the world's population in Southeast Asia, and nearly 3 billion people or 40% of the world if we includethe rising giants of East Asia and the Indian subcontinent, it is only natural that we arepoised to become the next major consumer market.

The potential for this to happen is certainly real, but we must be aware thatsuch a situation can only be achieved if our people become stronger consumers, which means that they need to have more money in their pockets. In other words, economic democratisation must first occur in order to facilitate the growth of a strong consumer market in the region.

Sandwiched between India and China, Asean must necessarily position itself to take advantage of the shifting global order. We must ensure that the potential for economic growth is leveraged upon in a responsible manner in order to produce greater democratisation and decentralisation, both political and economic. Only by truly opening up both our political structures and our economies can we find the synergy that is required to achieve the goal of a single unitedAsean Economic Community by 2015 and beyond.

Myanmar: Asean's greatest test

Ladies and gentlemen,

As I mentioned earlier, our region is currently witness to sweeping and remarkable changes, not least of all in Myanmar, long considered as Asean's collective responsibility.

As Nobel Prize winner and Myanmar opposition leader Aung San SyuuKyi herself observed, "The possibility of a great transformation is in sight." These are exciting times for all of us in Asean, and we all share the greater responsibility of ensuring a peaceful democratic transition in our fellow member-state.

When Asean first decided to admit Myanmar in 1997, many had reservations. Some held the view that Myanmar should first democratise before being accepted as a full member. However, though it may be 15 years later, change is happening swiftly. In the last one year, we have seen the transition from totalitarian rule by an oppressive military junta to a more participatory and democratic society, albeit still at its early stages.

If democratisation in Myanmar is ultimately successful, we would then be able to offer the world a whole new model of democratisation. Myanmar would become proof that democratic change can occur not only peacefully, but in a wholly different manner compared to the uprisings in the Arab Spring. In the case of Myanmar, we are witnessing a top-down transformation as compared to the mass-led bottom-up revolutions in the Middle East.

We in Asean now have to play a crucial role in this historic transformation. Just as how we helped guide their entry into Asean, at a time when the rest of the world had shunned them, we now need to facilitate and provide assistance to ensure that the democratisation process fully benefits not only the 50 million people in Myanmar but also the other 600 million in Asean.

A new economy is opening up, and we must do all we can to ensure that their participation into the regional economy is as seamless and as mutually beneficial as possible.

Economic democratisation as an enabler of growth

Ladies and gentlemen,

The Arab Spring was a phenomenon that caught the world by surprise. Indeed, naysayers had for a long time claimed that the Middle Eastern people were not ready for democracy. You cannot democratise if your people are poor. As far as causality was concerned, economic development was seen as a prerequisite.

However, the Arab Spring and the worldwide movements it inspired, such as the anti-capitalist protests in Europe and Occupy Wall Street in the US, proved beyond doubt that people of all socio-economic backgrounds, whether they are rich or poor, professional or blue-collared, all simply want their voices to be heard. In other words, people desire for greater participation, both politically and economically.

While the Arab Spring was borne out of a hunger for democracy and political participation, the protests that took place in Europe and the US signalled a yearning for economic equity and participation. They may live in democratic and economically advanced countries, but they had very little economic value as individuals. In short, they were shut out of an economy dominated and advantageous only to a small group of capitalist elites.

Therefore, democracy must not only be understood in the political sense but must necessarily also mean economic equity and participation. The ordinary man and woman must be engaged with the economy in a meaningful and gainful manner.

In this context, economic democratisation can play a critical role as an enabler of growth. In normal circumstances, we talk about economic distribution as the natural next step after achieving growth. However, I now propose that we talk about economic distribution as a growth catalyst.

The idea is very simple. Take Indonesia for instance. If every Indonesian had one US dollar extra to spend every day, that will amount to 240 million US dollars extra circulating in the economy every day. That is no small amount. In other words, if we can increase the purchasing power of our people, especially amongst the lower-income groups, we will be sure to create a great consumer market.

In order for this to happen, we need a strategy that will collectively raise income levels, especially those at the bottom levels of the economy. This can be achieved by democratising the economy, allowing greater access and participation and creating more opportunities. Increasing skills will automatically increase productivity thereby allowing workers to increase their incomes. Higher incomes will mean higher purchasing power, and the natural result of that will be a healthy economy.

Therefore, our challenge in Asean is to identify this synergy between democracy and economic development. A truly democratised economy where people engage in meaningful participation will mean that we will no longer compete to see who can provide cheaper costs of business, but rather we will compete to produce more consumers. Instead of cannibalising each other and competing for FDI, it is far more productive for us to enrich each other.

Decentralisation as a key factor of multi-cultural Asean

Ladies and gentlemen,

Another key aspect of democratisation is decentralisation. It is an integral process that is based on the basic principles of freedom, empowerment and the sharing of responsibility.

We Asean countries have many things in common, chief amongst them a traditionally centralised structure of authority.Yet the process of democratisation in our region has seen these traditional structures broken down in favour of a more effective system where decision-making processes are shared through greater local autonomy for people at sub-national levels.

Decentralised structures of authority also allow central governments more space to focus on national policies rather than trying to resolve issues such as the collection of garbage or the efficiency of a bus route in a province hundreds of kilometres away. Unfortunately, my own country has been a little slow in adopting this approach, but we are hopeful for change when we take over.

Decentralisation is an exceptionally important issue in Asean, because our region is such that almost every country is multi-ethnic and multi-cultural, and by extension naturally wrought with the problems of identity politics.

For example, one third of Myanmar's population is made up of various non-Burmese ethnic groups. In Thailand there is the question of the Muslims in the south, as is the same in the Philippines, while Indonesia's expansive archipelago encompasses a myriad of different ethnic groups. Malaysia on the other hand is divided by the South China Sea, and with that comes many issues that divide Sabahans and Sarawakians from Peninsular Malaysians.

The question then is how do we resolve such issues? Do we resolve them by force and heavy-handed central authority or do we instead adopt a power-sharing approach?

In post-Reformasi Indonesia, democratisation has entailed a degree of decentralisation that has been remarkable to say the least. Some have termed it as "big bang decentralisation", in which significant responsibility and financial resources were transferred to local levels of government. Regional spending multiplied, public service facilities were handed over to local jurisdiction and a brand new intergovernmental fiscal system was put in place.

Today, we see an Indonesia with flourishing sub-national regions. This is a case in which democratisation has meant greater accountability and competitiveness at the local levels resulting in a dynamic growth model that has been able to withstand global economic pressures without much adverse effect. For example, Indonesia's secondary city Surabaya has been able to spearhead economic growth, surpassing the national average and continues to expand by capitalising on its niches and peculiar strengths.

Though far from perfect, Indonesia has been a somewhat successful experiment and indeed a model for the rest of Asean to learn from. Because of the multi-ethnic and multi-cultural nature of Asean, decentralisation is an issue that we need to be cognisant of. While important, decentralisation must necessarily be approached in a careful manner in order to create a situation of co-existence without compromising on national sovereignty.

Penang at the forefront of democratisation and economic development in Malaysia

Ladies and gentlemen,

I am glad to report that Penang has not been left behind in these developments. Ever since this government assumed power in 2008, Penang has undergone a process of democratisation, both in governance and in economy.

When we first took power, my first act as Chief Minister was to implement a new guiding principle for governance: CAT (Competency, Accountability and Transparency). Based on these core principles, Penang has become the first state in Malaysia to introduce an open tender system for all public procurements and supplies. This move, while simple, has been ground-breaking in Malaysia.

On top of that, we have also made available government contracts for public scrutiny, another unprecedented move in Malaysia. What's more, our public projects also involve rigorous public consultation. For example, when we announced our intention to undertake four major public infrastructure projects last year, we held numerous press conferences asking for public opinion and even engaged various civil society groups in two townhall-style forums which I personally attended.

As a result of the above measures, we have been successful at combating corruption, making us the only state government in Malaysia to be praised by Transparency International.

We have now followed up on that by making a public declaration of assets for every member of the state cabinet. In addition, as a commitment to democracy and freedom, our State Assembly last year passed the Freedom of Information Enactment, which allows people the right to access previously off-limit government information. We have also established the first speaker's corner in Malaysia, where one can not only enjoy freedom of speech, but also freedom after speech.

Our firm belief in good governance and democracy has paid off handsomely. For two years in a row, we have been tops in manufacturing investment in Malaysia. In 2010, we attracted RM12.2 billion worth of investments while we received RM9.1 billion last year. We have also charted the highest increase in passenger growth among all airports in Malaysia, achieved the highest drop in crime index, and are now rated the most liveable city in Malaysia. We have even achieved the most success in reducing debt - slashing RM600 million out of RM630 million in the last three and a half years - a 95% reduction of debt, the highest amongst all states in Malaysia.

When I spoke about economic democratisation and improving purchasing power and income levels of people, it was not mere rhetoric. In Penang we practice what we preach. Besides instituting the open tender system and achieving economic success, we also became the first state in Malaysia to eradicate hardcore poverty, with every household in Penang earning a minimum of RM600 a month. In addition, we also run a multitude of social welfare programmes, giving cash aid to senior citizens, single mothers, the disabled, schoolchildren, newborn babies and subsidised dialysis treatments. These are all part of our efforts to ensure that the downtrodden are taken care of, and in turn able to contribute meaningfully to our economy.

In other words, democratisation in Penang has taken the form of a people-centric government with people-centric policies. By this, we mean a government that does three things:

1. Listen to the people.

2. Do the people's work.

3. Focus on the people.

These three principles guide our work as a people-centric government. It is also our commitment to the greater cause of democratisation.

However, the path to a truly democratic society is far from complete, especially in our country. Despite the gains that we have made in the last few years, many challenges lie in our path. Earlier I mentioned the Yellow-shirt Bersih 2.0 movement. On the 9th of July last year, tens of thousands of Malaysians took to the streets to protest against what they believe to be massive electoral irregularities.

Such is the situation in our country where we are plagued by phantom voters, widespread gerrymandering, mal-apportionment of constituencies that totally run askew of our demographics, a compromised electoral roll and incidents of vote-buying. These are critical problems that we need to overcome in order to truly democratise.

However, there is much hope to look forward to. Thanks to the Bersih 2.0 rally last year, the Malaysian public has awakened. Never before has such a massive rally been organised in which the participants represented Malaysians of all walks of life. Young and old, rich and poor, Malaysians from all communities stood together to demand their rights as democratic citizens, standing their ground in the face of tear gas and chemical-laced water cannons that were used by the authorities to quell the demonstration.

We now face a crucial general election that is anticipated to take place this year. The coming polls will be the litmus test of democracy as far as free and fair elections are concerned. We hope that the Federal Government will honour the basic rights of "one person, one vote" and ensure that no Malaysian citizen is disenfranchised.

Conclusion

Ladies and gentlemen,

Asean has set the goal of achieving regional economic integration via an Asean Economic Community (AEC) by 2015. The AEC seeks to be a single cohesive market and production base, a highly competitive economic region, a region of equitable economic development and one that is fully integrated into the global economy.

The time is ripe and the global conditions are in our favour. We must capitalise upon this, and we are certainly able to do so provided we are clear on our foundations.

Democratisation is a key factor for the continued growth of our region, and the fate of Myanmar is our biggest test. As responsible partners in Asean, it is our duty to ensure that the democratisation of Myanmar is achieved peacefully and will result in their becoming a meaningful partner of growth.

Secondly, political democratisation must necessarily be followed by economic democratisation. With the decline of the traditional consumer markets of USA, Europe and Japan, Asean must emerge as the next consumer base, and we must do this by raising the skills, productivity and income of our people. We must ensure that economic growth does not result in widening income inequality. Instead, economic distribution should be seen as a growth factor and not an afterthought.

Finally, decentralisation is a necessary model considering the multi-cultural and multi-ethnic makeup of our region. It is an important issue that we need to tread as part of the ultimate objective of becoming a major global economic player in the future.

In Penang, we have shown that democratisation has resulted in a people-centric government with people-centric policies. Only by listening to the people, doing the people's work and focusing on the people, can we hope to catch the fourth wave of democracy.

The challenge therefore lies in our ability to ride this fourth wave of democracy, or risk being swamped and drowned by its undercurrents.

Thank you.

*Lim Guan Eng, DAP Secretary General & MP for Bagan