False Economy - Alan Beattie [125]
Less than a year after the Asian crisis began, he was forced from office. The damage wrought by the Asian crisis took a decade to repair. Suharto's defenders would say that Indonesia's slow and halting recovery merely revealed how much the country missed his regime. A more balanced verdict would also point to the intrinsic fragility of a state oriented around the personal rule of one man and his clique, and blame him for some of the subsequent dysfunctions, as well as for the collapse itself.
Similar cataclysms at other times in history often involved cataclysmic military defeats or the loss of empire. For one of the most famous examples of attempts to close the gap between principles and practice, we turn again to our friends at the East India Company. At the end of the eighteenth century, in the House of Lords, Britain's highest court, corruption was put on trial in the person of Warren Hastings, former governor-general of India while it was under Company rule.
The seven-year trial was technically an "impeachment," a process—obsolescent in Britain even then—designed to remove officials from their posts. (Impeachment still persists in some constitutions—recall Bill Clinton's trial in the U.S. Senate triggered by the Monica Lewinsky affair.) It became much more than a question of personal morality: the impeachment turned into a battleground between competing norms of morality and probity. On one side were reformers who argued that the Company's actions were corrupt. On the other, the Company's defenders retorted that this was the way that things were done in Asia, and that in any case they worked. And the battle was symptomatic of a wider struggle in Britain against the deeply corrupt politics of the eighteenth century. It was given impetus by the loss of the North American colonies in their War of Independence.
First, a short digression about corruption and empire, which will also explain how the British East India Company got to run the subcontinent in the first place. Empires are particularly susceptible to corruption. They have monopoly and principal-agent problems in spades. Colonial officials are state bureaucrats who often wield a great deal of power over the economies that they are administering, and are frequently a long way from the imperial capital in whose interests they are supposed to be acting. The British and Dutch East India Companies, as we have seen, took over from the Portuguese, who had constructed a trading empire by carving out footholds in various corners of Asia. Reading contemporary accounts of just how decadent and corrupt the Portuguese colonial officers had become, it is painfully clear why the British and the Dutch could take over in Asia.
Portugal had forged trading links with India at the end of the fifteenth century in the person of the explorer Vasco da Gama. By the mid—sixteenth century it had established Goa on the west coast as a fort and trading post. Goa was run by a viceroy who answered to the king in Lisbon, and most of the senior posts were run by fidalgos—the sons of the Portuguese nobility, who also made up the officer class of the military. This proved to be an arrangement highly inconducive to honest and efficient government.
The trading posts of Portuguese Asia were intended to finance themselves through rents charged to locals and levies charged on traders passing through the ports, with only the hefty profits from the actual trading of spices taken by the crown back in Portugal. Thus the colonial outposts were largely left to their own devices. For a contemporary