In 2013, Xi Jinping stormed Beijing as the strongest Chinese leader in generations, pledging to disrupt the economy in ways neither Deng Xiaoping nor Mao Zedong dared. He was followed by Prayuth Chan-ocha of Thailand and Narendra Modi of India in 2014. Two years later, Rodrigo Duterte in the Philippines became the latest absolutist to shake up the neighborhood.
Yet, as 2020 approaches, the report card, broadly speaking, betrays far more weakness than strength.
Xi’s underwhelming grade can, in part, be discerned in the tear gas wafting through the streets of Hong Kong. Of all the wins Hong Kong’s protesters put on the scoreboard, the most tantalizing might be exposing the limits of Xi’s power.
There he is, China’s most potent leader since the 1970s, being outmaneuvered by a ragtag, leaderless mass of 20-somethings with umbrellas and Instagram feeds. The more his Communist Party issues threats, the more Hong Kongers stand their ground in defiance. Xi, loath to court pariah status with a crackdown live on CNN, is left sleepless in Beijing.
So are the economic reformers who bet big on Xi’s splashy, pro-market manifesto. It has gone almost nowhere, leaving China vulnerable to the trade war President Trump would launch five years later. China is limping along, growing the slowest since 1992, living on ever-bigger debt infusions and enabling a corporate sector wedded as ever to public support.
Xi has lots of company when it comes to failing to remake a dysfunctional economy. Abe’s nation is skirting recession yet again. That has his team scrambling to enact a $121 billion stimulus package and prod a central bank already at zero to do more to break the “deflationary mindset.”
Nowhere in sight, though, is the shock therapy Abe promised. Moves to cut red tape, loosen labor markets, catalyze a start-up boom and empower women took a back seat to aggressive interest rate cuts. And to those gushing over Abe’s corporate governance upgrades, here are two words: Nissan Motor. Truth is, Japan Inc. still answers to no one.
Nor has Modi’s tough-guy shtick put India on a higher growth path. Modi’s “Make in India” campaign to woo multinational companies is more slogan than credible strategy. Moves to open industries from aviation to insurance to greater foreign investment have been modest at best. Modi, meantime, has demurred on the truly vital reforms — labor, land and taxes.
Modi has indeed shown flashes of audacity, though not where India really needs it. Case in point: His takeover in Kashmir, driven by the modern politics of Hindu nationalism. Yet when it comes to revitalizing India Inc., Modi has been surprisingly passive.
A similar critique applies to Prayuth, the Thai general-turned-politician who led the junta that grabbed power 66 months ago. As prime minister, he’s gone easy on steps to raise Thailand’s game. On his watch, Bangkok’s ranking in Transparency International’s corruption perceptions index worsened from 85th to 99th, on par with Tanzania and Colombia.
In Manila, Duterte has yet to upend a long-neglected economy. Odd, as he was elected on the strength of nearly three decades running Davao City. Duterte became a national figure for producing faster growth and better infrastructure than the national average in the southern metropolis.
As president, though, Duterte has aimed his mojo elsewhere: at a war of choice against the drug trade. And here, he’s not completely alone. If only Xi’s government diverted some of its enthusiasm for detaining millions of ethnic minorities in the Xinjiang region to leveling the economic playing field.
Why haven’t Asia’s strongmen been more assertive? One answer has to do with vested interests and family dynasties. Since the global chaos of 2008, tycoons have pushed back even more forcefully to protect the status quo. In the Philippines, for example, Duterte has bowed to oligarchs he promised to tame. Another reason is that the process of simultaneously raising income, productivity and innovation is an increasingly daunting one. Hence the preference for treating the symptom of political challenges, not root causes, while distracting the masses with nationalistic flourishes.
There’s now a clear inverse relationship between leaders’ grips on power and moving up the free-market ladder. And here, if he’s paying attention, the weakness stalking Asia’s leaders holds some lessons for Trump. The billionaire’s arrival fueled hope for a pro-business renaissance — only to see incompetence and a preference for easy policy wins rule the day.
Just as Asia needs to regain reformist momentum to move economies forward, Trump should remember why he was elected in the first place. Likewise, Xi, Abe, Modi and others must act forcefully to open markets, incentivize innovation, stop coddling corporate zombies and show vested interests who’s boss.
Asia’s strongmen have long been a blight on democracy. Turns out, they may be even worse for the region’s economies.