Book Review: Participation without Democracy: Containing Conflict in Southeast Asia

April 16, 2019

Book Review:

Participation without Democracy: Containing Conflict in Southeast Asia

Garry Rodan (Cornell University Press, New York, 2018)

 

by REVIEWER: Meredith Weiss 06 Feb, 2019

 

Those of us who study politics differ on whether our discipline is rightly termed a “science”. People who weigh in on the “scientific” side tend to emphasise, alongside the permeation of numbers and deductive hypothesis-testing, the stock of knowledge we have accumulated: core concepts and theories, tested and refined over time. With his provocative latest book, Participation without Democracy: Containing Conflict in Southeast Asia, Murdoch University’s Garry Rodan puts years of field research and insight honed over decades to work to prove that such pretensions are more aspirational than well-founded. His argument, taken to its logical conclusion, impugns much of what political scientists study when we study “democracy”. It suggests we have missed the crux both of what distinguishes regime types, and of what sorts of political dynamics spur, constitute, and emerge from transitions. And his argument is convincing.

Southeast Asia—home to a bewildering array of institutional innovations—offers Rodan a trove of variation to mine, as he probes how these states really function. Those readers familiar with Rodan’s extensive oeuvre will note points of continuity with his earlier work: the inseparability of politics from economic forces, the salience of civil society, the crafty ways in which regimes and their leaders sustain dominance. With its rich detail and critical perspective, this book seems something of a capstone as Rodan approaches formal retirement, bringing his rich, career-spanning material on Singapore as well as Malaysia into conversation with a similarly nuanced discussion of the Philippines, and weaving together theoretical threads.

Participation without Democracy places modes of participation (MOPs) front and centre, characterising regimes in terms of both the extent and the type of participation and contestation possible. The book is explicitly oriented toward theory; hopefully the words “Southeast Asia” in the title will not deter readers focussed on other regions. But Rodan builds his analysis with fine-grained evidence, astutely assessed, from his three cases.

He proposes that elites meet the challenges that contradictions of capitalism pose—rising inequality, social disruption and others—by introducing new modes of popular participation. Elites use these MOPs to contain and channel dissent, while deepening concentrations of power and wealth; opponents sometimes hope these same modes offer tools to dismantle elite power. The “central paradox” Rodan traces is the extent to which “expanded political representation—in both its democratic and nondemocratic forms—is serving more to constrain political contestation than to enhance it”. Regimes and the elites at their helm find ways of serving their own interests by strategies that may look participatory on paper but, in practice, narrow the space for contestation and fragment or co-opt challengers.

Political scientists have long placed participation and contestation at the fore of definitions of democracy, but usually with a primarily electoral focus and more as indicators to be measured than as patterns requiring qualitative evaluation. Rodan demonstrates that we need to delve deeper: to ask not just whether participation happens, but who can participate and via what modes, which questions are open to debate and what happens to input gathered. He brings ideology squarely into the frame, not just vis-à-vis neoliberalism—he presumes elites are devout capitalists and popular opponents, less so—but also as shaping how citizens and states engage and pursue their respective interests.

Rodan argues that consultative and particularist ideologies predominate in the Southeast Asian cases he studies. The former favours technocratic, seemingly apolitical problem-solving without political competition while the latter favours discrete communities’ or identities’ rights to specific representation. He also finds germane, though, democratic ideologies (those that facilitate challenges to inequalities inherent to a hierarchical order) and institutionally unbounded (and infirming) populist ideologies. By embedding their preferred ideological frame in institutions—MOPs—elites may fragment or delegitimate challengers and corral the scope of debate. While these ideologies of representation are not mutually exclusive, the “struggle over the permissible boundaries of political conflict” is central to what constitutes politics.

MOPs emerge from relationships within capitalism, developed over time. History matters—especially legacies of Cold War-era suppression of the left and its institutions. Also, the sites of participation under different modes shape the sort of inclusion they allow. On the menu are autonomous individualised political expression, extra-state civil societal expression, collective societal incorporation, and state-sponsored, individual administrative incorporation. This framework shifts our gaze from democratic elections or authoritarian coercion to, for instance, the extent to which civil society is organised and articulated with or independent of political parties, and the breadth of elite-challenging issues and alliances.

Rodan uses two broad initiatives or patterns from each of his three countries to illuminate distinct MOPs and tease apart how each regime functions. Singapore exemplifies societal and administration incorporation, driven by a largely consultative and particularist ideology of representation. Rodan homes in first on the explicitly nondemocratic Nominated Member of Parliament scheme, designed to pre-empt partisan parliamentary opposition by incorporating unaccountable and appointed representatives of sectors and under-represented social segments (who might otherwise find common purpose and/or drift toward opposition parties) for their apolitical expertise. He parses, too, a series of institutions and initiatives for soliciting individuals’ policy feedback, from elaborate ongoing mechanisms to periodic mass “conversations”—albeit with largely pre-set agendas and without necessary influence. This vision of incorporating feedback demonstrates, Rodan explains, a technocratic ideology of politics as the “noncompetitive technical exercise of solving problems”.

In the Philippines, state institutions and capacities serve the interests of oligarchs, who are challenged by opponents ranging from moderate social democrats to anti-capitalist revolutionaries, all with differing visions of democratic representation. Rodan’s first case, the party-list system for electing a share of members of Congress, encourages fragmentation of challengers (as by a three-seat-per-contender cap). The system has been co-opted by forces of traditional politics; it does more to contain than amplify threats to elite privilege.

Meanwhile, proponents of bottom-up budgeting, introduced in 2012, pressed hard-to-reconcile the goals of first, reforming undemocratic institutions via fortified civil societal organisations and second, problem-solving efficiency. That divide served to diminish its role even before Duterte nixed it altogether, and was exacerbated by the program’s ideologically consultative approach of incorporating stakeholders and expertise into cooperative deliberation on elite-defined policy problems.

Lastly, in Malaysia, we find the challenges of a deep-set and structurally reinforced particularist ideology, rendering any sustainable, shared alternative vision elusive. Rodan details how the deep permeation of that ideology has effectively scuttled periodic, carefully delimited initiatives for high-level economic policy consultation and transformation. Any real challenge to extant privilege, as well as critique of the integrity of state institutions, have been put beyond the pale. Last May’s electoral upset may have loosened strictures on the latter front, but to question racial privilege remains, for now, verboten. Over time, these initiatives have disabused many reformers otherwise willing to accept administrative incorporation of hopes of genuine influence. Overall, there are fewer consolidated state-sponsored, extra-parliamentary MOPs in Malaysia than in Singapore or the Philippines, even despite the launch, post-publication, of new consultative initiatives.

The more independent modes that have emerged in Malaysia also face hurdles. Efforts to coordinate within civil society, Rodan argues, as for restoration of local-government elections or broader electoral reform, had made headway even before the 2018 elections. This could be seen most notably in the at least minimal inclusion of nonpartisan local counsellors in opposition-controlled Penang and Selangor after 2008 and the wide-ranging, if more catch-all than coherent, Bersih coalition. But the vagaries of Malaysia’s political economy, as well as NGOs’ preference for prioritising liberal ideological notions of good governance and individual liberties rather than economic issues, intercede. Bersih, for instance, lacks “a socially redistributive reform agenda to address structural inequalities”, without which “UMNO’s particularist ideologies of race and ethnicity would remain seductive for many disadvantaged Malays”. The new government’s embrace of ethnic particularism as a core plank of its campaign strategy in 2018, he suggests, was an unsurprising result.

As Rodan illustrates, these three countries manifest different patterns of capitalist development, including the role of the state and parties, such that they may even adopt similar MOPs with different motives. In all, though, we see starkly the gap between participation and even discursive, or issue-based, representation. In all, we see the balance among and implications of different MOPs as encoding and reinforcing ideas about how power is organised and what it means to be represented—from being permitted to help hone pre-defined policies to being able to change policy agendas, and from participating qua individuals or officially sanctioned categories to seeing promise in and space for novel collective mobilisation. This all presses us to assess regimes less in terms of their institutional structures than per a deeper evaluation of whether those institutions serve more to consolidate elite control or empower outsiders—an issue less of whether the institutions “work” than of how they are designed, and in whose interests.

Rodan’s analysis throws down the gauntlet to scholars of regimes. He offers a trenchant, if polite, rejoinder to more superficial assessments, and ups the ante by concluding with sketches of how an MOP framework helps us to understand contemporary populist challenges or transitions to other institutional forms. He considers how an MOP framework may also assist in making sense of the permeation of depoliticising consultative and particularist ideologies in established democracies such as the UK. The agenda Rodan presents recommends a fundamentally different approach to understanding and classifying regimes—one which will surely call into question the status of most purported democracies by scrutinising how the policy/political process actually works. Illiberalism at home, and pro-market ideologies abroad, are putting pressure on Southeast Asian civil society organisations’ financial health.

Moreover, and in keeping with his intellectual roots, Rodan asks that we not pretend a distinction between politics and economics: it is the “dynamic societal conflicts” economic processes generate that produce political institutions. That said, the language of capitalism’s contradictions seems at times a bit forced. Presumably any other economic order would yield its own contradictions and its own similarly skewed MOPs. Still, given the near-hegemony of capitalism in Southeast Asia and globally, whether state- or market-led, Rodan’s critique of this particular structuring of production, wealth, and interests is understandable.

But it is not just scholarly observers, but domestic reformers, who may find Rodan’s analysis challenging. Rodan stops short of describing what MOPs would enable effective challenges to elites and their privileges—real democracy—or from what quarters we might expect such a push. Which interests understand themselves sufficiently as silenced that they seek another path, and how might institutions be remade (or opposition parties be induced) to engage with those perspectives and preferences more directly? There is an underlying assumption here of a politically neglected non- or anti-neoliberal core in all three states, not just the Philippines, ready to be mobilised.

One might ask, though—particularly given the now-protracted enervation of organised labour, plus mass investment in capitalism (for example, cross-class participation in stock markets), however manifestly inegalitarian—whether alternative ideologies are now more decrepit or discarded than actively suppressed. And are there positive examples operating alongside, and perhaps at cross-purposes to, these institutions: have these patterns of social conflict yielded also more progressive, perhaps even scalable, MOPs? Put differently, where do we go from here, beyond trudging resignedly toward an elitist, contention-stifling future? Uplifting this book is not —but Rodan’s provocative exegesis is not just a good read, but a call to rethink how we study as well as pursue participation, representation and elite-challenging reform.

Meredith L Weiss is Professor and Chair of Political Science in the Rockefeller College of Public Affairs & Policy at the University at Albany, State University of New York. She has published widely on political mobilisation and contention, the politics of identity and development, and electoral politics in Southeast Asia, with particular focus on Malaysia and Singapore. Her books include Student Activism in Malaysia: Crucible, Mirror, Sideshow (Cornell SEAP, 2011), Protest and Possibilities: Civil Society and Coalitions for Political Change in Malaysia (Stanford, 2006), the forthcoming The Roots of Resilience: Authoritarian Acculturation in Malaysia and Singapore (Cornell), and ten edited or co-edited volumes, most recently, Political Participation in Asia: Defining and Deploying Political Space (with Eva Hansson, Routledge, 2018) and The Political Logics of Anticorruption Efforts in Asia (with Cheng Chen, SUNY, forthcoming). She co-edits the Cambridge University Press Elements series on Southeast Asian Politics and Society. Current projects focus on “money politics” in Southeast Asia, urban governance in the region, and reform processes in post-GE14 Malaysia.

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Business as usual: regime change and GLCs in Malaysia

March 14, 2019

By Dr. Edmund Terence Gomez

https://www.newmandala.org/business-as-usual-regime-change-and-glcs-in-malaysia/

 

• Edmund Terence Gomez is Professor of Political Economy at the Faculty of Economics & Administration, University of Malaya. His publications include Malaysia’s Political Economy: Politics, Patronage and Profits (Cambridge University Press, 1997), Political Business in East Asia (Routledge, 2002), The New Economic Policy in Malaysia: Affirmative Action, Horizontal Inequalities and Social Justice (National University of Singapore Press, 2013) and Minister of Finance Incorporated: Ownership and Control of Corporate Malaysia (Palgrave-Macmillan, 2017).

  When Pakatan Harapan unexpectedly secured power after Malaysia’s 14^th General Elections (GE14) in May 2018, voters expected the coalition and Prime Minister Mahathir Mohamad to dismantle an extremely well-entrenched government–business institutional framework that had contributed to extensive clientelism, collusion, nepotism and embezzlement. After all, the institutionalisation of more transparent and accountable governance was a Pakatan campaign pledge.

  However, barely nine months after taking control of government, Pakatan appears to be re-instituting the practice of selective patronage in the conduct of politics and through the implementation of public policies. In this inter-connected domain of public policies and selective patronage, government-linked companies (GLCs) will play a key role.

  The core institutions employed by the Barisan Nasional coalition and the hegemonic party at its helm, the United Malays National Organisation (UMNO), that allowed for extensive profligacy are what are collectively known as GLCs. These GLCs are, in fact, a complex ensemble of statutory bodies, foundations, trust agencies, investment enterprises, a sovereign wealth fund, as well as companies, with representation in a wide array of industries. These institutions, controlled by the central and 13 state governments in the Malaysian federation, officially function primarily as “enablers” of domestic firms, to nurture a dynamic privately-owned enterprise base. But GLCs also constitute an estimated 42% of total market capitalisation of all publicly-listed firms. 67 quoted firms can be classified as GLCs, as the government, through various institutions, has a majority equity interest in them.

  Federal ministries, under the ambit of cabinet ministers, also control a vast number of quoted and unlisted GLCs that do a variety of things, including promoting development of strategic economic sectors, redressing spatial inequities by developing rural areas and industries, and financing research and development to drive industrialisation. However, of the 25 ministries in the federal cabinet in 2017, before the fall of Barisan, three in particular, the Prime Minister’s Department, Ministry of Finance (MoF) and Ministry of Rural and Regional Development (MRRD), had control of a huge assortment of companies that were deployed to channel government-generated rents to UMNO members and well-connected businesspeople.

  At the state level, different public institutions own GLCs through the states’ chief ministers, through holding firms known as Chief Minister Incorporated (CMI). CMIs establish companies to undertake activities in specific constituencies to mobilise electoral support. Party members are liberally appointed as directors of these GLCs, a major source of political financing as their stipends are used for political activities. Through the CMIs, what had emerged was the fusing of bureaucratic and party apparatuses, allowing politicians to selectively channel government resources in a manner that would help them consolidate or enhance their political base.

  Another factor shaped modes of GLC development: a communal perspective to policy implementation, in keeping with the government’s longstanding affirmative action-based redistributive agenda to transfer corporate equity to the Bumiputera (Malays and other indigenous groups). However, rents meant for poor Bumiputera were hijacked by UMNO members. Eventually, these GLCs became sites of political struggles among elites attempting to consolidate power through patronage, a reason why critics have persistently excoriated them as inefficient and loss-making concerns.

  Interestingly enough, this GLC framework became entrenched in the economy as well as the political system during Mahathir’s long 22-year reign as prime minister, from 1981 until 2003. Other key figures who shaped how this political–business nexus evolved while they served with Mahathir previously include then-Finance Minister Daim Zainuddin (1984–1990), now his economic advisor, and Anwar Ibrahim (1990–1997), then and now the designated prime minister-in-waiting. By the time of GE14, this GLC structure had become so huge—and so abused by Barisan—that Mahathir himself described it as a “monster”.

  Despite Pakatan’s promise of a new approach to shaping Malaysia’s political economy, experience thus far suggests a surprising degree of continuity. Rather than give up an appealingly effective lever for consolidating power, Pakatan leaders seem inclined to borrow the same tools on which Barisan had so detrimentally relied.

  

  Power struggles, persistent patronage

  Soon after Pakatan formed the government, a disturbing series of events occurred. Shortly after the election, Prime Minister Mahathir inaugurated the Ministry of Economic Affairs (MEA), led by Azmin Ali, deputy president of Parti Keadilan Rakyat (PKR), Anwar’s party. Even before GE14, PKR was mired in a serious factional row, reportedly due to problems between Anwar and Azmin. Meanwhile, Mahathir is widely thought to be uncomfortable with transferring power to Anwar, who he had removed from public office in 1998.

  

  A PKR insider insists that the party is split into two factions, one loyal to party supremo Anwar Ibrahim and the other to deputy president Mohamed Azmin Ali.

  The newly-minted MEA took control of numerous GLCs from the Ministry of Finance (MoF), under the jurisdiction of Lim Guan Eng, leader of the Democratic Action Party (DAP). In this discreet shuffling of GLCs between ministries, Malaysia’s only sovereign wealth fund, Khazanah Nasional, was channelled from MoF to the Prime Minister’s Department, under Mahathir’s control. The government did not explain why these GLCs were shifted between ministries, but MoF’s enormous influence over the corporate sector has been significantly diminished. Under Barisan, the Prime Minister had also functioned as the Finance Minister, a practice Mahathir had started in 2001, but Pakatan, while in opposition, had pledged to ensure the same politician would not hold both portfolios.

  Even though Khazanah was under the Prime Minister’s Department, Mahathir appointed himself as its chairman, which is, by convention, the practice. The convention also is that the Finance Minister serve on Khazanah’s board of directors. Instead, Minister of Economic Affairs Azmin was given this appointment. The appointment of Mahathir and Azmin as Khazanah board members was contentious as Pakatan had pledged in its election manifesto that politicians would not be appointed as directors of government enterprises.

  

  Next, in September 2018, Azmin’s ministry convened a Congress on the Future of Bumiputeras & the Nation. Mahathir stressed at this congress the need to reinstitute the practice of selective patronage, targeting Bumiputera, a plan his economic advisor, Daim, endorsed. The following month, when Pakatan, through the MEA, released its first public policy document, the Mid-Term Review of the 11^th Malaysia Plan, it emphasised the Bumiputera policy as being imperative. In the past, GLCs have been central to government efforts to advance Bumiputera interests.

  Meanwhile, numerous ministers began actively calling for the divestment of GLCs, an issue also in the 2019 budget. Subsequently, when Khazanah began reducing its equity holdings, including in CIMB, Malaysia’s second largest bank, rather than seeming simply a step toward the larger goal of scaling back government ownership, this divestment raised the question whether it marked the commencement of a transfer of control of key enterprises to well-connected business people, even proxies of politicians, a common practice by UMNO in the 1990s. In fact, in ensuing debates about such divestments, the question was raised whether such divestments were an attempt to create a new influential economic elite, even oligarchs, who could check politicians in power in the event of a leadership change.

  Then, another contentious issue occurred. Minister of Rural & Regional Development Rina Harun, of Mahathir’s Parti Pribumi Bersatu Malaysia (Bersatu), appointed politicians from her party to the boards of directors of GLCs under her control. Under UMNO, this ministry had persistently been embroiled in allegations of corruption, undermining the activities of its GLCs that had been created to redress spatial inequalities and reduce poverty. The practice of patronage through GLCs to draw electoral support was rampant under this ministry as its enterprises have an enormous presence in states with a Bumiputera-majority population. So important is this ministry, in terms of mobilising electoral support, that it was always placed under the control of a senior UMNO leader. Hence, the minister’s directorial appointments suggested a worrying trend of continuity of irresponsible practices of the old regime.

  In December 2018, Bersatu leaders openly declared their intent to persist with the practice of selectively-targeted patronage. At its first convention after securing power, when its president, Muhyiddin Yassin, declared that “Bersatu should not be apologetic to champion the Bumiputera Agenda”, his statement was enthusiastically supported by members, suggesting an element of opportunism, even self-interested rent-seeking, in the party. UMNO leaders had made similar arguments in the past to justify state intervention, including through GLCs, a process that they abused to transfer government-generated rents to party members, to the detriment of poor Bumiputera. These trends suggested that Bersatu’s primary concern was its immediate need to consolidate power, not instituting appropriate long-term socioeconomic reforms, which might do less to muster support.

  The problem of instituting real change

  All told, then, these specific, sometimes discreet, steps since GE14 have called into question the extent of political economic reforms expected of Pakatan, based on its own manifesto. Moreover, under Pakatan, by its own admission, the volume of state intervention in the economy will still be substantial. Industrial development will be fostered through GLCs, as will attempts to nurture dynamic domestic Bumiputera-owned enterprises. Worryingly, what is absent is a coherently-structured industrial plan to cultivate entrepreneurial private firms. There is similarly no roadmap to reform these GLCs, or even to get them to target specific core industries requiring heavy capital investments and extensive research and development funding to rapidly industrialise the economy. Since politicians will control most of these GLCs as directors, they will determine the recipients of rents distributed to nurture domestic enterprises.

  The current state of play raises an important question about an interesting phenomenon: what happens, in terms of dismantling rent-seeking and patronage and instituting reforms to curb corruption, when a new regime comprises politicians who see this framework as a mechanism to consolidate power? A link between two core issues remains in place after regime change: elite domination and the continued practice of selective patronage, legitimised by advocating race-based policies that are to be implemented through GLCs. Under UMNO, elite domination was obvious, with Barisan component members subservient to then-Prime Minister Najib. In Pakatan, a multi-party coalition, Prime Minister Mahathir and Daim appear to have disproportionate influence when it comes to decision-making on core issues, though the parameters of their power remain unclear.

  Meanwhile, elite domination of the economy at the state level varies as several different parties are in power. State governments are controlled by UMNO, Bersatu, PKR, DAP, Parti Warisan Sabah, Parti Islam Se-Malaysia (PAS) and Parti Pesaka Bumiputera Bersatu (PBB). The latter two parties have long governed Kelantan and Sarawak respectively, while Bersatu and Warisan are new parties run by UMNO factions, though ostensibly with a reformist agenda. The governance dynamics of these parties in these state governments will differ, specifically in terms of how they employ GLCs, further indicating the ubiquity of these enterprises in the economy. These GLCs have persistently been used to distribute different types of rents such as financial aid, contracts, permits, licences, etc., to party members as well as others in the electorate in key constituencies. Even with regime change, the presence of covert networks of power created through GLCs in these states is unlikely to be reformed, thus contributing to continued serious wastage of scarce resources.

  There is plainly no clear method to the madness of how the new federal or state governments employ GLCs. Different sets of political and business elites operate at the national and state levels. In fact, before GE14, business elites were known to be creating ties with politicians in both UMNO and Pakatan parties, specifically PKR and DAP. Meanwhile, in Sarawak, wealthy businessmen had long since begun entering politics, even getting elected as parliamentarians, thus giving them access to federal government leaders. This diversity in political–business ties, where government institutions figure, is an indication of how complex the GLC problem has become. However, GLCs remain an opaque form of state intervention in the economy. And, since there is little public knowledge of GLCs, the opacity of these enterprises has allowed for their abuse by politicians.

  

  Fragile state and political economic outcomes

  Since Pakatan is a coalition of parties led by politicians who coalesced only because they had a common agenda—the removal of Najib from power—what prevails in the post-GE14 period can be described as a “fragile state”. This fragility is also because of the uneasy relationship between Mahathir, who leads the second-smallest party in Pakatan, and his long-time-nemesis-now-political-ally Anwar, who leads the party with the highest number of parliamentary seats. PKR, however, is ridden with serious factionalism, including an uneasy truce between Anwar and Azmin, who apparently is closely associated with Mahathir.

  What is emerging is new forms of power relations through the unhealthy circulation of political elites from the old regime into Pakatan, as well as alliances between leaders from different parties in this coalition. UMNO parliamentarians are lining up to join Bersatu, a quick route back to power for them after their unexpected ouster. By co-opting them, Mahathir’s new party can swiftly fortify its extremely weak base in Bumiputera-dominant states. Bersatu’s co-optation of discredited UMNO members is, however, seriously undermining support for Pakatan among the urban middle class, as well as Mahathir’s credibility. In fact, there has been recent talk in the public domain that a no-confidence motion against Mahathir as Prime Minister may be tabled in the March sitting of parliament, led apparently by leaders within Pakatan. Because of this complex situation of political in-fighting, there is much fear that politicians in power may move to create, through the divestment of GLCs, powerful

  Since a structural framework that allowed politicians to exploit institutions in various ways to serve vested political and economic interests remains in place, a key question has emerged. What are the possible political outcomes to this situation, in which contending elites in the new regime struggle to consolidate their respective power bases? Political outcomes can involve protecting the property rights—through ongoing and much-needed institutional reforms—of business elites who acquire privatised GLCs, thereby preventing expropriation of these companies by the government in the event of a change of premiership. Political outcomes can also entail endorsing entitlements that give one large segment of society privileged access to government-generated rents, as is already actively occurring. Inevitably, a related issue is the necessity of targeted race-based policies. These policies serve as a mechanism to retain patronage-based networks and consolidate power bases. This approach can, however, stymie domestic investments by non-Bumiputera, a serious and persistent problem during Barisan’s rule.

  Ironically, it was these forms of unproductive government–business networks that Pakatan had promised to dismantle when in opposition, in order to forge a “New Malaysia”. This New Malaysia was supposed to be devoid of race-based political discourses and policies, with the GLCs deployed to promote equitable development and redress social inequities. The GLCs were not to be led by politicians who have no clue how to utilise them productively in the economy. These pledges have been broken. Evidently, consolidating power is more important for Malaysia’s new political elites than restructuring an economy in dire need of reform.
  itutions, has a majority equity interest in them.
  The core institutions employed by the Barisan Nasional coalition and the hegemonic party at its helm, the United Malays National Organisation (UMNO), that allowed for extensive profligacy are what are collectively known as GLCs. These GLCs are, in fact, a complex ensemble of statutory bodies, foundations, trust agencies, investment enterprises, a sovereign wealth fund, as well as companies, with representation in a wide array of industries. These institutions, controlled by the central and 13 state governments in the Malaysian federation, officially function primarily as “enablers” of domestic firms, to nurture a dynamic privately-owned enterprise base. But GLCs also constitute an estimated 42% of total market capitalisation of all publicly-listed firms. 67 quoted firms can be classified as GLCs, as the government, through various institutions, has a majority equity interest in them.

  At the state level, different public institutions own GLCs through the states’ chief ministers, through holding firms known as Chief Minister Incorporated (CMI). CMIs establish companies to undertake activities in specific constituencies to mobilise electoral support. Party members are liberally appointed as directors of these GLCs, a major source of political financing as their stipends are used for political activities. Through the CMIs, what had emerged was the fusing of bureaucratic and party apparatuses, allowing politicians to selectively channel government resources in a manner that would help them consolidate or enhance their political base.
  Another factor shaped modes of GLC development: a communal perspective to policy implementation, in keeping with the government’s longstanding affirmative action-based redistributive agenda to transfer corporate equity to the Bumiputera (Malays and other indigenous groups). However, rents meant for poor Bumiputera were hijacked by UMNO members. Eventually, these GLCs became sites of political struggles among elites attempting to consolidate power through patronage, a reason why critics have persistently excoriated them as inefficient and loss-making concerns.
  Interestingly enough, this GLC framework became entrenched in the economy as well as the political system during Mahathir’s long 22-year reign as prime minister, from 1981 until 2003. Other key figures who shaped how this political–business nexus evolved while they served with Mahathir previously include then-Finance Minister Daim Zainuddin (1984–1990), now his economic advisor, and Anwar Ibrahim (1990–1997), then and now the designated prime minister-in-waiting. By the time of GE14, this GLC structure had become so huge—and so abused by Barisan—that Mahathir himself described it as a “monster”.
  Despite Pakatan’s promise of a new approach to shaping Malaysia’s political economy, experience thus far suggests a surprising degree of continuity. Rather than give up an appealingly effective lever for consolidating power, Pakatan leaders seem inclined to borrow the same tools on which Barisan had so detrimentally relied.

  Power struggles, persistent patronage
  Soon after Pakatan formed the government, a disturbing series of events occurred. Shortly after the election, Prime Minister Mahathir inaugurated the Ministry of Economic Affairs (MEA), led by Azmin Ali, deputy president of Parti Keadilan Rakyat (PKR), Anwar’s party. Even before GE14, PKR was mired in a serious factional row, reportedly due to problems between Anwar and Azmin. Meanwhile, Mahathir is widely thought to be uncomfortable with transferring power to Anwar, who he had removed from public office in 1998.
  The newly-minted MEA took control of numerous GLCs from the Ministry of Finance (MoF), under the jurisdiction of Lim Guan Eng, leader of the Democratic Action Party (DAP). In this discreet shuffling of GLCs between ministries, Malaysia’s only sovereign wealth fund, Khazanah Nasional, was channelled from MoF to the Prime Minister’s Department, under Mahathir’s control. The government did not explain why these GLCs were shifted between ministries, but MoF’s enormous influence over the corporate sector has been significantly diminished. Under Barisan, the Prime Minister had also functioned as the Finance Minister, a practice Mahathir had started in 2001, but Pakatan, while in opposition, had pledged to ensure the same politician would not hold both portfolios.
  Even though Khazanah was under the Prime Minister’s Department, Mahathir appointed himself as its chairman, which is, by convention, the practice. The convention also is that the Finance Minister serve on Khazanah’s board of directors. Instead, Minister of Economic Affairs Azmin was given this appointment. The appointment of Mahathir and Azmin as Khazanah board members was contentious as Pakatan had pledged in its election manifesto that politicians would not be appointed as directors of government enterprises.

  Next, in September 2018, Azmin’s ministry convened a Congress on the Future of Bumiputeras & the Nation. Mahathir stressed at this congress the need to reinstitute the practice of selective patronage, targeting Bumiputera, a plan his economic advisor, Daim, endorsed. The following month, when Pakatan, through the MEA, released its first public policy document, the Mid-Term Review of the 11th Malaysia Plan, it emphasised the Bumiputera policy as being imperative. In the past, GLCs have been central to government efforts to advance Bumiputera interests.
  Meanwhile, numerous ministers began actively calling for the divestment of GLCs, an issue also in the 2019 budget. Subsequently, when Khazanah began reducing its equity holdings, including in CIMB, Malaysia’s second largest bank, rather than seeming simply a step toward the larger goal of scaling back government ownership, this divestment raised the question whether it marked the commencement of a transfer of control of key enterprises to well-connected business people, even proxies of politicians, a common practice by UMNO in the 1990s. In fact, in ensuing debates about such divestments, the question was raised whether such divestments were an attempt to create a new influential economic elite, even oligarchs, who could check politicians in power in the event of a leadership change.
  Then, another contentious issue occurred. Minister of Rural & Regional Development Rina Harun, of Mahathir’s Parti Pribumi Bersatu Malaysia (Bersatu), appointed politicians from her party to the boards of directors of GLCs under her control. Under UMNO, this ministry had persistently been embroiled in allegations of corruption, undermining the activities of its GLCs that had been created to redress spatial inequalities and reduce poverty. The practice of patronage through GLCs to draw electoral support was rampant under this ministry as its enterprises have an enormous presence in states with a Bumiputera-majority population. So important is this ministry, in terms of mobilising electoral support, that it was always placed under the control of a senior UMNO leader. Hence, the minister’s directorial appointments suggested a worrying trend of continuity of irresponsible practices of the old regime.
  In December 2018, Bersatu leaders openly declared their intent to persist with the practice of selectively-targeted patronage. At its first convention after securing power, when its president, Muhyiddin Yassin, declared that “Bersatu should not be apologetic to champion the Bumiputera Agenda”, his statement was enthusiastically supported by members, suggesting an element of opportunism, even self-interested rent-seeking, in the party. UMNO leaders had made similar arguments in the past to justify state intervention, including through GLCs, a process that they abused to transfer government-generated rents to party members, to the detriment of poor Bumiputera. These trends suggested that Bersatu’s primary concern was its immediate need to consolidate power, not instituting appropriate long-term socioeconomic reforms, which might do less to muster support.

  The problem of instituting real change
  All told, then, these specific, sometimes discreet, steps since GE14 have called into question the extent of political economic reforms expected of Pakatan, based on its own manifesto. Moreover, under Pakatan, by its own admission, the volume of state intervention in the economy will still be substantial. Industrial development will be fostered through GLCs, as will attempts to nurture dynamic domestic Bumiputera-owned enterprises. Worryingly, what is absent is a coherently-structured industrial plan to cultivate entrepreneurial private firms. There is similarly no roadmap to reform these GLCs, or even to get them to target specific core industries requiring heavy capital investments and extensive research and development funding to rapidly industrialise the economy. Since politicians will control most of these GLCs as directors, they will determine the recipients of rents distributed to nurture domestic enterprises.
  The current state of play raises an important question about an interesting phenomenon: what happens, in terms of dismantling rent-seeking and patronage and instituting reforms to curb corruption, when a new regime comprises politicians who see this framework as a mechanism to consolidate power? A link between two core issues remains in place after regime change: elite domination and the continued practice of selective patronage, legitimised by advocating race-based policies that are to be implemented through GLCs. Under UMNO, elite domination was obvious, with Barisan component members subservient to then-Prime Minister Najib. In Pakatan, a multi-party coalition, Prime Minister Mahathir and Daim appear to have disproportionate influence when it comes to decision-making on core issues, though the parameters of their power remain unclear.
  Meanwhile, elite domination of the economy at the state level varies as several different parties are in power. State governments are controlled by UMNO, Bersatu, PKR, DAP, Parti Warisan Sabah, Parti Islam Se-Malaysia (PAS) and Parti Pesaka Bumiputera Bersatu (PBB). The latter two parties have long governed Kelantan and Sarawak respectively, while Bersatu and Warisan are new parties run by UMNO factions, though ostensibly with a reformist agenda. The governance dynamics of these parties in these state governments will differ, specifically in terms of how they employ GLCs, further indicating the ubiquity of these enterprises in the economy. These GLCs have persistently been used to distribute different types of rents such as financial aid, contracts, permits, licences, etc., to party members as well as others in the electorate in key constituencies. Even with regime change, the presence of covert networks of power created through GLCs in these states is unlikely to be reformed, thus contributing to continued serious wastage of scarce resources.
  There is plainly no clear method to the madness of how the new federal or state governments employ GLCs. Different sets of political and business elites operate at the national and state levels. In fact, before GE14, business elites were known to be creating ties with politicians in both UMNO and Pakatan parties, specifically PKR and DAP. Meanwhile, in Sarawak, wealthy businessmen had long since begun entering politics, even getting elected as parliamentarians, thus giving them access to federal government leaders. This diversity in political–business ties, where government institutions figure, is an indication of how complex the GLC problem has become. However, GLCs remain an opaque form of state intervention in the economy. And, since there is little public knowledge of GLCs, the opacity of these enterprises has allowed for their abuse by politicians.

  Fragile state and political economic outcomes
  Since Pakatan is a coalition of parties led by politicians who coalesced only because they had a common agenda—the removal of Najib from power—what prevails in the post-GE14 period can be described as a “fragile state”. This fragility is also because of the uneasy relationship between Mahathir, who leads the second-smallest party in Pakatan, and his long-time-nemesis-now-political-ally Anwar, who leads the party with the highest number of parliamentary seats. PKR, however, is ridden with serious factionalism, including an uneasy truce between Anwar and Azmin, who apparently is closely associated with Mahathir.
  What is emerging is new forms of power relations through the unhealthy circulation of political elites from the old regime into Pakatan, as well as alliances between leaders from different parties in this coalition. UMNO parliamentarians are lining up to join Bersatu, a quick route back to power for them after their unexpected ouster. By co-opting them, Mahathir’s new party can swiftly fortify its extremely weak base in Bumiputera-dominant states. Bersatu’s co-optation of discredited UMNO members is, however, seriously undermining support for Pakatan among the urban middle class, as well as Mahathir’s credibility. In fact, there has been recent talk in the public domain that a no-confidence motion against Mahathir as Prime Minister may be tabled in the March sitting of parliament, led apparently by leaders within Pakatan. Because of this complex situation of political in-fighting, there is much fear that politicians in power may move to create, through the divestment of GLCs, powerful business elites or even oligarchs to check other political elites.
  Since a structural framework that allowed politicians to exploit institutions in various ways to serve vested political and economic interests remains in place, a key question has emerged. What are the possible political outcomes to this situation, in which contending elites in the new regime struggle to consolidate their respective power bases? Political outcomes can involve protecting the property rights—through ongoing and much-needed institutional reforms—of business elites who acquire privatised GLCs, thereby preventing expropriation of these companies by the government in the event of a change of premiership. Political outcomes can also entail endorsing entitlements that give one large segment of society privileged access to government-generated rents, as is already actively occurring. Inevitably, a related issue is the necessity of targeted race-based policies. These policies serve as a mechanism to retain patronage-based networks and consolidate power bases. This approach can, however, stymie domestic investments by non-Bumiputera, a serious and persistent problem during Barisan’s rule.

  Ironically, it was these forms of unproductive government–business networks that Pakatan had promised to dismantle when in opposition, in order to forge a “New Malaysia”. This New Malaysia was supposed to be devoid of race-based political discourses and policies, with the GLCs deployed to promote equitable development and redress social inequities. The GLCs were not to be led by politicians who have no clue how to utilise them productively in the economy. These pledges have been broken. Evidently, consolidating power is more important for Malaysia’s new political elites than restructuring an economy in dire need of reform.

     

New networks in Thai Royal Politics

February 24, 2019

By Andrew Alan Johnson – 12 Feb, 2019

https://www.newmandala.org/new-networks-in-thai-royal-politics/

 

Thailand has everything,” a royalist friend once told me, at the height of the 2006 Thai political crisis. “Everything is so good—nature, culture, art, our King [Bhumibol at the time]. But we have the world’s worst politicians”. It is a refrain that many studying Thai politics have heard often in the past few years, and it is a sentiment that led the military to allow, in the 2017 constitution, for an unelected prime minister—a “good person” (khon dii) untainted by the supposed stain of electoral democracy.

Princess Ubolratana Mahidol

In the 2006 “good coup”, this idea of khon dii was a way to install royalists in power who did not have to enjoy popular support. Meanwhile in 2017, cynics (rightfully) pointed to the fact that this opening was a convenient one for junta leader and current Prime Minister Prayuth Chan-ocha to remain in power.

So the irony of this clause, and the desire for a candidate outside of the constitution being used to bring a former princess to the political stage to challenge Prayuth, should not be lost. On 8 February, the Thai Raksa Chart (“Thais Love the Nation”, a party aligned with the Pheu Thai party, itself a successor to the Thai Rak Thai party of Thaksin Shinawatra) nominated former Princess Ubolratana Mahidol—a sister of the current King, although stripped of her royal titles upon marrying a foreigner—as its sole candidate for prime minister in elections scheduled for 24 March.

What caught observers off-guard was that the party nominating the (formerly) royal Ubolratana was not the military-allied Phalang Pracharat or the royalist Democrat party—but a party allied with the man ousted from power in the name of Ubolratana’s father. Clearly something had shifted in the configurations of power (although some speculated that there was a long game afoot to discredit all Thaksin-associated parties).

But even that was hardly the most striking development in the story. Despite the fact that Ubolratana had officially lost her royal status years before due to her marriage to a foreigner, her own brother, King Vajiralongkorn, contested Ubolratana’s eligibility to act as Thai Raksa Chart’s candidate. On 11 February, the Election Commission concurred, and Ubolratana was officially denied permission to run on the grounds of her royal status (interestingly enough thus clarifying that Ubolratana was indeed a royal, and that all of her status was not stripped from her upon her marriage).

Such a public split within Thailand’s royal family would have been unheard of ten years ago. The public image of the monarchy peaked in the late 20^th century in a kind of model divine family (although, see Paul Handley’s 2006 The King Never Smiles). In the late Bhumibol-era propaganda, each royal child had his or her own role—a kind of pantheon of patron saints (or, as each royal’s power complemented the other, perhaps more akin to the Avengers). Vajiralongkorn (the only son) was to be the soldier, Sirindhorn the patron of the arts and humanities, Chulabhorn the scientist and Ubolratana the fashionista.

But what was to happen when this unity collapsed, as it had to eventually when the barami (authoritative charisma) of Bhumibol was not enough to keep the family together? What was a party like Thai Raksa Chart, widely considered to be in opposition to an assumed monarchy–military alliance, doing with a royal at its head, however briefly? What do we make of the public split between brother and sister playing out in the political sphere?

It is my case that these developments point to a clear end of a Thai politics divided between “red” Thaksinites and “yellow” royalists. It also points to a split between the presumed alliance of military and monarchy, and a challenge to the notion of a unitary “network monarchy” hiding behind Thai politics. The events of 8 February and their aftermath are a part of a slow succession crisis, reflecting a struggle over the creation of new patronage networks and new workings of the “power outside of the constitution”.

Power outside the constitution

When the military intervenes in Thai politics, it often cites a legitimacy outside the constitution. Indeed, the phrase “power outside the constitution” has been shorthand in Thai politics for those figures (i.e. royals) that are protected by lèse-majesté laws. For royalists, monarchical and military action was framed as protection of “Thai” values, framed as of anti-corruption, anti-communism, or simply a love for the barami (authoritative charisma) of the monarch. In this model of a kingly virtue at the centre of a timeless “Thainess”, epitomised by the thought of conservative intellectuals such as Kukrit Pramoj, Anand Panyarachun, and Surin Maisrikrod, the mess of politics and electoral democracy serves as challenge to be overcome, not as a source of legitimation in itself.

For Royalists of the later 20th century, coups then—especially “bloodless” or “good” coups such as 2006 or 2014—are a feature of Thai democracy, not a bug. Rhetoric of a righteous rule by moral “good people” furthered this sense of a wise, royal elite carefully guiding a populace too susceptible to manipulation by outside forces to be permitted free reign. In later years, this latter ethos was epitomised by Thailand’s Democrat party, a group of royalists who supported democracy only when it did not conflict with the wishes of the “good people”.

Thus, for much of recent Thai history, the military and monarchy existed in a kind of symbiosis, although who the puppet and who the puppeteer was always an open question. Depending on the time period, the military could be thought of as either manipulating the public image of the monarchy as a source of legitimacy for its actions, or on the other hand acting as the tool through which the desires of the monarchy would be made manifest, untainted by the stain of “politics”. Indeed, this latter sort of intervention-by-proxy maps well onto Thai cosmological models of power, wherein power is divided: both passive and holy (barami) as well as able to work its will (amnaj).

But this moment may be over. Prayuth’s implicit rejection of Ubolratana’s candidacy reveals a military coming out against one of the very pillars of its own legitimacy. Further, by aligning herself with the Shinawatras, Ubolratana not only complicated her relationship with the military, but also with the “good people” and their skepticism of a corrupting “politics”. Ubolratana, by setting herself up as a candidate for prime minister, seems to be pulling the barami of royalty into, and not outside of, the constitution.

This mght be the very thing that troubles Prayuth. If monarchical authority can function in the same way as political authority, there may be no room for power outside the constitution. The military, then, would be set adrift without a source of legitimacy for its actions. Such a situation might mean a world where the military is accountable to Thai civilians for its actions.

The end of the rainbow

Since the mid-2000s, Thai politics has been widely characterised as a clash between “red” and “yellow”, colours referencing the shirts of protest moments supporting Thaksin Shinawatra and royalist conservatives, respectively, from 2005–14. The Reds were cast, by their enemies, as naïve shills for a power-hungry immoral plutocrat or, by their advocates, as campaigners for a truly democratic Thailand. The Yellows were, similarly, cast either as moral bulwarks against corruption or the foot soldiers of an obsolete, parasitic oligarchy.

But there were complications to this narrative even as it developed. In my own fieldwork, I was told at a red-shirt rally that Thaksin was simply a tool—a highly problematic means to an ultimately democratic end. An hour later, another person told me that Thaksin should hold onto power for as long as was possible in order to give the economy the boost it needed, even were that to mean resorting to undemocratic means. Similarly, yellow organisations encompassed a variety of outlooks, from advocates for environmental causes and civil society, to anti-capitalist crusaders, to unabashed authoritarians claiming that the 2010 massacre of red shirts was not enough. Elsewhere, many of the core “yellow” NGOs, journalists and academics—initially alienated by Thaksin’s repression of critical voices—suddenly found themselves facing a far worse situation under the military regime.

Ubolratana’s announcement made these fissures within “red” and “yellow” apparent, at least in the flurry of discussion on social media since 8 February. Many former yellow shirts who saw Thaksin as the source of all Thai corruption bemoaned the association between such a despised figure and a royal. Some of those seeking a democratic Thailand found themselves cheering for a royal to enter politics, citing the difficult position in which the announcement placed Thailand’s military rulers. Observers on both sides wondered what it meant to have a candidate who might be protected from criticism by Thailand’s strictly-enforced lèse-majesté laws.

A house divided

In short, while it has long been time to stop characterising Thai politics as divided between a royalist military-monarchy alliance and a (crony)-capitalist-democratic one, Ubolratana’s announcement puts a final rest to the debate. In the new terrain of Thai politics, one can be a Thaskin-supporting royalist, an anti-Shinawatra democrat, a fan of military rule who seeks to limit the powers of the monarchy, and any other number of different configurations and networks of power that would not have been thinkable five years ago. Thai politics already had difficulty fitting into traditional notions of “left” and “right”—now it deserves another re-thinking.

Royal successions in Southeast Asian history have a tendency to be messy, as the inheritor of a deceased monarch’s barami—the morally legitimate successor to rule—might not be the one which palace law places upon the throne. And for all of Bhumibol’s long reign and successful public image, Thai royalists feared the division that might come of his death, as evinced by the spike in lèse-majesté convictions as Bhumibol’s health failed. The possibility for chaos following Bhumibol’s death was one that, rumours went, provoked the military into seizing and keeping power in anticipation of the late king’s death, through his funeral and through Vajiralongkorn’s coronation.

But Prayuth’s power is not Field Marshal Sarit Thanarat’s, and Thailand in the 21^st century is a different place. Duncan McCargo described the Thai monarchy as a “network monarchy”, meaning a situation where the palace remained symbolically powerful but increasingly reliant upon coopting other actors to shore up its power base. But with a fragmented royal family comes a weakened network. And it has fragmented in ways that surprised many Thai political observers and confounded the mess of rumours that have long surrounded the palace.

Rumours of Thaksin’s efforts to win over the current King seem not to have panned out. Whispers of a challenge to royal authority from Crown Princess Sirindhorn likewise do not seem to have manifested—this is not owing to a lack of popular support or power; the Siam Piwat group, in which Sirindhorn is a major shareholder, has just opened the new “Icon Siam” mega-mall, dramatically altering Bangkok’s riverscape and adding another palace to consumption to the city. 8 February was the chance for Ubolratana to make her presence known, mobilising her already impressive social media presence into something new.

Who exactly is co-opting who in regards to Ubolratana’s alliance with Thai Raksa Chart is unclear. But what is clear is that the “network monarchy” has become, or at least has the potential to fragment into, multiple, competing networks: Vajiralongkorn, some wings of the military and the Privy Council; Sirindhorn, “good people” and Siam Piwat; Ubolratana, Thaksin and Thai Raksa Chart; and others. With Vajiralongkorn’s coronation on the horizon (4–6 May) shortly after the elections we can expect to see these and others networks form, collapse, and clash.

The process will not be easy or pleasant, like any family fight.

 

FOREIGN POLICY: Cambodia needs to maintain good relations with the West

FOREIGN POLICY: Cambodia needs to maintain good relations with the West. Like it or not, the CPP still needs the West

by David Hutt – 14 Feb, 2019

https://www.newmandala.org/like-it-or-not-the-cpp-still-needs-the-west/

 

There is an assumption by some commentators and analysts (myself included, on occasions) that just because China is now Cambodia’s closest political ally, the influence of Western nations has become negligible.

As early as 2015, Sebastian Strangio noted in his book Hun Sen’s Cambodia  that Western influence in Cambodia had “begun to wane.” Years on, this process was complete, according to many. In late 2017, Foreign Policy magazine reported on the “limits of US willingness or ability to influence Cambodia become clear when compared to China’s overwhelming influence there.” “Why the West was doomed to fail in Cambodia,” reads a headline from the Southeast Asia Globe last year. The exiled political analyst Kim Sok more recently asserted that Prime Minister Hun Sen “has no choice but to rely on the Chinese” as he increasingly pushes the West away.

China might be many things to Cambodia: the main provider of aid, investment and goods, a key geopolitical ally and something of a sagacious, avuncular mentor, an “ironclad friend” in Phnom Penh’s argot. But it isn’t, and most likely never will be, a major importer of Cambodia-produced goods. Instead, the major importers are the United States and the European Union. Together, they imported a little under two-thirds of all Cambodian exports in 2017. China, by contrast, imported just 6% of Cambodian total exports that year.

This matters greatly as both the US and EU now threaten to impose trade sanctions on Cambodia and re-introduce tariffs on its exports, a response to the Cambodian People’s Party (CPP)’s stage-management of last year’s general election, at which it won all the seats in the National Assembly, and its dissolution of the main opposition party, the Cambodian People’s Rescue Party (CNRP), the previous year. On 11 February, the EU formally started the 18-month process to remove Cambodia from its preferential Everything But Arms (EBA) scheme, a process that can be stopped if the EU thinks Phnom Penh is making sufficient progress in political and human rights reform.

Cambodia’s economy, despite years of high economic growth, remains highly dependent on exports. Products made in its garment and footwear sector—the largest employer, by sector, and largest contributor to GDP—almost exclusively are exported to Western nations. So should the EU withdraw Cambodia from its Everything But Arms (EBA) scheme, which grants Cambodian exporters duty and quote-free access to European markets, then the imposition of tariffs and quotas will certainly see exports to Europe plummet, causing a considerable slump in the Cambodian economy.

The government knows this. That’s why it planned for years to reduce the economy’s dependence on exports, chiefly low-cost manufactured goods. But progress has been slow, if not glacial. Granted, the tourism sector is booming thanks to increasing numbers of Chinese visitors. So too are the retail and property sectors. But exports are still prepotent. There is likely zero chance, despite the opinions of some analysts, that if Western democracies punish Phnom Penh by imposing higher tariffs on its exports or switching to suppliers in other nations, then China can simply jump in and bail out Cambodia. Quite obviously, China doesn’t need to import low-cost garments from Cambodia; it produces more than enough domestically. China’s main import to Cambodia, the raw materials stitched and sewed at Cambodia’s garment factories, would also be harmed if exports to Western nations slump. Chinese investors own many of the largest firms in Cambodia’s garment and footwear sector, so they will be among those who will lose out if exports dry up. Moreover, Beijing would have wasted millions, if not billions, of dollars on funding new roads, ports and special economic zones in Cambodia that were aimed at improving its export capabilities.

A more astonishing response from Beijing would be to simply hand Cambodia the cash to make up for any shortfall if exports to the West decline, a move some analysts think is possible. But it’s actually improbable. Would this come in the form of concessional loans or simply cash payments? The latter would be raise serious opposition in Beijing, where some policymakers and analysts are already becoming sceptical of the amount of money wasted through Xi Jinping’s signatory Belt and Road Initiative (BRI). At least for the BRI, however, Xi can point to the likelihood of future returns on investments. Few profits, though, would be reaped by simply bailing out Cambodia’s exporters.

The other option, bailouts in the form of loans, would be just as risky to the Cambodian government, which is struggling (though doesn’t admit it) with a growing public debt, especially to China. How would Phnom Penh square the circle of attaining more loans if exports, its chief means of acquiring foreign currency, dwindle? Moreover, say that new European tariffs on exports and reductions in trade see Cambodia’s exports figures slump just 10%, or roughly US$500 million a year. Would China be willing to provide this much annually for few returns? Also, what about the knock-on impact to other sectors in Cambodia if exports slump? It would certainly see investment and profits contract in the retail, construction, property and many other sectors, too. The real costs of even a minor slump in garment exports is likely to be felt throughout the economy, as well as by the millions of family members of workers who rely on remittances each month.

Whichever way one looks at it, Western nations still have considerable influence in Cambodia. They clearly know this and that’s why they are exerting pressure on Phnom Penh to make political reforms through threats to the country’s export-driven economy. The Cambodian government, for the most part, either says it isn’t concerned about threatened Western sanctions, claims that they are an assault on Cambodia’s sovereignty, or a move to punish only poor Cambodians. It hasn’t yet publicly admitted that its own actions may actually be the real cause.

But here’s the kicker: trade with the US and EU might be immensely import to Cambodia, but it’s only negligible to them. Indeed, the EU’s trade with Cambodia—which is overwhelmingly Europe importing Cambodian goods, not the other way around—is worth about a tenth of its trade with Vietnam, for example. So there wouldn’t be any mutual catastrophe if exports decline; it would simply be felt by one side. Just look at how the US is currently weathering new tariffs President Donald Trump imposed on Chinese imports, which could soon be raised even higher. Any loss in trade with Cambodia won’t even be felt as a tremor in America, though it would be an earthquake in Cambodia.

Remember, too, that it isn’t as though Cambodia is the world’s only producer of cheap clothes and shoes. Bangladesh is making them for much cheaper, as does Vietnam, whose ruling Communist Party is now backing down to American and European demands for some political and legal reforms in order to boost trade. Hanoi appears more than happy to negotiate, while Phnom Penh stuffs its ears. It would be so much easier from some European importers to simply say, enough of Cambodia, and move operations or find new supply chains in other countries.

Amid all of this, pay attention to the irony of the situation. The CPP government has largely been allowed to do what it wants politically for so many years because of the fat profits reaped from its export-driven economy. Years, if not decades, of enviable economic growth rates have provided the CPP government with its main source of legitimacy; the economy is growing, wages are raising, unemployment is low, and we’ve created a brighter future for Cambodia, the party constantly says. Much of the public who might be unhappy with political conditions temper their emotions with this acknowledgment.

But the CPP government today faces a novel problem. While it was a low-cost, export-driven economy that gave the party so much legitimacy, the same export-driven economy is now its Achilles heel. However much it wants to drag itself under the parasol of Chinese patronage, it remains exposed to the storms of Western trade.

 

 

 

 

Marrying the Thai monarchy and modernity

January 6, 2019

by Pavin Chachavalpongpun

 

https://www.newmandala.org/marrying-thai-monarchy-modernity/

The royal wedding between British Prince Harry and American Meghan Markle has heralded a new era of one of the oldest monarchies in the world. The constant reinvention of the British royal family serves to remind other monarchies of the need to stay relevant to avoid anachronism.

Eighty years ago, Meghan marrying Harry would have remained an impossible dream. In 1937, the American and twice-divorced Wallis Simpson wedded Prince Edward, Duke of Windsor, a year after Edward’s abdication. Simpson represented unwanted qualities and was disqualified from being a British queen. But in 2018, Meghan—also an American divorcee, biracial, and a Hollywood actress—was cheerily welcome into the Windsor family. Times have changed. So has the British monarchy.

Thousands of miles away, Thailand is among the few countries in Southeast Asia where the monarchy has survived. The royal wedding in the United Kingdom was examined thoroughly in Thailand both in printed and social media.

In traditional media, the coverage of the nuptials was extensive, stoked by the public’s curiosity over British royal affairs, and held as a mirror to Thailand’s royals. Printed media focused on two main elements: first, the awe-inspiring pomp that accompanied the British royal institution, and second, the cost of the lavish wedding. In the two elements, commentaries appeared highly paradoxical.

The grandeur of the British royal wedding, as portrayed in Thai newspapers, was taken as living proof of the necessity of the Thai monarchy’s own solemnity, even its divinity. Celebrating Harry and Meghan’s wedding became a tool to strengthen the royal institution in Thailand, amidst growing anti-monarchist sentiment.

On the other end of the spectrum however, reports in local Thai media taking the cost of the British royal wedding as a point of discussion could be taken as subtle criticism of the Thai royals. For example, the widest circulated Thai Rath newspaper published a story on the expense of the wedding, reportedly as high as 32 million pounds, and expressed plainly to its readers, “The British royal family bears the cost of the wedding”.

The cost of maintaining the monarchy has long been hotly debated in the United Kingdom. In Thailand, although discussing royal affairs risks lèse-majesté charges, since the coup of 2006, society has been more vocal about this aspect of the Thai monarchy: its profligate spending. Year-after-year, public funding for the Thai monarchy has risen, sometimes stratospherically.

During the reign of King Bhumibol, successive governments funnelled enormous funds into the “Budget for the promotion of the dignity of the monarchy”. In 2013, for example, the budget amounted to US$395 million. After the coup in 2014, the Thai junta increased the budget for the monarchy by approximately 20 per cent, reaching around US$435 that year and US$536 million in 2015.

During the reign of King Bhumibol, successive governments funneled enormous funds into the “Budget for the promotion of the dignity of the monarchy”. In 2013, for example, the budget amounted to US$395 million. After the coup in 2014, the Thai junta increased the budget for the monarchy by approximately 20 per cent, reaching around US$435 million that year and US$536 million in 2015.

After the enthronement of King Vajiralongkorn, however, the budget for the monarchy was cut. US$123 million was allocated to the Thai monarchy in 2018. Still, extra funding streams from various ministries to promote the monarchy have not been curtailed. Overall, the Thai king still enjoys a far larger budget than the British queen. Britain’s Royal Household says that its annual sovereign grant is around US$52 million, although that does not cover costs such as security.

While reports seen in Thai Rath and other newspapers are mixed, Thai social media responded to the royal wedding in the United Kingdom more sensationally. The debate is divisive. On the one hand, the Harry-Meghan wedding allowed some regality to rub off on Vajiralongkorn’s controversial reign. In Thailand, the old discourse of France being “an unfortunate nation” with its abolished monarchy is juxtaposed with the pomp of the British monarchy, hitting home the important point of monarchy being a quintessential pillar of the nation. In a time of the Thai monarchy’s waning popularity, royalists hope to ride on Harry and Meghan’s popular wave to boost their own royal institution at home.

The point delicately raised by Thai Rath on the cost of the wedding was recurrently discussed in social media. Some argued against the use of taxpayers’ money on the monarchy’s private expenses. Despite the lèse-majesté law, comments on King Vajiralongkorn’s share of the public purse proliferated in social media circles. From this perspective, the Windsor wedding served as another blow to the unpopular monarch, who resides for much of the time in Munich, Germany.

Now that Thailand has entered into the tenth reign, His Majesty King Vajiralongkorn has sought to consolidate his rule, partly through a series of royal ceremonies. His father was cremated last year, an exercise that symbolically ended the era of Bhumibol and signaled the beginning of the Vajiralongkorn reign. His mother, Queen Sirikit, is bed bound. Should she pass away, Thailand will once again enter into mourning mode. The official coronation of Vajiralongkorn could fall after the Queen’s funeral. But the kingship of Vajiralongkorn will not be complete until he names the new queen of the Thai nation. All these ceremonies involve prodigious public spending.

Adaptability is a key to the monarchy’s survival. The high profile British wedding took place at a time of chaotic politics. Britain threatens Europe with Brexit. The United Kingdom’s new immigration policies are getting tougher. Nationalistic rhetoric is on the surge, both in Europe and in the United States. The wedding, watched by millions, was not just a plain fairy tale. There were serious political messages involving the new monarchy and global politics.

In Thailand, since the beginning of the new reign, the only change witnessed by Thais has been the resurgence of royal absolutism. It is ironic that while a royal wedding in the United Kingdom was partly extolled in Thailand as a symbol of adaptability, the royalists’ perception of the wedding between Harry and Meghan reflected a desire for their monarch to be more absolute.

 

Book Review: This is What Inequality Looks Like

December 13,2018

Book Review:

This is What Inequality Looks Like

by Serina Rahman 13 Dec, 2018

https://www.newmandala.org/book-review/this-is-what-inequality-looks-like/

Teo You Yenn (Ethos Books, Singapore, 2018)

In an ideal world, “dignity doesn’t have an expiration date attached to economic productivity. It affirms the worth of personhood. It feels different from what we have” (p221). In This is What Inequality Looks Like, Teo You Yenn writes a moving collection of essays that shine the light on a reality long swept under the carpets of gleaming, green and glamourous Singapore. In the home of Crazy Rich Asians, statistics that indicate growing numbers of millionaires every year conceal the lived realities of those who fall through the cracks and are barely acknowledged.

The stories on these pages are not a mere dry academic dissertation on poverty. Teo writes candidly accessible tales of real people and relationships, encountered and made familiar over years of academic fieldwork. It is her long study and thorough understanding of the policies and institutional systems that compound the difficulties of these lower-income citizens that make this book a powerful commentary. While she lays bare the processes that prevent many of them from moving out of the cycle of poverty, she appeals for awareness, and even empathy—as much needs to be done to review and revise some of the structures that trap the lowest segments of the population into immobility.

Sometimes it is the most basic and subtle of differences that have the most impact. Teo describes the run-down clusters of rental units she spent many hours visiting, hidden between internationally-acclaimed high-rise government apartments, yet a world apart. She describes them as zones “marked not only by the visual but also something quite primal and physical” (p46). She does not mean to ghettoise these homes, but she pinpoints for the reader the details that make the difference: the ubiquitous presence of police and narcotics officers, as well as loan shark and crime notices. She draws a sharp comparison between this oppressive negativity and the cheerful ambience and positive messaging of owner-occupied blocks—just one example of what inequality looks like.

Teo makes it clear that members of Singapore’s bottom percentiles are not tucked away and alienated from the island’s daily hustle and bustle. But they are made invisible by the roles that they play and denied a presence by wilful or unintentional blindness on the part of many who benefit from their services. “Low-income persons are in reality highly present in most Singaporean’s everyday lives… when we say we cannot see poverty in Singapore, it is partly because its manifestations are masked and partly because we do not look” (pp192–193). Working among every other Singaporean are those for whom a rental unit is a step up from homelessness; where the “typical” trajectory of finishing school, getting married, buying a home and having children (p80) is either out of reach or follows a different order. “Normalcy” is defined by the mainstream majority. The neighbourhood and lived reality of those who can just barely afford to rent are a world far beyond the imagination (if at all contemplated) by the average Singaporean—and deemed “inferior” and “problematic” (p29).

Through Teo we experience the warmth, generosity and hospitality of low income families who genuinely come together to help each other in the most difficult of times, whose kindness to those who have less than themselves belie the struggles that they face. This community is common in other parts of grossly poor Southeast Asia, and a stark contrast to hollow top-down orchestrations to engender a kampung (village) collective in many owner-occupied constituencies. Teo shows us that the mainstream caricature of those who “deviate” from societal “norms” are far from accurate. These communities that she has grown to appreciate comprise hard-working, self-reliant, family-centric citizens that not only actively contribute to Singapore’s economy but constantly strive to improve their lot in life.

Beyond the link between poverty and inequality, Teo deftly weaves in the importance of dignity and illustrates how there is a distinct lack of social justice in the treatment of the very poor where “every day is a struggle with (in)dignity” (p194). The problem of poverty in Singapore should not be one “of the ‘other’” (p250). The narrative that their issues are “are an exception” (p196) needs to be disrupted so that the search for solutions becomes a national effort. It should be a quest bred on a sense of responsibility and morality; of helping one of our own—simply because we can.

In a poignant concluding chapter, Teo peels back the layers of a wound as she recollects the reactions to her work over the years. Responses ranged from those who are surprised that poverty exists in swanky Singapore, to those who trivialise the plight of the people she describes, or deny their existence. More tellingly is the reaction of one particular audience member who chastises her for publicly going against the great “Singapore Story” and “airing dirty laundry” to an international audience. This chapter (p225) exemplifies the narratives and blind spots that we have perpetuated both to the world and ourselves. Nationalistic tendencies and the discomfort of discussing the ugly realities of those who have always remained hidden need to be overcome. Perceptions attributed to petty folk beliefs of “race”, which are discussed in an additional epilogue, need to be discarded.

To be fair, the discussion of inequality has been all the rage in Singapore recently. In May 2018, a Channel News Asia documentary hosted by a member of parliament, Regardless of Class, examined Singapore’s social divisions but was met and countered by netizens and online portals for its lack of the sort of analysis that Teo lays out in her book. Another MP referenced her book in an opinion piece on the government’s promotion of self-reliance—a topic that Teo herself dissects and illustrates as she chronicles the lives of those who do everything they can to not ask for help. Teo points out that this is because of the futility these families face in their appeals for assistance, and how the process erases any last shreds of dignity that they held. If nothing else, then, Teo’s book has already succeeded in taking the debate on inequality in Singapore out from behind closed doors.

In response to Oxfam International’s Commitment to Reducing Inequality Index, released in October 2018 (where Singapore was placed at number 149 out of 157 countries) a number of ministers were quick to point out the outcomes achieved by the city-state. These include 90% home ownership, high life expectancy, and extremely low infant mortality. In a post-National Day dialogue, Singapore’s prime minister brought up the issue of social mobility, also eloquently expounded on by Teo in her book. Most recently, another online news portal published a feature on a number of young people who were able to escape and overcome the difficulties of growing up in the lowest strata of Singaporean society. While the national response (whether explicit or implicit) to Teo’s work has been varied, it is clear that she has made a point in the corridors of power.

As she closes her book, Teo invites her readers to consider how their lives can be understood from the perspectives that she has presented. She asks that the middle and upper class majority in Singapore understand the consequences of their decisions and actions and how they inadvertently enhance the inequality and indignity faced by some fellow citizens.

For me personally, this book is a breath of fresh air that resonates vividly with my experiences across the border in poor rural Malaysian communities.  At a recent conference I attended, a scholar mentioned that while Singapore leads ASEAN this year, the rest of the region seems to look at the island with some disdain. Teo’s revelation of a rough underbelly makes the nation seem more “normal” in the eyes of the region. Smudges in the sparkling sheen that Singapore tries to portray may oddly endear it to the rest of Southeast Asia, as it is turns out that the island-state is not very different after all.

This is What Inequality Looks Like has clearly raised the blinds on a topic once hidden far out of sight. It is a book that needs to be read by all Singaporeans. Conventional tropes of meritocracy and social mobility need to be examined with a critical yet empathetic eye.

The poorest citizens of the nation need to be embraced into the mainstream and their struggles surfaced as national priorities. Only then can Singapore truly declare itself a first world nation. In the meantime, as Teo robustly concludes, we need to harness the values, beliefs, habits and aspirations that she believes exists within us as a nation to ensure that inequality can be refused and dignity restored.

 

Serina Rahman is a Visiting Fellow in the Malaysia Programme at the ISEAS-Yusof Ishak Institute, Singapore, conducting research in the fields of sustainable development, environmental anthropology and the economics of the environment. Serina co-founded Kelab Alami, an organisation formed to empower a Johor fishing community through environmental education for habitat conservation and economic participation in coastal development. She received her PhD in Science from Universiti Teknologi Mara in 2014.  Read her recent account of rural Malaysia post-GE14 here, and her review of Living With Myths in Singapore.