{"id":115245,"date":"2013-11-19T00:15:32","date_gmt":"2013-11-18T18:45:32","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=115245"},"modified":"2013-11-23T15:34:46","modified_gmt":"2013-11-23T10:04:46","slug":"princelings-and-nepotism","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/princelings-and-nepotism\/","title":{"rendered":"Princelings And Nepotism"},"content":{"rendered":"

By\u00a0Charitha Ratwatte<\/a><\/span>\u00a0–<\/strong><\/strong><\/strong><\/p>\n

\"Charitha<\/a>

Charitha Ratwatte<\/p><\/div>\n

In the context of the recently-concluded Commonwealth Heads of Government Meeting in Colombo, for which delegates from Britain and her former British colonies were in town, it is a good time as any to look at important issues on succession to power and the route to economic development.<\/p>\n

Princeling is a word which emerged out of China, the Middle Kingdom. During the time of the Emperor, senior courtiers close to the Forbidden City\u2019s Palace often lobbied directly with the Emperor, the Empress, senior concubines and eunuchs for their relatives to be appointed to high positions in the Imperial Bureaucracy. This was to consolidate their power and influence.<\/p>\n

It was said that the leading powerful courtier families sought to sustain their power and influence over the Imperial Court by ensuring that family members were well distributed among the Emperor\u2019s concubines, bodyguards, military commanders and the officials who carried out priestly duties for the Emperor, at the holy shrines. In this way they thought they could cover all bases and have multiple points through these Princelings, which they would use to influence the Emperor and his immediate circle.<\/p>\n

Although some of these \u2018agents\u2019 managed to keep a low profile, as was sensible, so that their connections would not be disclosed to other officials, many of them were unable to hide their influence and were perceived to be arrogant and undeserving of the important positions they held or the fortune their influence gave them access to. They made the mistake of trying to place themselves above the law and foster a culture of corruption and invincible immunity, thinking that they were untouchable.
\n<\/strong><\/p>\n

China<\/strong><\/p>\n

In today\u2019s Communist China too, such Princelings exist, the relatives and descendants of prominent and influential senior Communist officials of the People\u2019s Republic of China\u2019s Communist Party. Many of these Princelings hold high-level political, official and business positions in the upper echelons of China\u2019s Communist party, the bureaucracy and State-Owned Enterprises.<\/p>\n

The term Princeling came into open usage in China in the early 20th century referring to the son of Yuan Shikai, a self-declared Emperor, and his cronies. It was later used to describe the relatives of top four Nationalist families in pre-Communist China, Chiang Kai-shek\u2019s relatives, Soon May-ling\u2019s relatives, Chen Lifu\u2019s relatives and Kong Xiang Xi\u2019s relatives.<\/p>\n

After the 1950s, when the Nationalists were driven out of mainland China on to Taiwan by the Communists, the term was used to describe Chiang Kai-shek\u2019s son, Chiang Ching-ku and his cronies in Taiwan. In today\u2019s Communist People\u2019s Republic of China, the current \u2018Princelings\u2019 are mostly the children of Mao\u2019s close associates, the \u2018Eight Elders\u2019 of the Communist Party, and other recent national and provincial leaders.<\/p>\n

They include the present General Secretary of the Communist Party, the President and head of the People\u2019s Liberation Army , Xi Jinping, son of deceased elder Xi Zhongxun, Deng Xiaoping\u2019s eldest son Deng Pufang, recently-purged Provincial Governor of Chongqing Bo Xilai, son of elder Bo Yibo, and Yu Zhengsheng, son of Huan Jing, former Mayor of Tianjin, to name a few.<\/p>\n

These Princelings cooperate and try to coordinate their activities to ensure that it is rarely that a new blood comes into the Communist Party\u2019s hierarchy; they also see to it that anyone among them who gets too ambitious and uppity is disposed of. This was the case with Bo Xilai who was seen to be dangerously playing around with Maoist hard left wing ideology to promote himself as being opposed to the \u2018capitalism with Chinese characteristics\u2019 which has helped to pull millions of Chinese out of poverty.<\/p>\n

Bo was also a charismatic leader who was seen as too uppity and not willing to await his turn in the queue, and was purged on corruption charges and the complicity of his wife in the murder of an Englishman. One way the Princelings consolidate their hold on power is through nepotism. Nepotism is patronage bestowed or favouritism shown on the basis of family relationship, in business politics, sport or whatever.
\n<\/strong><\/p>\n

Home-grown dynasties<\/strong><\/p>\n

Among the Commonwealth Heads of Government and the delegations in Colombo, there were significant numbers of Princelings and persons who owed their presence to nepotism. The gold standard for this is the infamous jocular question the Syrians asked themselves, when one dictator Hafez al Assad was succeeded by his son, Bashar al Assad: \u2018What\u2019s similar between the Presidency of Syria and HIV Aids?\u2019 The answer: \u201cThey are both sexually transmitted!\u201d<\/p>\n

This is nothing new to us. We have and have had our own home-grown dynasties \u2013 in ancient Anuradhapura, Polonnaruwa and Senkadagala Kande Mahanuwara and also the more recent Senanayake, the Bandaranaike and the Rajapaksa dynasties. India has the Nehru\/Gandhi dynasty. Pakistan, the Bhuttos.<\/p>\n

Cynics point out that when General Ayub Khan took over power in Pakistan and declared himself a Field Marshal, vowing to find a system of government which suited the \u2018genius\u2019 of the Pakistani people, the main legacy he left behind was that during his time the Pakistani economy was controlled by 12 families, after him, there were 13 \u2013 the addition was his own family!
\nNepal had its hereditary Kings, the Shah royalty and also a hereditary Prime Minster lineage \u2013 the Rana family \u2013 until the recent ouster of the monarchy. The Maldives had President Gayoom and his half brother, who contested the current elections. Bangladesh has the two Begums, a widow and a daughter of former Presidents.<\/p>\n

Some of these dynasties are democratically perpetuated and call themselves elected popular dynasties! Like the presidency of the United States, the recent Bush dynasty. It looks as if there is going to be a Clinton husband-and-wife dynasty too. Britain had Prime Ministers, the Elder Pitt and the Younger Pitt. Singapore has the Lee dynasty. South Korea, the Park dynasty. Malaysia, the Razak dynasty. The Gulf States have their Emirs.
\n<\/strong><\/p>\n

Perverting the system<\/strong><\/p>\n

What is more interesting is the dynamics on how Princelings and nepotism pervert the system and the economy. A case in point is when the American securities firm Bear Stearns opened an office in Hong Kong in the early 1990s. At this time China had just discovered the capitalist practice of publicly listing shares to raise capital and the Shenzhen and Shanghai stock markets were developing.<\/p>\n

There was fierce competition to get at contracts to sell shares of Chinese State-owned companies on these markets. Bear Sterns was looking for a Princeling to recruit to access this business. They found Margaret Ren \u2013 daughter of a senior Communist party official in Guangdong Province and daughter-in-law of former Prime Minister of the People\u2019s Republic Zhao Zhiyang \u2013 who was working at Kidder Peabody\u2019s New York office.<\/p>\n

Ren was hired by Bear Sterns on a fixed salary plus commissions for business generated. Although Rens\u2019 father-in-law former PM Zhao was under house arrest following the Tiananmen Square massacre, Bear Sterns found that she had access to Chinese officialdom due to the officials wanting to show sympathy to Zhao!<\/p>\n

Ren was the pathfinder for other Princelings who were recruited by companies such as Bank of America, Merrill Lynch, Citigroup, Goldman Sachs, Morgan Stanley, JP Morgan, Credit Suisse and Lehman Brothers. These include children and grandchildren of former President Jiang Zemin, Premiers Wen Jiabao and Zhu Rongji.<\/p>\n

However the Princeling era may have waned, after the US Securities and Exchange Commission began an investigation into JP Morgan recruiting two well-connected Princelings. A person familiar with the inquiry says: \u201cMost of the people with a mainland background who were employed by these banks are very well connected, that\u2019s clearly an element in why these people were hired.\u201d<\/p>\n

A spokesperson for HSBC, which did not hire Princelings, said: \u201cIt was never part of our culture. But the fact that we didn\u2019t engage in such practices definitively put HSBC at a disadvantage in attracting Chinese Government business.\u201d<\/p>\n

After Ren joined Bear Sterns, the firm won assignments such as listing of the Shenzhen-Guangzhou Railway and the task of raising a share of capital for China Telecom. The Salomon Brothers unit of Citigroup noticed the success of Ren getting work for Bear Sterns and hired her in 2001. A former Salomon executive said: \u201cChinese officials push business to their relatives. It is critically important part of hiring in China to hire people with the right connections.\u201d Ren moved rapidly from Salomon Brothers to Merrill Lynch, to BNP Paribas and returned to Merrill in October 2012.
\n<\/strong><\/p>\n

Impact on the economy<\/strong><\/p>\n

Princelings and nepotism can cripple an economy by the crucial positions in a nation being held not on the basis of merit or performance but on connections.<\/p>\n

For example, a certain website on the World Wide Web lists out the positions held in a certain country by members of a dynasty. They range from, in reverse order of importance: captaincy of national sports teams, deputy chief of mission in an embassy, pilot in the air force, chairman of the national airline, ambassador posts, positions on corporate boards in which the state has a stake , positions on regulatory authorities, chairmanship and membership of statutory boards, minister posts, leadership positions in the legislative arm of government, private secretaries and coordinating officers to ministers, special advisor posts to ministers, provincial chief ministers, cabinet minister posts, deputy ministers, secretaries to ministries, and the chief executive of the country.<\/p>\n

The Princeling system in a one Party state can be criticised for promoting the lack of transparency, corruption and crony capitalism. The system in China has been criticised for being operationally rigid, politically closeted and morally illegitimate. However, there are analysts who argue that after 60 plus years of Communist rule, China has developed into the world\u2019s second largest economy. It has pulled a larger percentage of people out of poverty than any other nation at any time in human history. The proportion of Chinese who today are no longer poor and are economically strong is truly astounding.
\n<\/strong><\/p>\n

Capitalism with Chinese characteristics<\/strong><\/p>\n

\u2018Capitalism with Chinese characteristics\u2019 espoused by the Communist Party of China has been praised by its defenders for its adaptability, for it being a meritocracy and for its legitimacy among the people.
\nConsider the issue of adaptability, within these 64 years China has undergone periods of radical collectivisation, the disastrous Great<\/p>\n

Leap Forward, privatisation of farm land and dissolution of the collectives, the more disastrous Cultural Revolution, Tiananmen Square Massacre, Deng Hsiao Pang\u2019s Market economy reforms and President Jiang\u2019s initiative to open up membership of the Communist Party to successful entrepreneurs, the \u2018Red Capitalists\u2019. Would any other system, even the much-vaunted so-called democratic \u2018electo-cracies\u2019 have faced up to so many challenges and come out successfully?<\/p>\n

On the question of operational rigidity, the Chinese Communist Party has actually been able to implement a system of term limits, at a time when the tendency of autocrats even in electo-cracies, claiming to be democracies, the world over, are going in the other direction.
\nLifetime rule is no longer allowed in China, Politburo members have a mandatory retirement age between 68 and 70 years. Of course they may continue to live in the party leader\u2019s compound and try to mentor their prot\u00e9g\u00e9s, but they have to step down from their official positions. Communist China has been actually hailed by some as a meritocracy. Consider that out of the 25 member Politburo of the Communist Party, only five are Princelings. The 300-member Central Committee has few elites.<\/p>\n

The upward mobility that the Communist system has created for China\u2019s people is in many ways a model. The only limitation is mandatory membership of the Communist party. But this today includes Red Capitalist entrepreneurs \u2013 Karl Marx must be rolling in his grave! The recent decision of the Third Plenum of the Chinese Communist Party\u2019s 18th Central Committee meeting in Beijing to \u2018give a decisive role to markets\u2019 in China\u2019s economic policy in the future, analysts say, has the potential to usher in another round of explosive economic growth, according to analysts.
\n<\/strong><\/p>\n

What is China\u2019s secret?<\/strong><\/p>\n

What is China\u2019s secret? The Communist party of China has a little known agency called the \u2018Organisation Department,\u2019 which works like a Human Resources Department of any large business corporation. It recruits young Chinese graduates after a competitive examination for three types of enterprises \u2013 the civil service, state-owned enterprises and social organisations like universities and community organisations.<\/p>\n

The university graduates proceed through four levels of advancement through these institutions. This is a pyramidal structure. At the base at grade 1 there are 900,000 recruits. The next level grade 2 consists of 600,000 officials. Grade 3 is 40,000 officials; Grade 5 is the Central Committee of the Communist Party, consisting of 300 persons. Admittedly there is a certain amount of patronage and mentoring in the system. But in which Human Resource Department are those aspects absent? In India, both in the IAS and the IFS, we hear of a Kerala Mafia, which ensures the upward mobility of Keralites! Indeed, it is alleged that President Xi heads a Shanghai faction in the Central Committee!<\/p>\n

The committee appointed to drive China\u2019s reforms is said to consist of a majority of Shanghai faction members. The Organisation Department of the Communist Party conducts intensive reviews of the performance of these people by interviewing peers, supervisors and subordinates exhaustively. Their performance is constantly evaluated and reported on. By the time the recruits reach the Central Committee or the Politburo, they have put 30 solid years of performance, running SOEs, running provinces or managing institutions such as universities or research institutes.<\/p>\n

For example, the present President of the People\u2019s Republic President Xi has over 30 years advanced from the manager of a village unit to running a province and also being \u2018re-educated\u2019 during the Cultural Revolution.<\/p>\n

China is a case study on how a Princeling system has evolved into a meritocracy, according to some analysts. Public opinion is clear; a recent PEW survey in China showed that 85% of those interviewed were \u2018satisfied\u2019 with the Chinese system. The London Financial Times surveyed Chinese youth and found that 93% were \u2018optimistic\u2019 about their future. How many so called democratic electo-cracies will have such favourable numbers? Democratic electo-cracies are fast becoming \u2018elect, regret and reject at the next election\u2019 systems.
\nOn the corruption issue, the facts are telling. On Transparency International\u2019s Corruption Index, China hovers between 70 and 80 places out of 170 nations. It is moving up year by year. On the other hand India is at 94th position and dropping. Many democracies fare worse.<\/p>\n

China has been able to alleviate a rigid orthodox Communist system by blending it with their Confucian tradition of a meritocratic Mandarin autonomous administrative system, albeit tied to membership of the Communist Party, combined with term limits for the leadership.
\n<\/strong><\/p>\n

\u2018Responsible Authoritarianism\u2019<\/strong><\/p>\n

Author Francis Fukuyama has described the system operational in the People\u2019s Republic of China as \u2018Responsible Authoritarianism\u2019. If Princelings are appointed on the basis of merit and performance evaluation to high posts, then the system may deliver. But intrinsically if connections are the key to eligibility, then there is hardly an opportunity for a meritocracy to develop in the style of the Chinese Mandarin administrative culture. This is the great paradox which bedevils democracies which are in fact mere electo-cracies.<\/p>\n

Merely by having elections of one sort or the other, one cannot guarantee the implementation of a sustainable development process. The management and implementation of national policies must be in capable, competent, unbiased hands. The nation\u2019s managers and administrators must be person holding office on merit, whose past record must be one of competence. Managers who are mere<\/p>\n

Princelings or who hold high office based on connections simply cannot deliver.<\/p>\n

The Chinese have shown that even in an autocracy, competent meritocratic managers can still usher in an era of development. How long will it take the rulers of democratic electo-cracies to realise that they must depoliticise the administration and have a competent, autonomous, national management cadre and not mere political hacks or incompetent Princelings in key administrative and management positions?<\/p>\n

The path to sustainable development lies in the hands of a meritocratic autonomous, management cadre governed by financial and administrative rules accountable to the law. The lesson to be drawn is that yes men, acolytes, incompetent relatives, political hacks, bootlickers, sycophants and other sundry types of \u2018ass liquors\u2019 holding critical posts, cannot ever deliver economic or social progress, whatever benefits there may be to corrupt dynastic wealth creation. The stories currently circulating about the Principal of the Sri Lanka Law College of the Council of Legal Education is a case in point!<\/p>\n","protected":false},"excerpt":{"rendered":"

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