Many people have believed in this statement over the years. We have seen arguments like this used by the fascists in Italy and by the governments of strict law-and-order places like Singapore. I would have to say that I agree with the statement to some extent, presuming that the dictator is not excessively harsh.
There are some sorts of liberties that people really do not need to have. For example, Singapore's notoriously harsh rules about things like spitting in public do not really infringe on any serious rights. If dictators want to take away rights of that sort, it is certainly preferable to chaos. However, the taking of much more fundamental rights is not preferable to some amount of chaos. The sort of repression that goes on in China, for example, is worse by far than the sort of relative chaos that we have here in the US.
So I would say that I agree with this statement so long as the dictators do not take things to extremes. But the problem is that they usually do take things to extremes, which is why I do not generally agree with the statement.