A People’s Dynasty

A politician has gone on record labelling the regime to which he belongs as a ‘People’s Dynasty’. He has said: “It is a dynasty, but by people’s choice. A people’s dynasty.” The context was in that of a regime of centralised decision making which would further speed up in economic development.

The example was held out of countries in which there is “immediate decision making by one person”. It seemed to be the claim that where such steam rolling of speedy decision making takes place, economic development will follow, similar to night following day.

South Asia is not new to dynastic politics and regimes. In the recent past, the Nehru/Gandhi dynasty in India, the Bhutto dynasty in Pakistan, the dynasties of the Two Begums in Bangladesh, the Khaki clad military in Myanmar, the Royal dynasty in Nepal, the Gayoom dictatorship in Maldives are all manifestations of attempts at dynastic politics.

It is alleged that the recent regime in the Maldives is an attempt to re establish the Gayoom dynasty, which was ousted by a popular vote, and the world watches with interest whether developments in Myanmar will see the potential for an Aung San dynasty.

Dynastic rule has many defenders. They point out voters preferring to stick with known ruling families, the Bush family in America, the potential of the Clintons also in America. But the downside is that the centralisation of power and decision making, in dynastic systems, which have no entrenched systems for the Rule of Law and the Separation of Powers, an independent judiciary and a free media, is the inevitable decline into non responsive and repressive dictatorships.

The dictionary definition of dynasty is: ‘A sequence of rulers from the same family, stock or group’. But it seems that dynastic claims are being made for anticipated sequential dynasties.

The Mughals of India

Historically, South Asia’s most successful dynasty was the Mughals of India. The Mughal emperors were Muslims and direct descendants of Genghis Khan through Chagatai Khan and Timur the Great.

Readers would know that Genghis Khan, the ‘Great Khan’ as he was known, ravaged the kingdoms of Europe with his horse-mounted Mongol hordes from the Central Asian Steppes, once known as Moghulistan. The Mughal were the imperial rulers from India from 1526 to 1757, they remained a diminished force for another century.

At the height of their power in South Asia in the late 17th and early 18th centuries, the Mughals controlled most of the sub continent, extending from Bengal, the modern Bangladesh in the east, to the current Pakistani province of Baluchistan in the west, the currently partitioned Kashmir (between India and Pakistan) in the north to the Kaveri river basin in the south.

The classic period of the Mughal Empire started in 1556 with the rise to power of Akbar the Great, who ruled until 1605- for almost half a century- overlapping at each end the reign of his contemporary Queen Elizabeth I of England. Under his rule India enjoyed much cultural and economic progress as well as religious harmony.

While Akbar was a successful warrior, he also forged marital alliances with several Hindu Rajput kingdoms. Akbar succeeded his father Humayun in 1556. He was a wise ruler, setting high but fair taxes. He was inclusive in his approach to the non Muslim subjects of his empire; he taxed farmers one fifth of their agricultural produce.

He also set up an efficient bureaucracy and was tolerant of religious differences, which softened the resistance to Mughals rule by the local Hindu inhabitants. Jahangir, son of Akbar, ruled the empire form 1605 to 1627.

Jahangir was succeeded by his son Shah Jahan and inherited a vast and rich empire. Shah Jahan undertook a series of costly military campaigns to expand and consolidate the empire. At that time, the Mughal Empire was beyond doubt the greatest empire in the world. Shah Jahan commissioned the famous Taj Mahal, at Agra, which was built by the Persian architect Ustad Ahmad Lahauri, as a tomb for the Emperor’s wife Mumtaz Mahal, who died giving birth to their 14th child.

The Taj Mahal was begun in 1630 and completed in 1653. Local tax collectors had to raise more and more taxes to support not only Shah Jahan’s military campaigns and monumental buildings, but also the social and military elites of the regime, who were essentially parasitic on the economy.

At Agra, Shah Jahan maintained a lavish and exquisite court life. Shah Jahan’s son Aurangzeb, a very austere and devout Islamic, ousted his father, critical of his extravagant life style and locked the old emperor up in the Agra Fort, in a room from which he could only view the Taj Mahal and mourn Mumtaz, which Aurangzeb considered a folly and a waste of national resources.

Recently the British Library presented an exhibition entitled ‘Mughal India: Art, Culture and Empire’, an unprecedented attempt to capture the full sweep of the Mughal dynasty. Most of the exhibits were the fruit of collecting by representatives of the British India Company, who upon arriving in Delhi in the 18th century; found themselves enraptured by a civilisation in full flower.

The British Library’s exhibition brochure says: ‘The Muslim rulers reigned for almost 350 years over a mostly Hindu population, and were renowned for their religious tolerance and patronage of science and art.’

Comparisons to Sri Lanka

In some ways analysts have compared the Mughal taxation, revenue and expenditure regime in Shah Jahan’s time with that currently prevalent in Sri Lanka. High indirect taxation on basic necessities caused by the heavy cost of servicing the public debt, salaries and wages of the State’s bloated human resource apparatus, losses incurred by white elephant public enterprises, colossal investment on infrastructure and the cost of servicing the public debt.

The general thrust of taxation in Sri Lanka today has placed a heavy burden on the lower income earners through indirect taxes on basic food items. The revenue profile is dependent upon indirect taxes. 51% of revenue is extracted from taxes on goods and services. Income taxes amount to only 17% of total revenue.

The Mughals had a bloated civil service, a huge standing army, indulged in high cost monumental infrastructure like the Taj Mahal and maintained an extravagant and lavish life style at the palace. Funds to sustain this had to be extracted from taxes on poor Hindu farmers, which led to much resentment. Even the austere Aurangzeb frowned upon the excesses.

To some analysts, the edifice of the Taj Mahal, considered a wonder of the world and a really exquisite building built in white marble, is a classic indication of the problems created by those who think they have unlimited and unchecked dynastic power in perpetuity. Reports of Shah Jahan’s tax and expenditure policies suggest that he may have had to appropriate as much as 40% of now what is referred to the gross domestic product to finance the empire, the Mughal lifestyle of ostentation and extravagance and monuments.

Indeed one reason Aurangzeb overthrew his father was that he was critical of Shah Jahan’s lavish lifestyle penchant for monumental building, including the Taj Mahal, even though it was a mausoleum for his mother Mumtaz Mahal. The extortion of high taxes by the Mughals in Shah Jahan’s time and thereafter resulted in resistance by the indigenous Hindu population against the Mughals. Aurangzeb probably sensed this, when he decided to oust the father and take over.

Rent seeking

In a modern context, Shah Jahan’s behaviour would epitomise what is today referred to as rent seeking. The accumulation of fortune, not by creating wealth through serving customers or citizens better, but by the appropriation of such wealth after it has already been created by other people.

Rent seeking is a route to personal enrichment and has been a dominant theme in the economic history of the world. Whenever the balance tips too far towards appropriation of others wealth, over the creation of wealth by one’s owns efforts, the result is entrepreneurial talent diverted to unproductive activity, an accelerating cycle in which political power and economic power reinforce each other – until others become envious of the gross and excess manifestation of the proceeds of the appropriation and this resentment of the oppressed undermines the fragile legitimacy of the regime. Political and economic instability are an inevitable consequence.

Myanmar, before the reforms initiated by the most recent military dictator was labelled an ‘Elective Kleptocracy’. In modern economies rent seeking takes the form of endemic relationships between big business, government owned enterprises of other national states and the state itself. Corruption, crony capitalism, and rent seeking are results of such insidious relationships. Governance goes out of the window. Attempts are made to stifle any individual or institution which stands in the way, either by publicising the rent seeking, or trying to reinforce the Rule of Law.

The independent media, journalists and the Judiciary are quick short-term targets. Some crony capitalists support this, armed with dual citizenship or foreign passports and accounts in foreign banks, they are ready to take a share in the stolen assets, having the ability to up and run, at any hint of revolt against the regime.

Too close cosy relationships between politicians and governments, big business and State-owned enterprises of friendly countries, whose Exim banks generously fund expensive ‘make work’ or ‘strategic’ infrastructure projects in which most of the loaned money ends up in some lucky guys pocket. Highways and bridges to nowhere, empty harbours and underutilised airports, dot the landscape of such nation states.

At least the Mughal dynasty had the good sense not to name their edifices after themselves! The unhealthy affinity between, politicians, corporates, foreign State-owned enterprises and lending agencies brings about such results. The problem is further compounded by dynastic politics, as succession in power also becomes a factor, resulting in suppression of dissent and undemocratic behaviour.

Market economy

One safeguard is a market economy. Market economies advance through disciplined pluralism; a process that gives maximum scope for experiment and innovation, while ensuring that when experiments and innovations fail they are terminated, and occasionally, when they succeed, they are copied, imitated and multiplied.

The phenomenal advances in the communication and information technology sector were driven by such market signals; whereas in the alternative, loss-making airlines, loss-making State-owned providers of utility services are kept alive by pumping in dollops of tax payer’s money by a dynastic statist system, which is impervious to market signals.

The success of a market economy is not achieved by policies that encourage people to be greedy and imposing as few restrictions as possible on what the greediest of the dynasts does. That was the world of Shah Jahan and it produced very little in the way of economic advancement. Well-regulated market economies, in which transparency in transactions is real and the Rule of Law in enforced, is where innovation, creativity and economic advancement takes place.

Analysts have been recently commenting on changes taking place regarding the tolerance of rent seeking in various parts of the world. For example take Brazil, a leading member of the BRIC group of emerging economies, the host to be on the World Cup Football tournament and the Olympic Games in the near future.

Rent seeking in Brazil was smooth sailing for the well initiated who could play the system. Invoices were inflated routinely on public works projects and funds were siphoned off to cronies for various nefarious purposes, including election campaigns, and into foreign bank accounts, however recently things have become difficult for the rent seekers.

For the first time Brazil has succeeded to recover illicit funds for abroad. A court in Jersey in the British Channel islands has ruled that US $ 10.5 million of stolen pubic money in bank accounts linked to a Brazilian congressman belongs to the Brazilian Government. The court was told that the money was siphoned off from a road construction project in Sao Paulo state.

Readers are well aware of the scandals in China of the hitherto unknown wealth of the close family members of outgoing Prime Minister Wen, which was exposed by the New York Times. In the same way the hidden wealth of the incoming President Xi was laid out in detail by the news wire service Bloomberg.

In India the founder of a new political party – the Aam Admi party – Arjun Kejriwal, social activist, former disciple of Anna Hazare of Lok Pal fame, has issued a series of exposés on the corruption of high level political figures, including Sonia Gandhi, the governing Congress Party’s Leader’s son-in-law - Robert Vadra, the External Affairs Minister Khurshid and the Chairman of the opposition BJP, Gadkari.

An Indian commentator of repute, Gurcharan Das, former Chief Executive of Procter and Gamble India, in his book ‘India Grows at Night,’ says: “The Indian state has declined into a state of paralysis. Governance has become a serious problem and corruption is pervasive. India has law and China has order, but a successful nation needs both.” The point Das is trying to make is that India grows at night, only when the Government goes to sleep!

Sri Lanka’s ‘dynasty by people’s choice’

This is a good context as any to take a second look at Sri Lanka’s ‘dynasty by people’s choice’. A Sri Lankan economic think tank, the Pathfinder Foundation, has warned that Sri Lanka is showing signs of ‘opportunistic state capitalism’ with the Government cherry-picking opportunities and creating confusion about roles of the private and public sectors.

Pathfinder’s Executive Director has gone on record saying that Sri Lanka’s investment rate of 30% of GDP leaves a shortfall of about US$ 3 billion needed to attain the Government’s target of 8% growth.

“There is also need for greater clarity regarding the respective roles of the private sector and State sectors, including the military, in economic activity,” Pathfinder’s Executive Director says.

The situation is further compounded by the fact that the so-called people’s dynasty has been installed into power, not by the people’s free and fair choice at elections, but by an insidiously successful effort to subvert the people’s choice by cajoling and enticing people by various inducements, originally elected to diametrically oppose the policies of the dynasts, to cross the floor, assume office and vote with the dynasty, betraying the voters, who voted for a completely opposite set of policies.

The issue has been further compounded by a confession of a former jurist, who provided legal cover for the ‘jumpers,’ that he had decided some cases before him, on another unrelated subject, in a way which he hoped might bring about some benign and benevolent rule. If such was his juridical demeanour, can one question the validity of all that worthy’s judicial pronouncements! Some people, some choice, some dynasty!

The evils of dynastic-centralised decision making the ‘immediately one person takes the decision’ syndrome, are manifested in the ongoing attempt to impeach the Chief Justice, with a charge sheet which is allegedly a shambles of innuendo and half truths, which allegedly does not disclose any offence for which impeachment is required; the tsunami which erupted in the high security confines of Welikada jail, resulting in 30 deaths; and the ghastly series of homicides and violence against women and sexual offences against children, unprecedented in Sri Lanka’s history of crime, with the law enforcement authorities seem unable to solve, except by transferring Police officers around, which has caused public outrage.

The Budget speech prophesied more such unpredictable tsunamis. It is only reasonable to expect that, where decision making is centralised, accountability and responsibility lies also with the central decision maker.

Checks and balance

The bottom line is that governance and economic growth requires checks and balances. As Lord Acton famously said: “Absolute power corrupts absolutely.”

Rules of good governance, the Dasa Raja Dharma, the traditional and customary ‘Sirit Virith’ (conventions), which constrained the King’s power, were all there with a purpose. They evolved over centuries, when it became apparent that absolute unchecked power, led to excesses which threatened the rulers themselves due to a build up of public animosity reacting to the abuse of power. These are the lessons of history.

As Gurcharan Das, indicates, at least if the Government goes soundly to sleep at night, then the people can freely get on with their nocturnal lives! Rulers – dynastic or otherwise – are dependent on the people’s support. Autocratic, insensitive behaviour will not be tolerated by the people. Those who the people elected to oppose the dynasts and who have now sold their souls for the proverbial bits of copper, may continue their sycophantic behaviour, but those worthies have long ceased to reflect the people’s aspirations.

Modern history is replete with dynasties which thought they were installed forever and a day. The Suhartos of Indonesia, the Duvaliers of Haiti, the Mubaraks of Egypt, the Qadaffis of Libya, the military in Myanmar, the Ben Alis of Tunisia, the Mobutus of Congo, the Whites Apartheid in South Africa, come to mind.

We watch on our television screens on a daily basis the death pangs of Syria’s presidency (sexually transmitted – similar to HIV Aids, the Syrians, at one time, joked Hafez Assad to his son Bashir Assad).

The famous German playwright Bertolt Brecht wrote, after the abortive East German uprising against Soviet rule in 1953: “Would it not be easier for the Government to dissolve the people and elect another?!”

Unfortunately this ‘dissolution of the people’ by the Government had to wait in East Germany for decades more, albeit in reverse mode, until the demolition of the Berlin Wall! How sustainable are dynasties?

(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)