Democracy and Civil Society in Asia: Volume 1: Globalization, Democracy and Civil Society in Asia (International Political Economy)

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Democracy and Civil Society in Asia: Volume 1 Globalization, Democracy and Civil Society in Asia

Edited by

Fahimul Quadir and Jayant Lele

International Political Economy Series General Editor: Timothy M. Shaw, Professor of Commonwealth Governance and Development, and Director of the Institute of Commonwealth Studies, School of Advanced Study, University of London Titles include: Pradeep Agrawal, Subir V. Gokarn, Veena Mishra, Kirit S. Parikh and Kunal Sen POLICY REGIMES AND INDUSTRIAL COMPETITIVENESS A Comparative Study of East Asia and India Roderic Alley THE UNITED NATIONS IN SOUTHEAST ASIA AND THE SOUTH PACIFIC Dick Beason and Jason James THE POLITICAL ECONOMY OF JAPANESE FINANCIAL MARKETS Myths versus Reality Mark Beeson COMPETING CAPITALISMS Australia, Japan and Economic Competition in Asia-Pacific Deborah Bräutigam CHINESE AID AND AFRICAN DEVELOPMENT Exporting Green Revolution Kenneth D. Bush THE INTRA-GROUP DIMENSIONS OF ETHNIC CONFLICT IN SRI LANKA Learning to Read between the Lines Steve Chan, Cal Clark and Danny Lam (editors) BEYOND THE DEVELOPMENTAL STATE East Asia’s Political Economies Reconsidered Abdul Rahman Embong STATE-LED MODERNIZATION AND THE MIDDLE CLASS IN MALAYSIA Dong-Sook Shin Gills RURAL WOMEN AND TRIPLE EXPLOITATION IN KOREAN DEVELOPMENT Jeffrey Henderson (editor) INDUSTRIAL TRANSFORMATION IN EASTERN EUROPE IN THE LIGHT OF THE EAST ASIAN EXPERIENCE Takashi Inoguchi GLOBAL CHANGE A Japanese Perspective Dominic Kelly JAPAN AND THE RECONSTRUCTION OF EAST ASIA

L.H.M. Ling POSTCOLONIAL INTERNATIONAL RELATIONS Conquest and Desire between Asia and the West Pierre P. Lizée PEACE, POWER AND RESISTANCE IN CAMBODIA Global Governance and the Failure of International Conflict Resolution S. Javed Maswood JAPAN IN CRISIS Ananya Mukherjee Reed PERSPECTIVES ON THE INDIAN CORPORATE ECONOMY Exploring the Paradox of Profits CORPORATE CAPITALISM IN CONTEMPORARY SOUTH ASIA (editor) Conventional Wisdoms and South Asian Realities Cecilia Ng POSITIONING WOMEN IN MALAYSIA Class and Gender in an Industrializing State Fahimul Quadir and Jayant Lele (editors) DEMOCRACY AND CIVIL SOCIETY IN ASIA: VOLUME 1 Globalization, Democracy amd Civil Society in Asia DEMOCRACY AND CIVIL SOCIETY IN ASIA: VOLUME 2 Democratic Transitions and Social Movements in Asia Mark Turner (editor) CENTRAL–LOCAL RELATIONS IN ASIA-PACIFIC Convergence and Divergence? Fei-Ling Wang INSTITUTIONS AND INSTITUTIONAL CHANGE IN CHINA Premodernity and Modernization

International Political Economy Series Series Standing Order ISBN 0–333–71708–2 hardcover Series Standing Order ISBN 0–333–71110–6 paperback (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and the ISBN quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England

Democracy and Civil Society in Asia: Volume 1 Globalization, Democracy and Civil Society in Asia Edited by

Fahimul Quadir York University Toronto Canada

and

Jayant Lele Queen’s University Kingston Canada

Editorial matter and selection and chapter 1 © Fahimul Quadir and Jayant Lele 2004 Remaining chapters © Palgrave Macmillan Ltd 2004 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2004 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N. Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 1–4039–1883–X This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Democracy and civil society in Asia / edited by Fahimul Quadir and Jayant Lele. p. cm. – (International political economy series) Includes bibliographical references and indexes. Contents: v. 1. Globalization, democracy, and civil society in Asia – v. 2. Democratic transitions and social movements in Asia. ISBN 1–4039–1883–X (v. 1 : cloth) – ISBN 1–4039–1884–8 (v. 2 : cloth) 1. Democracy–Asia. 2. Civil society–Asia. 3. Globalization–Asia. 4. Asia–Economic conditions–1945- 5. Democratization–Asia. 6. Social movements–Asia. I. Quadir, Fahimul. II. Lele, Jayant. III. International political economy series (Palgrave Macmillan (Firm)) JQ36.D46 2004 320.95–dc22

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Contents Acknowledgements

vii

List of Tables and Figure

ix

List of Abbreviations

x

Notes on the Contributors

xii

1 Introduction: Globalization, Democracy and Civil Society after the Financial Crisis of the 1990s Fahimul Quadir and Jayant Lele

1

2 Discontents of Democracy: Elite Pluralism, Mystification and Rule of Big Capital Amiya Kumar Bagchi

13

3 Globalization, Economic Restructuring and the Implications for Democracy in Developing Countries Jayati Ghosh

29

4 Globalization, Economic Restructuring and the Democratic Implications William K. Tabb

56

5 Nation Against Democracy: The Rise of Cultural Nationalism in Asia Radhika Desai

81

6 Political Culture, Alternative Politics and Democracy in Greater China David Zweig 7 From Victimized Communities to Movement Powers and Grassroots Democracy: The Case of the Assembly of the Poor Suthy Prasartset 8 Grassroots Democracy and Community Empowerment: The Quest for Sustainable Poverty Reduction in Asia Leonora C. Angeles

v

111

140

182

vi Contents

9 Civil Society and Good Governance: A New Chapter in Thailand’s Political Reform? Chantana Banpasirichote

213

Index

234

Acknowledgements The central importance of the countries of Asia in the rapidly changing global political economy requires that their role in global change and the impact of that change on the people of Asia be regularly examined. The desire to contribute to such an examination led to the conference ‘Democracy and Civil Society in Asia: The Emerging Opportunities and challenges’ at Queen’s University in Canada in August 2000. The conference brought together scholars from Asia and North America to engage in presentations and exchange of ideas around the central concern about challenges to and prospects for democracy in Asia. The conference gave the scholars an opportunity to focus on these central concerns and to bring to bear on them their knowledge and experience of the enormous intellectual, political and economic diversity of Asia. This volume contains a selection of papers presented at the conference and subsequently revised for publication. The success of the conference and the publication of this volume is a result of the support from a number of institutions and individuals. Centre for the Study of Democracy, then under the leadership of Professor George Perlin provided intellectual and financial support. Professor Steve Page, Professor and Head of the Department of Political Studies was generous with his support and Evelyn McCaugherty and Shirley Frazer were instrumental in keeping the planning of the conference on track. Alex Choi and Paritosh Kumar carried the enormous burden of planning and smooth running of the conference and have made valuable intellectual contributions to the project. They also helped establish and maintain ongoing liaison with participating scholars, both before and after the conference. The editors would like to thank Roberta Parris, Program Secretary, International Development Studies at York University for her superb editorial support. We also acknowledge the contribution of three York University students: Andrew Aziz, Hiba Masood and Noorjahan Pirani. Their cheerful assistance enabled us to put together this manuscript. The editors are grateful to Professor Timothy M. Shaw and Amanda Watkins of Palgrave for their support and encouragement throughout this project. vii

viii Acknowledgements

Other colleagues, students and members of the staff in the Department of Political Studies, including Sujata Ramachandran, Dave Dorey, Lasha Tchantouridze and Youngwon Cho, took on major responsibilities in the organization of the conference. Wendy Erickson-Grey was, as always, generous in volunteering her time and talent. Julie Hoffarth of Odyssey Travel went out of her way to find ways to make the complex travel plans of the participants work successfully. There were others, of course, whose support was crucial but are far too numerous to mention here. Their contributions are also greatly appreciated. Fahimul Quadir Jayant Lele

List of Tables and Figure Tables Table 3.1 Table 8.1 Table 8.2 Table 9.1 Table 9.2

Net Capital Inflow into Developing Countries Poverty Incidence in the Philippines Causes of Poverty and Required Interventions in the Philippines, Summary of Various Studies A Synopsis of Thai Political History and Dynamics of Civil Society Civic Groups and Good Governance in Political Reform

45 192 194 217 226

Figure Figure 6.1

The Distribution of Democratic Values in Rural China, 1999

ix

128

List of Abbreviations AAN ACPC ADB AIDS AOP APPEND APEC ASEAN BIS CCP CIDA CP CPT DAB DECS DOF DOH DOLE DP DPP DSWD DTI EIA ESG-TU EU FDI FIES FIO GATT GDP GFSME GNP G7 IFI ILO IMF

Alternative Agricultural Network Agricultural Credit Policy Council Asian Development Bank Acquired Immune Deficiency Syndrome Assembly of the Poor Alliance of Philippine Partners for Enterprise Development Asian Pacific Economic Cooperation Association of Southeast Asian Nations Bank for International Settlements Chinese Communist Party Canadian International Development Agency Communist Party Communist Party of Thailand Democratic Alliance for Betterment of Hong Kong Department of Education, Culture and Sports Department of Finance Department of Health Department of Labour and Employment Democratic Party Democratic Progressive Party Department of Social Welfare and Development Department of Trade and Industry Environmental Impact Assessment Economic Studies Group of Thammasat University European Union Foreign Direct Investment Family Income and Expenditure Survey Forest Industry Organization General Agreement on Tariffs and Trade Gross Domestic Product Guarantee Fund for Small and Medium Scale Enterprises Gross National Product Group of Seven International Financial Institution International Labour Organization International Monetary Fund x

List of Abbreviations xi

LGC MIT M-M MNCs MPs NAPC NCCC NCRFW NEC NGO NHRC NICs NSO OECD PDAP PNET POs PPSE PRC SAPs SFAN SRA SBGFC UK UNCTAD UNDP UNESCO UNRISD USA USAID USIP VC WCED WDR WHO WTO

Local Government Code Malaysia, Indonesia, Thailand Modigliani-Miller Multinational Corporations Members of Parliament National Anti-Poverty Commission National Counter-Corruption Commission National Commission on the Role of Filipino Women National Election Commission Non-governmental Organization National Human Rights Commission Newly Industrialized Countries National Statistics Office Organization for Economic Cooperation and Development Philippine Development Assistant Program People’s Network for Elections People’s Organization Promoting Participation for Sustainable Enterprises Peoples Republic of China Structural Adjustment Programmes Small Farmers Assembly for the Northeast Social Reform Agenda Small Business Guarantee and Finance Corporation United Kingdom United Nations Conference on Trade and Development. United Nations Development Programme United Nations Educational, Scientific and Cultural Organization United Nations Research Institute for Social Development United States of America United States Agency for International Development United States Institute of Peace Villagers’ Committee World Commission on Environment and Development World Development Report World Health Organization World Trade Organization

Notes on the Contributors Leonora Angeles is an Assistant Professor at the School of Community and Regional Planning and the Women’s Studies Programme, University of British Columbia. She is also a faculty research associate at the Centre for Human Settlements, the Centre for Research on Women’s Studies and Gender Relations, and the Centre for Research on Southeast Asian Studies. Amiya Kumar Bagchi is a renowned economist and historian. He has taught and researched at Presidency College, Calcutta, University of Cambridge, University of Calcutta, Cornell University, USA, University of Bristol, UK, Maison des Sciences de l’Homme, Paris, Roskilde University, Denmark and University of Naples, Italy. Formerly the Director of the Centre for Studies in Social Sciences, Calcutta, he is an RBI Professor of Economics at the Centre for Studies in Social Sciences in Calcutta. Chantana Banpasirichote is an Assistant Professor of Government, in the Faculty of Political Science, at Chulalongkorn University, Bangkok, Thailand. She teaches the politics of development, democracy and development, political conflict and violence, and conflict resolutions and non-state actors in policy process. Banpasirichote’s current research interest is on development and conflicts, social impacts of dams, community resource management, state-civil society relations, and participatory democracy. She is also serving as a Board member of a few non-governmental organizations in Thailand. Radhika Desai is an Associate Professor in the Department of Political Science at the University of Victoria in Victoria, British Columbia, Canada. She is the author of Intellectuals and Socialism: ‘Social Democrats and the British Labour Party’ and Slouching Towards Ayodhya as well as a number of articles in professional journals. Jayati Ghosh is an Associate Professor at the Centre of Economic Studies and Planning in the School of Social Sciences at Jawanharlal Nehru University, India, where she also works with the Planning Committee of the Indian Government. She also is a research fellow at Cambridge University. She writes a regular current affairs column for Frontline Magazine, as well as an economics column for The Economic xii

Notes on the Contributors xiii

and Political Weekly. She sums up the last decade of her life as one spent opposing the Policies of the International Monetary Fund. Jayant Lele is Professor Emeritus at Queen’s University, Kingston, Canada. He is the author/coauthor/editor of many articles and books including, Tradition and Modernity in Bhakti Movements, Elite Pluralism and Class Rule, Language and Society, Hindutva: The Emergence of the Right, Unravelling the Asian Miracle, and Asia: Who Pays for Growth? Suthy Prasartset is presently Associate Professor of Economics, at Chulalongkorn University, Bangkok, Thailand. His current research focuses on global political economy and social movements. He has published a large number of books and articles in Thai, Japanese and English. He is currently an adviser to Thailand’s Assembly for the Poor and vice-chairperson of the Campaign for Popular Democracy. Fahimul Quadir is an Assistant Professor of the Division of Social Science and coordinator of the International Development Studies Program at York University in Toronto. He taught Global Studies at St. Lawrence University, Canton, New York, Political Studies at Queen’s University, International Development Studies at Dalhousie University and Political Science at the University of Chittagong, Bangladesh. He has recently been published in Canadian Journal of Development Studies, Contemporary South Asia, New Political Economy, South Asian Studies, Hentz and Bøa[o]s (eds.), New and Critical Security and Region, Mukherjee Reed (ed.), Corporate Capitalism in Contemporary South Asia, Thomas and Wilkin (eds.), Globalization and the South, Gills (ed.), Globalization and the Politics of Resistance and Poku and Pettiford (eds.), Redefining the Third World. He also co-edited (with MacLean and Shaw) a volume entitled Crises of Governance in Asia and Africa (Ashgate, 2001). William K. Tabb is Professor of economics and Professor of political science at Queens college and Professor of political science at the Graduate Center of the City of New York. He is the author of The Postwar Japanese System: Cultural Economy and Economic Transformation (1995) and Restructuring Political Economy: The Great Divide in Economic Thought (1999). David Zweig is Professor of Social Science at Hong Kong University of Science and Technology. In 1999–2002, he taught in the Department of Political Studies, Queen’s University. He is a political scientist specializing in Chinese politics and political economy. He is the author

xiv Notes on the Contributors

of Agrarian Radicalism in China, 1968–1981 (1989), China’s Brain Drain to the U.S. (1995), and Freeing China’s Farmers (1997). His most recent book, Internationalizing China: Domestic Interests and Global Linkages (2002), was published by Cornell University Press in the Cornell Series in Political Economy, edited by Peter Katzenstein.

1 Introduction: Globalization, Democracy and Civil Society after the Financial Crisis of the 1990s Fahimul Quadir and Jayant Lele

This volume brings together a group of scholars from various parts of the world to explore the future of democracy and sustainable human development in Asia. Its immediate focus is on the current process of globalization, mainly economic and financial globalizations, and its effects on the changing socio-economic landscape of the region. The purpose is to see whether or not the decision of opening up the economies in much of the region has created an opportunity for Asian countries and communities to achieve the goals of democratic development in the new millennium. This volume also takes a closer, critical look at the Asian financial crisis of the late 1990s not only to offer an analysis of why and how it happened, but also to assess the impact of such an unanticipated crisis on both financial and political governance of Asia. When the financial crisis hit the region, which exposed Asia’s economic vulnerabilities to external shocks and pressures, there were expectations among mainstream organizations and authors that the crisis would lead to the creation of a much-desired political environment in which both democracy and human development would find a rational, institutional expression. The hope was that the crisis would force the state to give way to civil society that would come to play an important role in establishing a more open structure of democratic governance in the region. Asia is still struggling to realise such a vision. In addition to identifying the key factors that appear to have impeded the process of building a democratic, just social order in the region, the authors of this volume explore an alternative agenda for democratic development. They consider both the strengths and weaknesses of civil society to promote a different vision of democracy and/or development that is grounded in the ideals of equality, justice, 1

2 Globalization, Democracy and Civil Society

empowerment, and participation. While the consensus is that civil society is the domain for greater socio-political changes, the authors explain the difficulty that societal groups face to assert popular control over the decision-making process. Most of the authors in this volume therefore express cautious optimism as to the future of democratic governance in Asia in the twenty-first century.

Deconstructing the myths of globalization At the heart of this volume is an analysis of economic globalization that not only called into question the so-called notion of ‘Asian miracle’ (World Bank 1993), but also posed a formidable challenge to the ability of Asian countries to maintain their autonomy vis-à-vis the International Financial Institutions (IFIs). While globalization means different things to different people, most authors in this volume, including Amiya Kumar Bagchi, Jayati Ghosh, and William Tabb, view globalization as a process of expanding capitalist relations and institutions across national geographical boundaries. This involves the restructuring of the entire mechanism of production, finance and distribution on the principles of a market economy. It requires countries around the world to undertake wide-ranging economic reform policies that focus primarily on redefining the role of the state in national economic development, freeing the private sector from the grip of the state, liberalizing the trade and exchange rate regimes, and allowing the private sector to emerge as a key actor in decision-making. This process of developing a pure market-oriented structure of national and global economic governance, as Bagchi and Ghosh explain, has further contributed to the growing inequalities between and within nations in different parts of the world, including Asia. With empirical evidence, they demonstrate that only a few selected countries and communities have been able to actively participate in the process of globalization and benefit from it. A vast majority of the countries in the South have witnessed a clear decline in their living standards in the last two decades. The recent Human Development Report (UNDP 2003) confirms that some 54 countries are poorer now than they were in 1990. It shows how the inability of many Southern countries to focus on human development concerns has negatively affected their desire to make a dent on the poverty conditions. In 21 countries, a large number of people simply can’t put food on the table twice a day. Life expectancy has fallen in 34 countries while more children now die from hunger and related diseases before they celebrate their 5th birthday

Fahimul Quadir and Jayant Lele 3

(UNDP 2003). The irony is that, although a few developing countries appeared to have made some progress in both restoring macroeconomic balance, and accelerating higher levels of growth through the implementation of market reform programs, these economic achievements have hardly made any positive impact on the human conditions in much of the South.1 Most official aid agencies, including the UN, now admit that economic liberalization programs sponsored by the IFIs have left behind a vast majority of marginalized groups, mainly the poor who were hit hard by the retreat of the state (UNRISD 1995). The absence of an effective safety network has made it almost impossible for a large number of people to access various essential socio-economic services – from heath care to education – that used to be provided by the state. Many of these services are currently available for purchase at a market value that most poor simply cannot afford. The authors of this volume, especially Bagchi, Ghosh, and Tabb, identify the inherent contradictions of the contemporary process of building a global structure of capitalism. Ghosh calls into question the commonly held assumption that economic globalization would set in motion the free flow of capital across national boundaries, thus allowing the developing world to bridge the growing gaps between their domestic savings and investment requirements. The belief is that, once the trade and monetary regimes are liberalized, private capital will flow into the South to help them attain higher levels of economic growth. However, the recent trends in foreign direct investment (FDI) disputes such a thesis. What most developing countries find extremely frustrating is that the flow of private FDI has remained concentrated into the hands of a few so-called newly industrialized countries (NICs) of Asia and Latin America (UN 1998). As Ghosh demonstrates in her chapter, between 1990 and 1997, only 10 NICs were actually able to take advantage of the free flow of capital which received some 75 per cent of the total FDI that went into the developing world. The tragic events of September 11 made the whole situation even worse. Private capital flows have fallen sharply since the incidents of September 11. In Asia, for instance, the flows of FDI sharply dropped from $134 billion in 2000 to $102 in 2001, setting a negative trend in the flow of net capital from the North to the South (UNCTAD 2002). Contrary to the optimism expressed by mainstream policy-makers, the developing countries have continued to witness a negative resource transfer since 1996. In other words, they transferred more capital to the North than they received from the industrialized world in the last several years (Ghosh 2003: 2).


Apart from generating and/or perpetuating inequalities, liberalization programs also appeared to have undermined both the political and financial viability of states and commercial institutions, including private companies, corporations, and banks, in Asia. As analysed by Tabb in his chapter, Asia’s decision to create a healthy market mechanism allowed transnational forces of production and finance to move capital freely across national territorial boundaries. Given that there was no real restriction put in place in much of the region, foreign companies and corporations were able to bring in short-term capital for investment in East and Southeast Asia. While their presence had generated a wave of optimism among investors in corruption-ridden economies of the region, the sudden departure of foreign private capital made the region completely vulnerable to external shocks, contributing to the collapse of indigenous currencies in many parts of the region in 1997. The introduction of liberalization programs also paved the way for private companies to establish their dominance over the decisionmaking processes which used to be controlled by the semi-authoritarian states in East Asia. By taking advantage of the prevailing culture of patrimonialism, nepotism, and cronyism, private corporations were able to quickly (re)establish unholy alliances with the state that prevented a number of Asian governments, including the Thai and South Korean regimes, from sharing the real picture of the economy with their own people. In most cases, as Tabb finds in his research, people were not alerted to the deepening crisis of the economy, leaving ordinary citizens in the dark. The financial crisis of the late 1990s, then, took the region by surprise. People were simply not prepared to deal with such a huge crisis that profoundly affected their lives and livelihoods.

The financial crisis of the 1990s and the ‘push’ for democracy The recent resurgence of the modernization paradigm reinforces a complementary dynamic between economic reforms and political democratization. Drawing upon the arguments once presented by Schumpeter (1950) and Lipset (1959), neo-modernizationists are now claiming that market-oriented reform programs contribute to the creation of a political framework for democratic governance. The belief is that the introduction of a competitive market mechanism would generate political pressures for democratization. It is expected that the need to ensure greater competition among diverse socio-political


groups would force authoritarian regimes to develop an open, transparent, and participatory form of political governance (Huntington 1991 and Prezeworski 1991). Such an understanding of the mutually dynamic relationship between economic and political reforms has also been manifested in the newly developed aid paradigm called ‘good governance’ through which official aid agencies are now offering assistance to the developing world in constructing liberal, pluralist democracy. The World Bank, for instance, officially acknowledged the linkage between market capitalism and democracy by publishing its first major revisionist analysis in 1989, Sub-Saharan Africa: from crisis to sustainable growth (World Bank 1989). In this document, the Bank claims that the crisis of governance is the major cause for continued underdevelopment and growing poverty in the developing world, in general and in Africa, in particular. The document calls for an immediate improvement in the structures of development management in the South. The Bank believes that without helping the developing world to create a political system that promotes such notions as participation, accountability and transparency, the goal of equitable growth is unlikely to be achieved. It therefore devises a concrete plan to offer technical and financial assistance to developing nations in order to create what it calls ‘an enabling environment for sustainable and equitable growth’ (World Bank 1992: 3 & 10). The expectation is that this framework of governance will ensure more productive use of development resources (World Bank 1994). While the non-political mandate makes it a bit difficult for the Bank to use the notion of governance as a means to promote such concepts as democratization and human rights, a vast majority of donor countries and agencies have already used good governance programs to export liberal political and social philosophy. In order to support the movements for democracy in the developing world, many official aid agencies have already widened the definition of governance by incorporating a variety of political issues, including civil society, freedoms of speech, religion and expression, the rule of law and free and fair elections (Islam & Morrison 1996). The Canadian government, for instance, views good governance as a framework for implementing broader socio-political programs that are designed to give both democracy and development a chance to survive (Schmitz 1995). Similarly, when providing aid, the US, British, German, and Swedish governments are now attaching more importance to undertaking programs that are directly aimed at the


promotion of democracy and the strengthening of associational life (Robinson 1995). The authors of this volume, especially Lenora Angeles and Chantana Banpasirichote, seek to shed light on how pro-market reforms created the push for democracy in the rapidly changing context of Southeast Asia. In her chapter, Banpasirichote establishes a direct link between the financial crisis of the 1990s and the movement for constitutional democracy in Thailand in the late 1990s. She explains how the crisis brought together groups with diverse, often contradictory, interests to forge strategic coalitions to fight for democracy. These socio-political groups were able to use the political space created by the financial crisis to question what she calls ‘bad politics’ in Thailand. By conveniently appropriating the discourse of governance and civil society, they challenged the state’s desire to maintain its hegemonic control over the decision-making process. This movement reached its peak when NGOs and the new middle class of the ‘Miracle Era’ decided to actively participate in it. Their involvement eventually contributed to the adoption of a new constitution in 1997, making the state more responsive to popular concerns in Thailand. David Zweig’s comparative analysis takes the issue of democratization beyond local pro-democracy actors. His case study of political attitudes and participation in mainland China, Hong Kong, and Taiwan offers an insight into the role of the international community in pushing the demand for democracy. He assesses the role of democratic values and political structures in the likely choice by citizens in alternative vs. formal forms of politics. Zweig presents results of comparative and discrete survey data from the three Chinas, on interest and participation in as well as attitudes towards politics, attention to public affairs and the frequency of public meetings. His study finds that international pressures contributed, with varying degrees, to the choice of the forms of democracy embraced in these three countries.

Is civil society a panacea? The concept of ‘civil society’ has recently come into sharper focus as most analysts, policy-makers and activists now claim that societal groups are central to the creation of a democratic political culture (Ottaway and Carothers 2000). Although the term has received widespread support from across the philosophical spectrum, the definition of civil society still remains a subject of major controversy among academics and activists. In mainstream literature, civil society is


defined as the ensemble of private, non-state organizations working independently of the state for the protection and advancement of citizen’s rights, freedoms and interests (Bernhard 1993). Focusing on the dichotomy between the state and civil society, liberal authors often see it as an arena or political space outside of the state (Wood 1990: 60–64). They view civil society as the centre of opposition to all kinds of arbitrary rule, including military dictatorship, authoritarianism, and totalitarianism. Gelner, for instance, refers to civil society as a: set of non-governmental institutions which is strong enough to counterbalance the state and, while not preventing the state from fulfilling its role of the keeper of the peace and arbitrator between major interests, can nevertheless prevent it from dominating and atomising the rest of society (Gelner 1994: 5). The primary purpose of a vibrant civil society is to ensure that governmental authority is exercised on the basis of popular acceptance (Bratton 1994: 59). In other words, civil associations explore ways to keep a check on state power, making sure that the state does its job properly (Christenson 1994: 724). They act collectively, as Diamond claims, ‘to express their interests, passions, and ideas, exchange information, achieve mutual goals, make demands on the state, and hold state officials accountable’ (Diamond 1994: 5–7). Another major objective of civil society is to promote individual rights and freedoms. Considering the liberation of civil society from the control of the state as a prerequisite for the construction of both liberal democracy and free markets, an increasing number of donor organizations are placing greater emphasis on programs that aim to strengthen civil society. Likewise, many Southern organizations, mainly NGOs, are also describing their work in civil society terms and are claiming that they are facilitating groups in civil society to work together for the promotion of democracy and development both at the local and national levels (Blair 1997: 31). A considerable amount of donor money is currently directed to the creation of civil society networks, which are expected to assume a greater responsibility for promoting liberal democracy and free markets throughout the world. The hope is that, in addition to forcing authoritarian regimes to embark upon democratization initiatives, these networks of private associations will play a crucial role in widening political participation, deepening governmental accountability, promoting democratic citizenship and supporting market liberalization initiatives (Diamond 1994).


Much has been written about the enormous diversity of meanings and contents that get attributed to the concept of civil society. However the underside of this conception rarely finds a place in the mainstream discussion about its origin, its significance and its democratic credentials. Radhika Desai’s chapter in this volume explores an important aspect of this underside, the relation between democracy and the cultural nationalisms that have grown in Asia under conditions of globalization. The analysis presented in this volume goes beyond this liberal approach to civil society. Drawing upon the Gramscian perspective,2 Lenora Angeles, Chantana Banpasirichote, and Suthy Prasartset show that the democratic potential of civil society in the region is more limited than is widely assumed. Both Angeles and Banpasirichote question the ability of civil society groups to insist on their autonomy vis-à-vis both the state and market in East and Southeast Asia. Many of these organizations contain neo-conservative and neoliberal elements that put a direct limit on their ability to successfully protect popular interest. Banpasirichote’s research also identifies a clear link between civil associations, the government, and big business. The traditional reliance of the voluntary sector on government, business, and religious organizations for financial support contributes to the continuing inability of civil society groups to actively pursue an agenda for democracy and human development. A vast majority of these groups have used the notions of good governance and civil society so as to advance their own interests. Banpasirichote concludes that political reform, in which the grassroots movements, such as the Assembly of the Poor (AOP), will find their own space, is going to be long and incremental.

Going beyond constitutional democracy: the future of democratic governance in Asia Most authors in this volume emphasize the need for the region to go beyond the discourse of constitutional democracy, as they argue that liberal democracy is unlikely to set the stage for human progress and prosperity in Asia. In the presence of greater inequalities, Tabb reminds us, procedural democracy cannot offer any real optimism about introducing a political system that is motivated by the goals of equality, justice, human development, and participation. The analyses of this volume point to the growing evidence that a transition to democracy does not necessarily guarantee the creation of political


institutions that allow people to determine their own future. It is evident that the functions of constitutional democracy are rather limited primarily to the holding of periodic elections and resolving socio-political conflicts through existing political institutions.3 Recent political histories of a number of countries in Asia, including Bangladesh, Pakistan, the Philippines, and Thailand clearly illuminate the failure of constitutional democracy to bring about the necessary political changes that are essential to ensure political freedom and material prosperity for the majority. In most cases, popularly elected regimes have only paid lip service to democracy. The so-called democratic regimes in these countries have continued to rely on practices that are essentially ‘authoritarian’. What therefore is needed for the region is to explore an alternative route to democracy and development. The purpose of this alternative route would be to create a political space in which voluntary organizations and civil society groups will work together to promote the values and goals of democratic governance. Strong emphasis will be given to the maintenance of an autonomous space for civil society so that societal groups can resist the process of co-optation either by the state or the market. Efforts will also be made, as Angeles explains, to hold governmental institutions accountable to the people for all of their actions. A participatory structure of governance is expected to give communities the power needed to establish their control over the socio-political institutions that profoundly affect their lives and livelihoods. Such a vision of democracy and development has already begun to take root in different parts of the region, including Bangladesh, the Philippines and Thailand. In his chapter, Suthy Prasartset shows how grassroots movements in Thailand have acted as a countervailing power to both the state and big business. In addition to challenging the programs and policies of the state that often served the interests of a small group of political and financial elites, these movements for democratic development have managed to develop strategic alliances with like-minded groups that transcend religious, ethnic, political, and economic divides. He explains the success of the AOP, which emerged as a response to the failure of state sponsored growth-led development agendas, in forging a trans-class coalition to promote the goals of participatory development. What is interesting is that the signs of the emergence of such nonpartisan, autonomous civil society networks can be seen in almost every single corner of Asia. Popular organizations are now making


an effort to bring marginalized groups together to form powerful trans-border coalitions of civil society to defend peace, human security, and sustainable democratic development in the region. Suggesting that collective action has no practical alternative, the voluntary sector is devoting itself to the creation of trans-national civil society networks simply to give both democracy and development a new meaning. If this current trend continues and if the voluntary sector can manage to maintain its autonomy vis-à-vis both the state and the market, Asia is likely to witness the development of a new socio-political order where the emphasis is going to be placed, not so much on the free movement of capital, but rather on efforts to free the continent from poverty, discrimination, and exploitation. Notes 1 Although many African and Latin American nations are still trapped in a low growth cycle, countries in Asia have managed to grow at around 5 per cent a year due to the growth in domestic demand and the rapid expansion of the service sector (Ghosh 2003). 2 Unlike the liberal approach, the critical perspective does not proceed from the distinction between the state and civil society. Although it does admit that civil society may exist in opposition to the state, it rejects the thesis that the state is the primary source of oppression and exploitation. Gramsci’s civil society is composed of those long-lasting institutions that are neither part of the material basis of society, nor of the state machinery. These organizations are engaged in developing what is called ‘the moral and intellectual leadership’. Some of the examples of such organizations would be voluntary associations, educational institutions, the media, religious institutions and organizations, professional groups and cultural associations (Bocock 1986: 33–34). Many of these ‘social’ associations are very much engaged in a complex set of power struggles, where they often compete with each other for the creation and maintenance of hegemony (Kumar 1993; Simon 1982). Such an understanding of civil society not only calls into question the liberal distinction between the state and civil society, but also challenges the assumption that civil society is the site of democratic and egalitarian relationships. 3 Important to mention is that democratically elected regimes often refuse to put a constitutional limit on the use of state power necessary to protect and promote basic human rights. Instead of allowing democratic institutions such as the parliament and judiciary to play any meaningful role in representing popular interests, they tend to exercise a form of personal rule giving the rise of what Zakaria (1997) calls ‘illiberal democracy’.

References Bernhard, M. (1993), ‘Civil Society and Democratic Transition in East Central Europe’, Political Science Quarterly 108(2): 307–26.

Fahimul Quadir and Jayant Lele 11 Blair, H. (1997), ‘Donors, Democratisation and Civil Society: Relating Theory to Practice’ in D. Hulme and M. Edwards, eds., NGOs, States and Donors: Too Close for Comfort? London: Macmillan: 23–42. Bocock, R. (1986), Hegemony, New York: Tavistock Publications. Bratton, M. (1994), ‘Civil Society and Political Transitions in Africa’ in John W. Harbeson et al., eds., Civil Society and the State in Africa, Boulder, CO: Lynne Rienner: 51–81. Christenson, G.A. (1994), ‘World Civil Society and the International Rule of Law’, Human Rights Quarterly 19(4): 724–737. Diamond, L. (1994), ‘Rethinking Civil Society: Toward Democratic Consolidation’, Journal of Democracy 5(3): 4–17. Gelner, E. (1994), Conditions of Liberty: Civil Society and Its Rivals, New York: Penguin Books. Ghosh, J. (2003), ‘Global Economic Gloom’, Frontline 20(2): 1–4. Huntington, S.P. (1991), The Third Wave: Democratization in the Late Twentieth Century (Norman, Oklahoma: University of Oklahoma Press). Islam, N. and D.R. Morrison (1996), ‘Introduction: Governance, Democracy and Human Rights’, Canadian Journal of Development Studies, Special Issue: 5–18. Kumar, K. (1993), ‘Civil Society: An Inquiry into the Usefulness of a Historical Term’, British Journal of Sociology 44(3): 375–401. Lipset, S.M. (1959), ‘Some Social Requisites of Democracy: Economic Development and Political Legitimacy’, American Political Science Review 53(1): 69–105. Ottaway, M. and T. Carothers, eds., (2000), Funding Virtue: Civil Society Aid and Democracy Promotion, Washington, D.C.: Carnegie Endowment for International Peace. Przeworski, A. (1991), Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America, New York: Cambridge University Press. Robinson, M. (1995), ‘Strengthening Civil Society in Africa: The Role of Foreign Political Aid’, IDS Bulletin 26(2): 1–8. Schmitz, G.J. (1995) ‘Democratisation and Demystification: Deconstructing “Governance” as Development Paradigm’, in D.B. Moore and G. Schmitz, eds. Debating Development Discourse: Institutional and Popular Perspectives, London: Macmillan: 54–90. Schumpeter, J.A. (1950), Capitalism, Socialism, and Democracy New York: Harper and Brothers. Simon, R. (1982), Gramsci’s Political Thought: An Introduction, London: Lawrence and Wishart. United Nations (1998), World Economic and Social Survey 1998, New York: United Nations, Dept. of Economic and Social Information and Policy Analysis. UNCTAD (2002), World Investment Report 2002, New York: United Nations Conference on Trade and Development. UNDP (2003), Human Development Report 2003, New York: Oxford University Press. UNRISD 1995 States of Disarray: The Social Effects of Globalization, Geneva: United Nations Research Institute for Social Development. World Bank (1994), Governance: The World Bank’s Experience Washington, D.C.: World Bank.

12 Globalization, Democracy and Civil Society —– (1993), The East Asian Miracle: Economic Growth and Public Policy New York: Oxford University Press —– (1992), Governance and Development Washington, D.C.: World Bank. —– (1989), Sub-Saharan Africa: From Crisis to Sustainable Growth Washington, D.C.: World Bank. Wood, E.M. (1990), ‘The Uses and Abuses of Civil Society’, in Ralph Miliband et al. eds, The Socialist Register 1990, London: Merlin Press: 60–84. Zakaria, F. (1997), ‘The Rise of Illiberal Democracy’, Foreign Affairs 76(6): 22–43.

2 Discontents of Democracy: Elite Pluralism, Mystification and Rule of Big Capital Amiya Kumar Bagchi

Elite rule, class rule, and elite pluralism in India Marxist scholars have grappled with the nature of the state and the basis of governance in a society deeply scarred by divisions of class, caste, ethnicity and religious affiliation.1 Democracy as a possible and desirable form of organization of the government of state had been put forward by Rousseau, Paine, Mary Wollstonecraft, Condorcet and William Godwin. In England, the so-called Philosophical Radicals, Ricardian Socialists, the Chartists and John Stuart Mill added to the literature on democracy. In France and Germany, the work of Alexis de Tocqueville, early socialists such as Louis Blanc and the Fourierists, Moses Hess, and of course, Marx and Engels enriched the understanding of how democracy could and should function. Tocqueville accepted democracy with resignation rather than with enthusiasm, but was nonetheless an insightful pioneer in its conceptualization. The ruling strata in the European countries came to accept some version of democracy as a necessary evil, to be tolerated and even advanced at times in order to appease the discontent of the masses and contain the possibility of their revolt. However, along with theorists of democracy, there were theorists who wanted to preserve a hierarchical social order with democracy if possible, and without it if necessary. Drawing on both the memory of feudal Europe and on the scientism of Saint Simon and his adherents, Auguste Comte put forward the vision of a society which would be governed by an educated elite and ensure ‘order and progress’. By the last quarter of the nineteenth century, a new crop of theorists existed who put forward the thesis that the fate of the majority of mankind 13

14 Discontents of Democracy

was to be governed by a minority. The thrust of their critique was directed most powerfully against the vision of the socialists but also against political theorists who wanted democracy to assure substantive freedoms to the people and their active participation in government. Perhaps the three most prominent theorists of this broad antidemocratic, anti-socialist school were Vilfred Pareto (1986), Gaetano Mosca (1939) and Robert Michels (1949). Pareto put forward the hypothesis that all goods and resources in every known society are distributed unequally according to a statistical function which has come to be known as the ‘Pareto distribution’. This law of inequality of distribution applies also to ability, intellect, and political power. However, he had no theory to explain why and how the distribution of wealth, power or prestige is cut off at a particular point and the ‘haves’ above that threshold form the governing minority and the ‘have-nots’, the subjugated majority. This is where Mosca made his entry with the idea of a political class. The political class is a subset of the governing class: it specializes in politics and utilizes a political formula to organize itself. The political formula, ironically enough, can be said to be a development of Marx’s formulation that the ruling ideology of a society is generally the ideology of the ruling class, and an anticipation of the Gramscian formulation that a successful ruling class has to exercise ideological hegemony over the general populace. Mosca also provided an incisive critique of US democracy, which has long been taken as the most successful example of a working democracy. He brought out, for example, the power of money and manipulation of opinion in the USA, and a high degree of continuance of political power within the same ruling group. Robert Michels focused on the proliferation of bureaucracy within those social democratic parties of Europe of the 1920s that had taken part in the actual running of affairs in central governments, prefectures and municipalities. Building on the work of his predecessors, he saw political parties themselves being ruled by a few party functionaries, and democracy being the resultant rule of the few powerful men who emerged out of the competition and compromises between these political parties. It can be seen in the words of Joseph Schumpeter (1947) that under procedural democracy the people select rulers rather than principles of governance. This view sat comfortably with his vision of capitalism as a world ruled by oligopolistic firms. Against this model of elite rule, several theorists of American democracy put forward the vision of a democratic polity being associated

Amiya Kumar Bagchi 15

with a pluralist society. In such a society, interests and cultures would compete with one another and procedural rules would guarantee that these interests and cultural values would find a place in actual patterns of governance. However, these theorists of pluralism could not actually demonstrate that the members of the groups which were supposed to espouse different interests and cultures would have an equal chance of representation in the body politic, and that power would not gravitate towards a small elite.2 In India, there was a caste-based pluralism before the advent of independence and democracy. The Hindu-Brahmanical social order defined a rough hierarchy of castes but all the castes could go about their business unhindered so long as they accepted their place in the caste and social hierarchy. Looking back it would seem that any political scientist studying India would recognize a model of caste-based pluralism as the homologue of elitist. Myron Weiner, and others following him, came to regard castes as abiding formations and the building blocks of Indian democracy. But they regarded the castes as somehow closed groups, and did not see that class rule was mediated through castes and their shifting alliances. It is useful here to glance briefly at the obstacles that the conventional courses offered in Indian universities on political theory and practice created for a proper appreciation of the role that elitism and class rule played in maintaining the stability of formal democracy in independent India. Much of the nineteenth and early twentiethcentury theories on democracy in mainstream political science courses in my undergraduate days were silent about the interaction between the civil society and the organs of state in a democracy. The simple question, ‘How does democracy work?’ remained unanswered in most textbooks. John Stuart Mill’s ‘Representative Government’ was more of a cautionary tale to avoid the dangers of an uninformed majority rather than a guide as to how the wishes of the majority should be reflected in political decisions. For understanding the working of the highest level of the state, the Marxists appealed to Lenin’s ‘State and Revolution’. However, this proved to be a handbook for a revolutionary party in a society with an old-style, pre-democratic, authoritarian government rather than a guide to the working of a state with a formally democratic apparatus of rule, or the modus operand of a radical party in a deeply unequal society but with a formally democratic government. As mentioned earlier, the theories that sprang up to fill this void were mostly theories of oligarchy or theories of dominance by the elite in a so-called pluralistic society.


In the nineteenth-century era of British liberalism, we learned about the supreme goal of advancing individual utility or, in a Mill-GreenHobhouse extension, individual welfare. We also learned about the need to pursue politics in terms of values that would transcend individual self-interest. How those values would find expression in a system where political parties ultimately have to consult the selfinterest of their electoral supporters was never made clear. Into that vacuum entered the Mosca-Michels theory of parties inevitably gravitating towards an oligarchic formation. Individual interests could only be aggregated in parties with a centralized leadership and competition between such parties would result in an oligarchic conducted polity. A variation on this theme was provided by the theory of competition between interest groups. Interest groups would form their own parties or their own causes in large party formations, and the pluralism of such parties or formations would guarantee the pluralistic character of the governance structure and hence protect the pluralism of the civil society. A further twist to this line of argument was provided by Joseph Schumpeter, Anthony Downs, and following them, the VirginiaChicago School of Political Economy and Public Choice (Mueller 1989: chapters 10–12). It was claimed that electors do not choose policy packages rather they only choose policymakers. The chosen rulers are entrusted with the task of representing the interests of the electors. Policy-makers pursue their own agenda and often implement policies that are contrary to the interests or wishes of the people they are meant to represent. There are two kinds of protection available for this situation. The first is to devise incentive mechanisms that will lead the electors and the policy-makers to stick to the most suitable course of action, which was defined by the economists implicitly, or explicitly, to be one guiding the economy to a Pareto-efficient equilibrium. The second type of precaution is to simply minimize the scope of public action in the first place. Even in situations characterized by externalities, that is, by an essential interdependence between the outcomes of actions of two agents acting independently, the state need not intervene: bargaining between the two agents will lead to a solution that approximates a Pareto-efficient outcome (Coase 1960). I wrote an extended critique of Myron Weiner’s ‘Politics of Scarcity’ (Bagchi 1964/1995). My critique was primarily normative, but it also had a component that challenged the empirical validity of Weiner’s construct. In concentrating on group interests driving politics in India, Weiner did not succeed in demonstrating how individual interests


were represented in group interests. Moreover, he ignored the issue of public goods – the kind of entity that had been the staple of earlier theories of civic virtue and liberalism – and the question of class interest. In this chapter, I have distinguished between several varieties of pluralism, or in a slight displacement and translation, multiculturalism. These varieties include elite pluralism in a procedural democracy, elite pluralism in an authoritarian state, egalitarian pluralism in a democratic state, and egalitarian pluralism in an authoritarian state. The pluralism or multiculturalism which was characteristic of, say Mughal India, Kashmir under Zain-ul-Abidin (1420–1470 C.E.) or Bengal during the reign of Husain Shah and Nusrat Shah (1493–1532 C.E.) was elite pluralism in an authoritarian state (Majumdar et al. 1978: 395–401, 571, 577). Different faiths and cultures were tolerated and often actually patronized on condition that adherents of those faiths or practitioners of those cultures were known to be loyal to the ruler. Lele (1981) demonstrates how in a formally democratic state like India, elites base their power on the control of material assets such as land, industrial and mercantile capital and cultural assets such as membership of a dominant caste, and then use this control to exercise political power. Through the exercise of that power they accumulate further material assets and greater political influence. In India caste is only one, though in many cases, the most important marker, used for class manipulation. Power brokers and power-wielders across caste boundaries incorporate leaders of other castes and kinship networks into their power bases.

Global elite pluralism, political strategies and market strategies of exclusion and tropes of popular and elite resistance in contemporary Asia We move to a different register when we take up questions of civil society and democracy in Asia. In many ways, if Bombay is a metaphor for modern India, then modern India is a metaphor for the whole world. The governance pattern of the world is a criss-cross of authoritarian, elite multiculturalism, democratic multiculturalism, elite multiculturalism, and egalitarian multiculturalism in an authoritarian state. This classification does not reveal the dynamics of civil society and democracy in Asia or in the world. In order to grasp that, we have to scrutinize three processes working simultaneously: deliberate strategies


of exclusion on the basis of ethnicity or other ascribed stigmata (analysed, for example, by Taylor, 1997), exclusion effected by market processes, and heightened insecurity of ordinary people in an increasingly privatized world. The security of health and life is further endangered by the global political economy of agriculture under which, on the one hand, the Washington twins (The World Bank and the International Monetary Fund), in combination with their terrible and dictatorial little sister in Geneva (the World Trade Organization) are pushing the total liberalization of trade and finance down the throats of the developing countries, and on the other hand, the G-7 countries continue to subsidize their agriculture at a rate which has not even been approached by all the developing countries taken together (for a short analysis of the inconsistencies of the WTO agreement, see Das 1998). A global food surplus pulls down the prices of farmers in poor countries even as tens of millions of people cannot buy enough food for their minimum nutritional requirements (Sen 1999). In many developing countries, such as India, the poor go hungry, even as food stocks pile up in government and private storehouses, as the public distribution system is pared down in the name of market efficiency (Hopper 1999; Swaminathan 2000). The cruel irony of the situation was perhaps best brought out in a cartoon by R.K. Laxman, India’s leading cartoonist in the Times of India, on November 4, 2000. This showed a subordinate in a warehouse of the Food Corporation of India frantically informing his boss: ‘Not an inch of space left, sir. If another lot comes, we will be left with no choice, but to distribute it among the poor, and the hungry’. Let me recapitulate very quickly some of the characteristics of the global economy that have become evident in the 1990s. First, almost without any exception, all countries have experienced an enormous increase in income and wealth inequality (see the summary and references in UNCTAD 1997; UNDP 1999). Second, the vulnerability of ordinary people with respect to fluctuations in incomes earned has increased in many countries, especially of Latin America, Africa and South and West Asia (UNRISD 1995; UNDP 1999). Third, the volatility of financial markets that had been mainly confined to Latin America has spread to Asia and the ex-Soviet countries as well. Fourthly, money laundering and earnings from the drug trade have reached a historic high (Laniel 1999). The production of crops yielding the drugs has come to provide subsistence to a major fraction of the poor in countries like Colombia, Ecuador, Myanmar, and Afghanistan, which have been devastated by civil wars and/or policies of structural adjustment.


Fifthly, armed conflict between warring states or claimants to state power have become endemic in Southeast Europe, many sub-Saharan African countries, South Asia and Afghanistan. Connected with the last development, sectarian conflict has become more open and taken more violent forms in many countries. Finally, covering all these developments and managerially involved in provoking conflicts and mediating them has been the role of the global rich who sought to free capital from all social control even as they sought to impose ever more oppressive shackles on the freedom of labour to manoeuvre (Bagchi 2000; ILO 2000). Soon after the French Revolution held aloft the banner of ‘Liberty, equality and fraternity’, fraternity was dropped from the vocabulary of bourgeois democratic politics. Sorority never found a place in that conception of a male-dominated political sphere: women were relegated to the status of passive citizens. But fraternity was often used in struggles of resistance against imperial aggression and of liberation from that rule. The imperialists themselves used the supposed fraternity of the conquered groups to impose a little big brother working in tandem with the imperial Big Brother. Communitarianism served as cogs in the machine of imperial governance in Spanish-ruled America, Britishruled India, Dutch-ruled Indonesia, and Africa under formal European rule. Now again, the ruling elites in many countries are using communities as easily manipulable aggregates, and the values of community are often being preached from the media capital of the world, namely, the USA. If Asian values are today discovered as values of authoritarianism cultivated by dictatorial regimes in Asia, they were given favourable media coverage only a few years back as a distinguishing mark of dynamic East Asia as contrasted with stagnant Latin America or incoherent South Asia. History, of course, uses models beloved of manipulators to befuddle them at the next roll of the dice. Community values have also been used to resist and overturn authoritarian regimes, often professing to be secular but possessing the supreme virtue of being capital friendly. The most striking example of such a revolt in recent memory is perhaps the Iranian revolution organized by Ayatollah Khomeini and his followers. But, of course, where communities do not have internal democracy or easy exit routes, they turn out to be oppressive to the people imprisoned in them (Alam 1999). The ideology of the Golkar Party in Indonesia was illustrative of this. The Indonesian economic crisis of 1997 ultimately led to the overthrow of the murderous military-authoritarian regime of Suharto and his capitalist and military


cronies. But this happened because of popular revolts led by students in 1998, and not through the goodwill of the self-proclaimed protectors of democracy worldwide, namely, the ruling coterie of the United States and their allies (Human Rights Watch 1994). The elite pluralism, authoritarian or semi-democratic, practised in most states, and in such bastions of democracy as the USA or the UK is mirrored in the ambivalent attitude of the establishment of those states towards the blatant violations of democracy and multiculturalism in other states of the global system, including, of course, the Asian states. It is acceptable for Saudi Arabia or the United Arab Emirates to rule out all possibilities of democracy and multiculturalism, but it is a crime when Saddam Hussein exercises a variety of authoritarian ways to manage cultural diversity – a crime to be punished by further penalizing the Iraqi children, women, and of course, men. To look at the paradox in yet another way: the authoritarianism of some regimes finds popular support because it is seen, often wrongly, as a shield against the worst depredations of global capital. Thus, Mahathir Mohamad’s style of semi-democratic authoritarianism finds a sympathetic echo among many ordinary Malaysians because they look upon his policies as a bulwark against the machinations of financial capital. Even if liberals might fume against his suppression of dissent, ordinary Malaysians will remember that they benefited from the affirmative action pursued by his party in the 1970s and 1980s when growth took place without a rise in inequality (Hashim 1998). The fact that Malaysia escaped the worst effects of the financial crisis and recovered quickly from the crisis, partly because of the controls imposed by Mahathir’s regime on capital mobility would also have enhanced his popularity (World Bank 2000). What applies to Mahathir’s Malaysia applies with redoubled force to Communist China. Until now, in spite of the fact that China has aggressively entered into the global markets for commodities, technology and capital, it has broken all records of growth. Moreover, ordinary people’s standards of living have improved in almost all areas despite a tremendous growth in regional inequality and a tendency for rural-urban differentials to widen again. Hence, the talk of violations of human rights in China until now has found only a faint echo among the majority of the Chinese people. The claims of the self-proclaimed leaders of democracy sound hollow when they have extended the politics of exclusion from their own government to the rest of the world. In the USA, presidents are routinely elected only by a minority of the voters. The two-party machine and the financial requirements ensure that nobody can even compete


without support from some section of the wealthy. Because of this dominance of money in the electoral process, ordinary people do not find candidates who will focus their attention on real issues affecting their welfare, issues of insecure employment at low wages, limited access of the poor to higher education, and an inefficient and expensive healthcare system in the richest country of the world (WHO 2000). Moreover, the rich and right-wing groups in the USA have systematically used so-called initiative campaigns to reverse gains made by the poor and the underprivileged, such as laws authorizing affirmative action or enabling women to obtain abortion facilities safely and cheaply (Broder 2000). Presidential and Congressional plutocracy is thus not equivalent to rule of all the people, for the people, by the people. The three major organizations now laying down rules for the operation of the global economy, as designed by the G-7 countries, are thoroughly undemocratic in composition and operation. The democrats that the G-7 countries bless, such as Carlos Menem, and Alberto Fujimori, have repeatedly flouted constitutional norms and have continued to enjoy the support of the elite pluralists in Washington, London, Berlin and Paris. On 5 April 1992, for example, Fujimori violated Peru’s constitution, dissolved the Congress, suspended the judiciary, jailed members of the opposition and assumed dictatorial powers. Under Fujimori’s rule, the military jailed, killed and disappeared anybody suspected of connection with terrorists, and presidential immunity was granted to the perpetrators of these crimes (Human Rights Watch 1993). In the year 2000 again, Fujimori, in violation of the constitutional ban on any President being elected for a third term, decided to contest the election, and suspicion of widespread electoral fraud was confirmed by all impartial observers, including the international media. The opposition candidate, Alejandro Dolado, withdrew in protest, and Fujimori declared himself president. Such is the character of democracy the US establishment helped restore in Peru. Exclusionary strategies can use non-market instruments (Taylor 1999) but the market can render them nearly invisible and therefore more difficult to fight. When international finance and media support the exclusionary strategies, the fact of exclusion becomes obscured from the public gaze. The French Revolution trinity of collective goals to be pursued by a revolutionary people did not inscribe yet another goal, which has become more and more important in the quotidian existence of human beings, even as unrestrained capitalism is making it less and less of an attainable objective. This is the goal of security. Before the


industrial revolution appeared on the scene and was followed by the sanitary and medical revolutions in Europe, human beings were insecure because of natural causes which flooded them, or parched their fields, or destroyed their homes in hurricanes, or killed them with bacterial or viral infection, or with starvation; alternatively, they were insecure because of attacks by wild animals, other men who might be brigands or soldiers of a warring state, or soldiers of their own state. Now economic forces, most of them born out of human decisions and human institutions, can take away their livelihood, and starve and kill them because of their inability to purchase food or healthcare. All this has happened, when the technology for providing enough food for everybody in the world has arrived, and when the preventive and curative measures have allowed the average life of a woman to exceed 85 years (Manton, Stallard & Tolley 1991). The spread of the capitalist system had led to ever-widening cycles of fluctuations in prices, employment and incomes. But since the end of the nineteenth century, in western Europe, in Australia and New Zealand, and then in the Soviet bloc countries from the 1930s, the state had stepped in to provide social insurance against man-made, and pathogenically caused insecurity. Much of that welfare or social security system has either already collapsed or is being steadily eroded. Together with that development, several other, connected processes are further increasing the insecurity of human beings everywhere. The first is the steady withdrawal of the state from most sectors providing goods and services. In the ex-Soviet countries this has led to massive unemployment and declines in incomes. As is well known, in the Russian Federation this has been attended by a rapidly declining longevity with a contracting population (Andreev et al. 1998; Ellman 1994). Even in China, the downsizing of the state enterprises has led to the dismissal of several hundred thousand, if not millions, of employees. As in other countries (such as South Korea after the economic crisis of 1997) the women have suffered much more than men: a larger proportion have suffered retrenchment because of the closure or downsizing of the enterprises undergoing adjustment (UNDP 2000: 53). In India also, a steady process of attrition of state enterprises and employment provided by them is continuing. In spite of a decline in fertility in most developing countries of Asia, the workforce is expanding at fast rates – at more than 1.5 per cent per year in most countries. With deteriorating terms of trade of agriculture and shrinking opportunities of employment in that sector, workers are moving to cities and towns in their own countries and migrating abroad in search of work. When


they find employment, it is generally in low-paid, casual or contract work (Bagchi 1999b). A large proportion of migrants to other countries turn up as illegal immigrants. Even as the World Trade Organization and the Washington twins are increasing the area of unhindered operation of capital, they are also tacitly or openly supporting the attempts of governments, especially in rich countries, to suspect most intending immigrants as possible criminals. The widely publicized case of 58 Chinese immigrants found dead in a Dutch tomato-carrier at the port of Dover in England, in the year 2000, is only one illustration of how this kind of insecurity has been heightened under the current global order (Bagchi 2000). A frantic process of privatization has accompanied the gradual or sudden withdrawal of the state from the productive sphere. The logic of this has often been non-transparent, as in India: improving efficiency, finding a positive value for rapidly deteriorating assets, meeting budgetary deficit, and attracting foreign direct investment have all been offered as reasons. Reasons unstated are pleasing transnational capital and its backers, the governments of G-7 countries, and global watchdogs of capital, and allowing cronies and associates of decision-makers to get part of the expected capital gains in the role of go-between or temporary handlers, causing a flutter on the stock market. The unleashing of capital has been accompanied by the burgeoning of securitised assets all over the world. That this unabated financial liberalization has been responsible for most of the turmoil in global stock markets has been admitted by all sides, including the watchdogs of capital (BIS 2000; Giron and Correa 1999). The financial turmoil has been largely responsible for banking crises in many countries. The World Bank calculated that resolving bank crises (primarily caused by unregulated financial liberalization) has cost between 10 and 15 per cent of GDP in the Czech Republic and Mexico, between 23–24 per cent and 40 per cent in Cote d’Ivoire, Macedonia and Indonesia (all between 1988 and now) and more than 40 per cent of GDP in Chile in the crisis of 1982–85 (WDR 2000: 37). The Bank for International Settlements in its latest annual report has documented the enormous volatility in financial markets, even in 1999, when most of the turbulence caused by the Asian financial crisis and the worst of the Russian financial crisis is supposed to have been absorbed (BIS 2000: chapter VI). The increased volatility of the stock markets in a situation in which more and more assets are being privatized and securitized, of course, exposes the ordinary people in Asia to further insecurity, as the


effects of this volatility are felt through the whole banking and production system (Bagchi 1999a). While all these developments are badly disrupting the lives of ordinary people everywhere, they are not accepting the changes like dumb animals. From Chiapas to Jakarta, ordinary people have fought the capital-friendly state and sometimes succeeded in making it change its ways, at times quite radically. The demand for participation in the democratic process has led many countries to decentralize government responsibilities. One of the most hopeful of such experiments is being conducted in Kerala in India (Isaac & Franke 2000). But the elite can also talk about decentralization, meaning decentralization of responsibilities and routine administration, but not generally of political power, including powers of regulation. So long as global capital remains fancy-free but fetters are put on people’s geographic mobility and collective action, civil rights as well as political rights will continually be violated by sectarian terrorists, and terrorists donning the legitimacy of the state. There have also been movements against the irresponsible behaviour of the global watchdogs of capital but the citadel of global rule of capital is yet to be seriously challenged. I shall end with stories of two women caught up in the maelstrom of sectarian turbulence and ancient domestic violence in the city of Bombay. A woman’s NGO which was trying to document the violence unleashed in Bombay between December 1992 and January 1993, by the Shiv Sena and its allies and also provide relief to some of the victims of that violence was approached by a Hindu woman complaining about domestic violence perpetrated by her husband. In the course of conversation, it turned out that she had also taken part in the violence against her Muslim neighbours. If in this situation, the NGO encouraged her to register a case with the police against her husband, the police were quite capable of letting her husband go scot-free but harassing her, in order to show that they were not so sectarian in their activities as they were alleged to be. Around the same time, another woman, this time a Muslim, approached the NGO again complaining of domestic violence. This time again, the NGO had seriously to consider the proper course of action. A complaint with the police, knowing the anti-Muslim bias of the typical policemen, might result in the husband being subjected to a dose of punishment in the hands of the police much greater than was his legal dessert.3 Thus with class rule, elite pluralism and growing insecurity of ordinary people, the democratic rights of those people cannot be guaranteed simply by passing laws. The separation of the sphere of


civil society from that of the state remains virtually meaningless so long as liberty is not combined with equality and security provided in a framework of genuine fraternity and sorority. Elite pluralism will remain an enemy of the substantive freedoms of the people even when a procedural democracy has been installed all over the world. The fight for egalitarian multiculturalism (acceptance and nurturing of cultural diversity), in a framework of procedural democracy is yet to be won even in most much-vaunted bastions of democracy in the North Atlantic seaboard. In Asia many countries have still to get rid of the domination of local military-feudal oligarchs supported by predatory transnational capital and its client governments in G-7 countries. The fight for democracy in Asia, as in most other developing countries of the world, is thus to be waged both against the local ruling class and against the global controllers of finance and international economic policy. The introduction of formal or procedural democracy as such will not protect the substantive freedoms of the people if the local and international oligarchs can continue to practise elite pluralism, and marginalize the majority. Notes 1 Not to speak of that fault line, gender division, which cuts across all the other markers of separation and hierarchy). It may be useful to glance briefly at the model of rule by an elite as an alternative to the model of a ruling class governing an unequal society – a model that had been powerfully conceptualized by Marx, Engels and their followers (Marx and Engels 1848/1969; Marx 1850/1969; 1852/1969; Bottomore 1964; Wright 1997). 2 As it happens, even as the theory of a democratic polity presiding over a pluralist society was being elaborated, the majority of the African Americans in the USA, had been suffering disfranchisement a century after the formal abolition of slavery and the US government was actively encouraging the installation of dictatorships in countries under their influence so long as the latter were friendly to ‘free enterprise’. But this is only one illustration of the gap between the theorizing of mainstream political theorists and the real world of democracy. 3 I owe these two stories to Dr. Flavia Agnes, a fearless activist-lawyer based in Mumbai.

References Alam, J. (1999), ‘Public Sphere and Democratic Governance in Contemporary India’, in Rajeev Bhargava, et al., eds., Multiculturalism, Liberalism, and Democracy, New Delhi: Oxford University Press: 323–47. Andreev, E.S. et al. (1998), ‘Population of Russia: What Can We Expect in the Future?’ World Development, 26(11): 1939–56.

26 Discontents of Democracy Bagchi, A.K. (1995), Sangskriti, Samaj, o Arthanity (in Bengali: Culture, Society, and Economics), Calcutta: Anushtup. —– (1985), ‘Of Semi-Feudal Democracy and Military-Bbureaucratic Authoritarism,’, in Mitra, A., ed., The Truth Unites: Essays in Tribute to Samar Sen, Calcutta, Subarnarekha: 101–08. —– (1991), ‘Predatory Commercialization and Communalism in India’, in Sarvepalli Gopal, ed., Anatomy of a Confrontation: The Babri Masjid – Ramjanmabhumi Issue, New Delhi, Viking: 193–232. —– (1994), ‘Democracy and Development in the Post-Soviet World’, Economic andPolitical Weekly, 29(53): 3319–22. —– ed. (1995), Democracy and Development, London, Macmillan for the International Economic Association. —– (1998), ‘The Growth Miracle and its Unravelling in East and Southeast Asia’, Economic and Political Weekly, 33(18): 1025–42. —– (1999), ‘Multiculturalism, Governance and the Indian Bourgeoisie’, in Rajeev Bhargava, et al., eds., Multiculturalism, Liberalism, and Democracy, New Delhi: Oxford University Press: 219–47. —– (1999a), ‘Globalisation, Liberalisation and Vulnerability: India and the Third World’, Economic and Political Weekly, 34(45): 3219–30. —– (1999b), ‘Economic Reforms and Employment in India’, in Fumiko Oshikawa, ed., South Asia under the Economic Reforms, Osaka: The Japan Centre for Asian Studies, National Museum of Ethnology: 15–64. —– (2000), ‘Neoliberal Economic Reforms and Workers of the Third World at the End of the Second Millennium of the Christian era’, International Journal of Comparative Sociology, 41(1): 71–80. Bank For International Settlement (BIS) (2000), 70th Annual Report, Basel: Switzerland Bank for International Settlements. Bottomore, T.B. (1964), Elites and Society, London: C.A. Watts and Co. Broder, D.S. (2000), Democracy Derailed: Initiative Campaigns and the Power of Money, New York: Harcourt. Coase, R.H. (1960), ‘The Problem of Social Cast’, Journal of Law and Economics, 1(1): 1–44. Ellman, M. (1994), ‘The Increase in Death and Disease under “Katastroika”’, Cambridge Journal of Economics, 18(4): 329–55. Hashim, S.M. (1998), Income Inequality and Poverty in Malaysia, New York: Rowman and Littlefield. Hopper, G.R. (1999), ‘Changing Food Production and Quality of Diet in India’, Population and Development Review, 25(3): 443–78. Human Rights Watch (1993), Human Rights Watch World Report 1993, New York: Human Rights Watch. —– (1994), The Limits of Openness : Human Rights in Indonesia and East Timor, New York: Human Rights Watch. ILO (2000), World Employment Report 2000, Geneva: International Labour Organization. Laniel, L. (1999), ‘Drugs and Globalisation: An Equivocal Relationship’, International Social Science Journal, 160: 239–40. Lele, J.K. (1981), Elite Pluralism and Class Rule: Political Development in Maharashtra, Bombay: Popular Prakashan.

Amiya Kumar Bagchi 27 Majumdar, R.C. et al. (1978), An Advanced History of India, 4th edition, London: Macmillan. Manton, K.G. et al. (1991), ‘Limits to Human Life Expectancy: Evidence, Prospects, and Implications’, Population and Development Review, 17(4): 603–37. Marx, K. and F. Engels (1969), Manifesto of the Communist Party, translated from the German and reprinted in Marx and Engels, Selected Works, Moscow: Progress Publishers: 108–37. —– (1850/1981), The Class Struggles in France, 1848 to 1850; translated from the German and reprinted in Marx and Engels, Selected Works, Moscow: Progress Publishers 1969: 205–99. —– (1852/1969), The Eighteenth Brumaire of Louis Bonaparte; translated from the German edition of 1869 and reprinted in Marx and Engels, Selected Works, Moscow: Progress Publishers: 394–487. —– (1969), Selected Works, Moscow: Progress Publishers. Michels, R. (1949), Political Parties; translated from the German, Illinois: The Free Press. Mosca, G. (1939), The Ruling Class, New York: McGraw Hill. Mueller, D.C. (1989), Public Choice II, Cambridge: Cambridge University Press. Pareto, V. (1986), The Rise and Fall of Elites, Salem, NH: Ayer. Pizzorno, A. ed. (1971), Political Sociology: Selected Readings, Harmondsworth, Middlesex: Penguin. Schumpeter, J.A. (1943), Capitalism, Socialism and Democracy, London: Allen and Unwin. —– (1947), Capitalism, Socialism and Democracy, second edition, London: Allen and Unwin. Sen, A. (1999), Development as Freedom, New York: A.A. Knopf. Swaminathan, M. (2000), Weakening Welfare: The Public Distribution of Food in India, New Delhi: Leftword Books. Taylor, C. (1999), ‘Democratic Exclusion (and its remedies ?)’, in Rajeev Bhargava, et al., eds., Multiculturalism, Liberalism, and Democracy, New Delhi: Oxford University Press: 138–63. Thomas I.M. and R.W. Franke (2000), Local Democracy and Development: People’s Campaign for Decentralized Planning in Kerala, New Delhi: Left Word Books. UNCTAD (1997), Trade and Development Report 1997, Geneva: United Nations Conference on Trade and Development. —– (1998), Trade and Development Report 1998 and 1999, New York and Geneva:United National Conference on Trade and Development. —– (1998), Trade and Development Report 1999, Geneva: United Nations Conference on Trade and Development. UNDP (2000), China: Human Development Report, New York: Oxford University Press. —– (1999), Human Development Report 1999, New York: Oxford University Press for UNDP. UNRISD (1995), States of Disarray: The Social Effects of Globalization, Geneva: United Nations Research Institute for Social Development. World Bank (2000), East Asia: Recovery and Beyond, Washington, D.C.: World Bank.

28 Discontents of Democracy World Bank (2000), World Development Report 1999/2000, New York: Oxford University Press. World Health Organization (2000), World Health Report 2000, Geneva: World Health Organization. Wright, E.O. (1997), Class Counts: Comparative Studies in Class Analysis, Cambridge: Cambridge University Press.

3 Globalization, Economic Restructuring and the Implications for Democracy in Developing Countries Jayati Ghosh

Introduction Even in the context of the extraordinary twentieth-century, the 1990s could be described as a remarkable decade. Rarely in modern economic history has there been a period characterized by such dramatic volatility, not only in material forces and economic and political conditions, but also in perceptions and expectations. The most recent phase of international capitalism, which is now described as the process of globalization, has been one of very rapid and dramatic changes, and the promise – largely belied thus far – of even greater changes to come. At the start of the new century, the majority of the people in the world are living in countries where various sorts of economic insecurity has increased quite significantly, and has changed the ways in which citizens can react to both national and international economic forces. In this chapter, the implications of the basic processes of economic globalization for patterns of democracy in developing countries will be considered. The focus is on developing countries in general, while the perspective is South Asian. In the next section, the important tendencies of the world economy in the 1990s are briefly outlined. In the third section, some of the myths about globalization, which in turn affected both government policies and expectations of elites and ordinary people in developing countries, are exposed in relation to reality. This section also deals with the economic strategy of economic liberalization which has both created and resulted from the process of global economic integration, and considers its effects on the material conditions of people in developing countries. The fourth section contains a consideration of some of the implications of the global spread of media 29

30 Globalization, Economic Restructuring and Implications for Democracy

and a certain kind of cultural homogenization. This concluding section also briefly outlines some of the effects this can have on democracy at different levels and on social tension and cohesion.

The world economy in the 1990s One of the most striking characteristics of the world economy over the 1990s was the substantial increase in the economic vulnerability of nations. Such vulnerability was not confined to the economies that have traditionally been regarded as more fragile, such as the least developed countries or those developing countries that relied heavily on external bank finance for their accumulation, but affected even the largest and most powerful economies. Because of the sudden incorporation of previously ‘socialist’ countries into the international capitalist system, it also penetrated countries that were earlier relatively insulated. This enhanced economic vulnerability took several forms. The most obvious was the increased potential for sudden and sharp economic shocks, whether in the form of dramatic movements in exchange rates, large inflows or outflows of capital, or changes in trade flows. The greater volatility in foreign exchange markets was reflected in the increased variance of exchange rates in the 1990s compared to earlier decades, and was a predictable outcome given the sheer volume of such liberalized transactions. The daily value of total foreign currency transactions in just one such center – New York – was estimated in 2000 to amount to more than $1.4 trillion, of which less than 3 per cent referred to trade in goods and services, while the remainder reflected capital flows and other speculative transactions. Further, shocks were no longer isolated in nature, or confined to particular countries, but tended to spread through ‘contagion’ to other countries. The transmission mechanism could have been either real or financial flows, but increasingly it came to be recognized that shortterm capital flows were now the primary via media. Contagion itself, which is qualitatively new, was something that was still little understood. Quite often it has been simply geographical proximity that has been responsible for the transmission of shocks from one country to another, while in other cases some assumed common characteristics (which the financial press has dubbed ‘fundamentals’) have been held to blame. But the lack of any systematic pattern that holds for all cases of supposed contagion suggests that financial markets do not necessarily operate according to any clearly defined rules, and this makes prediction very difficult. Once the financial contagion occurs, the

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transmission of other economic shocks and recessionary tendencies is easy to explain. This is why the possibility of even worldwide contagion is now taken seriously. Another marked feature of this decade was the sheer rapidity of the changes that were being generated from within or forced upon economies. Once again, large and highly volatile capital movements were associated with this, but that was not the only factor behind the greater speed of movements in various real and financial markets. Both economic expansions and downturns, especially in developing countries, became highly intense and compressed processes, and the turnaround was equally sharp and often unexpected. In the closing years of the twentieth-century, these processes reflecting external vulnerability assumed a greater significance because they occurred in an overall context of global slowdown in economic activity. In the heady days in the early 1990s, the explosion of the forces of globalization and the apparent triumph of capitalism over any rival economic system were taken as sufficient to establish more rapid and sustained material expansion in much of the world. That expectation has been tempered by a much more sober reality, in which it is now clear that these forces have actually been associated with a deceleration of economic activity in much of the developed world, a continuing implosion in vast areas of the developing world including the continent of Africa, and a dramatic downslide in what had hitherto been the most dynamic segment of the world economy – East and Southeast Asia. The later years of the decade brought the greatest disappointment. Global output growth, which averaged 3 per cent in the period 1990–97, was less than half that rate in 1998 and 1999, and as many as 36 developing countries experienced declines in per capita income. The causes for this increased economic fragility of both the entire world system and of individual countries within it, are to be found in the greater integration of the international system through the various forces which are collectively known as ‘globalisation’. There are numerous such forces, which can be briefly categorized as trade integration, foreign investment flows, portfolio capital movements, external debt transactions, purely speculative currency movements, and finally integration based on technological changes such as the spread of satellitebased media. Consider first the growing importance of external trade. This is frequently cited as one of the more significant manifestations of globalization, and it is certainly true that for many economies the share of


external trade in GNP is greater today than, say, half a century ago. Yet it is also true that when the yardstick of comparison is the relative importance of foreign trade during the late 19th century, the current period appears much less remarkable. Thus, the share of external trade in the GNP of the United Kingdom in 1870 was nearly 30 per cent, that is one and a half times the ratio prevailing more than a century later; while for the US the ratio was roughly the same as today, at around 7 per cent. The ratios of trade to national income were much higher for the African and Asian colonies, as well, and typically ranged from one-fourth to one-third of national income, whereas for most countries in these regions today (barring the high-exporting East and Southeast Asian countries) they are around half that proportion. This is equally true for the Latin American countries. The feeling that international trade has grown substantially comes about because of the massive decline in such trade during the War years, after which they have recovered slowly in the second half of this century. What we observe today is a shift back to the level of trade performance achieved by the international economy in the last decade of the nineteenth century. Then, as in the past decade, world trade growth was faster than world output growth. However, relative price equalization, one feature that economists typically expect to be among the first effects of trade, has not really occurred. Instead of equating prices across countries through international goods arbitrage, today’s external trade leads to a lower degree of correspondence in price movements than it did a century ago. This is partly a result of the greater volatility of exchange rate movements, which makes companies and traders less willing to react to short-run changes in nominal exchange rates unless they are assured that these reflect secular trends. There have also been changes in the internal structure of most capitalist economies that make them less responsive to international price linkages and more prone to pricing to particular segmented markets, largely because of the importance of oligopolies in production. Furthermore, multinational companies in their internal and external transactions now dominate an increasing share of world trade. This shift in the pattern of international trade away from being dominated by relatively homogenous products towards the greater role of product differentiation, means that oligopolistic rents absorb much more of the ‘gains’ from international trade than ever before. The other significance of external trade lies in the fact that since the 1980s, it has been seen as the basic engine of growth for developing countries, and the chief means through which rapid industrialization is

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possible. The incredibly high rates of export growth exhibited by the East Asian region pointed to the positive aspects of global economic integration through trade. It is now apparent that it was precisely such excessive export dependence that engendered certain vulnerability in the region. Similarly, there is the other side of the coin: that exports mean some other country’s imports and sometimes can be seen in importing countries as substituting for domestic production and employment rather than simply adding to consumption. In developed countries this perception has given greater political weight to calls for protectionist policies, especially those directed against the manufacturing exports of developing countries. The second important agent of globalization is foreign direct investment (FDI), which expanded dramatically over the 1990s. Total FDI flows into both developed and developing countries surged in the 1990s, to reach more than $600 billion in 1998. Consequently, FDI became the single largest item in net private capital flows. FDI inflows into developing countries increased at an average rate of around 14 per cent per annum, well above the annual average increases in total gross fixed capital formation at 4 per cent and in exports of goods and nonfactor services at 3.8 per cent. Once again, there is need to put this into perspective. These flows certainly appear large today, but in terms of proportion of world income they are still relatively minor when compared to the enormous and prolonged flows that marked the late 19th century, when capital flows out of Britain amounted to between 5 and 7 per cent of GNP and flows into the US accounted for more than 5 per cent of her GNP. Further, the dominant share of all FDI (more than 85 per cent in 1997 and 1998) was accounted for by mergers and acquisitions, which do not represent new investment or asset creation but simply result in changes in the ownership of existing assets. The major consequence of such a drive towards mergers and acquisitions is greater international industrial concentration in the hands of a few firms in each business sector. Thus, the sources of most FDI – the large multinational corporations – have become even more dominant in the control of international production and distribution. The top 100 MNCs, which are all from the developed industrial countries, have approximately $1.5 trillion worth of assets abroad and account for more than one-third of global FDI stock. Their assets, sales and profits have all increased substantially in the past five years, but the same is not true for their total employment, which has stagnated.


Even this FDI has been very unevenly distributed across regions. Developing countries received less than one-third of total world FDI in the 1990s, and of this, around one-third went to China alone. Only a handful of countries in the developing world experienced FDI inflows of any significance, while most countries received capital inflows that were negligible in per capita terms. Further, these FDI flows may have more than doubled over the past five years, but their share of total capital formation remains very small, at around 4 per cent for developed countries and 7 per cent for developing countries. It is only in some of the newly industrializing economies of Asia that both inward and outward FDI flows were substantial in relation to domestic investment. Even in this region, the net effect on domestic investment was typically rather small as well as limited in terms of time span. The form of capital flow that is widely seen as responsible for the increased vulnerability of nations in the 1990s is, of course, portfolio capital movement, in the form of investment in domestic stock and securities markets by non-residents. Such flows registered a marked increase to developing country ‘emerging markets’ in the 1990s, as a result of a combination of factors. These included the wave of financial deregulation that swept the developing world in the past decade; the increasing need for international asset managers, including pension funds which have been growing in size, to diversify their portfolios in order to assure larger returns; and the economic slump in rich industrial countries, which reduced rates of return on capital investments made and forced mobile capital to seek alternative avenues for investment. This wave has already diminished in strength, and most developing country equity markets have experienced the negative effects of decelerating net inflows of foreign portfolio capital. Not only are today’s international capital markets very hierarchical, oligopolistic and skewed, they are also notoriously imperfect in their operations. Their behaviour over the past decade suggests that they are clearly not efficient in any sense of the term. This is evident in two important areas. While the mobility of capital internationally has increased considerably over the past 50 years and especially in the past decade, it has not resulted in equalization of rates of return on capital or of wage rates across countries. There is no indication that capital typically moves from capital-rich to capital-poor countries; rather, the evidence points to the geographical and income concentration of capital. Similarly, the increasing capital flows have not resulted in a substantial transfer of savings from high saving to low-saving coun-

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tries, even among the group of industrial countries (except for the much-publicized example of Japan’s capital exports to the US). This is clear from the fact that while savings rates across countries show wide variation, the range of differences in the ratio of current account to GDP is much narrower, so that variations in investment rates are not much different from those in savings rates. Even the favoured recipients of capital inflow in East Asia have been economies with very high domestic savings rates. Most of all, however, such flows have tended to generate unparalleled degrees of volatility and uncertainty in capital and currency markets. These in turn lead to much more dramatic material changes as well as a much greater degree of volatility and uncertainty. It is now clear that the all too brief period, when the financial markets of some developing countries and economies in transition were seen as the favoured destination of international investors, is over for the time being. The outlook for most emerging markets is muddy if not definitively negative. This is likely to imply significant net outflows of foreign capital from many economies, as already witnessed in the Asian crisis countries and in Russia. The growing fear and insecurity among market participants, which is reflected in the large yield spreads seen recently, could become self-fulfilling and result in the prolonged disruption of international financial flows with severely depressing effects on economic activity as well as on world trade. What is important to note here is that the crisis – in the specific form of dramatic reduction in net capital inflows – can attack virtually all emerging markets, not simply those which have been identified as having specific domestic problems or which are perceived as particularly risky prospects. This is essentially a repetition of a historical pattern in international lending and portfolio investment which can be traced over more than a century, whereby problems of repayment or potential default in one recipient country have led to dramatic declines in all such inflows to all developing countries, rather than being confined to the individual transgressor. This brings us to the other important form of capital flow that has generated very sharp cycles in the recent past – external borrowing. It is true that international lending to developing countries has always been characterized by boom-and-bust cycles, and sharp collapses in such flows, consequent upon repayment problems of a small sub-group of debtors, were evident in the 1920s, 1930s, and of course in the external debt crisis of the 1980s. While it has typically been in the nature of private international capital to move in such a manner, the current


expansion of global finance has only accentuated such a tendency. This is because the wave of financial liberalization also involved easing restrictions on external borrowing by domestic private agents, and this has contributed in no small measure to sharp inflows and outflows of resources in developing countries. To these must be added those movements of capital, which are purely speculative, betting on the future value of currencies or other financial assets. These are empirically difficult to separate from other capital flows, but the conceptual difference is important, because such speculative behaviour played a major role in generating and worsening financial crises throughout the 1990s. Of course, it is worse than simplistic to blame currency traders – such as the (in)famous George Soros – for the problems of economies in financial crises, but it is evident that their behaviour not only accentuated market trends, but occasionally created financial pressure greater than anything warranted by macroeconomic conditions in particular countries. These aspects of global economic integration led to the intensification of some features of ‘traditional’ capitalism, which until recently seemed to have become less relevant. Thus, one of the features of the workings of the international economy, which had been much discussed by development theorists and third world practitioners, was the squeeze on primary commodity exporters, typically through terms of trade movements. The sudden rise in primary commodity prices in the mid-1970s and then again in the early 1980s seemed to belie the existence of this secular trend. But the past decade brought it back with even greater force, as international terms of trade moved against primary commodity exporters, and prices of agricultural and mineral raw materials, as well as of petroleum products, slumped. The other features of the capitalist system, which used to be discussed earlier, were the tendencies towards economic centralization and geographical concentration. In most Marxist or development literature, the nature of market functioning was held to be responsible for the first, while the second was attributed to imperialism. Yet even here, the patterns of development from the 1970s seemed to suggest that the relevance of these processes was now more restricted. Various types of economic and production organization got more attention, such as in the ‘industrial clusters’ and ‘flexible specialisation’ which increased the economic significance of small and medium sized units relative to large enterprises. The changing world structure of production, especially the

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emergence of semi-industrial countries as major exporters of manufactured products, was highlighted to argue that imperialism was effectively a past phase, and that modern globalization would involve a much more complex dynamic between participating nations. By the closing years of the decade, it became evident that both of these conclusions were premature. If anything, international centralization of production and distribution accelerated in the 1990s, and the wave of mergers and acquisitions, which continue to sweep across all capitalist countries, suggest that the process still has some way to go. The economic and financial crises in Latin America, Southeast Asia, and other emerging markets, have brought into question the assessment of regions which were earlier seen as examples of the successful proliferation of capitalism as a means to development and transition to industrial country status. Throughout these continents today, imperialism does not seem dead at all for ordinary citizens; indeed, it may never have seemed so potent. This emphasis on the continued, indeed accentuated, potency of imperialism obviously should not blind us to the role played by the domestic ruling classes in thwarting or inhibiting the developmental and democratic ambitions of most of the citizenry. The success of imperialist globalization stems very largely from its ability to draw local elites (and even middle classes) into their own ranks, to offer part inclusion into a privileged international world where the travails of the local poor can be forgotten, even while their crucial role in generating productive surplus is not lost sight of. The incorporation of local elites, and the consequent interplay of domestic class forces with the requirements of global capitalism, makes the political economy of the current phase both more complex and more striking. The Southeast Asian experience of the 1990s provides a graphic illustration of many of these points, and indeed encapsulates a certain development trajectory, which has a much wider significance. Many of the features mentioned above were especially evident in the region: the sharpness and rapidity of both economic expansions and slumps; the increase in vulnerability expressed through both the effects of sudden shock and the process of ‘contagion’; the processes of centralization and concentration inherent in the current world economy. The subsequent recovery, in turn, based as it is on a combination of sale of important productive assets to large external buyers and possibly unsustainable fiscal impetus, also suggests that the earlier model of export-led rapid expansion is no longer available even to the original practitioners.


In turn, this highlights a feature of current capitalism, which is similar to a crucial feature of an earlier heyday of globalization in an earlier century: the dependence of the core economies on surplus extraction from the periphery. This was critical for core capitalism not only in the primary accumulation phase but also in financing and sustaining the industrial revolution and thereafter allowing for investment rates, which ensured high rates of growth of economic activity in the core countries. The mid-twentieth century changed that relation into one in which, while resource extraction remained important, the focus shifted towards the importance of the periphery in providing markets. By the turn of the new century, the pendulum appears to have swung back again to a situation in which countries of the periphery are viewed in terms of their ability to generate surpluses which are to be consumed by the capitalist core, and especially by the United States. The peculiar circumstances whereby the US economy is on an extended consumption boom financed by the rest of the world’s (including the developing world’s) savings, is a reflection of this larger tendency. All of this suggests that the search for an alternative model of industrialization must be taken seriously, and that such a model should not be dependent upon assumptions regarding the beneficial effects of trade and capital account liberalization, which are now known to be mistaken. In the next section, these assumptions, and the impact they have had on developing country macroeconomics, are discussed in more detail.

Globalization and growth: the recent evidence Globalization has been welcomed because it has been seen to provide an opportunity for the vast bulk of the world’s population, many of whom still live in conditions that barely ensure survival, to ‘catch up’ materially with the more privileged richer minority. Yet the evidence that we already have suggests that this pattern of growth is one, which is fundamentally unequalizing. The process of global economic integration that we can observe thus far, has been one which concerns and benefits large international capital in its various forms, and increases worldwide economic concentration as well as greater inequality in incomes and in access to resources. This is evident from some of the data relating to patterns of growth and distribution in the past two decades. Thus, purely in terms of geographical distribution, around 1.6 billion people (more than one-fourth of the world’s population) live in coun-

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tries in which average incomes have actually fallen over the past decade or more. By contrast, the number of people living in countries where average incomes have risen in real terms is slightly less than that, at under 1.4 billion. In 70 countries, per capita incomes are less than they were in 1980, and in 43 countries (many of which are in the continent of Africa) such incomes are less than they were in 1970. In the 1990s, average incomes fell by a fifth or more in 21 countries, mostly in the formerly socialist countries of Eastern Europe and the former Soviet Union. Countries like Russia experienced historically unprecedented declines in average living standards, which in turn precipitated major social disintegration and a collapse of demographic indicators, pointing to severe crisis. Even in several countries in which average incomes rose, including those in Asia, worsening distribution meant that there are many more poor people in terms of absolute numbers than the two decades prior. The unequalizing nature of the growth process currently in operation is revealed most dramatically in the worldwide gaps between rich and poor, which have widened even faster in the recent past. The gap in per capita income between industrial and developing worlds more than tripled between 1960 and 1990. Between 1960 and 1991, the income share of the richest 20 per cent of the world’s population rose from 70 per cent to 85 per cent, while the income share of the poorest 20 per cent of population fell from 2.3 per cent to 1.4 per cent. In fact, the income shares of more than 85 per cent of the world’s population actually fell over this period. The ratio of shares of the richest to the poorest groups doubled from 30:1 to 60:1. This has also been reflected in the growing concentration of assets. Thus, today the assets of only the three richest people in the world amount to more than the combined GNP of all the least developed countries put together. The net worth of 350-dollar billionaires is equal to the combined incomes of the poorest 45 per cent of the world’s population that is 2.3 billion people, who are likely to hold assets worth even less than this. All of these inequalities are estimated to have grown over the past decade (UNDP 1996, 1998). In the very recent past, tendencies towards stagnation and enhanced inequality have become more accentuated. Consider the pattern of international trade. World trade in volume terms grew by only about 3.5 per cent in 1998. This is the smallest increase of the decade and markedly less than half the rate of 1997. This low rate of increase resulted from the almost 5 per cent decline in imports of developing countries, mainly owing to the collapse of imports in the


crisis countries of East Asia, and the 10 per cent import drop in Japan. In 1999, import levels just began to recover, but only very slowly, with import volumes rising 2.5 per cent in the developing countries, and 0.25 per cent in Japan. The value of world trade in dollars actually fell in 1998. This is the first time in the decade, or indeed in the current phase of globalization since 1980, that world trade has declined in terms of dollar values. The plunge in commodity prices, particularly of oil, was obviously a factor, but the prices of manufacturing exports also fell. This was more than enough to counteract the rather weak expansion of trade volume. All this negatively affected the export earnings, and therefore the import demand, of many economies. Similarly, even though the countries that were hit by renewed financial turbulence in early 1999 managed to stabilize their currencies faster than expected, exchange rates for a majority of countries have remained at values far below their pre-crisis levels. This implies a net loss of real income and, therefore, purchasing power in these countries, which has been compounded by the declining unit values of their exports. Movements in international finance further intensified low import demand from developing countries. Between 1991 and 1996, developing countries had received a positive net transfer of financial resources, which enabled them to finance an excess of imports over exports. The East Asian crisis reversed this flow, with this region in particular being faced with a massive withdrawal of funds. Financial flows to the region declined from a net inflow of $31 billion in 1996 to a net outflow of over $110 billion in 1998. Even though there has been some resumption of capital flows to developing countries including those in the Asian region in 1999, the overall prognosis is not very optimistic. Despite the recent reduction in interest rates for the majority of potential borrowing countries, the differences between these and yields of Treasury bonds of the United States remain higher than before the Asian crisis. Also, there appears to be a more general reluctance to lend to most developing and transition economies, almost regardless of the interest rate. One reflection of this reluctance is the increasing investment-saving gap in the United States, as measured by its high and rising current account deficit. This gap has been filled by absorbing a significant proportion of world savings that could have been directed towards financing a higher level of capital formation in other countries. When analysts wax eloquent on the positive role played by the US economy

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in terms of being the only engine of growth in the current international economic configuration, it should be remembered that this has been made possible because of the inflow of savings into the US from the rest of the world, including from some of the poorest countries that can least afford it. In this context it is worth considering another point that is frequently made in such discussions, that ‘sound’ macroeconomic policies as exemplified in low deficit or surplus current accounts and low fiscal deficits are the key to investor confidence. Currently the only country in the world that can boast of continuously attracting international investors is also the one with the largest current account deficit (in excess of $246 billion at latest count), the largest external debt and a large fiscal deficit – the US. Despite this, the inflow of the world’s savings into the US economy continues unabated. Even within the industrial world, the countries with the most prudent macroeconomic policies and the largest current account surpluses – Japan and the euro area – are those facing recession and falling investor confidence. All these are not accidents; in fact they are necessary correlates of the pattern of global integration and inequality over the last decade. Even the UN has recognized this: ‘The pattern of output growth across nations is widening the disparity between levels of living and personal incomes in the developed countries and those in the rest of the world. … In the majority of countries, growth for the foreseeable future will fall far short of what is necessary to effect a substantial improvement in living standards and a reduction in the number of people living in poverty. … Thus, whereas in recent years many of the developed countries were able to take advantage of globalisation, the effects on many developing and transition countries have been perverse’ (UN 1999: 24). On the basis of a slightly closer look at the experience of growth and external imbalance in developing countries, the Trade and Development Report published by UNCTAD points out that growth in developing countries as a group in the 1990s was at an annual average of around 4.3 per cent. This does represent a recovery from the levels of the 1980s, but it is still well below the average of 5.7 per cent per annum of the 1970s. Moreover, this partial recovery in economic growth was accompanied by a significant worsening of external deficits.


Indeed, if China (whose performance was exceptional for a variety of specific reasons) is excluded, then it turns out that the average developing country trade deficit for the 1990s was higher than that for the 1970s by almost 3 percentage points of GDP, while the average growth rate was lower by 2 per cent per annum. Of course, low oil prices in the 1990s (compared to high oil prices in the 1970s) played some role in this average since a number of developing countries rely on oil exports. But the same pattern is evident, to almost the same degree, even for non-oil exporting developing countries, indicating that the basic problem lay elsewhere. The pattern was also the same across regions. In Latin America, growth was lower while trade deficits as a share of GDP were the same. In sub-Saharan Africa, growth fell but trade deficits rose. Countries in Asia ran on average greater external deficits in the 1990s without achieving faster growth. The general tendency among the majority of developing countries over the 1990s, therefore, was of widening external deficits combined with stagnant or falling growth rates. This was precisely the opposite of what had been promised by the proponents of liberalization at the start of the decade. Two forces were supposed to create a virtuous cycle of growth and (eventually) lower deficits for developing countries: the Uruguay Round of GATT, which was supposed to bring about a dramatic increase in market access for developing country exports; and the greater freedom accorded to international capital flows in the wake of financial liberalization, which would allow developing countries to finance deficits easily and increase their domestic growth rates. Obviously, neither of these forces acted quite in the manner predicted by their votaries. What explains the more depressing reality? If we eschew the simplistic explanations which have been all too readily advanced in the recent past, which tend to blame everything on ‘over-hasty financial liberalization’ or domestic problems like ‘crony capitalism’, then it is possible to identify some common features which apply to all or most developing countries, and which also reflect the general conditions of the world economy. There are thus two important factors behind the adverse combination of payments deficits and lower growth: terms of trade losses and rapid trade liberalization. Both of these stem directly from the attempts of developing countries – pushed by public international institutions like the IMF as well as private ones like the World Economic Forum – to integrate more closely with the world economy in terms of both trade and finance, to

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make their economies more ‘open’ and to rely more heavily on exporting activity as an engine of growth. Thus, the terms of trade losses reflected the growing numbers of developing country exporters crowding into already saturated markets, pushing down prices further, and reducing the income gains from additional exports. Interestingly, the process of relative price decline occurred for both primary and non-primary goods exported by developing countries. The decline in commodity prices (both oil and others) is well known by now, reflecting both slow growth of aggregate demand in industrial countries as well as substitution away from use of such commodities because of technological change. But standard adjustment policies continue to promote reliance on these traditional exports for most developing countries, further worsening the problem. But even for manufactured exports by developing countries, relative prices fell. In fact, since the beginning of the 1980s, the terms of trade of developing countries relying mainly on manufactured exports have fallen by as much as 1 per cent per annum on average. This reflects the increased concentration of developing country interest on certain labourintensive or natural resource based manufactured products, including low-technology inputs to the electronics industry. There is growing concern that such manufactures may be acquiring the characteristics of primary commodities in world markets. The fear that several analysts had expressed earlier, that all countries cannot play the same game of aggressive export promotion in labour-intensive manufactures without affecting international prices, now appears to have been justified. The problem has been aggravated by inadequate market access for developing country exports in developed markets. This has turned out to be one of the major false hopes raised by the Uruguay Round and the formation of the WTO. While developed country markets have not become more open for developing exporters, the markets of developing countries have been significantly liberalized. Many developing countries opted for ‘big bang’ forms of trade liberalization, which drastically changed the structure of domestic demand in favour of imports, but even the more gradual liberalizers have seen imports make big inroads into their markets and erode the viability of domestic manufacturers. In the past, it used to be felt that trade liberalization combined with currency devaluation would ensure that trade deficits would not get too large. Indeed, the inability to finance such deficits typically ensured that trade would eventually be brought into balance, even at the cost of domestic contraction. But the possibility of using private capital markets to finance such deficits, even if only for short periods,


has meant that deficits now continue for slightly longer periods. More significantly, because trade liberalization has often been accompanied by financial liberalization, it has broken the link between the current account and exchange rate movements, which now get determined by the behaviour of capital flows at the margin. So the new scenario is one of exchange rate instability and currency ‘misalignment’ driven by capital flows that further cause trade balances to deteriorate. Often, the imbalances can be sustained for some time, because of continued capital inflow. But the story of the 1990s was one of increasingly rapid reversal of such capital movements, leading to boom and bust cycles. The Asian crisis and the ongoing difficulties in Russia, Brazil and elsewhere, are evidence of this. In the process, there was also significant damage to domestic industry, in many cases leading to effective de-industrialization because nascent manufacturers simply disappeared in the face of severe and cheap external competition. This is portrayed by some determined advocates of indiscriminate liberalization, as bad for workers but good for consumers in the country. But it can only be good for consumers if domestic economic expansion is somehow sustained sufficiently to ensure that there is more purchasing power in the hands of consumers. The pattern of terms of trade movements along with effects on domestic economic activity and employment suggests that this was not the case for most developing countries. So the greater openness of developing countries in the 1990s was associated not only with higher volatility and larger payments deficits, but even with inferior economic growth performance. Another of the great beliefs of the age of globalization has been that foreign investment – and foreign direct investment in particular – could and would transform the world by bringing more capital to capital-scarce economies and causing great changes in the productive structures of developing economies. From the mid-1980s, the voices arguing for this perception became more insistent and confident, and the experience of several Southeast Asian countries in the period 1986–1995 seemed to confirm their optimism. It was suggested that pessimism and wrong-headed economic policies were the only things holding back other developing countries from reaping the benefits of FDI-led export-oriented economic expansion. Even now, it is rare to find an official document of any developing country government, or indeed even of any multilateral institution, which does not put a lot of emphasis on the potential positive role of FDI in a country’s development, or on the need for doing everything possible to attract such investment through various incentives and other policy measures.

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But what exactly was the record of such FDI in the past decade? In some ways, this is an especially good period to study the positive effects of FDI, because throughout the world foreign investors and multinational companies never had it so good. Everywhere in the world, including in developed countries, government were vying with each other to attract such investment, and this led to a progressive reduction of regulations and restraints that could have inhibited MNC freedom in any way. Therefore, it is natural to expect, especially with all the hype surrounding the decade of globalization, that both foreign investment and FDI would have been quantitatively more significant than ever before, and that they would have played much more important roles in furthering the processes of industrialization and structural change in developing countries. In this context, the actual evidence on the role of foreign investment comes as something of a surprise. Table 3.1 provides information on the aggregate net capital inflow into developing countries, as a share of their GNP, in three periods since 1975. Some explanation of the term ‘net capital inflow’ is in order. Non-residents minus sales of domestic assets by non-residents define this as the acquisition of domestic assets. This includes categories such as official inflows (grants and aid), FDI, portfolio equity, bonds and bank credit. It turns out that aggregate net capital inflows into developing countries was not all that significant as a share of developing country GNP in the 1990s. In fact, the average for the 1990s was only marginally higher than that for the period 1975–82, and only stood out because of the much lower net inflows during the period 1983–89, that were when the external debt crisis was working itself out. Indeed, if China is excluded, then it turns out that the 1990s shows a lower quantitative significance for net foreign capital inflow, in all other developing countries combined. The late 1970s turns out to have been the time when foreign capital was most significant relative to national income, and the globalizing 1990s comes a rather poor second.

Table 3.1

Net Capital Inflow into Developing Countries (as per cent of GNP)

Total net inflow Including China Excluding China Source: UNCTAD (1999).

1975–82

1983–89

4.91 5.45

2.87 2.97

1990–98 5 4.22


The big change across the different time periods has been in the nature of the capital inflow. In the period 1975–82, fully half the net inflow consisted of bank loans; official flows, including development assistance, amounted to another 32 per cent. FDI and portfolio inflows together amounted to a measly 11 per cent. By the 1990s, the picture had changed dramatically. All official flows were down to 20 per cent, and bank loans to 24 per cent. Instead, portfolio inflows had increased to 21 per cent and FDI to 34 per cent of net inflow. However, even this net capital inflow does not give us an idea of the actual resource flows to or from the country. That is provided by net capital flows, which represents net capital inflows minus net capital outflows (that is, acquisition minus sales of foreign assets by residents). For a genuine idea of net resource transfer, we need to look at the extent of net capital flow minus interest payment and profit remittances, which emerge out of such flows. By this reckoning, external savings have contributed really rather little to the development process for all developing countries (including China) taken together. Net resource transfer was actually negative in the 1980s, but even in the period 1990–98, they amounted to only 2.65 per cent of the GNP of developing countries, just slightly above that ratio for the late 1970s and early 1980s (2.48 per cent). One of the reasons for this less than wonderful performance of net transfer in the 1990s was the change in the pattern of net capital flows over the 1990s. Around 1992–93, a number of developing countries across Asia and Latin America went in for substantial financial liberalization, including deregulation of capital account transactions. In consequence, while capital inflow increased, so did capital outflow, as more and more domestic residents found it both more possible and more attractive to hold foreign assets. The effects of this were that in the period 1995–98, net capital inflow did certainly increase, by nearly 30 per cent compared to the earlier four-year period. But net capital outflow went up even more, by more than 200 per cent, as domestic residents rapidly (often frantically) acquired foreign financial assets. In consequence, net capital flows for all developing countries taken together in the second part of the 1990s were lower than they were in the first part, by 8 per cent. Even those previously seen as high priests of market orientation and financial liberalization are now making similar points. Thus, the World Bank, in its latest publication Global Development Finance 2000, is skeptical about the role played by movements of private capital in furthering sustained industrialization.

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‘All past episodes of surges in capital flows to emerging markets have ended in severe international financial crises. Hard landings rather than soft landings have been the rule… Booms in private capital flows to emerging markets have been punctuated by frequent banking and exchange rate crises in the capital-receiving countries, and have usually ended in severe economic dislocation or political conflict. By contrast, financial crises and debt overhangs were relatively rare during the Bretton Woods era, when capital controls and stringent financial sector regulation limited capital flows to emerging markets (although several exchange rate crises did occur). It remains extremely difficult to determine to what extent these periodic reversals of capital flows have been themselves the cause of crises or a response to fundamental economic problems in the borrowing economies. Certainly such reversals have responded to excessive levels of debt, terms-of-trade shocks, or other events that reduce the prospects for economic growth in the borrowing countries. However, actions by creditor countries or lending institutions also have contributed. Monetary tightening in creditor countries and sudden changes in tolerance for risk on the part of lenders has sparked crises. Creditors have also contributed to crises by continuing to lend even in the face of evidence that funds were being directed to activities that could not generate sufficient returns with which to repay the debts created’ (World Bank 2000: 120) On a similar note, the World Bank report is cautious about reacting to the possibility of a renewed spurt in capital flows to developing countries such as India, the prospect of which currently causes much excitement among our own policy makers. Thus, while it recognizes that the current pause in capital flows could last for some years, it also suggests that factors such as continued technological progress, rapid economic growth, a favourable political climate, and the ageing of industrial country populations (compared to the much younger age structure of most emerging markets) may well lead to a renewed boom in capital flows to emerging markets over the next decade. The point, however, is that even such a renewed boom is not seen as necessarily a cause for celebration among the host emerging economies. Thus, the report argues that ‘if these inflows continue to be as volatile as they have been in the past, their benefits to the developing world may be reduced. Also, the spread of capital flows to countries with weak institutional


capacity may increase the likelihood of crises in those economies. The great differences in incomes, legal and institutional frameworks, and cultural backgrounds between creditors and borrowers will tend to heighten the effects of asymmetric information and encourage herding among lenders. The growing role of banking systems in emerging markets in intermediating volatile capital flows could lead to greater risk to financial systems and could intensify the devastating effects of crises on economic output, particularly given the weakness of banking systems in many countries. Finally, continued financial innovation is likely to facilitate speculation and the rapid shifting of flows in and out of emerging markets’ (World Bank 2000: 120).

The global media: concentrating culture By now it is almost a cliché that culture has become an economic good under late capitalism, or that globalization in the past decade has accentuated this process quite dramatically. Indeed, the very fact that it is already a cliché, even though the process is so recent, is a pointer to the extreme rapidity of social change in the current international context. But despite this speed, even sudden or short-term cultural influences tend to leave longer term residues in society, and can have unexpected consequences. One of the more significant aspects of the recent process of globalization of culture is the idea that culture can be identified and expressed in physical or other goods that can be traded and sold, such as crafts, films, books as well as music. Even tourism is often presented as the selling of particular cultures, the more ‘exotic’, ‘unspoilt’ or ‘nontouristy’ the better. Trade in culture has become an explosively growing activity thanks to new technologies, such as satellite television, multimedia and the Internet. Along with this, more and more culture itself is disseminated through communications media that deal with news, entertainment and other related aspects. This area is one of tremendous and growing concentration in terms of ownership and control. Virtually all the major productive and service sectors in the international economy are currently undergoing a major process of concentration. To that extent, the media and communication industries are simply part of a wider trend, which reflects both the requirements, and the effects of global deregulation and greater freedom of private enterprise. But the sheer size of the mergers and acquisitions in this area, in the context of an

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industry that was already highly concentrated, suggests that what is happening here is of a different order. It is also qualitatively different, because after all the media industries do not just produce ordinary commodities: they produce the dissemination of information and cultural artifacts that determine how societies think, how much they know of and how they relate to the world around them, even how they dream. That is why it comes as something of a shock to realize just how concentrated – and highly interlinked – the international media industry is, and how much of this has occurred in the last decade alone. The dissemination of information and culture has become one of the most potent sources of profit for today’s large capitalists. Thus, the international culture industry is currently the one of the largest and certainly the fastest growing in the world. According to a UNESCO study, world trade in goods with cultural content – such as printed matter, literature, music, visual arts, cinema, along with photographic and television equipment – nearly tripled in the period between 1980 and 1991, amounting to $200 billion then. Since then, it has grown even faster because of satellite technology and other such vehicles. Internationally, the number of television sets per 1,000 people has nearly doubled from 121 in 1980 to 235 in 1995. In East Asia alone, the number of televisions per 1,000 people zoomed from less than 50 to more than 250 in the same period. The number of hours of television watched globally nearly tripled between 1979 and 1991, and since then is estimated to have grown at an even faster rate. Because of this, advertisers have also flocked to this medium – as they are now increasingly flocking to the Internet – and advertising expenditure in this sector in Europe and North America alone more than doubled in just five years over the late 1980s. The multimedia boom has spawned large multimedia companies who can now be counted among the largest multinational corporations. This is really a phenomenon of the last decade, or at most the last fifteen or so years, as giant media firms have sought ‘synergy’ through not just vertical integration but by effectively ‘acquiring control of every step in the mass media process, from creation of content to its delivery in the home’ (Bagdikian 1997). The 1990s in particular have witnessed an unprecedented wave of mergers and acquisitions among global media giants. As a result, the top six multinational conglomerates – News Corporation, Time Warner, Disney, Bertelsmann, Viacom and TCI – now effectively own and control huge swathes of the media, publishing and commercial entertainment


activities across the world. Competition between them therefore is also based on the use of monopoly power and the open attempt to link activities and consumer choices in different markets. Many of these firms have explicitly rejected national identities and posited themselves as global or internationally based corporations, even though the dominant expression of content, the form of expression as well as the structures of ownership and management is really from the United States. It is true that the domination of US-based media programming has its limits, but the extent to which it nevertheless determines both format and content, even when the language used is other than English, continues to be significant. Globalization over the past decade has been associated with the implantation of the commercial model of communication wherever it did not earlier exist, and its intensification elsewhere. Insofar as this has meant a reduction in state monopoly over information and its dissemination, this is a positive thing. But it carries other, potentially even greater dangers in terms of the replacement of the state-driven model of media control with one of control by oligopolistic private corporations. The expansion, conglomeration and subsequent activity of these large media firms was closely affected by the changes in government regulation – and effective deregulation – in most countries of the world in the 1990s. It has been observed that ‘everywhere, governments are preparing new laws and regulations for the digital era, but in virtually all of these debates the superiority of the market and the profit motive as the regulator of all branches of communication is taken for granted’ (Herman and McChesney 1998: 109). But there are important reasons why this need not necessarily be the case, and that is why the current processes of concentration of media ownership and greater control by some conglomerates of all aspects of the media and culture business, may have certain negative implications, which in turn impinge on the freedom of people in society. The first important implication relates to the fact that markets, and media activities driven by the market, treat readers and audiences as consumers, not as citizens. Since what is being purveyed is not an ordinary good, but the very substance of knowledge, which makes for informed politics, social consciousness and the ability to change the social, political and economic context, this matters a great deal. Indeed, in modern democracies, the media play a central role in terms of the possibility of creating an informed population making choices, which are critical for their own welfare and for society in general. There are several aspects to this, which in turn have significance for

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democratic practice. Thus, there tends to be a decline in the obligation to serve non-commercial information interests, such as those involved in public citizenship, or those which reach particular groups whose economic power is relatively limited. This effectively marginalizes the public sphere. On television, for example, when there is public debate on issues of major political or social importance, it is typically expressed in minuscule fragments or in such a frivolous manner that the content is generally missed. This absence of knowledge or access to it only in truncated and potentially misleading form, undermines democracy. As Bagdikian (1997) points out, a public, which is inadequately informed about the substance of arguments that affect its most important social policies, has effectively lost the substance of citizenship rights as well. Related to this is the generally conservative bent of the ‘information’ and analyses that are consequently presented in such media. The crucial difference between what is good for private business (especially large, multinational private business) and what is good for the quality of life in a society gets ignored. This is not so much the product of an overt conspiracy as a more insidious system of shared values, in which the journalists, presenters and editors are all part of a system, which promotes generally conservative economic philosophies. It also means that in general, most news, analyses and even entertainment programs are presented in ways that support particular entrenched positions and are hostile to dissent. Further, there is another sense in which the tone and content of media dissemination is not even innocently determined: that relates to the growing dependence of international media on advertising revenues for its very survival and profitability. In a sense, therefore, while international media is increasingly concentrated in ownership, it is actually ‘owned’ by the advertisers. What is notable is that the advertising industry itself is highly concentrated, even as it continues to grow in both expanding and stagnant markets, because the need to encroach on rivals’ markets is never diminished. Global advertising expenditure growth has outstripped GDP growth in every year over the past decade and the trend is expected to continue. This, in turn, means that advertisers increasingly determine the content of media service provision. And as their role in influencing media content grows, so too the traditional notions of the separation of editorial and commercial interests tend to weaken. Also, because advertisers want affluent audiences who are likely to be influenced in the choice of their consumption, so media content tends to cater to


the more affluent groups in society. This not only has a class bias, it reveals a basically undemocratic tendency. This may explain why, for all that the new media seeks to make its content directed at consumers rather than at citizens in the more complete sense, it still does not accord its consumers complete sovereignty in terms of choice of content. Finally, owners, managers and editors, often in conjunction with advertisers, determine the content of most media dissemination. And this in turn, is influenced by perceptions of what would be the most arresting image to hold the viewer’s attention or the reader’s interest, the least demanding and therefore most likely to be indulged of stories, and the most facile of sound-bytes and printed epigrams. So the choices available to the consumer of the various media are limited to those that are consciously provided by those who purvey this service, and viewers or readers cannot hope to go beyond this. Numerous surveys among the television watching households of the US, for example, have found widespread dissatisfaction with the nature of the content of the programs, the extent of gratuitous violence, and so on, and have expressed the desire for alternative programming – to little avail, because the basic pattern of the programming has remained unchanged despite such knowledge. Indeed, the plethora of television channels now available often serves only to underline this ironic lack of real choice. Add to this the sheer effect of particular forms of programming and restricted information spread as well as so much directed advertising, on the consumption and lifestyle decisions of individuals and households, and the actual lack of freedom of the recipients of this process of cultural determinism becomes more obvious. Much in the frightening manner predicted by Aldous Huxley in his ‘Brave New World’, what appears to be much more choice and freedom for individuals in different societies, ends up being predetermined aspiration without even the knowledge that it is unfree. It should be obvious that one other important implication of the processes discussed here is that the media industry is less competitive than ever, and is increasingly founded upon a range of monopolistic practices. This too undermines its democratic possibilities. It has been pointed out that this coexists with very fierce competitive pressures for cutting costs and bringing down the bottom line, which in turn have meant the decline of professional objective journalism. To a large extent, the fact that profit motivation now dominates over any other focus in this major social and economic activity has contributed to this decline. It is not just that serious independent enquiry and investiga-

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tive journalism may result in dissident or non-mainstream positions, it is also that such activity is more time-consuming and expensive than the quick and facile on-the-spot interpretations which are more commonly resorted to. Of course, the entire picture is not as completely dire as may appear from this account. Just as technological change at one level has made the possibilities of and pressures for commercialization and concentration in the sector much stronger, so it has also created other possibilities of spreading information – chiefly through the Internet – which are cheaper, more open, more potentially questioning of the dominant paradigm, and thus more democratic. It is true that Internet access is still greatly limited, especially in the developing world, but nevertheless it does provide new opportunities for access to and dissemination of information, and views and analyses which otherwise did not exist or were being increasingly squeezed out by the process of media concentration described above. Globalization does indeed create differences, even as it homogenizes – but not in the positive form of encouraging genuine creative diversity. Rather, globalization creates far deeper and more pervasive inequalities – across regions of the world, within countries, across classes and income groups. These inequalities encompass gaps in wealth, income, access to productive employment, opportunities and a whole range of other material and social conditions. And they are made the more painful by the constant display of the advantages of being better off, emanating from both media imagery and actual consumption patterns of the wealthy. The tensions and insecurities brought about by these widening inequalities cause people to seek refuge in particularities: political separation, regionalist demands, revanchist cultural movements, and so on. This may explain why Asian youth in particular appear to be so susceptible to social tendencies that tend to identify and blame some real or imagined ‘other’ for the harrowing gap between reality and aspiration. In India, we are familiar with the growing potency of fundamentalist and communalist tendencies and the support for such divisive forces even among the youth. In Indonesia, the response is taking the form of Islamicist reaction; in the Philippines growing support for populist and semi-mystical Christian cults has been noted; in Malaysia increasing friction between ethnic groups is observed. Everywhere in Asia, small-scale violence is on the increase, and in some countries it has unfortunately been matched by large-scale violence as well. In many countries, the latest social manifestation of


economic crisis is the attack on migrant workers, who are being harassed and evicted from countries ranging from Malaysia and South Korea to Bhutan and India. Of course, there are always some cultural roots to such social divisions, and it would be foolhardy to ascribe all social ills to material processes. But the role of economic alienation in generating perceptions of more fragmented and divided socio-cultural identities, cannot be denied. Even as the American created ‘McWorld’ expands and, octopus-like, swallows up other cultures, it sows the seeds of divisiveness and suggests its own disintegration. This explains the paradox that the most prominent recent social result of globalization has been the assertion of narrow national identity in its least generous form. The negative reaction to this has come in particularistic and tribalist responses that often hark back to some imagined glorious past of particular communities. The sociologist Benjamin Barber called this the ‘jihad’ response to ‘McWorld’. Of course, this is the most pessimistic and extreme scenario, and there is much in today’s world that is already fighting against such cultural hegemony. There are other, more inventive forms of cultural dissidence to a unifying pattern, which sabotage hegemony more effectively because they reaffirm the basic creativity of human response. Interestingly, as mentioned above, these are often aided by new technology such as the Internet, which – at least for now – allows for an ease and freedom of information dissemination that was earlier unthinkable. But they are successful only because they resist the aggrandising onslaught of one form of culture from a position of confidence and strength in their own, which in turn means with a basic sense of tolerance as well. Indeed, that is the basic challenge today for those who want to resist the hegemonic onslaught of an international propagation of culture that is both unnecessarily homogenizing and essentially undemocratic. The need is to forge not only new types of cultural and social responses without falling prey to reactionary fundamentalism, but also to work out more creative ways of uniting people across the world who can maintain their separate identity even as they create a new and more participatory internationalism. References Bagdikian, B.H. (1997), The Media Monopoly, 5th edition, Boston, MA: Beacon Press. Barber, B. (1996), Jihad vs. McWorld: How Globalism and Tribalism Are Reshaping the World, New York: Ballantine Books.

Jayati Ghosh 55 Herman, E.S. and R.W. McChesney (1998), The Global Media: The New Missionaries of Corporate Capitalism, New Delhi: Madhyam Books. Huxley, A. (1994), Brave New World, London: Flamingo. UN (1999), The World Economy in 1999, New York: UN Department of Economic & Social Affairs. UNDP (1998), Human Development Report 1998, New York: Oxford University Press. —– (1996), Human Development Report 1996, New York: Oxford University Press UNTAD (1999) Trade and Development Report 1999, New York: Oxford University Press. World Bank (2000), Global Development Finance 2000, Washington, D.C.: World Bank.

4 Globalization, Economic Restructuring and the Democratic Implications William K. Tabb

Introduction We have witnessed the process of globalization, seemingly increase and widen economic vulnerabilities with its rapid and dramatic deregulation. The contagion experienced in Latin America and most recently in the East Asian financial crisis are products of the vast increase in short term capital movements and international integration. Globalization broadly, and economic restructuring in Asia specifically, both raise a host of questions concerning what is best for the people of the region. While there is general agreement among economists that foreign direct investment can be a productive source of funds, Professor Jayati Ghosh, in her chapter in this volume, has pointed out that Foreign Direct Investment (FDI) has not gone to new plants and equipment. Mergers and acquisitions do not represent new asset creation but merely result in a change in ownership of existing assets, which accounts for 85 per cent of FDI in recent years. In any case, only a handful of developing countries are experiencing FDI inflows of any significance. Most receive capital inflows that are negligible in per capita terms and are small as a share of total capital formation. We are not witnessing the development of local economies but rather the growth of foreign control over these economies. Why then have countries moved away from autonomous development models to embrace foreign investment? Professor Ghosh, who is critical of such developments, suggests that ‘imperialism does not seem dead at all’ and indeed ‘it may never have seemed so potent’, but why do host governments welcome the new imperialists? Perhaps a partial answer can be found in the impact of an increasingly persuasive and 56

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omnipresent media housed in the West that penetrates all corners of the world. But the deeper answers lie in the coercions of what we may call the global state governance institutions such as the International Monetary Fund and the World Trade Organization that increasingly limit the options of presumably sovereign states. Given the crises created by globalization of markets and the financial cycles that have caught so many economies in recent decades, debtors have been hammered into a deeper dependency by the international financial institutions. With that loss of sovereignty they are forced to follow the policies of the Washington Consensus-privatization, liberalization of markets, devaluation, deregulation, austerity and in all things except the police power, a smaller public sector. Given such pressures, local elites have moved away from nationalist development strategies and some have found the seductive allure of junior partnership with transnational capital appealing. This chapter addresses questions related to these transformations. It is divided into three sections. The first considers the meaning and significance of globalization. The second describes and interprets the contemporary economic restructuring in Asia. The last briefly comments on the democratic implications of these developments and processes.

Globalization’s meanings Globalization is often seen as the growing, and in some versions the unprecedented, international integration of economic life involving, as Bob Sutcliffe writes, ‘a major rise in trade and foreign direct investment relative to production, an enormous surge in international financial transactions, and the growth of global economic institutions such as the multinational corporation and international organisations such as the European Union’ (Sutcliffe 1998: 321). He adds, ‘existing globalization is characterized by very different levels of global mobility, according to which elements of the economy is being referred to. And there is a tendency for mobility to be greater the more abstract and less human is the potential mover: finance is the most global part of the world economy, while workers, especially unskilled workers are the least’ (Sutcliffe 1998: 326). Concern over the relative gains to capital and loss to labour goes to the heart of the matter for many, and how this aspect of globalization is treated, whether increased global efficiency or distributional costs, is a key division. Those concerned with economics focus on efficiency gains and thus see globalization as basically benign

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and beneficial for all in the proverbial long run. Those who come from a political perspective often stress the seriousness of dislocations and the impact of the activities, actual and potential, of those who consider themselves victims of the process. There is of course this economic base to globalization, driven as it is by market forces and a new type of scale economies which come from an Internet access to arm’s length suppliers, customers and relational contracting alliances. The corresponding governance discussion has been of the norms and standards appropriate in the new circumstances and the policies and institutions appropriate to the more open political economy. However, the social justice focus is never far from view. This is the perspective which suggests that the market has gone too far in dominating social and political outcomes. The opportunities and regards of globalization are spread unequally and inequitably – concentrating power and wealth in a select group of people, nations and corporations, marginalizing others. Globalization also has ‘a material basis in technological change, increased trade, investment and financial flows, enhanced corporate power, an ideological shift in favor of free markets, and the imposition of laissez-faire policies’ (Goodstein 1998: 298). The stress of an ideological shift so that the policies which accompany globalization, neoliberalism are understood in terms of the power shift in favour of corporate dominance. Richard Higgott, as part of his remarks on the 75th anniversary of the journal International Affairs, suggested that perhaps the most important issue in international affairs in the next century will revolve around the relationship between the impact of globalization and the unbundling of territorial boundaries and the traditional sense of justice tied to ‘Westphalian coordinates’ which have come unmoored. He suggests that reweaving the social bond in a postWestphalian order, under conditions of globalization is more than a normative question, if indeed the normative issue of justice can be separate from a positive analysis of globalization whose interpretative subjectivities are integral to its definition (Higgot 1999). What happens is that during waves of rapid globalizing change, when ‘all that is solid melts into air’, those with short historical perspectives see the emergence of something totally new and unprecedented; in one sense they are right. The forms of globalization of each globalization era are new even if the phenomena which they represent is of long standing. The immediacy and the disruptiveness of the changes are none-the-less real and often terribly painful. People organize to protect themselves as best they can against the destabilizing

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force of the ‘creative destruction’ which threatens to sweep away security they have known. Thus, there is both continuity and dramatic change. The conversations of efficiency and social justice cannot be kept separate because the popular movements have been able to make themselves heard and can no longer be ignored, but also because the negative social impacts of globalization affect the interests and concerns of the powerful directly and in numerous unforeseen ways. Nontraditional threats to national security are increasingly evident. Organized crime and drug trafficking, environmental catastrophe, rapid population growth and massive migrations of undocumented economic refugees of civil wars, economic stagnation and collapse, and failed states are all front burner issues. Consider the way AIDS has come to be perceived as a major threat to national security by US military planners. It is, in an odd way, characterizing globalization’s dangers. The thought that economic efficiency is all that matters and can be the sole criteria for judging globalization is simply not tenable. Recent financial crises in Asia and elsewhere have narrowed acceptance of repressive development state regimes whose authoritarian rule and grossly unequal distribution of wealth and power are no longer so easily rationalized as necessary for growth. Corrupt leaders and their partners in plunder are widely blamed by victims of these financial reversals and there is a widespread view that much of the corruption could be avoided or moderated with more open polities with active movements of the democratic base. The debate for the most part, however, is whether globalization is ‘good’ or ‘bad’, although it is becoming clearer that matters are more complicated. It is an important task to sort through the intricacies of who globalization is good and bad for, and how it might be made better for those who are considered to be paying unacceptably high costs. The operation of the globalization process takes place within, and is mediated by, a set of governance frameworks stretching from the transnational to the local. It is the nature of these institutions, their operation, and the ways they could be restructured which is centrally important. Accepting the free market outcome is not really a possible answer. Markets are always embedded in a larger societal framework. They require social mechanisms to enforce contracts, and standards for judging what is permissible behaviour by participants. When market outcomes favour a smaller minority and seriously discommode majorities, these rules come to be questioned and there are political ramifications which typically produce organizing efforts and


movements which eventually change the rules of the game. This has historically been the case. The East Asian financial crisis and the manner in which the US Treasury Department and the International Monetary Fund have handled it provoked just such a rethinking. The contrast between the policy measures traditionally taken in the core countries, from deficit spending to ward off contractions to government subsidies to controls to prevent financial crises, contradicting with the advise-cum-orders the IMF gave to the East Asian economies in the wake of the region’s crisis. The IMF, the debt police, the enforcer for US imperialism in the eyes of many has, in its evolution over a little more than half a century, transformed itself profoundly. Initially, when its clients were the Western European countries, it was an instrumentality devoted to promoting economic growth in time of unexpected adversity, providing liquidity to avoid the deflationary impact financial crises could generate. It has increasingly weighed its emergency loans with an ever-growing list of conditionalities which more and more tightly constrain borrower policies. Countries are forced to make socalled structural reforms that they prefer not to make and indeed were unwilling to make until their desperate situation gave them no real choice but to accede to the Fund’s demands. ‘Conditionalities’, as Joseph Stiglitz, the former Chief Economist at the World Bank, recently fired for his outspokenness, has said, ‘are adopted without social consensus. It’s a continuation of the colonial mentality’ (Komisar 2000: 36). The Bretton Woods philosophy was just the opposite. To prevent global slowdown it was proposed by Keynes that an international currency be created for accounting purposes between countries and liquidity be made available as needed, quickly and easily in the case of financial crises. The United States preferred to see the dollar, under its own control, as the international currency and the contemporary IMF forces opening of economies to foreign investors who supply liquidity by purchasing local assets which are vastly and temporarily undervalued. This forcing of contractionary policies is, as Stiglitz says, ‘just the opposite of the economic analysis that was the basis of the founding of the IMF. Why? In order to make sure that creditors get repaid’. To better understand how these elements have been playing out in Asia in recent years and how they are likely to influence the trajectory of democratic possibilities in the future, we need to consider the region’s economic evolution in the decades immediately preceding the crisis and how the interests of finance capital and its government allies in the way the crisis was addressed impact contemporary develop-

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ments. In this chapter, I focus on the East Asian economies through the lens of the financial crisis of 1997–8. This is not to say that the other countries are unimportant. Indeed the two giants of developing Asia, China and India, are both fascinating and profoundly important. I can only comment briefly on them. China has studied the strengths and weaknesses of the variants of East Asian experience and, given its own history, aspirations and the contemporary global political economy, has drawn on East Asian development patterns to fit its understanding of what is possible and desirable in terms of its own development. It has adopted a strategy that has combined as tight a control by the Communist Party as it can manage with a set of carrots and controls to attract and manage foreign investors. China’s desire to be admitted to the World Trade Organization and to gain normal trade status with the United States has led to modification of this strategy in ways that reflect substantial risk taking on the part of the government, but which nonetheless leaves the Chinese state more control over its economic destiny and greater autonomy in its foreign relations than any other developing nation has managed to achieve in the current conjuncture. The case of India is also exceedingly interesting. It too is, potentially, an economic force of major significance. As it opens its economy, it faces similar questions as to timing and extent of liberalization. India has been cautiously moving toward a greater openness for some time now. Given the severe dislocations liberalization typically has entailed for Third World countries and a weak central state control structure, how India proceeds and what sort of policy mix makes sense are not easy questions to answer. Because we are fortunate to have a number of South Asian colleagues with us, I am fortunately relieved of the need to deal with these difficult matters, but the interplay between neo-liberal policies and their consequences for ethnic strife are present and particularly important in that country as well as a number of others in the region. I would comment though that the pressures on India and China are not as immediate and pressing as those placed on the other East Asian economies by the financial crisis. India and China had not allowed their currencies to become convertible and maintained protectionist safeguards in trade and investment and so buffered their economies from the destabilizing wave of speculative inflows and outflows which were so damaging elsewhere. They are nonetheless under globalization pressures. Wishing more rapid economic development, they seek to attract foreign investment and with it the advanced technology and


access to foreign markets which may be an engine for growth. But they too must come to terms with globalization, its benefits and its potential costs. The clearest cases are perhaps, though, those of the Asian NICs, the Newly Industrializing Economies, and especially South Korea, the largest of these.

The role of the state If there is, or was, an East Asian development model, a conjecture which is hotly debated, it is widely agreed that state power can be used to help national capital compete in global markets by protecting local firms from foreign competition, providing them with low cost capital as long as it is employed for productive investment, preventing funds which are needed for domestic investment from draining abroad either into higher return foreign investments or into excessive luxury imports and holding down labour costs by whatever means. In the ideal type of East Asian development state model, local banks provide the conduits for mobilizing domestic savings and allowing national capital to expand continuously without risk that loans will be called or borrowing costs increased. Foreign banks were prevented from either entering or playing a major role in a nation’s economy so that these conditions could be maintained. Repressive governments prevented independent labour unions or oppositional political movements to keep the consumption of the masses to a minimum so that accumulation would be maximized. Each of these elements is undergoing transformation in the economies of the region. State-led development, using below market financing and high leverage, successfully built industrial capacity capable of breaking the industrial monopoly of core producers. The first to do so, Japan, South Korea and Taiwan, were encouraged by the US for geopolitical reasons. The then threat of communist China trumped the usual American determination to avoid Third World industrialization in those years. With time, the prospects of low cost manufacturing in the region as a source of potential profitability for US-based transnationals changed the strategic outlook of the American state. National capitals in the region took advantage of this opening to assert substantial control over their country’s development. Other, weaker nations were mere export platforms for US and Japanese transnationals. For decades, governments used banking as a vehicle for the statist developmental strategy (complete with political patronage and economic corruption, which did not seem to be a serious handicap until

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external conditions changed). Banks, by mobilizing resources on a massive scale and allocating them at low cost to favoured industries, allowed these countries to enter world industrial markets as producers. The high leverage was the tool of national development policy. This Asian economic model, which for three decades moved more people out of poverty faster than ever before in the history of capitalism, is now convicted in the eyes of many economists on the very basis of its past success: ‘the trinity of over-investment, over-spending, and overguidance’ (Fallows 1997: 11). This accumulation regime foundered on two unyielding rocks. The first is global overcapacity. The second is the collapse of financial bubbles which were produced when expanded productive investment opportunities could no longer be found for the vast savings these economies generated and, more importantly, as it turned out to the foreign borrowing their success encouraged. As funds which could not be invested productively found their way into property and stock market speculation as well as corrupt borrowing by companies whose only claim to new loans was their political power to extort them, a bubble of excess grew and inevitably burst. High gearing ratios which, by Western standards represented excessive and unsustainable leverage, were central to the high growth regime. Liberalization of financial markets and a slowing of growth undermined the viability of many companies and banks. As the extent of bad loans dramatically increased, the state was no longer able to guarantee credit viability and the system began to fall apart. The economic transformations which followed financial crises were recognition of this reality. Of course the better connected operators continue to look to the state for protection and much of the manoeuvring in the economies of the region involve who will have to pay and how much in the shakeouts. At the same time the force of the changes unleashed by the overextensions will hardly allow the old order to be reconstituted without serious modification, if at all. A brief recounting of these events should make this clear. Over the years 1995 to 1997, the dollar rose in value by about 50 per cent against the Japanese yen. Countries which had tied the value of their currency to the dollar, therefore, saw their currencies appreciate and the price of their goods go up, reducing their export competitiveness. As their economy slowed, debt burdens increased, and their property boom became shaky. Investment slowed and their balance of payment deficits grew. The pressure led to devaluation of their currencies and so refinancing dollar-denominated debt increased dramatically at the same


time as ability to repay weakened substantially. Bankruptcies followed. Thailand had foreign obligations which exceeded 4 per cent of its GDP for a half dozen years preceding its crisis, but it was only when growth slowed that investors became concerned. They rushed to protect their capital, getting as much out of the baht as fast as they could. Governments in such a condition could try to defend their currency’s value by offering higher and higher interest rates to compensate lenders for possible devaluation. But such high interest rates, 50 per cent or more, hurt domestic industry. Further, local banks were hesitant to lend at any interest rate. They had so many bad loans that they needed to build up reserves. Local companies with contracts to export could not honour them because they could not get short-term loans to finance production and export of their products. This ‘credit crunch’ destroyed basically healthy businesses as well as weak ones. It is at this point that we started to hear so much about ‘crony capitalism’. Many of the bad loans had been made to politically connected borrowers often without adequate collateral, or any collateral. Banks went bankrupt and demanded government bailouts since the lending had been at the request of the politicians and other officials. For a year or so preceding the collapse of the baht, Thailand had been urged by the IMF to reduce its short term borrowing and do something about its banking system and speculative lending practices. The early warning system that the IMF had so proudly put in place after the Mexican peso crisis in 1995 failed because while the IMF gave the early warning to Thailand, the Thai leaders who were making money hand over fist were not inclined to listen. Local elites understood the basic rule of capitalism is to get rich. They did. They denied anything was wrong for as long as they possibly could. Since other countries in the region had been following basically similar practices they too were vulnerable and a domino effect or financial ‘contagion’ spread. Thailand’s problems, it turned out, were part of a larger context involving overcapacity, described earlier, and the inability of the Asian miracle economies to sell enough even at lower prices to finance their corporate borrowing. Further, just as the East Asian economies had taken over labour intensive commodity manufacturing from high wage Western nations, China increasingly undercut all other East Asian producers. Thailand had borrowed more than other East Asian export regimes as a percentage of its GDP, and so crisis struck there first. But the Bubble Economy, over borrowing to finance golf courses, condos and upper class shopping malls, fed by foreign borrowing to meet a market created by a class of consumers which was created by the very boom in foreign borrowing and

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a development model built on low wage, police state repression of mass movements could not outlast the global slowdown and the over investment and asset speculation it produced. Investors claim they did not know the ‘real situation’. Solutions from such a perspective call for better and timelier information and what is understood as ‘greater transparency’, a phrase which seems to mean that Asian businesses should use US-style accounting and disclosure standards. Yet it seems clear that investors asked few questions. They were attracted by high-expected returns and pushed by low returns at home. Surely the way these economies operated did not change. For example, in Indonesia, one of the hardest hit, growth had been a steady 6 to 8 per cent a year for a decade. The banks lent to whomever the government told them to, and this often included the children of the Indonesian dictator and most members of the parliament, which acted as a rubber stamp for the dictator for three decades. He also appointed the upper ranks within the military which ran the country. Until the early 1980s the banks were in fact state-owned. After that, interest rates were freed, new licenses given out and private banks proliferated. By the early 1990s, bank credit was expanding by about 50 per cent a year, clearly an unsustainable situation. Non-performing loans grew but there was little or no regulation of the banks so losses could be covered up. Indonesia was not, and is not, the only country where losses were hidden and bogus figures were published. Accounting rules throughout the region are weak and enforcement weaker to non-existent. As in Russia and much of Latin America as well as Korea and elsewhere in East Asia loan classification rules were, and continue to be, ‘adaptable’. Banks appear to be making good profits up to the moment they are threatened with closure. Large financial groups that guarantee loans for other companies have huge but non-disclosed, exposures. As long as growth continues none of this really matters. When growth slows the high debt ratios become unsustainable. Private foreign capital that had flowed in so freely crowds the door in a mad rush to exit the weakening economy thereby dramatically worsening the situation. One important question which needs to be faced is will the emergence of greater democracy change the political structures which have defined the pattern of economic relations in these societies? On the economics side it is the model of high debt ratios that needs to be addressed. Paying down debt seems to be happening in some measure through retrenching and to some extent by foreign capital coming in to shore up operations.


The political side involves the extent to which favoured interests will be protected from market forces and the degree to which popular movements are able to change the role of the state in economic policy to include safety net and social investment funding so that growth can be on a more inclusive basis. Democracy which led to the empowerment of groups of the base and popular mass movements would in all likelihood push for a development strategy which gives local demand for collective goods and higher living standards a more central place, decentring the almost exclusive export orientation of these regimes, and an economy in which the wages and working conditions, and not simply foreign investment and rapid accumulation, would figure more prominently. Addressing the way the US Treasury and the International Monetary Fund have attacked the developmentalist state does not address this second critique of the regional economies’ ever dominant development strategies. Therefore, while economists concern themselves with the economic transformation the financial crisis has brought on, this is hardly a sufficient discussion. Nonetheless, we will say more about this mainstream debate before considering the potential for very different emphases which may flow from greater democracy in the countries of the region.

The debate Mainstream financial theory rests on what is known as the ModiglianiMiller (M-M) proposition. It asserts that the capital structure of a firm – the mix of equity and debt on its balance sheet – doesn’t matter. M-M claims that the market value of any firm is independent of its capital structure. For many East Asian economies this seemed to be wrong. The high debt levels of these companies meant that any slowdown dramatically increased their fixed costs since unlike stockholders who can be put off with low or no dividends, bond holders must be paid on time and in full. As long as these companies were profitably expanding such high leverage made sense. It allowed faster expansion. Local companies were in a position to undertake high risk potentially high return projects which required large amounts of capital; for example chip, factories which cost a billion dollars or so each. But when economic growth slows the debt burden can become intolerable. Governments, so long as they were able to keep financial markets closed to capital flight, could weather crises by backing loans made and keeping the companies afloat through periods of negative cash flow until economic recovery allowed restarting debt repayment. Government guarantees

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thus allowed more risk in the system than otherwise would have been possible – and higher growth. Loans were made not because of the viability of particular projects but because lenders felt more protected against loss by such implicit state guarantees. In the 1990s, under pressure from international finance and the US, government which opened financial markets lost considerable control over their economies. The supporters of state-led growth argue that it is financial liberalization (which allows free short term capital flows) which has produced the region’s liquidity problems and undermined the high debt system which has been so effective. Without the government being able to stop short term capital flight debtors are unable to continue to finance their obligations. Open capital markets in a period of slow growth have effectively undermined the system which has for decades produced record growth. The most extreme case is perhaps that of Korea where the sales of the top four chaebols, the conglomerates which like the Japanese keiretsu after which they are modelled, own all sorts of businesses from consumer electronics to steel mills to banks, generate half of the country’s exports. They depend on very high leverage and continuous expansion to legitimize borrowing which in turn depends on increasing exports. Any brake on expansion means diminished capacity to meet interest payments and makes rolling over borrowing more difficult. When Korea’s growth rate fell from an outstanding nine percent in 1995 to a still quite remarkable six percent in 1996, the slowdown was accompanied by a doubling in the country’s trade deficit. In its state-controlled system, Korea’s widely used short term debt instruments – predominantly three- and six-month promissory notes (OUM) which are typically continuously rolled over – planners who strongly influenced bank lending practices had a powerful lever with which to direct national development. They could exercise displeasure at particular corporations by discouraging rollover of their OUM falling due. The system was more complicated in that companies used OUM rather than cash to pay each other and firms could take these promissory notes to banks for discounting should they need cash. So many of these notes were in circulation that they represented a huge burden on the system should they not be honoured. The rising number of bankruptcies Korea experienced from 1997 reflected just this occurrence. The Korean government has felt popular pressure to reign in the chaebol whose monopoly position, expansion for growth’s sake, and predatory practices toward smaller firms had increasingly slowed Korea’s growth and threatened its future. However, the former


President Kim Young Sam was unable to make much progress given a legislature beholden to bank and chaebol interests which financed a majority in the National Assembly who were not about to bite the hand that fed them so that corporate governance standards, accounting transparency and an end to cross lending guarantees for subsidiaries and affiliates could occur. Consequently, none of these measures has made significant progress. By the fall of 1998 industrial production had fallen by almost 50 per cent and unemployment was above 10 per cent and rising in a country with little in the way of a safety net and small chance of finding new employment. While there has been some recovery at this writing, the cost to individuals and family life have been devastating for millions. Certainly most Koreans believe their system needs reform. Citizens in Southeast Asia, the MIT countries (Malaysia, Indonesia and Thailand) and the Philippines hold similar views of the need to change their governments. The suffering of the crisis has made people angry about the lack of democracy and accountability of ruling elites. Still a question remains as to whether the West led by the United States has the right to impose changes in this moment of crisis, changes which are guided as much or more by the interests of Western capital as by any commitment to democratic reform. The structural adjustment being forced on the East Asian countries specifically in the wake of the financial crisis, but on the other countries generally as part of the strategy of the IMF and those who influenced the direction of its policy strategies, has been widely criticized. As the IMF has made increasing demands on debtor countries for more basic structural changes in the way their economies operate, especially in the state-corporate relations characteristic of the East Asian developmental model(s), such criticism has become more vocal and some of the most stinging rebukes originate in surprising places. An example is, Henry Kissinger’s dialogue to the 1988 Meetings of the Trilateral Commission. In Southeast Asia, I believe the attempt to solve a currency problem with a huge program of economic reform has created a massive political problem that makes the economic problem insoluble. It means that every economic proposal is seen through the prism of an attempted political revolution by the outside world. Must every last economic institution of the West be transported to other countries? When a country is in trouble, is it really true that globalisation requires that the first thing we tell the country is to devalue its currency and increase unemployment? Is there no positive message we

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can bring them, except that in three years you may be able to go to the market again? (Kissinger 1988: 47) In a similar vein, the influential conservative Harvard economist and head of the National Bureau of Economic Research Martin Feldstein has written: ‘A nation’s desperate need for short-term financial help does not give the IMF the moral right to substitute its technical judgments for the outcomes of the nation’s political process’ (Feldstein 1998: 27). Feldstein argues that it is not the IMF’s business to impose other structural adjustments not related to the balance of payments even if such changes would, or might, improve long term performance of the economy in question. Jagdish Bhagwati, the prominent Columbia University trade theorist, introduced the term ‘Wall St.-Treasury complex’ paralleling the military-industrial complex which President Eisenhower in his farewell address warned was achieving unwarranted power over the US political economy. What Bhagwati had in mind was that US economic Robert Rubin, Bill Clinton’s powerful Secretary of the Treasury, who was disposed to think that capital’s freedom to move in and out of national economies is a right which the American government must defend as a priority of international politics, was guiding policy. Professor Bhagwati and others question whether Wall Street’s interests should come before the right of sovereign nations to protect their economies from the devastating impact of short-term capital movements (Bhagwati 1998). From the progressive side Robert Wade, a Brown University political economist, likens the IMF’s interventions in Thailand and Indonesia ‘to screaming fire in the theatre’ and ‘its intervention in Korea amounted to screaming louder’ (Wade 1998). In 1944 at the Bretton Woods conference, which created the IMF, John Maynard Keynes for the British and Harry Dexter White for the Americans had been adamant that liberalization of the capital account was harmful and to be avoided at all cost. It would rob countries of the ability to follow independent economic policies. Importantly Keynes was of the view that markets were irrational. The herd mentality led to bouts of over-optimism. Overextension led to deep pessimism which also had a tendency to persist too long. Governments had to protect their citizens from runaway animal spirits. As the Keynes Plan proclaimed ‘it is widely held that control of capital movements, both inward and outward, should be a permanent feature of the post-war economy.’ The central argument was enshrined in Article VI of the IMF’s Articles of Agreement which endorsed capital controls (and


which the IMF now wants to abolish). Echoing Keynes, Martin Wolf has described the recent situation: ‘The capital markets, when they were euphoric, simply ignored bad news. And when depressed, they have simply ignored the good news. Either way, they have overshot wildly, and have destabilized the host economies in the process’ (Wolf 1988: 11). Markets have been able to destabilize basically healthy East Asian economies because the core countries, primarily the United States supported by Great Britain, have promoted financial market opening which was in the material interests of their financial communities. It is they who have been the greatest beneficiaries of the new global financial regime which undermined the Bretton Woods system. The recipient countries, while profiting from direct foreign investment which brings with it technological, management, and marketing advantages, are not capital short economies. They are major savers. They did not need the inflow of speculative capital for national development. It has brought asset inflation which has proven to be quite costly. Indeed, those nations, China, Singapore and Taiwan, which have the largest foreign exchange reserves, have been able to withstand the speculative threat. In one of history’s great ironies the countries which have controlled capital flows, and these range from Chile to India, have not been devastated by financial crises. They provide a counter model for those who now think about imposing restrictions on capital flows. In doing so their experience lends support to the Keynes approach which the IMF has undermined. In the 1990s, deregulation of capital markets in Asia had allowed massive inflow of short-term capital at a much faster rate than the underlying rate of growth of the economies in question. Despite maintaining favourable macroeconomic fundamentals (growth rates and savings rates were high, inflation low, government deficits under control) they then became vulnerable to destabilizing capital flight when growth slowed down. Kiichi Miyazawa the former Japanese prime minister speaking to a 1998 Trilateral Commission gathering in Berlin who summarized the case along these lines, saw the crisis as demonstrating ‘the failure of the market’. ‘In a nutshell each of these countries failed in their national portfolio management of assets and liabilities.’ But if the IMF is able to enforce free capital mobility under all conditions at all times, nations can hardly manage such portfolios. They are passive recipients of what markets decide. Indeed, the economists endorsing IMF Washington Consensus conditionality have complained that the crisis appears to have ended too

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soon. By mid-1998 it had bottomed out denying further leverage to force more unpleasant medicine down the throats of the economies of the region. The accelerated liberalization which brought on the crisis was the medicine the patient was urged to continue taking. Even though the roots of the crisis were in private sector decisions in the increasingly unregulated environment, the cure was said to be more freedom for speculators and fewer social controls. The nationalization of the resultant unsustainable private debt obligations undermined prudential lender behaviour, and forced high interest rates at the expense of local economic development to pay off the foreign creditors. Stiglitz was not alone in observing that ‘the lenders in the more advanced countries tend to recover most, if not all, of the amount lent, with the cost of the bailout, including the cost of economic restructuring largely borne by the workers’ (Komisar 2000: 36). The Economist, home of the laissez-faire empire, noted that political and strategic arguments trump economic considerations which often become secondary in the way the Fund addresses financial crises (The Economist 1999). The cost to the region has been substantial. The losses from the East Asian financial crisis from 1998 to 2000 are estimated at nearly two trillion US dollars (an amount double the current income of the poorest fifth of the world’s population). It was paid in the loss of livelihood for tens of millions, dramatically increasing poverty, loss of savings, and indebtedness, and reducing health care, schooling and other costs. The recovery since the nadir of the fall of 1998 was witnessed in output growth, exchange rate stabilization (although there has been deterioration again with higher US interest rates since April 2000), and improvement in balance of payments. As in past crises these macroeconomic balances can recover fairly quickly while it takes considerably longer for employment and especially real wages to return to earlier levels. An analysis of 80 countries over roughly the last quarter of the 20th century and the 300 crises they have experienced shows output growth recovers to pre-crisis levels in one year on average after the peak of the problem period but income distribution worsens for three years and real wage growth takes about four years to recover. World Bank data also shows an asymmetrical effect in which in good times the gains of the poor are proportionately smaller then their losses in bad times. In the New Economy era, growing income inequalities everywhere may be intensifying this pattern. The latest published World Bank data shows unemployment is down but still fairly high in the five Asian countries most seriously affected by the financial crisis and that regional pockets of poverty have spread


(World Bank 2000). These five crisis countries have seen their currencies, the baht, peso, won and ringgit, stabilize, but at 30 per cent or so less than their pre-crisis values and in the Indonesian case, the rupiah by 60 per cent or so through April 2000. Since then higher U.S. interest rates have pushed the value of these currencies lower. The crisis has left heavy debt and greater economic insecurity. Commercial bank nonperforming loans at the end of 1999 officially ranged from 20 per cent in Korea to 70 per cent in Indonesia with Malaysia at 24 per cent and Thailand at 40 per cent. The figure for China was perhaps 25 per cent based on government data, although private estimates range substantially higher. A minimum of 40 per cent of China’s state enterprises are deemed unprofitable and their unpaid obligations are large. Government debt everywhere has become significantly higher. Recapitalizing the region’s financial institutions has been expensive, equal to about 16 per cent of the GDP in South Korea, 32 per cent in Thailand and 58 per cent in Indonesia. There is nothing unexpected about any of this. Unfortunately this is the way the system operates. As Immanuel Wallerstein writing on the history of the world-system notes, Capitalism is based on the constant absorption of economic loss by political entities, while economic gain is distributed to ‘private’ hands. What I am arguing, rather is that capitalism as an economic model is based on the fact that the economic factors operate within an arena larger than that which any political entity can totally control. This gives capitalists a freedom to manoeuvre that is structurally based (Wallerstein 1974: 348). How much room they have to manoeuvre is not of course predetermined. It depends on popular awareness and political struggle. In much of Asia today, since considerable banking and other corporate assets have come to be owned by the state as a result of bankruptcy during the financial crisis, how these are privatized may, as Kawai and Newfarmer write, ‘shape the distribution of assets for generations to come – as well as the course of economic performance’ (Kawai & Newfarmer 2000).

The current conjuncture The economies of East Asia seem to have recovered much faster from the 1997–8 financial crisis than many thought possible. The resur-

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gence evident by the spring of 2000 led observers to see the region as ‘riding a wave of growth reminiscent of the Asian miracle of the 1980’s’ seeming ‘to make the Asian crisis a distant memory’ (Landler 2000: 1). Of course trends reverse. A slowdown in the American economy affects exports from the region and so impacts its growth rate. The structural changes already forced on the region make their economies even more dependent on global markets. Kawai and Newfarmer are not alone in thinking that ‘East Asia is vulnerable to external shocks in ways fundamentally different from the days before the crisis’ (Kawai & Newfarmer 2000: 11). The uncertainties in the region’s biggest economy, Japan, and the future of China are a big question mark. Nor is the rest of Asia a homogeneous entity in which internal developments are unimportant. Nonetheless, we can perhaps usefully draw a line familiar to students of the region, at the Tropic of Cancer and distinguish between the economies of north east Asia and those of south east Asia. Investors seem to have drawn such a line. North of it, Taiwan and South Korea as well as India’s emergent software industry and Hong Kong’s Internet start-ups attract investor attention but Indonesia, Thailand and the Philippines do not. The political instability, prevalence of corruption which impacts both business expectations and political stability as well as the prevalence of an Old Economy low value added manufacturing base do not now attract investors (Karmin 2000: C1). Pressures to restructure will continue to be felt.

Liberalism, liberalization, and the prospects for democracy As we now turn to the question of the implications for the future of democracy in the region, in light of the economic restructuring which has been described, it is useful to review the two central elements of classic liberalism resurgent in the present conjuncture which are being urged on the region. The first element is participation in governance by the broad populace which democracy promises. The second is that of market liberalism, the promise of individual equality in the marketplace. This is the freedom to make what one can of oneself without ascriptive limits based on birth family status and caste privilege. However the move from tradition exposes individuals to new forms of risk. For example, the increasing prevalence of formal democracy is problematic in the context of dramatic inequalities in wealth and power. Furthermore, the emergence of a risk society implying that risks are spread evenly elides the reality that some countries, groups, and


categories of individuals are more risk prone than others. Risk is unequally distributed geographically and, if you like, sociologically. To talk of democracy in the presence of great income inequality is problematic. As I read the English language press from the Asian region, I am impressed by both the wrenching impacts of economic difficulties for the masses on the one hand and, in countries where the media is allowed to carry such stories, descriptions of corruption of the political system on the other. Their stories recount how the wealth of many government ministers doesn’t tally with their regular parliamentary income. Generals’ wives also seem to have remarkable net worth. Our attention at this volume is on Asia, but we need only look to the current presidential campaign to be reminded that money politics in the United States, and we may add, and in most countries, exercises a substantial role. More controversially perhaps, I want to suggest that part of the push for greater accountability and respect for democratically established rules comes from Western governments on behalf of transnational capital. During the Cold War era and even earlier through the era in which foreign states ruled through local intermediaries, a certain amount of graft was accepted as the price for smooth accommodation to foreign interests. The old dispensation endorsed strongman rule so long as the local elite kept its people in line and allowed the extraction of surplus by the imperial powers. In the new situation, with the end of the Cold War, and the attempt to create a unipolar New World Economic Order along neoliberal globalization lines, the rent seeking by undemocratic and repressive regimes is no longer neither needed nor viewed as optimal. They introduce a large element of uncertainty to business dealings and extract payments from all who would do business in the country, locals and foreign investors alike. Such regimes are no longer needed: the Cold War is over, national liberation struggles appear a thing of the past, and, in Margaret Thatcher’s famously confident formulation, ‘there is no alternative’ to the market. Formal democracy is the governance structure of choice in the new situation. It encourages a growing middle class while disempowering popular movements which lack the money to compete in media driven electoral politics. The crisis is the occasion to effectively pressure these countries to sell off assets to foreign capital. This is more smoothly achieved when it is a democratically elected government which carries out the policy. There may be grumbling but people are more willing to accept that the government had no choice. A government lacking democratic legitimacy carrying out unpopular measures will stir up more opposition.

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The demands for trade liberalization and further loosening of capital account freedom are likely to be counterproductive and painful in the short run and perhaps the long run as well. It is my view that in the absence of a plausible alternative (with the petering out of national liberation movements, the weakness of what had been a more effective non-aligned movement in the years of the Cold War, and indeed the removal of the support the USSR could provide for those countries willing to combat Western imperialism), transnational capital prefers to work with formally democratic regimes. The demand that their economies be transformed in an ‘AngloSaxon direction’, as Martin Wolf of the Financial Times phrases it, is a call to surrender autonomy and fall in line with the global changes being demanded by transnational corporate capital led by the International Monetary Fund and the executive branch of the United States government in negotiations with debtor states. Democratic governments in debtor countries are more able to sell the need for such adjustments. Formal democracy allows an easier acceptance of neoliberalism and an undermining of nationalist development alternatives. This is not to say that even inadequate democratic governance may not be an improvement over despotism but the character of democracy on offers needs to be interrogated and critiqued. For example, one can say that Korea’s problems are ‘political’ but there is more at stake. The demand is for the dismantling of the developmental model which had served Korea well for the decades of record growth, rather than the sort of democratization that the brave popular movement activists had in mind when they went up against government troops in the streets demanding democracy. The winners from further regime change along these lines are likely to be foreign investors and benefits may not go beyond the middle class to the vast majority. In Southeast Asia more generally the case is being made that crony capitalism has been the problem preventing better adjustment to the international financial crisis. Growth had covered up corrupt practices which were suddenly exposed when exports slumped. At the larger level the regimes of not only most of Asia but over long periods in Africa and Latin America, in which corruption and repression flourished, were the creatures of the Cold War period in which the United States supported dictatorship as the best obtainable bulwark against communist-led or potentially influenced popular movements. These regimes kept the red menace at bay. In the post-Cold War era they are expendable. They are no longer needed with the demise of communism. Globalization now allows, and benefits from, dismantling of these


corrupt, rent seeking regimes. A rule of law and more honest enforcement of contracts, the end of extortionist practices by local officials and the favouring of domestic elites in the marketplace is in the interests of transnational capital. The current crisis represents an opportunity to transform these regimes. But the causes are also to be found in the extremes of foreign capital flows, speculative excess, and overcapacity, phenomena which implicate transnational capital which now stands to benefit from the solutions being imposed by the International Monetary Fund. There can be little question that globalization limits meaningful democracy. Much of government decision-making is displaced to the agencies of global state governance institutions, the IMF, the WTO and others. Democratically elected governments can feel their citizens’ pain while proclaiming they are powerless given the constraints globalization imposes. Consequently, while there may be formal democracy, a passivity can be encouraged since there are no obvious targets which can be effectively challenged since economic restructuring is presented as inevitable. Thus, globalization and the restructuring which has occurred as a response to financial crises ironically produces pressure for greater democracy but a limited and, perhaps in many places, only symbolic democracy. Without the dictatorial regime the opposition is less united as to goals and strategies. With globalization states of the global south have gone from resisting transnational control to offering incentives to attract foreign investors. Nationalism no longer is a glue in the same way and more difficult issues of class become more central to domestic politics. These are complex and difficult matters and I look forward to their discussion as the central theme of the conference. Addressing the abuse of power involves complex and crosscutting issues of class, interest group politics and foreign manipulation. Even such seemingly simple issues as the need for a rule of law need to be carefully deconstructed (Jayasuriya 1996). The issue of crony capitalism is complicated by the reasons it is opposed and the self-interests of those who rail most vocally in the West against its purported abuses. The attack on corruption as a wedge to weaken national capital and force liquidation of its assets for sale at knock down prices to foreign investors is a powerful incentive for some supporters of greater openness and democracy in the region. At the same time corruption and ineptitude are real. For example, the Hyundai drama in which Chung Ju-yung, the patriarch founder of South Korea’s biggest conglomerate with its 52 trillion won ($46 billion), is debt feuding with his sons who are at each other’s

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throats as well and the government’s indecision about shoring up or liquidating various other troubled chaebol in need of restructuring involve many elements, foreign and domestic, which need to be analytically unpacked. Similar skirmishes go on throughout the region. In Malaysia Mahathir Mohamad, the prime minister, resists efforts by Daim Zainuddin, at this writing the finance minister, to reduce the influence of heads of state-owned businesses. In Indonesia efforts to bring the system closer to the norms required to attract and retain foreign investors’ confidence are in even greater difficulty. With each effort at greater transparency, corruption investigations uncover links to the highest circles of government. Investigation of the former dictator Suharto’s family and of B.J. Habibie, his handpicked successor and crony, has begun. There are some details of the Golkar Party’s looting of the now nationalized Bank Bali of tens of millions of dollars for Habibie’s 1999 presidential campaign and we have some questions as to his successor’s, President Abdurrahman Wahid ability to address the deep structures of corruption. Reform has been painfully slow and foreign investors remain skiddish. The more important question for this conference is what are the people’s requirements? What is the relation between controlled reform from above to address the needs to charm foreign capital who are tired of the exorbitant cost corruption imposes on the cost of doing business, the failure to establish proper enforcement of business contracts and on the other hand the creation of meaningful participatory democracy in which the needs of the masses are an important priority for the state? Similar issues arise when we consider labour rights, environmental concerns and other quality of life issues. These tend to be seen as foreign impositions, a veil for protectionism demanded by the advanced economies. There are in many venues the claim as well that Asian values express preference for patriarchy, paternal control and authoritarianism and efforts to impose democracy are foreign efforts which represent Western imperialist design to weaken these economies. Lee Kuan Yew’s well circulated view that Western-style social welfare is not only too expensive but fosters laziness and dependency which undermines family and societal values are widely shared in elite circles. Such orientalist arguments are essentialist in that they identify certain features of East Asian society and imbue them with a sense of timelessness and deny the social and economic antagonisms, which are centrally part of these societies.


The emergence of ASEAN + 3, (the ten ASEAN countries plus China, Japan and South Korea) which has held its own summits for the last three years and in its membership matches the East Asian Economic Group (proposed a decade ago by Mahathir Mohamad, the prime minister of Malaysia, and then thought far too radical a departure and totally unacceptable to the Americans), has the potential for excluding the United States as a venue which might short circuit APEC, the AsiaPacific Economic Cooperation forum which the United States has dominated. The Japanese proposed Asian Monetary Fund, a revival of a proposal vetoed by the US a few years ago, is coming into being as a vehicle to preserve the developmental state option and the ASEAN + 3 plan for a regional system of currency swaps will help them deal with future financial crises, hopefully without being forced to follow unwanted and potentially damaging IMF directives. While we may applaud the efforts by East Asian governments to avoid relations of dependency and recognize the potential of a region whose aggregate economy and external trade is about as large as that of the US and the EU (and which has larger monetary reserves) to become an equal partner in shaping the global economy in this new century, we are aware of the profoundly undemocratic nature of so many of the governments involved, the extent of official repression and sectarian violence, and the social cost of autocratic rule. Finally we are aware of working conditions that in many countries are dehumanizing and abusive to an extent that is hardly necessary for development to take place. The key point to bear in mind is that neither existing regimes which use state power to privilege the few and oppress the many nor the neoliberal alternative which covers attempts at increased foreign domination disguised as self-regulating markets and ‘transparency’, the rule of law, and free competition, are motivated by concern for the people of the region. Neither of the dominant positions, both the neoliberal deregulation that produces unstable, speculative behaviour and loss of control nor the reactionary impulse to such efforts which strengthens the grip of local elites in resisting needed change, is desirable (Pieper & Taylor 1998). At the popular level not all movements are progressive either. Resister communities of identity based on ethnicity, religion or xenophobic nationalism are backward looking and typically divisive, making alliances with other victims of globalization forces more difficult if not impossible. The old middle ground of social democracy has found it difficult to respond to globalization’s penetration of nation state territorial boundaries. Actually existing communisms have self-destructed removing the space in which experiments in

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Third World socialism could be attempted. The core question democratic movements, and hardly only in Asia, face is how to develop an alternative to a globalization governed exclusively by international finance and transnational corporations and their mediating institutions. References Bhagwati, J. (1998) ‘The Capital Myth’, Foreign Affairs 77(3): 7–12. Fallows, J. (1997) ‘How the Far East Was Won’, U.S. News & World Report, December 8: 11. Feldstein, M. (1998) ‘Refocusing the IMF’, Foreign Affairs, 77(2): 20–33. Goodstein, E. (1998) ‘Malthus redux? Globalisation and the environment,’ in D. Baker, et al., eds., Globalization and Progressive Economic Policy Cambridge: Cambridge University Press: 297–317. Higgott, R. (1999) ‘Justice and the World Economy’, Proceedings of Centre for the Study of Globalization & Regionalization on the 75th Anniversary of Journal International Affairs. Jayasuriya, K. (1996) ‘The Rule of Law and Capitalism in East Asia’. Pacific Review, 9(3): 367–88. Karmin, C. (2000) ‘Investor Indifference Marks Asian Divide’, Wall Street Journal, May 22: C1. Kawai, M. and R. Newfarmer (2000) ‘East Asia: Recovery Gathers Momentum’, World Bank 13 April, draft version. Kissinger, H. (1988) ‘The United States and Europe: What Are We Trying to Do?’ in annual Meeting of The Trilateral Commission, 1998 Berlin Meeting, Trialogue 52, New York: The Trilateral Commission: 47–9. Komisar, L. (2000) ‘Joseph Stiglitz; The Progressive Interview’, The Progressive, June: 36. Landler, M. (2000) ‘Asian Region Rides a Wave of Growth Linked to Exports’, New York Times, 27 May: 1. Pieper, U. and L. Taylor (1998) ‘The Revival of the Liberal Creed: the IMF, the World Bank, and Inequality in a Globalised Economy’, in D. Baker, et al., eds., Globalization and Progressive Economic Policy, Cambridge University Press: 37–64. Sutcliffe, B. (1998) ‘Freedom to move in the age of globalisation’, in D. Baker, et al., eds., Globalization and Progressive Economic Policy, New York: Cambridge University Press: 325–336. Tabb, W.K. (2000), The Amoral Elephant: Capitalist Development in the Early 21st Century New York: Monthly Review Press. —– (1998) ‘The East Asian Financial Crisis’, Monthly Review 50: 24–38. —– (1999), Reconstructing Political Economy: The Great Divide in Economic Thought London and New York: Routledge. —– (1995), The Postwar Japanese System: Cultural Economy and Economic Transformation, New York: Oxford University Press. The Economist (1999), ‘Sick patients, warring doctors’, 18 September: 82. UNDP (1999), Human Development Report 1999, New York: Oxford University Press. Wade, R. ‘The Asian Debt-and-Development Crisis of 1997–9: Causes and Consequences’, World Development 26(8): 1535–53.

80 Globalization, Economic Restructuring and the Democratic Implications Wallerstein, I. (1974) The Modern World-System I; Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century San Diego: Academic Press. Wolf, M. (1998), ‘Lessons of the Asian Crisis’ in Annual Meeting of The Trilateral Commission, 1998 Berlin Meeting, Trialogue 52, New York: The Trilateral Commission: 10–14. World Bank (2000), East Asia: Recovery and Beyond, Washington, D.C.: World Bank.

5 Nation Against Democracy: The Rise of Cultural Nationalism in Asia Radhika Desai

Specificity of Asian nationalism Discussions of democracy are usually bloodless, fleshless affairs.1 The focus is on things like institutions, constitutions, electoral systems, bills of rights, charters of freedoms and what-not; modular prefabricated components of a structure which can be assembled and built anywhere. One gets very little sense of the local social, political, economic and cultural condition in which these democratic institutions and practices must surely be embedded. Indeed, particularly in its post1989 version, the discourse of democracy has been supplemented with its own, almost equally modular, discourse of the necessary social ambience for democracy, its potting soil as it were: the discourse of civil society. ‘A set of diverse non-governmental institutions which is strong enough to counterbalance the state and prevent it from dominating and atomising the rest of society’ (Gellner 1994: 5), civil society’s own health determines, we are told, that of democracy and, in post-1989 conditions, the malingering of democracy in the former communist countries, or parts of newly democratic Africa or Asia, is usually traced to a less than robust civil society. As a conceptual term and a real social development ‘civil society’ forms the link between capitalism and (liberal) democracy. It is, moreover, a deeply problematic link and the real contradictions of this relationship constitute the basis of its many conceptual confusions and evasions.2 The health of capitalist liberal democracies everywhere is dependent upon the resolution, temporarily at least, of these contradictions. They arise from constitutive tension between the substantive inequalities which capitalism generates and exacerbates, and the 81

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formal equalities which liberal democracies grant. The associational life of civil society mediates, and temporarily at least, resolves, these tensions. But the health of democracies is also determined by the local, living, concrete conditions of the societies concerned – the particular configurations of economy, politics, society and culture, which we call nations. Indeed, ‘civil society’ can be said, in many ways, to be opposed to ‘nation’. Contrary to those who would celebrate the age of modern democratic politics which the French Revolution inaugurated as that of democracy and civil society, are those, like Tom Nairn, who remind us that ‘The age which followed 1789… is surely correctly labelled as “The Age Ascendant of Nationalism” – not as the Age of Ascendant Civil Society’ (Nairn 1997: 83). Like everywhere else in the world, nationalisms in Asia emerged in tandem with Asia’s induction into the historical processes of capitalist development. This meant that, with the exception of Japanese nationalism, they originated and formed themselves through resistance to the chief feature of this modernity – formal colonialism or less institutionalized forms of foreign domination. In this they are, of course, part of a particular ‘wave’ of nationalism, one of the many that have erupted in the complex history of the ‘combined and uneven development’ of capitalism.3 To the celebrated universalism of civil society and democracy are opposed the deplorable particularism and authoritarian potential of nationalism. In this chapter I want to draw attention to the anti-democratic implications of the emergence of particularly strong authoritarian forms of nationalism in Asia that I call ‘cultural nationalism’. While cultural nationalisms are not unique to Asia, they are arguably stronger there. This is less because of any priority of culture in Asia as it is due to the specific place of Asia, particularly its relatively more dynamic East, South East, and South, in the world economic order. Asia’s new authoritarian cultural nationalism – Nihonjinron, Hindutva, Confucian Values, Asian Values, to name but a few – are also remarkable for the contrast they make to the strong developmental (and in Japan’s case, even pacific) nationalisms which Asian nations featured in the immediate post-Second World War period. This chapter focuses on the emergence and dynamics of these new cultural nationalisms in Asia and their implication for democracy and civil society. We proceed first by noting the historical specificity of Asian nationalisms. Why an apparently universalizing force as capitalism has, in the course of its spread across the globe, been accompanied by the creation

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of concretely particular nation-states is something of a historical conundrum (Balakrishnan 1996). But that there is a profound historical relationship between capitalism and the nation-state, in a way there is not between other historical forms of modern society and the nation-state, seems fairly clear. Communism was originally universalist. Since the development of capitalism had already resulted in the creation of nation-states, it was internationalist. Marxists such as Otto Bauer, who devoted thought and attention to the issue, sought to transcend existing nations and nationalisms in a supra-national and socialist political construction. This was also how the original Communist state, the USSR saw itself, and was seen, not as a nation-state, but as a political form which ‘transcended the problem of nationalism by formal recognition of the terrains and cultures of its major nationalities while subordinating them fully to a universalist project’. It was only with Stalin’s decision not to incorporate the Eastern Bloc countries into the Soviet Union after 1945, followed, of course, by the various Asian Communisms, which conceded the nation-state principle within the Communist World. Fascism on the other hand, while it exploited nationalism ‘locally’ was also a supra-nationalist force, pitted not against ‘world-wide Jewry’ as Anderson would have it, but against Communism which it dubbed ‘Judeo-Bolshevism’ (Mayer 1998). The tension between the objective or economic universalism of capitalism and the subjective or cultural particularism of nations and nationalisms parallels another tension which has been referred to in many different ways. Tom Nairn’s dubbing of nationalism as ‘the modern Janus’ (Nairn 1977) being only the most famous. It is the tension within nationalism between the backward looking and the forward looking, between its historically progressive role in shifting the basis of legitimacy from dynastic succession to its modern popular basis on the one hand, and the potential within it for atavistic regression on the other. It is the tension between the universalism of the role of nationalism in creating, across the world, civil and democratic societies and the particularism of its basis in and commitment to particular cultures.4 It is, in short the tension between the civic and the ethnic sides of nationalism. While there is no logical necessity to this, historically it is the former which have been seen to be politically progressive and the latter have usually been feared as the basis of political reaction and authoritarianism in modern mass politics. Attempts, largely Orientalist, have been made to suggest that ‘anticolonial nationalisms’, such as the Asian, tend to be ‘ethnic’ nationalisms and are opposed to the ‘civic’ nationalisms of the metropolitan,


European or North American, liberal capitalist democracies. Such attempts run into several problems. On the one hand, there is the increasing stabilization of liberal democracy in many Asian countries. On the other, there is the resurgence of racism, and the increasing hollowing out of liberal democracy by money and the media, in metropolitan countries, as also elsewhere, in tandem with the political need to manage the increasing inequities of contemporary capitalism. Hans Kohn’s distinction between the pristine nationalisms – the ones which came before the others (principally the English, American and the French) – which were ‘new… fundamentally liberal and universal’, more emancipatory, less oppressive and all other nationalisms which were not, is even more pernicious, not to mention false. For one thing, all ‘nations’, in the sense of the modern capitalist form of ‘community’, bear important relationships to the particular communities which pre-existed them among the same populations, no matter how much the modern nations cut across, and were cross-cut by, these older communities, no matter how much these are actually and ideologically constructed and reconstructed in the process of the formation of the nation. As such we can expect the relative proportions of novelty and antiquity to be a highly contingent matter. For another, since communities are always defined against others, except in radically isolated communities, the sort of innocent universalism Kohn evokes is impossible. All the three candidates for priority in the history of nationalisms, England (1688), the United States (1776) and France (1789) were fundamentally defined against various others at the very moment of their formation: France and England had their colonies and US nationalism was based on a white identity as against both black and Native. If the spirit of the age (or in the case of England, religion) gave the content of their nationalism a universalist cast, it actually became the basis of imperialism in the form of White Man’s Burdens, Civilising Missions and Manifest Destinies. Finally, as Tom Nairn has pointed out in the case of English and British nationalism, these early nationalisms also acquired the same ethnic and cultural characteristics as other nationalisms in the course of the subsequent history of the spread of the nation-state form to other regions and populations, through wars and popular struggles. Through these the identities which these nationalisms embodied tended to become more defined and more prominent in their discourses and practices (Kohn 1940). Such attempts to distinguish Asian nationalisms on the basis of the higher prominence of ‘primordial’ elements, such as ethnicity, religion, or race, usually turn out to be exercises in what Samir Amin calls

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Eurocentrism, a ‘culturalist phenomenon’ which posits ‘irreducibly distinct cultural invariants’ on whose basis it denies the possibility of genuinely ‘general laws of human evolution’ except to claim, falsely, that ‘imitation of the Western model by all peoples is the only solution to the challenges of our time’ (Amin 1989: vii). In this manner, nonWestern ‘cultures’ are assumed to be ethnic, religious or racial, and are negatively subordinated to Western ‘societies’ which are assumed to be liberal, tolerant and ‘civic’. In fact, Asian nation-states with exceptions like Vietnam, are rarely ethnically homogenous. Asian nationalism remains state-centric and the management of minorities, ranging from state repression to varying degrees of incorporation, within such states differs as much among Asian states themselves as it does between any of them and states in other parts of the world. Asian nationalisms, again excepting Japan, do differ from those of the metropolitan countries in the centrality of their resistance to imperialism. They may also be said to differ in degree and specificity from nationalisms in other imperialized parts of the world because of the wide reach of Communism in Asia in the twentieth century, the centrality of Asia among the theatres of the Cold War and, finally, the greater relevance of the non-aligned movement. For these reasons understanding Asian nationalisms involves dealing with the long-standing opposition between nation and class. This opposition is further compounded by the fact that, in the words of one scholar, the failure to understand nationalism was Marxism’s ‘great historical failure’ (Nimni 1985) and by the actual historical experiences in which nationalism has been pitted against socialist politics, whose most horrific culmination hitherto has been Nazism.5 Most contemporary Asian states have been marked not only by nationalism but also, very deeply, by Communism. Asia also contains some of the most important instances of states where nationalism and Communism have been combined, China and Vietnam in particular. These original combinations, progressive and effective as they were, contributed to the unique horrors of Khmer Cambodia. The interaction of Communism and nationalism has also shaped Asia’s destiny in the twentieth century in other countries in a quite different way. Whether in Indonesia or India, Thailand or the Philippines, the containment of Communism was a (capitalist) national project with all that this also meant in terms of Superpower interventions, non-aligned balancing acts and internal accommodations between the needs of accumulation and legitimation (Anderson 1994 and Ahmad 1994). A settling of accounts, both conceptual and historical, of this interaction between nationalism


and Communism, nation and class – close, conflictual, creative, and destructive as it has been – is then crucial. Beginning with Lenin, an accommodation between the Left’s internationalist ideas and actually-existing nationalisms has been based on the anti-imperialist potential of the nationalism in question. The international class struggle, it was argued, would be advanced by supporting national struggles in less developed parts of the world because they too were anti-imperialist. Popular, or Communist national struggles were, of course, quite unproblematically anti-imperialist, but others too, led by a ‘national bourgeoisie’ whose interests were understood to be opposed to those of metropolitan capital and could therefore be expected to be anti-imperialist, were to be supported. In addition to seeking economic autonomy from metropolitan capital internationally, these nationalisms were also expected to be conducive to greater equality, civic and economic, and productivity domestically than could be expected in the shadow of imperialism. Although it originated in Lenin’s reflections during the Great War, this image of nationalism’s progressive potential really came into its own only in the second half of the twentieth century. Political independence, and the finalization of the nation-states-system in Asia was the result of Communist and national anti-colonial struggles. These raised hopes for a continuation of the struggle for national selfdetermination through ‘development’, for translating political independence into genuine economic independence from the former colonial powers to which they still remained economically subordinated. However, by the end of the century the picture looked very different. Communism had fallen in Europe and was being systematically denatured in Asia, making capitalism more truly global, and imperialist, than it had ever been. Perhaps this is the true meaning of ‘globalisation’. It certainly seemed to put any project of national economic self-determination radically into question as one after another the economies of Asia, like those of the rest of the third world, were subject to the economic, financial and political tutelage of metropolitan capital, its states and international agencies. The effects of this on nations and nationalism in Asia as elsewhere have been hard to discern. For progressive nationalism, as conceived hitherto as anti-imperialist internationally and civic and egalitarian domestically, has not only been extinguished, it has not only been replaced by nations aligned with imperialism and the domestic exacerbation of inequality at home. There is more, we are told: globalizing capitalism also seems to be undermining nation-states and nationalisms in new ways.

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Nationalism is dead! Long live (cultural) nationalism! A decade ago Eric Hobsbawm had ended his study, Nations and Nationalism since 1780 thus: ‘As I have suggested, “nation” and “nationalism” are no longer adequate terms to describe, let alone analyse, the political entities described as such, or even the sentiments once described by these words. It is not impossible that nationalism will decline with the decline of the nation-state, without which being English, Irish or Jewish, or a combination of all these, is the only one way in which people describe their identity among the many others which they use for this purpose, as occasion demands. It would be absurd to claim that this day is already near. However, I hope it can at least be envisaged. After all, the very fact that historians are at least beginning to make some progress in the study and analysis of nations and nationalism suggests, as so often, that the phenomenon is past its peak. The owl of Minerva which brings wisdom, said Hegel, flies out at dusk. It is a good sign that it is now circling around nations and nationalism’ (Hobsbawm, 1990: 182–83). Hobsbawm, with his agnostic and sceptical attitude towards nations and nationalism, stressing their constructed nature and oppressive possibilities, and equally often their sheer silliness, can be expected to be sanguine about the passing of the ‘apogee of nationalism’ (1918–1950). It may be for him a thing to be buried and not praised. And he insisted on this line of analysis even when he was compelled by the collapse of Communism and the break-up of the Soviet Union, only a couple of years after he had buried nations and nationalism, to address the question, ‘why… the general European mutation of ethnic into nationalistic politics’? He concluded, that the rise of new nations in the former Eastern Bloc and more generally of nationalist separatism were simply ‘The chickens of World War I coming home to roost’, a settling of past accounts, frozen by the rise of Communism and unfrozen by its fall. There is something to this. The late twentieth century certainly represents another ‘wave’ of nationalisms in which many nationalities managed to acquire the status of nation-states, in the former Soviet Union particularly, but also including some which had struggled for nationhood for decades, such as Palestine. But this newest wave is different from those that preceded it. For one thing, the national cultures


and identities of the new nations, in all cases, whether of an Uzbekistan or a Palestine, were forged much earlier. Here the nations that arose from the break up of the USSR may at first sight be regarded as different. The general view of the matter is that the USSR had had a denationalizing and oppressive effect on the nationalities, which constituted it. However, Ronald Suny (1990 and 1991), in particular, pointed to the fallaciousness of this view. He argued that, on the contrary, it preserved and maintained within its constituent republics the various national cultures which successfully or unsuccessfully laid claim to their own states after the collapse of the USSR. To this one might add that the fact that the USSR disintegrated into its various national components is one of the more remarkable features of that otherwise messy process. What Hobsbawm, along with many others, is arguing is that stable national cultures and identities would have found it much more difficult to constitute themselves in the late twentieth century. Today, although a few old nations have finally and lately achieved statehood, nations in general are undercut and crosscut by the politicization and commodification of cultures and identities: national as well as nonnational, non-territorial ones. The result is a complex picture. While there has been an increase in the number of national cultures and identities which have been accorded at least some recognition, the difference between national and non-national identities like gender or race is being flattened out. In this situation, on the one hand, new cultures and identities are increasingly not territorial and are dissociated from nationalism as such. They increasingly bypass and even undermine, rather than provide the foundation for, nations. On the other hand, politicization and commodification put even longer established national cultures and identities into a new kind of flux. Nor are other, socio-economic conditions conducive to the stabilization of the new nations. Benedict Anderson reflects that the latest wave of nationalisms has created ‘a congeries of weak, economically fragile nation-states out of the debris of the Soviet system, some entirely new, others residues of the settlement of 1918; in either case, from many points of view a quarter of a century too late’. Not only are these nationalisms ‘unlikely to disturb global trends’, ‘Portable nationality, read under the sign of “identity” is on the rapid rise as people everywhere are on the move’ (Anderson 1996: 8). Many older and betterestablished nation-states under the pressures of globalization and neo-liberalism can also be expected to have their problems: ‘States incapable of militarily defending their citizens, and hard put to ensure

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them employment and ever-better life chances, may busy themselves with policing women’s bodies and schoolchildren’s curricula, but [he asks] is this kind of thing enough over the long term to sustain the grand demands of sovereignty’ (Anderson 1996: 9)? There is much to this sort of burial of nationalism. However, it tends to be tied to the thesis of the ‘decline of the nation-state’, a thesis which enjoyed particular plausibility in the age of globalization. That globalization was undermining nation-states is a dictum which is practically commonsense in our time. However, both globalization as a process, and its connection with the nation-state were not so simple. It was simply not true that globalization undermined the nation-state, making it irrelevant. On the contrary, the nation-state remains central to the processes of globalization itself, participating in the construction of its complex international political architecture, as Leo Panitch (1998 and 2000), for one, forcefully argued on a number of occasions. And now, in the aftermath of the series of financial crises and the stockmarket bust which spelled the end of financial globalization, globalization’s most dominant element, not to mention the terrorist attacks on the World Trade Center and the Pentagon, globalization is not so often spoken of and may have yielded to a new age of strong states and Wars. Indeed, it may be an age which is so premised upon strong states, nations and nationalisms that a few of the weaker areas face the prospect of being wound up, a major reversal of the historical trend which by the close of the twentieth century had created almost 200 nation-states. Rather than any simple ‘decline of the nation-states’ or even nationalism, what we are witnessing is something more complex and novel. On the one hand, globalization was merely the symptom of a massive shift in the balance of class forces in favour of capital, in country after country, across the world. These shifts translated into a very different set of state policies, policies which work in favour of capital and to increase its options, domestically and internationally, and presented an increasingly miserly and punitive face to working people, as well as the vast numbers of unemployed, or insufficiently employed supernumeraries which this sort of capitalism creates. In these circumstances, the relevance of nationalism as an ideology of legitimation of an iniquitous social order should be obvious, though its resonance may be reduced by the same social circumstances. These complex shifts have so far escaped scrutiny while another development seems to command almost rapt attention when nationalism is discussed. As the century closed there were few regions of the world that


were not imbricated in the web of imperialist capitalism. But in those that were only weakly embedded in it, or as Giovanni Arrighi puts it, those ‘communities, countries, or even continents’ which have been, or feared being, issued the ‘unbearable verdict’ of contemporary world capitalism of being ‘redundant, superfluous to a changing economy of capital accumulation on a world scale’ – many of the ‘weak’ states which have come into being after the Fall of Communism in Central Asia particularly come to mind – extreme forms of ethnic or religious nationalism have emerged. But Arrighi would not see these as nationalism at all. Combined with the collapse of the world power and territorial empire of the USSR, the unplugging of the ‘redundant’ communities and locales from the world supply system has triggered innumerable, mostly violent feuds over ‘who is more superfluous than whom’, or, more simply, over the appropriation of resources that were made absolutely scarce by the unplugging. Generally speaking, these feuds have been diagnosed and treated not as expressions of the self-protection of society against the disruption of established ways of life under the impact of intensifying world market competition – which for the most part is what they are. Rather, they have been diagnosed and treated as the expression of atavistic hatreds or of power struggles among local ‘bullies’, both of which have played at best only a secondary role (Arrighi 1994: 330–1). Whether or not we choose to see these developments as furors of nationalism, these ‘nationalist’ formations and ideologies are little more than barely credible legitimations for marauding armed gangs which disguise themselves as states, whether we are talking about (pre and post 2001) Afghanistan or Uzbekistan. What needs far more attention, and is getting little, is what is happening to nationalism in those parts of Asia that remain central to the ‘changing economy of capital accumulation on a world scale’. These nationalisms, until recently developmental and pacific, are rapidly taking the form of cultural nationalism. The shift from nationalism as hitherto understood to cultural nationalism can be seen in the contrasting impulses and dynamics of cultural nationalisms within the international states system and in its domestic politics of accumulation and legitimation. Today, nation-states, and nationalisms are not anti-imperialist. Rather they concern themselves with finding, keeping and, at best, slightly bettering (naturally at the expense of other such states) their position, within the classes they represent, economically, militarily and ideologically, in the imperialist

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hierarchy. Even in Iran, the most recent of the anti-imperialist revolutions, the recent period of stabilization has been marked by increasing accommodation with the West, not to mention the tragedy of presentday Vietnam under Doi-moi. That they are not anti-imperialist is seen, perhaps most clearly, in the rise of similar kinds of cultural nationalisms, complete with ‘extremist’ (excluding and othering minorities) and ‘moderate’ (including and repressively tolerating them) wings, in the countries of the metropole, whether we are speaking of Great Britain, Germany, Japan or the United States. Most Asian nation-states are today well integrated in the imperialist capitalist system, and among them too we are witnessing a shift to cultural nationalisms such as Hindutva, Asian Values and Confucianism. Domestically, instead of being based on egalitarian citizenship, cultural nationalisms are based on ideologies of national cultures in which different groups and ethnic and cultural identities have differential cultural precedence. This precedence tends to be generally correlated with their higher or lower positions in the economy and labour market, and to their differential access to state largesse. They are produced and reproduced within the hierarchies implied by the ‘national culture’ and the corresponding state practices they necessarily create. The contrast between the progressive hopes once pinned on nationalism and the politically reactionary character of its cultural nationalist successor can be starkly put. On the one hand, there was the nationalism, which posed to itself questions about the historically progressive political tasks to be accomplished within each nation, along with its international links and implications. This was a nationalism which answered the Leninist question ‘What is to be done?’ in the case of each nation. On the other hand, there are nationalisms, which seek to both consolidate national culture and identity and take their place internationally, in order to reinforce an accepted domestic and international capitalist order. This was a nationalism, which posed itself Hitler’s question: ‘Sein oder Nichtsein?’ While this is a stark contrast, what is interesting is the relative smoothness of the transition from the one to the other, characterized less by discontinuities than by continuities. This can only mean that the differences between the concept of nationalism in its progressive sense with its Leninist origins, and cultural nationalism, are greater than the differences between the phenomenons they denote. The Indian case is particularly instructive in this regard. A cultural nationalist proto-fascist party could come to power and settle down to rule, it appears, for a long time, with neither a break in the continuity of liberal democratic institutions nor any trend


change in the pattern of capitalist development and related evolution of class relations in the country. After a brief account of the political economy of the transition from developmental to cultural nationalism, I hope to show in general terms where the continuities between the two lie. I hope, in the light of these arguments, to explore the dynamics, as far as they can be theoretically specified, of cultural nationalism further. To anticipate the framework, it may be said that the process of transition from the one to the other is part of a much longer-term historical process of the excoriation of community by civil society, of gemeinschaft by gesellschaft and the battles of the former against the latter. The nation, at its best, and by its most sympathetic analysts, was regarded as the most effective repository of community in modern conditions – combining the values of civil society and community within itself. However, it appears that the nation under globalization seems to be losing the historical battle against the abstraction of civil society. This has implications for the dynamics of cultural nationalism. On the one hand, the increasing penetration of the market in cultural production and consumption gives culture itself very shallow roots and imparts to it a volatility, which is transmitted to cultural nationalisms. The flux to which they are thus subject requires them to perform ideological balancing acts almost continuously. On the other hand, it implies that the opposition to this form of nationalism, and the world capitalist order it supports, can only come from a universalism which is nevertheless based on distinct forms and structures of non-commodified life, ‘national’ or otherwise, many of which will have to be re-built or built entirely anew.

Development and the political economy of developmental nationalism The idea of the nation-state as potentially anti-imperialist in the imperialized parts of the world may have originated in Lenin, but it acquired the currency of common sense in progressive circles only in the post-Second World war period. In a more nebulous form, the idea became central to the progressive conception of the role of the postcolonial nation-state. Most new states then, and most Asian states, were products of more or less popular anti-colonial struggles, and it was assumed that these states would pursue national development (which was capitalist, although since this usually went without saying, this contributed to its nebulousness which was ideologically very important in those now lost and lamented times) which was both pro-

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ductive and egalitarian domestically, in the social democratic temper of the times, and autonomous abroad, though the nature of this autonomy was never specified. The post-war order, under US direction, had, after all, created a panoply of institutions at Bretton Woods which placed a number of apparently powerful economic decisions, particularly control over flows of capital, in the hands of national governments. They seemed designed to permit these governments to manage their economies to promote growth and employment largely independent of external considerations. Far more than in any other part of the ex-colonial world, the potential for autonomous, ‘national’ capitalist development was realized in Asia, most spectacularly in South Korea and Taiwan, but also, if to a lesser extent, in India and South East Asia. The rise of the Asian ‘miracle’ economies, South Korea, Taiwan, Singapore and Hong Kong, and the general acknowledgement of substantial industrialization in the third world, if in pockets, constituted an apogee of such ‘nationalist’ development. Not since the rise of Japan in the early twentieth century had non-European nations industrialized to the degree and with the speed which was now being witnessed, and not only in the East Asian countries. Moreover, these experiences, particularly those of South Korea and Taiwan, which were very closely examined, were not examples of industrialization through blanket integration in the world market. They had involved heavy state intervention and direction, and were ‘developmental states’. These experiences were regarded as reinforcement of the notion of autonomous national capitalist development, particularly in the concept of the ‘developmentalist state’ and, until the East Asian financial crisis, this notion still retained a wide currency. That crises was, however, only the culminating moment in a long death of development, national development (for it had been nothing if not that), brought on by the progressive liberalization of controls over Capital and its movements by nation-states which had been the basis of the Bretton Woods arrangements. This liberation of capital was executed by a more or less worldwide neo-liberal counterrevolution in economic policy, which, ironically, penetrated the Bretton Woods institutions most deeply. The era of national economies and national economic strategies is past – for the time being at least. With capital free to move where it wishes, no state (and least of all a small poor one) can pursue any economic policy that the owners of capital seriously dislike.


Economic planning, welfare systems and fiscal and monetary systems all become subject to control, in effect, by capital markets, signaled, in the case of third world countries, by the conditions attached to IMF/World Bank lending – precisely the situation the Bretton Woods system was designed to prevent (Leys 1996: 23–4). The crisis, however, exposed the economic vulnerability of some of the strongest developmentalist states to metropolitan capital, particularly international financial capital. But it did more: it exposed, particularly in the measures taken to ‘resolve’ it by imperialist governments, particularly the US, and their agencies, their political vulnerability to imperialist design. For the IMF and the US government clearly aimed not only at restructuring the political economy of developmentalism radically in a neo-liberal direction, but also at ensuring that vast agglomerations of Korean capital, as well as that of other countries, became available for US capital to acquire at crisis-deflated prices. The ideological attack on their ‘crony capitalism’ indicated clearly, furthermore, that what was once fostered and tolerated for Cold War purposes – the ‘developmentalism’ of these states – was now not only dispensable but constituted obstacles to the interests and intentions of metropolitan capital which could and would be removed. Critical scholars read this crisis in two slightly, but importantly, different ways. One way, exemplified by Prabhat Patnaik, was to see in it the end of the hopes for national capitalist development: in his view the crisis exposed the dynamics of a new phase of capitalism, characterized by stagnation in the metropolitan countries, increasing inequality and asset transfer from across the world into the hands of metropolitan financial capital and, of course, increasing poverty in the third world. Crucially, ‘This new phase also entails the end of bourgeois economic nationalism as a practical project in the third world, i.e. of the attempt of the third world bourgeoisie to carve out a space for itself and build a capitalism that is relatively autonomous of imperialism’ (Patnaik 1999: 67). Mitchell Bernard, however, reminded us in his assessment of the same events of the hollowness of the ideal of autonomous national capitalist development, however state sponsored. He warned us against thinking of ‘State-centred dependent capitalism as a desirable alternative to the reimposition of neo-liberalism’, as some middle classes and capitalists adversely affected by the recent events, trade unions, certain sorts of development theorists and votaries of ‘developmentalist states’ were already doing in the affected Asian economies (Bernard 1999: 203).

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While Patniak appears to believe that there is something qualitatively new in the present phase of capitalism as he identifies it, which puts an end to the possibility of what he calls a national capitalism ‘relatively autonomous of imperialism’, Bernard sees South Korea and other developmentalist states as having been dependent rather than even ‘relatively autonomous’ all along. That is to say, both are agreed that such development is now impossible. With the passing of the project of autonomous national development, its domesticated international condition, and associated notions of a ‘national bourgeoisie’, we can say that the dome of cultural nationalism has struck. Unlike developmental nationalism, it is neither anti-imperialist, nor productivist, nor yet egalitarian. On the contrary, even so, the notion of autonomous national capitalist development continues to haunt the discourse about nations and nationalism in the post-Communist world of globalization in a way, which obscures the reality of a settled and accepted imperialism. In the smoke and mirrors world of mainstream political and intellectual discourse today, many apparently different views about contemporary nationalism, cultural nationalism, are articulated. Boosters of globalization view it either as an understandably atavistic and uncomprehending, or purely bloodyminded, response against globalization. Proponents of cultural nationalism, for their part, are engaged in a discourse about protecting and promoting the national ‘way of life’ though whether this is to be accomplished within a globalizing world, or against it, is not always clear. The dialogue between the two has given rise to the impression that the two things are opposed to each other, even though, despite the rise of cultural nationalism, the penetration and hold of metropolitan capital over economic activity the world over increases ceaselessly. The focus on cultural issues may be designed to deflect attention from economic depredations, though the success of this tactic cannot be assumed, given the enormity of the latter. Certainly cultural nationalism has rarely if ever been associated with genuine economic concessions even for the ‘national’ bourgeoisies, let alone for the nation’s more ordinary citizens. While apparently opposed, the actual dialogue between globalizers and cultural nationalists produces some important ideological effects and herein lies its utility to both of them. The discourse provides some legitimation, however threadbare among the victims of the globalizing activities to globalizing governments, as protectors of national ‘ways of life’. Among those who benefit from globalization, it articulates the process of globalization as an international assertion of the interests of


the ‘nation’, by which they usually seem to mean their own, no longer merely ‘national’ interests. From the imperial point of view, it may be noted that another effect of this is that by naturalizing as well as condemning nationalism it medicalizes discourses about the treatment of some of its more extreme manifestations which tend to occur in regions weakly integrated into the global capitalist system: sometimes drastic surgical action may be necessary to root them out when they threaten the stability of the imperial order and the integration of the nation in question into it, as in Kosovo, or today in Iraq.

Developmental nationalism and cultural nationalism All nationalisms have a cultural content. Indeed, most accounts of nationalism, and certainly the popular understandings, tend to reduce it to this largely backward-looking cultural component; nationalisms are generally considered to be matters of national ‘culture’, ‘identity’, ‘heritage’, and so on. This reduction of nationalism to the status of a cultural legacy usually goes along with an essentialist view that this culture or identity constitutes an inexplicable, almost mystical, eternal, and original attribute of that nation. Of course, many nationalists themselves tend to favour this view; a sort of primordialism. Moreover, as most textbook accounts of nationalism aver, nationalism is a crossclass and often broad-based popular affair. This is usually taken to mean that the ‘national’ culture, identity, or heritage is shared, and participated in, by all the nationals of a nation, more or less equally. Nothing could be farther from the truth. Nationalism’s cultural content, however narrowly or widely based, is usually structured so as to reflect the balance of class forces in that nation and nationalism. The positions, higher or lower, of the various popular and elite components of the ‘national culture’, its overall balance between hierarchy and equality, or the differential positions of various minorities, at any historical moment, reflect the configuration of classes and groups in the real social order of property, privilege and precedence which the development of capitalism had created in that society. Nowhere does the development of capitalist relations of production, in and of itself, produce a state with juridically equal citizens, or a labour market with equally free wage labourers, as the histories of both the advanced and less developed parts of the world attest. Rather, every society and every market produces a hierarchy of groups, among the propertied and nonpropertied alike, and one of the chief functions of the cultural component of nationalism is to reflect and reinforce, culturally, this

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hierarchy. Nor do nationalisms or national cultures automatically result in equal participation of various groups in it. Some groups may be forever excluded. Nationalism, therefore, can neither be made nor understood outside the framework of the class relations of the nation. We must always ask: ‘Whose nation is it?’ This question, which refers to the internal hierarchical structuring of nationalisms’ cultural components, is perhaps the most important and neglected question in understanding the dynamics of nationalism. It has been neglected by progressive scholars particularly, and remained unasked so long as the hope of any autonomous and anti-imperialist capitalist development could be sustained. Until then, attention tended to be monopolized by ‘economic’ questions of greater priority. If all nationalisms, developmental and cultural, have a cultural content, then the key to understanding but not exaggerating the contrast between a civic and developmental nationalism and contemporary cultural nationalism in capitalist societies, is to appreciate that the transition between the two has not been accompanied by any major social transformation. The culture of the dominant classes has always been at the cultural core of nationalism, of the ‘national culture’. The cultures of other classes and groups have been hierarchically ordered in relation to this core culture. Popular ideologies and energies which went into the creation of each nationalism, and strengthened it during anti-colonial struggles and the initial stabilization of the new nations, had added a broadly civic and egalitarian element, which could, and often did, also contest the dominant culture. They often made the nationalism concerned more culturally egalitarian and forward-looking in a way, which corresponded to its materially egalitarian developmentalist project. As developmental nationalism gave way to cultural nationalisms, the popular cultural elements tended to be appropriated, contained, or, in the most radical cases, excluded or destroyed, by the dominant elements. Shorn also of its forward-looking developmentalist project, what reasserted itself was the largely backward-looking hierarchical ordering of the national culture, which as cultural nationalism, now fully elaborated its inherent hierarchical and repressive potential. The most important and interesting critical theories of nationalism also place its cultural dimension, which so often seems to verge on the mystical, within a narrative of capitalist modernity. The transition to capitalism involves, from this point of view, a basic restructuring of the size and shape of communities. The pre-capitalist-world was constituted by smaller-scale communities characterized, on the one hand, by an extreme localism, and on the other, by a superficial, often imperial,


cosmopolitanism. That the modern industrial capitalist world is, by contrast, divided into the larger-scale communities we call nationstates is more than coincidental. Ernest Gellner originally theorized the historical emergence of nationalism as the cultural accompaniment of the rise of what he called ‘industrial society’, which, he argued, was characterized by a highly advanced division of labour with, moreover, an unstable occupational structure; one in which individuals not only occupied places different from their parents but often changed occupations within their lifetimes. This mobility and interchangeability required, as Gellner’s functionalist argument went, a broadly based and shared cultural idiom based on literacy, a national culture, with all that this meant in terms of the state sponsorship of education and so on (Gellner 1983). Gellner himself proved unable to prevent his designation of ‘industrial society’ from seeping out to mean more broadly the development of capitalism itself. Others, such as Michael Mann, have stressed the importance of the rise of absolutist states and the social mobilizations which resulted from its destruction of localism (Mann 1991) as a central factor in the rise of nations and nationalism. And, like Gellner’s industrial society, Mann’s Absolutist States are also central elements in the historical development of capitalism and its modernity. While bulk of this literature refers to the rise of nationalism in Europe, the associated idea that nationalisms elsewhere were essentially ‘diffused’ cultural forms, and Partha Chatterjee’s (1986) quite unnecessary anguish over whether this meant that nationalism in India, for example, was ‘derivative’, are quite beside the point. In the first place, they ignore the fact, stressed particularly by Benedict Anderson’s widely-cited (but not, evidently, closely read or understood) book, Imagined Communities, that nationalisms had originated in the New World. Such ‘Eurocentric provincialism’ is clearly shared by non-European scholars with a proclaimed interest in challenging Eurocentrism (Anderson 1999: xiii). Concerns about the derivative of original character of this or that nationalism are clearly revealed to be the false problems they are if we focus attention on the material basis of nationalism, of its forms and contents, in actual historical developments as capitalism spread across the globe. Like nationstates, nationalisms also, in their cultural as well as in their economic content, share many structural similarities, even if the content must necessarily vary locally. Nationalisms are neither original nor derivative, only structured by local material and historical conditions.

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The cultural content of nationalism emerges out of specific tensions within, and plays a definite role in, the historical process of combined and uneven development of capitalism. Tom Nairn offers one of the better general accounts of this process. In his refinements of the essentially Gellnerian view of the relationship between industrialization and the rise of nationalism, Nairn locates the chief tension which produces nationalism in the conflict which takes place as capitalism develops – a conflict between community and culture, or Gesellshaft, on the one hand, and the impersonal, atomising, commodified, cash-based structures of ‘civil society’ (here meaning, as it does classically, market society based on formal-legal structures and practices) or Gemeinshaft which have historically undermined community, on the other. In Nairn’s conception, national societies are the resolution of the tension between the two – essentially between the inevitability of Gesellschaft and the human need, indeed, itself an inevitability of sorts, for Gemeinschaft. Nations are simply the modern capitalist form of community. Thinking along with Wallerstein and his World Systems analysis, Etienne Balibar offers a conception of nations which is similar, in being based on the destructive effects of civil society on communities. His account does not confine itself to the history of capitalist modernity alone but reaches back much further into the history of the spread of market relations. I would modify Balibar’s formulation slightly, largely with a view to making it more consistent, as shown in square brackets in the long quote below: ‘The history of social formations would not be so much a history of non-commodity communities making the transition to market society or a society of generalised exchange (including the exchange of human labour-power) – the liberal or sociological representation which has been preserved in Marxism – as a history of the reactions of the [succession of] complex[es] of “non-economic” [better to say non-market] social relations which are the binding agent of a historical collectivity of individuals, to the de-structuring with which the expansion of the value form threatens them’ (Balibar 1994: 8). Balibar enables us to envisage, in a fashion reminiscent of Karl Polanyi, a long historical process in which various forms of community, of which the nation is only the latest, have always had to be constructed and reconstructed against the challenge which money and commodities have immemorially represented. One may add here, also after Polanyi, that surely, given the secular spread and deepening of market


relations throughout history, these ‘reactions’ have also been accommodations to the market, up to and including recent globalization. Unlike Nairn, however, Balibar takes the idea of the cultural and ideological constructedness of nations, as well as earlier forms of community,6 much more seriously. This constructedness is both backward and forward-looking, a tradition and a project. For while nationalisms have often been seen as a break with the past, dissolving older forms of hierarchy into new conceptions of national citizenship, they also, in class societies, constitute the mechanisms through which these older forms of cultural hierarchy, which once legitimized the structures of surplus extraction and privilege in pre-capitalist societies, are brought, in suitably modernized formats, into the capitalist national society. To the extent that the hierarchy of various classes and groups in the precapitalist societies is transported, unchanged, to the modern capitalist society, nationalism’s own hierarchical orderings will correspond to those of the past. These refashioned hierarchies of culture operate to ease and intensify surplus extraction by a capitalist ruling class which retains important continuities with pre-capitalist ruling classes but now operates in a ‘civil society’ formally based on juridical equality. In the transition from pre-capitalist to capitalist societies, these hierarchies once based on formal, often legally enforced restrictions, prohibition and privileges, are transformed into modern ‘ideologies’ about the values of that national culture. Thus, slavery in the United States, for example, or untouchability in India, is transformed into a cultural denigration of black people and former untouchables. Subscription to these ideologies and their scales of value may be entirely ‘voluntary’ but their effect in ‘enforcing’ certain forms of privilege and subordination cannot be underestimated. If there is one characteristic which distinguishes the nation from all previously known forms of community, it is this: although all historically known forms of community look backwards, the dynamism of capitalism (and of its negation, socialism) has imparted a stronger forward looking character to nations than to previously known forms of community. Ernest Rennan had commented that ‘Forgetting history, or even getting history wrong’ is essential to nations and nationalism and Hobsbawm recently commented that what nations want is a ‘retrospective mythology’ (Hobsbawm 1996: 255). Here the relationship between nations and historians recalls that between (would-be) kings and (some of the more nationalist) Brahmans in medieval India: Brahmans ‘controlled the knowledge of genealogies and could manufacture them for a correct price’ (Lele 1995: 59–60).

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Nation-states are supposed to be based in (popular) legitimacy and kingdoms on (dynastic) legitimacy (Blumenburg 1983). The rise of the nation-state is supposed to represent a shift from one basis of legitimacy to another. Clearly, however, nations, in particular capitalist ruling classes which are usually drawn from among the pre-capitalist ruling classes, also appear to require a certain legitimacy of historical lineage, for much the same purposes. This constructedness does not simply reflect, passively, the historical processes of the co-evolution of nations and capitalism. They contained an indispensable element of collective human will and imagination. Miroslav Hroch captures well this reflexive relationship between historical processes and the nationalisms they produce, both the national identities and the national projects which are embedded in them: The basic condition for the success of any agitation (not only national agitation) is that its argument at least roughly corresponds to reality as perceived by those to whom it is directed. National agitation therefore had to (and normally did) begin with the fact that, quite independently of the will of the ‘patriots’, certain relations and ties had developed over the centuries which united those people towards whom the agitation was directed. They formed a community united by inward ties, and they were at least vaguely aware of this. There was of course a further psychological condition that was not entirely evident: this was the ability of the targets of national agitation to conceive of the existence of ‘their’ group outside the framework of their everyday experience. This conception in turn depended on the degree of education and the personal experiences of individuals. These were not circumstances which the agitators could themselves create or influence; they were the results of the process of modernisation (Hroch 1998: 99–100). The history of any bourgeois nationalism can be traced through the principal texts and events which mark the origins and progress of the conception of the nation and its project as conceived by such ‘patriots’ and popularized among the people. But what is more important, and here our point about classes and nations finally becomes clear, by taking, like Balibar, a materialist view of the constructed-ness of nations and communities – they are not just ‘imagined’ as Benedict Anderson’s (1981) famous argument has it in some innocently popular way. Rather they are fruits of a collective but also internally hierarchically


structured imagination, cultural products of societies whose structures of material production bear upon those of cultural production. Such societies react to the challenges posed by the spread of market relations or the combined and uneven development of capitalism on the basis of certain material and cultural configurations. While politically conservative elements of the pre-capitalist dominant classes may be involved in futile attempts to preserve their existing bases of dominance, the more progressive elements among them will likely be engaged in ensuring their dominance in the emerging capitalist society: the landlord turned capitalist farmer or even industrialist is an archetypal figure of this transition. Thus, pre-capitalist configurations form the basis on which any national capitalist society, whether or not based on full juridical equality, is nevertheless hierarchically restructured in the realm of civil society in a way that the culture of the dominant classes, with a more or less authentic history stretching back to the mists of time becomes the ‘true’ national culture and those of all other classes and groups, allied and oppositional, can be positively or negatively subordinated to it. Therefore, most often upon independence, in spite of popular mobilization which accompanied the national struggle, the structures of dominance and subordination, of surplus extraction, do not radically change. This has been the case with most nationalisms in Asia and, barring various national communisms and some revolutionary fundamentalisms such as Iran in 1978, everywhere in the world. With the eventual waning and appropriation of popular energies, their cultural manifestations, primarily popular and progressive civic and egalitarian elements of culture, whether ‘traditional’ or ‘modern’, also gradually disappear from the ‘national culture’. The transmutation of that nationalism into a cultural nationalism is not complete. Now the culture of the dominant classes and groups, which always lay at its core, emerges as more or less the entire of nationalism. This is, for example, in broad terms at least, the story behind the much-lamented transmutation of Indian nationalism into Hindu nationalism.7 No national capitalism exists as pure civil society and nationalisms and national cultures are important mediators of the complex structures of inequality and hierarchy at the best of times. In all capitalist national societies, structures of the pre-capitalist political economy – of surplus extraction – form the basis on which the new capitalism and the new nation emerge. While both may restructure these pre-given forms to a greater or lesser extent, to they extent they remain class societies, the substance of the original political economy and culture persist if in new ‘modern’ or ‘nationalised’ forms. The authoritative

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assertion of ‘tradition’ or ‘national culture’ in these contexts is usually the discourse of a now more or less capitalist elite harnessing the noneconomic resources of ‘tradition’ in the hyper-exploitation of lower classes, races, castes and women, perpetuating a distinctive fraud against even the capitalist ideal of the exchange of equivalents, always a heuristic idea rather than a historical reality, not to mention wielding it against ‘modern’ and ‘alien’ ideas such as social justice. Such neotraditionalism and cultural nationalism also helps to cement at least a superficial unity among competing sections of the dominant classes. Cultural nationalism, based as it always is on the culture of the dominant classes, also becomes the means for the management of the intensified economic inequalities of contemporary capitalism by recasting them as cultural differences. It becomes what Etienne Balibar called ‘a mechanism for the differential reproduction of the labour force’ – ‘a process of ethnicization, of grading systems and inequalities within the general workforce, whose “subjective” counterpart is the institutionalisation of racial-cultural prejudices among the dominators and the dominated, and above all among the dominated themselves, on which the ruling class can play at its own risk’ (Balibar 1991). Such a national culture or tradition was always present in nationalism, even when it was more progressive, but now, in the context of neo-liberalism, globalization and increasing inequality, it becomes nationalism’s most active element. Cultural nationalism is generally viewed as culturally intolerant and aggressively homogenizing against cultural minorities within nations. This view is correct, as evinced by the attacks on minorities in many countries, such as India, where cultural nationalism of a particularly virulent sort has emerged. But it is also insufficiently complex. For cultural nationalism need not always mean homogenization. The politics of cultural nationalism will remain obscure until it is recognized that ‘diversity’ is central to the political management of the gross inequalities produced by this new political economy as homogeneity is. In all countries various degrees and varieties of subordinated inclusion and outright othering of the economically underprivileged as ‘cultural groups’ – which is the primary function and effect of cultural nationalism – have been employed in the attempt to create viable coalitions of support, in elections and in other forms of politics. These coalitions of support are structured such that the proportion of economic to merely ‘cultural’ or ‘psychological’ rewards decreases as one goes down the economic ladder, and from the centre to the periphery of the dominant coalition of interests. These groups within the cultural nationalist


political formation who appear to be the most homogenizing in their impulses, such as the shock troops of the lumpen which have accompanied cultural nationalism in many countries, are in fact the policemen of the outer limits of these coalitions, inflicting exemplary discipline on those ‘outside’ who may have the potential and/or effrontery to object to such politics and the resultant political economy. The effect of this in intimidating even those ‘within’ the cultural nationalist community, in ‘showing them their place’ is as powerful as it is intended. Among the more well-established bourgeois states of South, South East and North East Asia, for example, cultural nationalisms take the form not of homogenizing discourses but a form which in some semblance is ‘multiculturalism’. These claims to respect and value diversity are, however, accompanied by a new effrontery: whatever is done in the name of the nation is, by definition, respectful of diversity. Although more performative than credible, such claims do furnish a brazen mask of respectability to be shown to the ‘international community’. In this Asian cultural nationalism may only be taking a leaf out of the book of Western ‘multiculturalism’. It is neither meant to, nor actually succeeds in, resolving the problems either of inequality or difference (Fraser 1995). It is by failing that multiculturalism has its real effect: to serve as the occasion for majoritarian ‘backlash’. ‘Silent majorities’, oppose ‘vocal’ minorities who get ‘special treatment’. Such ideas, for example, the widespread anti-multiculturalist opposition to ‘political correctness’, are no longer the preserve of the extremists. They create a pervasively authoritarian climate in the political ‘mainstream’ as well. All demands for equality can be recast as those of cultural minorities who must (not) be pandered to. While many among the ‘progressive’ intelligentsia rail against global ‘cultural homogenization’ and champion the cause of particularistic cultures,8 others, often still avowedly ‘progressive’, lend scholarly support to these now frighteningly ‘mainstream’ arguments by reiterating the need for a certain ‘basic’ level of cultural homogeneity in society for legitimate order even in democratic states. Both discourses are wielded against egalitarian movements as alien and destructive of the national culture9. Multiculturalism, like its Asian brethren, Nihonjinron, Hindutva, Confucian Values or Asian values, oscillates between enforced conformity to a superior, more ‘liberal’, culture, and assimilationism. Both require cultural boundaries to negotiate.

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Nations as community within capitalism: an oxymoronic construct? There is a deep historical irony in the rise of cultural nationalism in a time of historically unprecedented acceleration in commodification. Tom Nairn argues that capitalist modernity did not only make the reality and fear of cultural destruction real, it also provided the means to resist it: Modernity made such fear more alive and real, but has also made it more contestable. Having been startled into memoriality, they [nationalities] are damn well not going to subside again. Before industrialization this happened all the time: cultures peoples, traditions would just ‘go under’, leaving a few puzzling bricks and stones if they were lucky (Nairn 1997: 5). Now, it is impossible to plausibly compare the rates of cultural destruction and survival under different modes of production (but one may note, also plausibly, that cultural destruction is hardly unknown under capitalism). But what is certain is that having seen so clearly the positive side of this irony, Nairn fails to see the negative side: that the instruments offered by capitalist modernity or civil society, which tends to generalize commodification, will, on the contrary, undermine this community. When Balibar and Wallerstein also argue that nations are only the latest in a succession of reactions to the effects of the market on community, they also fail to note that the nation-state as a form of community is different in that it faces the challenge of not just of reacting to and placing limits on a stabilized system of market relations, but of accommodating to and fostering within itself a tendency towards generalized commodification, which is, moreover, intensifying and accelerating at an alarming rate. Insofar as the tendency of capitalism, as distinct from other economic orders whatever the extent of markets within them, is precisely towards a replacement of all social relations with commodity relations, to create generalized commodity exchange as the basis of society, is not the idea of a nation as a modern capitalist community ultimately oxymoronic? Or if not that, at least fated to be excoriated by the very processes which it proposes to resist only by accommodating? This returns us to the issue, posed earlier, of whether we are witnessing the decline of nations and nationalism or a resurgence of cultural nationalism. What does the rise of specifically cultural nationalisms which are actually committed to little more than


harnessing their ‘cultural resources’ to the task of accelerating the spread of market relations at home and more intensified imperialist penetration abroad, and, as we have seen, to managing its contradictions culturally, signal for the nature and dynamics of nations and nationalism? It would appear, prima facie, that the political efficacy of cultural nationalism in the above respects faces, in the context of the intensified and accelerated penetration of capitalism and commodification, new challenges. The ‘cultural logic of late capitalism’ according to Fredric Jameson (1991), rests in particular on the more or less complete commodification of lands and the Unconscious (which we may, with considerably less intellectual flair, translate simply as culture). The effect of both on cultural nationalism is deeply problematic. Firstly, much of the lore (fake and folk) of the nation derived from the experience of rural life and the accelerated destruction of this specific mode of human experience over the last 50 years, during which the peasantry has become a progressively smaller minority and the rural migrants to the cities of the third world only a generation away from deculturation (Nairn 1997), also undermines nations, their cultural continuities and stabilities. Secondly, contemporary capitalism is characterized by a situation in which the very structures of cultural production and reproduction have been penetrated by commodification, while most ‘noncultural’ forms of production have, in a consumer and advertising dominated culture, become matters of culture and lifestyle, themselves subject to a pace of change in trend and fashion dictated by consideration of accumulation and competition and not any independent aesthetic. This rapidly spiralling process robs culture of the solidity and settled patterns of affinity, taste and social practice with which the concept has hitherto been associated. Culture now sports the very ephemerality, which characterizes the commodity form, vastly more richly analyzed, of course, by Marx. Cultural nationalism today is generated in structures of cultural production, which are specifically capitalist and deeply commoditized. In this context, the form cultural nationalism can now take is to older eyes, inauthentic – cultural nationalist pop, rock and punk songs, videos, and other cultural commodities (usually seen as the opposite of culture). Their effect on the culture they claim to express can only be actually to mine and undermine it. And as commodities these cultural products are also subject to endemic ephemerality. At the same time, paradoxically, in a system of commoditized culture and culturalized commodity production, the stakes of ever-greater sections of the

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capitalist classes in the ‘national culture’ have increased. Culture not only offers then opportunities for employment and entrepreneurship, economic activity itself depends on the generation of culture which must necessarily, in an age where other forms of community have been historically surpassed, be national. The climate of late capitalism also, however, makes the life of a given cultural product short and therefore this cultural nationalism moves along on shifting bases and ground, appears very changeable and probably contributes to the very anxiety and need for belonging which further fuels it. Cultural nationalism is condemned to an instability and dynamism that is usually not associated with nationalism or culture hitherto. It is especially relevant that many analysts of Hindutva have seen it to have had a strategy originally, when it was formed, and to have worked on the basis of a long term molecular strategy to propagate it and preserve it until it has finally got the reins of power in the country in its hands. This view misses both the actual changeability of this ideology and strategy over time, including the decades when it was more or less in the political doldrums, not to mention the volatility in the face of the imperatives of the politics of power and the politics of support in the 1990s. It also exaggerates its separateness from the ideology of the surrounding society. Rather it was always linked to its conservative, authoritarian, religious, nationalist and populist currents. And it continues to appropriate more and more of society’s figures, symbols and discourses to itself, even the most improbable. Hindutva’s attempt to appropriate Dr. B.R. Ambedkar, the leading nationalist figure who attempted to represent the cause of the untouchables and is regarded as the father of India’s secular constitution, is of this order. But the process may fast be spiralling to exhaustion. Notes 1 I would like to thank Stewart Scott for his help with the typing and editing. I would also like to acknowledge the contribution of the Centre for Asia Pacific Initiatives at the University of Victoria. A fellowship there in the year 2002–3 contributed to the elaboration and completion of this paper. 2 The critical literature on the problematic nature of the relationship between capitalism and democracy is vast, and includes the voluminous, and continuous rumination on the subject by several generations of Marxists. Two particularly useful discussions can be found in Offe 1984 and Therborn 1977. 3 As is well known, there have been many such previous waves: the ‘creole’ nationalisms of the Americas starting in the late 18th century; the rise of nationalisms in Europe in response to the Napoleonic wars and the conversion of French revolutionary universalism itself into a distinctive form of nationalism (and not just imperialism); the Springtime of the Peoples; the


4

5 6

7

8

9

integrations of Germany and Italy; the Central and Eastern European nationalisms which proved so destabilizing of the European states system in the period before the Great War; the tidal wave of anti-colonial nationalisms which achieved their successes from the middle of this century till the lifting of the Apartheid regime in South Africa and the independence of Namibia and which sired more nation-states than any of the previous waves; and finally the post-Communist wave which created new nations not just within the territory of the former Eastern Bloc but also in other parts of the world where the Cold War had prevented nationalist movements achieving their goals. Palestine and Northern Ireland are two of the chief examples. The earliest theorist of capitalist modernity on a world-wide basis, Hegel, with his stress on universal reason, regarded nationalism, the embodiment of the particular in modern universalizing times, as particular, ‘a particularity without quiddity’, inconsequential empirical variety, which while temporarily mutually conflicting, would ultimately be superseded in the order of ‘the high praetor that is the universal spirit’ (Anderson 1992: 292–4.) The centrality of nationalism rather than racism or anti-Semitism to Nazism and to fascism in general has been best argued by M. Neocleous (1998). After his more Gellnerian works on nationalism Nairn’s (1977) swaggering endorsement of the ‘primordialists’ is surprising. It appears to be an instance of understandable but misdirected spite, contesting the surely non-existent notion that ‘nationality’s general lineage… is either dubious or dispensable’ (1977: 8). The competing ‘constructionist’ conception does not deny definite, and even authentic, pre-national or national cultures, nor the link between them. Indeed, it is the link between the two, and the light it sheds on that between forms of pre-capitalist and capitalist domination and subordination, which is a neglected area of study and the focus of this account of the transition from developmental to cultural nationalism. While the fraternity of organizations centred around the RSS have played a crucial role in this transition, this change, particularly the electoral rise of the RSS affiliated BJP is based on a far broader and diffuse acceptance of cultural hierarchies based on the legitimation of the predominantly Hindu capitalist and middle classes. Frankel (1977) has recently examined the explicit endorsement by the antisocialist culturalist ‘radical’ journal Telos, of the principal themes of the neofascist populism of the Extreme Right, such as the French National Front and Italy’s Lega Nord. A common admiration for the Nazi jurist Carl Schmitt’s theories of ‘the political’ unites Telos and the democratic theorist Chantal Mouffe. I have examined the seriously anti-democratic consequences of Schmitt’s assertion of axiomatically irreducible cultural difference, a form of irrationalism, when imported into a theory of democracy, however well intentioned (Desai, 2002).

References Ahmad, A. (1994), Theory: Nations, Classes, Literatures, London: Verso. Amin, S. (1989), Eurocentrism New York: Monthly Review Press. Anderson, B. (1999), Imagined Communities, revised edition, London: Verso.

Radhika Desai 109 —– (1998), The Spectre of Comparisons: Nationalism, Southeast Asia and the World, London: Verso. —– (1996), ‘Introduction’, in G. Balakrishnan, ed., Mapping the Nation, London: Verso: 1–16. —– (1992), A Zone of Engagement, London: Verso. —– (1988), Imagined Communities, London: Verso. Anderson, P. (1992), A Zone of Engagement, Verso, London, 1992, pp. 292–4. Arrighi, G. (1994), The Long Twentieth Century, London: Verso. Balakrishnan, G., ed. (1996), Mapping the Nation, London: Verso. Balibar, E. (1996), ‘Preface’, in E. Balibar and I. Wallerstein, eds, Race, Nation, Class: Ambiguous Identities, London: Verso: 1–14. —– (1991), ‘Es gibt keinen Staat in Europa’, New left Review 186: 5–19. Bernard, M. (1999), ‘East Asia’s Tumbling Dominoes: Financial Crises and the Myth of the Regional Model’ in L. Panitch and C. Leys, eds., The Socialist Register 1999, London: Merlin Press:178–208. Blumenberg, H. (1983), The Legitimacy of the Modern Age, Cambridge MA: MIT Press. Chatterjee, P. (1986), Nationalism in the Colonial World: A Derivative Discourse? London: Zed Books. Desai, R. (2002), ‘Fetishizing Phantoms: Carl Schmitt, Chantal Mouffe and “the Political”’, in A. Bakan and E. MacDonald, eds., Critical Political Studies: Debates and Dialogues from the Left, Montreal: McGill Queen’s Press: 387–408. Frankel, B. (1977), ‘Confronting Neo-liberal Regimes: The Post-Marxist Embrace of Populism and Realpolitik’, New Left Review 226: 57–92. Fraser, N. (1995), ‘Recognition and Redistribution’, New Left Review, 217: 68–93. Gellner, E. (1994), The Condition of Liberty: Civil Society and its Rivals, New York: Penguin. —– (1983), Nations and Nationalism, Ithaca, NY: Cornell University Press. Hobsbawm, E., ‘Ethnicity and nationalism in Europe Today’, in G. Balakrishnan ed., Mapping the Nation, London: Verso: 255–66. —– (1990), Nations and Nationalism Since 1780, Cambridge: Cambridge University Press. Hroch, M. (1998), ‘The Nature of the Nation’ in J.A. Hall, ed., The State of the Nation: Ernest Gellner and the Theory of Nationalism, Cambridge: Cambridge University Press: 91–106. Jameson, F. (1991), Postmodernism, Or the Cultural Logic of Late Capitalism, Durham: Duke University Press. —– (1998), The Cultural Turn: Selected Writings on the Postmodern, 1983–1998, London, Verso. Kohn, H. (1940), ‘The Genesis and Character of English Nationalism’, Journal of the History of Ideas, 1(1): 69–94. Lele, J. (1995), Hindutva: The Emergence of the Right, Madras, India: Earthworm Books. Leys, C. (1996), The Rise and Fall of Development Theory, Oxford: James Currey. Mann, M. (1992), ‘The Emergence of Modern European Nationalism’ in J.A. Hall and I.C. Jarvie, eds. Power, Wealth and Belief, Cambridge: Cambridge University Press: 137–66. Mayer, A. (1998), Why did the Heavens not Darken? New York: Pantheon Books. Neocleous, M. (1998), Fascism, Oxford: Basil Blackwell.

110 Nation Against Democracy Nairn, T. (1997), The Faces of Nationalism: Janus Revisited, London: Verso. —– (1988), The Enchanted Glass, London: Pan Books. —– (1977), The Break-Up of Britain, London: Verso. Nimni, E. (1985), ‘Great Historical Failure: Marxist Theories of Nationalism’ in M. Shaw, ed., Marxist Sociology Revisited: Critical Assessments, London: Macmillan: 99–142. Panitch, L. (2000), ‘The New Imperial State’ New Left Review (ns)2: 5–20. —– (1998), ‘The State in a Changing World’, Monthly Review 50(5): 11–23. Patnaik, P. (1999), ‘Capitalism in Asia at the End of the Millennium’, Monthly Review, 51(3): 53–71. Suny, R. (1991), ‘The Revenge of the Past: Socialism and Ethnic Conflict in Transcaucasia’, New Left Review 189: 111–25. —– (1990), ‘Incomplete Revolution: National Movements and the Collapse of the Soviet Empire’ New Left Review 184: 5–34. Therborn, G. (1977), ‘The Rule of Capital and the Rise of Democracy’, New Left Review 103: 3–41.

6 Political Culture, Alternative Politics and Democracy in Greater China David Zweig

Introduction What forces and circumstances lead people in Asian societies to turn from formal democratic institutions to alternative institutions or extrainstitutional political action?1 According to Rocamora, when elections are controlled by central or local oligarchies, citizens in East Asia form civic organizations or non-governmental organizations (NGOs), join social movements, or turn to social protest (Rocamora 2000). This chapter addresses this issue in three Chinese societies that are part of Greater China: Taiwan, Hong Kong and the Chinese mainland. In this way, we can account for the impact of Confucian culture on political behaviour, and highlight the role of democratic values and political structures on the decision to rely on formal versus alternative politics. Also, rather than accepting that democratic institutions failed in these societies, I chose to treat the assertion that people had to turn to alternative democracy as a hypothesis to be tested empirically. One of the hallmarks of Asian politics is the existence of oligarchs who dominate political processes and ensure that less elitist social forces cannot successfully use democratic institutions as channels for asserting and pursuing their interests, despite the existence of some democratic institutions – in particular, elections, campaigning, and voting. Formal constitutions emasculate political structures so that outcomes are controlled by extra-parliamentary alliances, local political factions or central oligarchies; this leads to the emergence of what is now commonly called ‘illiberal democracy’ (Zakariah 1997: 22–43). Under these conditions society is more likely to resort to informal procedures, some highly democratic, such as the formation of legal, non-governmental organizations 111

112 Political Culture, Alternative Politics and Democracy in Greater China

(NGOs), while in other cases they turn to social protest and extra-legal political activity in order to elicit resources from political elites. To assess these relationships, this chapter asks the following questions and puts forward certain hypotheses. First, how deeply are democratic values imbued in the minds of Chinese citizens? Do they believe they have the right to participate? Do they have the information necessary to participate in a knowledgeable way? Here, one would hypothesize that the greater the level of democratic consciousness, the greater the demand for meaningful political participation, either through formal or alternative political means. Second, what is the nature of the political structures, in particular the party structure, the electoral system, and the authoritative body to which people are elected? Is the process by which candidates and winners are selected open and competitive? Are those who are elected able to influence the authoritative allocation of value by the political system? Indeed, can the opposition party, if it wins at the ballot box, actually come to power? If parties exist but cannot take power, members of society, particularly those not affiliated with the ruling party, are likely to resort to informal political strategies, including public protest, to influence government policy. Finally, based on the level of democratic consciousness and the nature of the political structures, we will try to explain why citizens in the three different Chinese societies rely on formal versus alternative forms of political behaviour.

Democratic consciousness: the role of political culture Democratic consciousness refers to the subjective attitudes of citizens towards their right or desire to participate in politics. In many ways, this reflects standard aspects of a society’s political culture, including views about the process of political activity, tolerance for overt political conflict and opposing views, awareness of political information and efforts by citizens to attain such information. While the absence of such values within a society complicate the creation of a participatory or democratic polity, their existence in the face of non-democratic political structures could trigger social unrest or political repression. For democracy to succeed, political elites must tolerate political conflict and accept the norms of rotation and compromise, that is, willingly turn over power to the opposition if they lose elections (Pennock 1979: 244). To what extent can these values develop within an Asian, and particularly Chinese, society? According to Pye, and others who share a

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culturalist view, Chinese political culture is fixed and relatively passive, with Chinese society governed by elites who rule by moral example. These elites favour the idea of a static, conformist social order, a form of ‘anti-politics’, which ‘precluded the kinds of activities associated with using power competitively in support of different values’ (Pye 1985: 42). Also, fears of social disorder that might follow from a transition to full-fledged democracy mitigate against most forms of political action by Chinese citizens. Therefore, we expect little tolerance for differing opinions and little public contestation for political power. Moreover, with formal government as the sole legitimate basis for power, societal pressure becomes illegitimate and a manifestation of corruption. The result is a highly paternalistic political culture that relieves society’s deep-seated need for social and political security. While this study looks at all these societies separately, cross-national data on levels of attention to politics show that some citizens in all three Chinese societies are quite interested in gaining political information. Moreover, despite differences in levels of socio-economic development and political structures, there is a general similarity along this particular dimension, and in fact, rural China is not the most traditional of these societies.

Political structure A second aspect to consider is the nature of the formal political structures. Is the system democratic, with multiple parties competing through free, democratic elections? What is the constitutional arrangement – do victors in elections constitute a legitimate political authority that can influence the allocation of political and economic values? The extent of this formal democracy may be measured by standard phenomenon such as the number of political parties, rates of participation in campaign related activity, and the share of resources allocated by the freely elected political authority. Third, are the parties and elections truly a mechanism for the competitive selection of political elites, and can a multiplicity of social forces, including the poor, find channels for political expression through these structures? In East Asia, although numerous parties compete through relatively free elections, these political systems are often dominated by political oligarchies. Thus, as Joel Rocamora argues (2000), despite the multi-party nature of the Philippines, the parties are really the creation of individual politicians and have few links to social forces. They cannot serve as a mechanism through which society can


pursue its interests, thus citizens turn to informal democracy and NGOs as an alternative means of pursuing these interests. In our three case studies, significant variation exists in the nature of the electoral system and party structure, as well as the ability of those who are elected to affect public policy. In China, villagers can elect a fully constituted political authority, the Village Committee, but the scope of its influence is limited to local economic issues. In Hong Kong, despite the existence of real political parties who compete for public office through a democratic process, the constitutional arrangement imposed on Hong Kong by China and the British under the ‘Basic Law’ – Hong Kong’s mini-constitution – makes it impossible for these parties to perform the functions prescribed for them in democratic theory. Finally, in the 1990s, Taiwan established a fully democratic system with competitive elections among party candidates for all key public offices, including the presidency. We therefore may respectively characterize these three Chinese societies as examples of ‘village’, ‘partial’, and ‘full’ democracies.

Formal versus alternative democracy: politics and protests How do levels of democratic consciousness intersect with each society’s political structures to determine the pattern of politics within that society? We suggest that the extent to which the political structures respond to the level of demand for democratic or responsive politics helps explain whether citizens rely on formal versus alternative forms of democratic activity. Where the system fulfils those demands through a fully democratic process, as in Taiwan, we anticipate lower levels of social protest, particularly illegal or violent political activity, especially when compared to the years before the development of the multi-party system. We also anticipate less of a need for alternative democratic institutions and less reliance on informal political structures. In rural China, despite the rise of democratic consciousness and the establishment of village democracy, local political oligarchs, party cadres or newly emerging businessmen, may still be able to manipulate the electoral process. However, with the emergence of a new form of candidate selection, called ‘selecting from the sea’ or ‘hai xuan’, the level of manipulation by local elites or party leaders may be decreasing. Nevertheless, since many injustices and social concerns in rural China, including corruption and the imposition of unofficial fees and taxes, are perpetrated by elites beyond the reach of village elections, we

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would anticipate high levels of political and social unrest in the absence of state suppression or alternative mechanisms for seeking redress (Bernstein & Lu 2000). Also, villagers also may turn to informal associations, such as religious or clan organizations to meet their needs. Finally, despite a relatively high level of democratic consciousness in Hong Kong and the existence of competitive parties, the unique constitutional arrangement which prevents parties from playing any major role in policy making and the distribution of social resources may create a significant role for informal political institutions and social protest. Moreover, continued efforts at this democratic denial could lead to serious levels of social unrest.

Taiwan: public consciousness, the electoral mechanism, and formal democracy Taiwan’s democratic transition reflects a classic case of a disenfranchised and excluded majority that employs a mass movement to assert its political rights and create its own political party to challenge the ruling oligarchy and eventually both democratizes the political system and subsequently takes political power. Remarkably, this process has occurred relatively peacefully, due in part to the enlightened leadership of Chiang Ching-kuo, who realized that Taiwan’s future development depended on political liberalization and the emergence of a multiparty system. Still while many observers see Taiwan’s transition confirming the argument that inevitably socio-economic developments lead to political reform, the role of ‘the electoral mechanism’ and other political forces is too frequently downplayed (Hu 1993: 134–168). For Hu, the existence of partial democracy, with even limited electoral process, served as a critical independent variable undermining the authoritarian system and promoting the democratization of political system.

Democratic consciousness in Taiwan Various studies of Taiwanese political culture suggest that structural changes in the political system, as well as the experience of democratic participation, changed people’s attitudes towards politics. According to Hu, between 1983 and 1989, the value orientations of voters in Taiwan underwent a distinctly pro-democratic transformation, altering the political culture of Taiwanese society. And while support for ‘individual


freedom’ and the ‘separation of powers’ remained under 75 per cent,2 with the former supported by only 50.1 per cent and the latter by 64.4 per cent, dramatic increases of 16.4 per cent and 17.6 per cent respectively indicated that between 1983 and 1989, Taiwan had moved towards a far more democratic political culture (Hu 1993: 143). Creating an indicator by combining individual evaluation on four democratic valueorientations, Hu shows that while the majority of Taiwanese still remained ‘modern authoritarians’ – having increased from 63.7 per cent in 1983 to 68.3 per cent in 1989 – the number of ‘traditional authoritarians’ decreased from 23.5 per cent in 1983 to 11.1 per cent in 1989, while the per cent of people with ‘liberal democratic’ values rose from 12.8 per cent to 20.7 per cent (Hu 1993: 144). Another study by Parish and Chang also found little support for the culturalist argument of ‘change-resistant political values’. Instead, they argued, socio-economic modernization combined with changes in political structure explained value change (Parish & Chang 1996: 27–41). Finally, responses to a series of questions about attitudes towards freedom, political pluralism, and separation of powers also show very significant change in political values in Taiwan between 1984 and 1996. However, further dissection of the data show that changes in attitudes towards politics occurred soon after the lifting of martial law in 1987, again supporting the argument that changes in political structure can affect attitudes rather rapidly, and that what are perceived as deeply held Chinese values may be altered by changes in political structure.3 Thus for all questions but number four, more than half of the change in value recorded for that question took place between 1984 and 1987. For question four, however, the experience of a multiparty system in the 1990s, more than just the lifting of martial law, probably convinced people that such systems did not necessarily lead to chaos.4

Changing political structures in Taiwan: the emergence of the multi-party system Beginning in the 1950s, the Kuomintang (KMT), composed of mainland political elites who moved to Taiwan in 1949, introduced local elections as a means to legitimate its rule. Its controls over local political factions or local oligarchs and the co-optation of local Taiwanese elites allowed it to totally dominate the electoral process through the early 1970s. But beginning in the 1977 local elections, a loosely coordinated opposition group, bearing the label of ‘Dangwai’, (or ‘outside

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the party’, that is outside the KMT) began to make inroads on the KMT’s power base. Over the next seven years, the opposition created various semi-formal campaign organizations, and in 1986 created a formal party, the Democratic Progressive Party, or DPP. During this period, the KMT was hard pressed to undo this process and arrest the movement’s leaders as many of them had emerged through local elections sanctioned by the KMT, and therefore bore political immunity. To stabilize the political and economic system; the KMT tried to incorporate the opposition into the political system by allowing them to compete openly as an organized political party in all-island level elections. These elections for some seats in the Legislative Yuan, in 1986 and 1989, transformed the Taiwanese political landscape by allowing the local population to participate in nationwide elections that further democratized their political consciousness. A further critical structural change was also underway. For decades, mainlanders who had come to Taiwan in 1949 and who claimed their seats based on the 1947 elections on the mainland had controlled Taiwan’s parliament, the Legislative Yuan. But by the late 1980s most of the old guard had died off, so in 1993, all seats in the Legislative Yuan were put up for grabs, affording the opposition a real chance to expand its representation.

Social protest and alternative politics in Taiwan Political liberalization in Taiwan, particularly before the official sanctioning of an opposition party, triggered a dramatic increase in the incidence of social movements and social protest. According to one report, the number of social protests rose from 143 in 1983, to 183 in 1984, 243 in 1985, 271 in 1986 and then in 1987, the year that martial law was lifted, 676 incidents of social protest were reported (Chu 1994: 100). Numerous social movements led these protests which, though generally apolitical, challenged the KMT state to be more responsive to society’s concerns, to dismantle its corporatist controls, and establish new rules for politically sensitive subjects. For example, led by a powerful environmental movement, public protests over environmental degradation grew dramatically. While there was an average of 13.75 environmental conflicts per year between 1980 and 1987, between 1988 and 1990 the average jumped to 31.3 protests/year, peaking at 258 in 1991 alone (Tang & Tang 1997). Chu attributes this rise in public protest to a lack of secondary associations or other functional intermediaries to translate popular discontent into effective policy


responses, as well as limited capacity of the authoritarian state to respond in a timely fashion to emerging popular demand (Chu 1994: 106). But informal politics had long been a hallmark of Taiwan’s political system. When the KMT moved to Taiwan it empowered competing local factions or clans, giving them control over local politics, all the while linking them to the centre through a system of networks and patron-client ties running out of Taipei to the whole island. These factions helped the KMT insure its own hegemony, even as it allowed relatively free and fair elections. This system, which prevailed through the 1950s, 1960s, and the early 1970s, mirrors local politics in the Philippines as described by Dr. Rocamora in his companion paper (Rocamora 2000). However, over time these local factions and clientelist networks, which formed an overlapping formal and informal political structure, found winning local elections more and more difficult. As society grew wealthier and more educated, aspiring local political entrepreneurs competed for political power through elections. Drawing on issues such as national identity and Taiwanisation, horrendous environmental degradation, and political reform, these new contenders challenged the local power structures. Elections that had once been a mechanism for control, now became a public process of political contestation through which local interests competed for government resources. The continued influence of informal political power in the localities and the increased role of ‘black money’ politics is a major target of political protests. Political reform remains high on the political agenda of many citizens, along with concerns about social order and crossstraits relations. Political protests have probably become more civil, as Rigger argues, ‘the frequency of demonstrations has diminished steadily as reform has progressed’.5 In fact, the occurrence of violent assemblies and parades has decreased significantly since the peak year of 1989, when there were reportedly 28 cases. In 1996, there were eight cases, with three in 1997 and four in 1998. Similarly, the number of people injured in political protests has decreased significantly since 1988, when 486 people were hurt. While numbers stayed over 100 through 1994, only 25 people were harmed in 1997 and 32 in 1998 (National Police Administration 1998: 181). Still, citizens have on various occasions in the late-1990s taken to the streets en masse to protest government’s inability to halt ‘gangster’ politics. Despite the emergence of a stable electoral system, increasing wealth and autonomy of local politicians has allowed informal politics to play

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a major role in Taiwanese politics. With elections now the ‘sole, legitimate channel for upward mobility and access to key public offices’, winning elections has become supremely important for local KMT bosses (Kau 1996). Also, due to the ability of the DPP to field popular local candidates, money has become a key factor in determining electoral outcomes. Thus local politicians, factional leaders, and powerful clans have become power brokers who negotiate with the central KMT authorities, more as equals than as supplicants, demanding a variety of payoffs for turning out the votes. According to Kau, since the KMT has to rely more and more on the rich and powerful to deliver votes, ‘it is now quite commonplace to see the forces of factional bosses, big clans, business conglomerates, and Mafia-type gangsters take control over local political campaigns’ (Kau, 1996: 302). The rise of criminal elements among local politicians – in 1994, 35 per cent of 858 first term councilmen at the township and village level had criminal records or associations with illegal gangs – has particularly harmed the KMT, which, lost out to the DPP in the recent presidential election largely over the issue of political reform and ‘black money’ politics.

Hong Kong: parties without power in a ‘partial democracy’ Hong Kong is a hybrid political system in that it is neither clearly authoritarian nor democratic. The population has a strong sense of democratic consciousness and as well formal political parties that were established in 1991 and compete vigorously in the electoral process. However, the constitutional arrangement imposed on Hong Kong by the Beijing government created a highly ‘restricted’ or ‘partial democracy’.6 Under this arrangement, political parties that are popularly supported by citizens have minimal influence on government policy because elected legislators cannot initiate public policy. As a result, the role of political parties in decision-making over the allocation of political values remains quite limited, weakening a key channel for statesociety communication, confidence building, and elite-mass linkages. The parties and other political institutions poorly manage social and political discontent (Lau 2000). Moreover, clientelist parties and elites without strong grassroots support increasingly dominated Hong Kong’s government (Hing 1998: 67–87). Yet the leadership in this ‘executive led’ political system is popularly seen as excessively probusiness, even as social inequality in Hong Kong grows. This growing gap between haves and have-nots, and popular dissatisfaction with livelihood issues, such as housing and health care, increase popular


dissatisfaction with the government. In fact, the summer of 2000 witnessed unprecedented levels of public protest, leading some observers to assert that political instability is no longer beyond the realm of possibility (Hing 1998).

Democratic consciousness in Hong Kong A common stereotype about Hong Kongers is that they care only about making money and not about politics; many studies characterize them as politically apathetic. But given the political constraints imposed by British colonial society, Hong Kong’s position next to a soon-to-besovereign China, and the refugee status of so many inhabitants, Hong Kong only began in the early 1970s to develop a more active political culture (Degolyer and Scott 1997: 68–78). And as territory wide political structures were erected that encouraged grassroots activities, a foundation was laid for rapid political development in the 1980s and 1990s. In particular, the Tiananmen crackdown in Beijing awoke the population to the continuing dark side of the soon-to-be sovereign power, while the political reforms of Governor Patten allowed for greater political expressions of those political concerns. Hong Kongers are voracious consumers of all types of political and economic information. According to the Hong Kong Transition Project, 64–68 per cent of people surveyed read a newspaper every day. In April 1998, 48 per cent of people reported watching news or current affairs programs on television for seven hours or more/week, while in April 2000, 38 per cent were still doing so.7 Hong Kongers also have a high tolerance for political conflict. About 80 per cent find multi-party competition in elections and party debates within the legislature, acceptable. Approximately three-quarters of the people interviewed accept disagreements between Legislative Council (Legco) and the Executive Council (Exco), while over two-thirds of the population also support the idea that people have the right to express their political opinions through street demonstrations and protests. Hong Kongers also resent non-democratic political activities. While the findings are less than conclusive, only 50 per cent of citizens accept the idea that the Executive Council should veto proposals by the Legislative Council, even though this power is enshrined in the Basic Law. And while those who did not find such actions acceptable decreased from 28 per cent in 1998 to 22 percent in 2000, 22 per cent responded ‘don’t know’ in 1998, while 28 per cent did so in April 2000. Clearly there is a great deal of ambivalence on this issue. But

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when asked about the right of business groups to veto grassroots proposals, people showed a strong support for pluralist democracy and strong resentment towards the influence of the ruling oligarchy. In 1998, more people (45 per cent) found business groups vetoing grassroots proposals unacceptable than acceptable (45 per cent versus 34 per cent), although in 2000 more people found it acceptable than unacceptable (39 per cent versus 36 per cent).8 Still, in April 2000, 25 per cent of those interviewed selected ‘don’t know’ in responding to this question.

Political structures: a legislature with parties but no powers The political structures in Hong Kong were carefully crafted so as to weaken society’s and Legco’s ability to influence policy. Hong Kong is an Executive-led polity where the Chief Executive wields enormous (almost unlimited) power, and this Chief Executive, Tung Chee-hwa, is quite anti-democratic. Even before he took office, Mr. Tung demonstrated what Lau Siu-kai calls an ‘abhorrence of politics’ and political parties, as well as a political conservatism that leads him to reject even a watchdog role for the elected legislators (Lau 2000). He disbanded the elected municipal councils, consistently refuses to meet with the Democratic Party, previously the strongest party in Hong Kong, and denigrates the legislature, seeing it as little more than a gadfly he must tolerate. Political parties in Hong Kong are weak; democratization was a top down affair, unlike the process that occurred in most de-colonized societies it was not a fight led by political parties against the colonial power; thus, parties were not able to create their own legitimacy as forces for democratization and political liberalization. After ten years public support for parties is still low and only 21.7 per cent of Hong Kongers had any Party ID. In large part, the partial nature of the democratic system in Hong Kong and the political context – that is, its early days of transition to mainland sovereignty – is an important impediment to party development. Still, following the Tiananmen crackdown in Beijing, parties were seen as the key institution that could promote more rapid political democratization and thereby protect Hong Kong from Beijing. In a 1998 survey, 44.7 per cent of Hong Kongers believed that parties were needed, and only 18.2 per cent said that they were not needed (Lau & Kuan 2000). In particular, the Tiananmen crackdown strengthened the stature and popularity of the Democratic Party (DP) that was seen as


the party leading the opposition to the authoritarian rule by Beijing. Even in 1998, people who were concerned about the pace of democratization in Hong Kong favoured the DP over other parties, while those who trusted Beijing and the Hong Kong government favoured the proBeijing Democratic Alliance for the Betterment of Hong Kong (or DAB), as well as the pro-business Liberal Party. In essence, the Democratic Party was perceived as the key opposition party vis-à-vis the Hong Kong government and the government in Beijing. Yet, in the past few years, particularly following the East Asian crisis, people’s concerns have shifted away from singular concerns with democratic freedom, towards multiple concerns about economic opportunities and livelihood issues. The result has been a simultaneous decline in the popularity of the Democratic Party, which has failed to address these livelihood issues, and the rise of the Democratic Alliance for the Betterment of Hong Kong. This latter party has benefited from strong support from the ruling oligarchy, which has been encouraged by pro-mainland forces in Hong Kong to help it. DAB cadres have received management training at Qinghua University in Beijing, funded by members of the oligarchy. While members of the Democratic Party must turn over some of their Legco salary to the party to help finance its administrative costs, the DAB is flush with cash and funds two full-time staff in each electoral constituency that respond to complaints from local constituents about grassroots issues. As a result, the DAB is building a strong political machine within the community that is likely to result in their becoming the largest party over the next few years. The unique characteristics of the Hong Kong legislature further contributes to the limited role parties play in the political process. Both Beijing and the British colonial authorities favoured keeping Legco weak so that even if a single party came to dominate the legislature, it would not be able to veto bills proposed by the Executive. Thus severe limits were placed on the role of parties to serve as interest articulators or representatives of societal interests. Article 74 of Hong Kong’s miniconstitution, the Basic Law, scuttles the right of private members to propose any bills ‘with meaningful policy implications’. 9 The only real power granted to Legco is the right to veto government bills, particularly its budgets, the threat of which gives them some negotiating powers. But this power is limited by the strong power of pro-government business leaders in Legco, whose dominance is secured because the electoral system has been structured in such a way as to insure that no liberal political party can translate popular support into control of the

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legislature. As of 1999, only 40 per cent of the seats in Legco (20 seats) were directly elected from geographic constituencies, another 50 per cent (30 seats) were elected through highly unrepresentative ‘functional constituencies’ – where only leaders in professional associations are allowed to vote for their representatives to the legislature – and 20 per cent or ten seats were elected by a pro-Beijing, pro-business selection committee. Efforts by former Governor Patten to further democratize the functional constituencies by allowing employees, as well as the elites, within a sector to vote, did not survive the 1997 transition, as Mr. Tung reversed those reforms after coming to power so that once again, only the leaders, often the owners of businesses, in each sector are allowed to vote.10 Even in September 2000, the Election Committee still selected six members of Legco, allowing the number of people directly elected from geographic constituencies to rise to 24 seats. Moreover, the proportional representation system used in the geographic constituencies further weakens liberal forces in Hong Kong. Under the electoral system, people vote for a party list with multiple seats in each constituency, rather than a first-past-the-post system; this type of system favours less popular parties, such as the DAB, as it can get seats with less than 30 per cent of the vote in any district. According to Lau, The labyrinthine manner whereby the legislature is elected makes it impossible for any political party, nor any organized political force for that matter, to control the legislature. Popular parties face insuperable obstacles in developing themselves into powerful political forces since the popularly elected seats in the legislature constitute only a minority in the body. Furthermore, the proportional representation method used in the direct election of legislators inhibits the development of strong popular parties. Functionally elected legislators owe their allegiance to sectional interests and conduct themselves mostly as individuals and hence largely beyond the control of party discipline. The few legislators elected by the Election Committee are the products of factional infighting in the tiny electoral body. Naturally they do not form a cohesive force on their own. Consequently, Legco is a highly fragmented and fissiparous political body (Lau 2000: 6). Moreover, parties have no access to the Chief Executive, who is the initiator of most legislation, as he refuses to meet with them in part out of his fear of legitimizing the Democratic Party. Therefore,


not surprisingly, political parties remain most popular among those who are disaffected with the political authorities (Lau & Kuan 2000).

Alternative politics, NGOs, and public protests in Hong Kong The emergence of political parties in the early 1990s and the political liberalization of the Patten years (1992–1997) did not obviate the need for public meetings and public processions, both indicators of informal political activity. According to data from the Hong Kong police, the number of public meetings between 1987 and 1995 increased from 92 to 1,112 with the major increase occurring between 1990 and 1991, after the Tiananmen crackdown in Beijing. Similarly, the number of public processions rose from 172 to 401, with a jump of over 25 per cent in 1994–95. With weak parties and the business oligarchy dominating the formal institutions of political authority, Hong Kongers resort to forming civil society organizations and other grass roots bodies to promote their interests. The number of registered societies has continued to grow since the early 1980s, and despite the legalization of political parties in 1991, the number of registered societies increased by 75 per cent between 1991 and 1998. The stature of political parties has been declining over the past few years, triggered in large part by their inability to help citizens resolve many of their livelihood needs. As socio-economic issues rose onto the political agenda, as a result of the East Asian crisis, none of the parties were able to deal with them. Despite its strong pro-democracy position, the mainstream faction in the Democratic Party, reflecting its middle class nature, is economically conservative; they opposed the introduction of a minimum wage in Hong Kong. The Liberal Party cannot raise such issues, as it reflects business interests and draws its support from the Functional Constituencies. Finally, the DAB is pro-Beijing and progovernment, and therefore cannot adopt anything nearing a radical social agenda. Only more marginal parties, such as the Frontier, or the radical faction within the DP could respond to these articulated social interests. As a result, the East Asia crisis helped decrease the political support for political parties, precipitating political disillusionment and a period of ‘party stagnation if not decline’ (Lau & Kuan 2000). Given the impotency of the parties to affect the legislative agenda, party competition is perceived as reflecting power struggles among elites more than as battles over public policy. There has been a significant

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decline in popular acceptability of both multi-party competition in elections, from 85 per cent to 78 per cent, and party debates in Legco (from 83 per cent to 77 per cent).11 Most important, in a recent survey, Hong Kongers expressed the views that they felt neglected by politicians, as only 14.1 per cent of people interviewed thought that politicians were concerned about their problems, while 61.5 per cent found politics and government complicated and difficult to understand (Lau 2000). Similarly, when asked whom the Chief Executive and the civil servants should listen to if there is an important livelihood issue needing resolution, only 2 per cent of people said that the government should listen to political parties and pressure groups, while 16 per cent favoured directly elected Legco members, the majority of whom are affiliated with political parties. The most important group to be consulted was the general public which accounted for some 43 per cent. Yet even as support for parties declined, so has popular support for street demonstrations and protests. Whereas in June 1998, 72 per cent of citizens found such protests acceptable, and 18 per cent found them unacceptable, as of April 2000, only 67 per cent found them acceptable and 23 per cent found them unacceptable. Yet it is clear that since the spring of 2000, the number of protests increased; on July 1 alone, five different groups fanned out throughout Hong Kong, staging various protests. According to the International Herald Tribune, Hong Kong had turned from the ‘City of Light’ to the ‘City of Protest’(Chandler 2000). Even the pro-business Liberal Party felt it necessary to bring its people to the streets to protest the decline in property values. Finally, while senior and established leaders of the Democratic Party favour working within the system, a core group of ‘young Turks’ prefer to engage in more street level activity. Motivated by social issues rather than lofty concerns about democracy, these DP members see the political system – including the Legislature – as unresponsive and feel that direct confrontation is the only way to gain their goals. The split is also driven by the continuing decline of the DP, which is seen by some observers as another reason that ‘democracy in Hong Kong may have to hit the streets’ (Mitchell 2000: 26–28).

Concluding comments on Hong Kong It is ironic that the ruling oligarchs depict Hong Kongers as unprepared for full democratic participation while Hong Kongers consume massive amounts of political information and strongly support democratic, rather than non-democratic practices.12 In fact, it is the wealthy in


Hong Kong who are not prepared for a full democratic transition. This ‘democratic denial’ can only return to haunt the oligarchy by generating future political instability. Hong Kongers increasingly see the government, ruled by the oligarchy and its political representatives, as increasingly unfair. They feel Mr. Tung bows to the will of Beijing and to the strongest of the oligarchs, Mr. Li Ka-shing, one of the wealthiest men in the world. Thus people are becoming increasingly worried about their political freedom. While in July 1998, 74 per cent of people were ‘not worried at all’ about personal freedom, that number had dropped to 62 per cent in April 2000. At the same time, the numbers that were ‘slightly worried’ rose from 13 to 20 per cent. Still the numbers who are ‘very worried’ remains at only 5 per cent. Nevertheless, as more and more people perceive that elections are little more than ‘window dressing that creates an illusion of democratic development’, the elite-mass gap could further deteriorate.

The PRC: ‘village democracy’ without parties Of our three Chinese societies, the PRC has undergone the most limited amount of democratic development. Nonetheless, since 1987 the Chinese Communist Party (CCP) has instituted basic grassroots democracy in the form of village elections for a Village Committee that effectively controls certain aspects of the local economy. Overall, these Village Committees cannot challenge local CCP authority, although one reason they were introduced was because village level CP committees had seriously deteriorated in almost 80 per cent of villages following decollectivisation. The CCP felt it was losing control over the countryside, so when a young group of rural specialists approached some senior party officials and recommended the introduction of village democracy, these leaders felt that the party had little to lose. Although theoretically autonomous these Village Committees fall under the influence of the township government, the lowest level of official government authority in the countryside that rests one bureaucratic level above these village committees. Given that there are no other truly free elections at any other levels of administration in China, I have labelled this form of political structure ‘village democracy’.

The strength of the ‘democratic idea’ in rural China Despite the low level of economic development in rural China, data from a survey carried out in summer 1999 in rural China reveal strong

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support for the ‘democratic idea’ in rural China.13 Villagers were asked to respond to a series of six questions about democracy and electoral politics. For example, we asked villagers to respond to the following statement – ‘Only people with specialized knowledge and ability have the right to speak during periods of decision making’ – by selecting ‘strongly agree’, ‘agree somewhat’, ‘don’t agree very much’, or ‘completely disagree’. We also allowed them to respond with ‘don’t know’ or give no response. Since this statement reflects non-democratic values, those who ‘strongly supported’ the above statement were given a score of –2, while those who ‘agreed somewhat’ received a score of –1. Similarly, those who ‘disagreed somewhat’ received +1, while those who ‘strongly disagreed’ got +2. Interestingly, almost 45 per cent of villagers disagreed with this statement – 27.6 per cent ‘disagreed’ and 17.3 per cent ‘strongly disagreed’. On the other hand, over 30 per cent ‘somewhat agreed’, while only 12.1 per cent ‘strongly agreed’. Of these villagers, 9.1 per cent selected ‘don’t know’.14 A second question showed that villagers strongly believe they have the right to send petitions to upper levels, an act that reflects a reliance on informal or alternative democracy. In response to the statement: ‘If villagers disagree with local policies, they have the right to send accusatory petitions to higher levels’, over 80 per cent ‘strongly agreed’ (41.1 per cent) or ‘agreed somewhat’ (40.3 per cent), while only 6.4 per cent ‘disagreed’ and 2.4 per cent ‘disagreed strongly’. Only 6.6 per cent of villagers had no opinion on this issue. Finally, villagers strongly disagreed with the statement argument often proposed by Chinese oligarchies that Chinese willingly accept non-democratic politics so long as they can make money. Thus, in response to the statement: ‘As long as the village economy shows stable development, there is no need to raise the level of democracy’, only 6.6 per cent ‘strongly agreed’, while 14.4 per cent ‘agreed somewhat’. Instead, 32.3 per cent ‘disagreed somewhat’, while 33.1 per cent ‘strongly disagreed’. Finally, 10.3 per cent ‘didn’t know’. Clearly, the oligarchs are mistaken. By combining each person’s score for all six questions we were able to give them an overall score in terms of a ‘democratic ideal’ and position them on an anti- versus pro-democratic continuum (Figure 6.1). The distribution of villager attitudes in Figure 6.1 shows a rather strong prodemocratic tendency among these 120 villages, with very few villagers possessed of anti-democratic value; moreover over 40 per cent had what we might see as strong pro-democratic values, in that they took a strongly democratic position on at least one of the six questions.15


16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% –10 –9 –8 –7 –6 –5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12 Figure 6.1

The Distribution of Democratic Values in Rural China, 1999

Given that these villages were relatively poor with little industrialization, democratic consciousness seems to have emerged without significant socio-economic development. We also asked people about their level of attention to politics and public affairs. The data shows that people are interested in state affairs, with 21.4 per cent being ‘very interested’ and another 51.5 per cent being ‘relatively interested’. Similarly, over 50 per cent had engaged not infrequently in some form of discussion on economic and political affairs in the last month, although the amount of discussions seems to be less than would be expected from the asserted level of interest in state affairs. Finally, many in this group may be illiterate or simply do not read newspapers much, relying on the radio for their political information. What did people actually think about the democratic practise in rural China? Was it perceived as legitimate? Again, we found strong support for free and fair elections. In response to the statement: ‘If your current cadres have good leadership ability and the people’s confidence, then we do not need elections’ – over 55 per cent ‘did not agree much’ or ‘totally disagreed’. Only 23.9 per cent ‘agreed somewhat’ while only 12.4 per cent ‘totally agreed’. Thus the assertion that Chinese people prefer order and economic development to democracy may not hold true in these localities.

Political structure: the institutional framework for ‘village democracy’ Village democracy was introduced step-by-step, based on draft regulations passed by the National People’s Congress in 1987. At that time

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‘demonstration villages’ were set up in about 35 counties. In the 13 years since 1987, almost all provinces in China have introduced their own regulations, while the central government has further codified this grassroots phenomenon. Estimates vary, but today perhaps as many as 40 per cent of villages in rural China employ secret ballot, multiple candidate elections to choose the director, vicedirector, and members of the Village Committee – committees are comprised of five to seven members in total. Villages have also been called on to draft ‘village charters’, which commit the elected representatives to run village affairs democratically or face recall, and have been directed to open their books to their citizens by posting them on public billboards. The goal is to decrease corruption and increase public confidence in the elected officials. Nevertheless, some observers have suggested that despite the openness of the electoral process, local CCP officials can control elections by determining the candidates. However, in our localities, when villagers were asked: ‘What do you think of the CCP’s level of influence over elections?’ – only 9.6 per cent saw the party’s influence as ‘very great’; 22.3 per cent saw the CCP having ‘a certain level of influence’; 22.3 per cent saw it having ‘not much influence’; while 20.6 per cent saw it having ‘no influence’. Again, 21 per cent said that they ‘did not know’. Even if we assume that those who selected ‘did not know’, did so because they were afraid to say that they saw the CCP having influence, 42.9 per cent still did not feel that the CCP had very much influence. Responses to a similar question verify these findings. We asked: ‘If a ministry or bureau wants to control the election, they can do so by controlling the selection of candidates’. The responses were as follows: ‘Totally agree’ – 6.5 per cent; ‘relatively agree’ – 18.4 per cent; ‘don’t agree much’ – 20.9 per cent; ‘totally disagree’ – 20.4 per cent; ‘don’t know’ – 27.1 per cent. Again we find about 41 per cent feeling that outside or local established political forces cannot really control the selection of candidates or the outcomes of elections. The National People’s Congress, China’s legislature, has enshrined a key reform to the electoral process by introducing ‘hai xuan’, or ‘selecting candidates from the sea’, which in 1999 as the only legal mode of candidate selection, further weakened the local authority’s ability to manipulate outcomes. Under this system, villagers meet together and can nominate any person in the village who possess their democratic rights. Through a series of public elections, people who get the largest numbers of votes in each public polling are allowed to continue until


two or three leading candidates remain in the contest. These two or three candidates then run for public office. Among the villages we surveyed, 19.7 per cent of villagers reported that their village used this method in the most recent election, 17 per cent reported that villagers in their village directly nominated the candidates, while another 4.9 per cent reported that a small group of villagers collectively nominated their candidates. These choices, plus self-nomination (0.6 per cent of cases), suggest that over 42 per cent of villagers partook in a relatively democratic process for selecting candidates. On the other hand, if one sees nominations by various local organizations, including the party secretary, the local election committee, or the Villager Assembly, as inherently non-democratic, then 36 per cent of villagers participated in more non-democratic procedures. In terms of other democratic measures, 79.3 per cent of villagers reported that they had voted in the most recent election and had done so by secret ballot. Also, 69.6 per cent of villagers reported multicandidate elections, while only 11.3 per cent reported that there had not been more than one candidate. Still, only 22.4 per cent reported that their village had allowed candidates to speak publicly before the election, while 57.8 per cent reported that they had not. Finally, villagers felt that the elections in their village were becoming more democratic, with 17.6 per cent feeling that they were not ‘more fair’ than before, while 41.3 per cent felt that elections in their community were ‘a little more fair’. Finally, a rather large percentage (13.1 per cent) nominated candidates or encouraged others to vote (20.6 per cent). These data suggest a rather robust local political climate relating to this form of formal democracy. The voting rate is high at 79.3 per cent, while the percent of people who did not participate at all was low, at only 10 per cent. Yet, even when villagers freely nominate their own candidates, a form of anticipated reaction may be at work here, if villagers select people whom they believe will be acceptable to the local party officials and do not select people who oppose CCP rule or are at odds with the local party officials. Thus when asked to respond to the statement: ‘people who do not carry out the state’s policies are not allowed to run for office and hold power’, 31.1 per cent ‘strongly agreed’ and 28.9 per cent ‘agreed somewhat’, while only 26.1 per cent ‘did not agree much’ or ‘did not agree at all’. More importantly when asked, ‘who should be elected’ for office – and people were allowed to select more than one choice – the largest number of people, 60.3 per cent, selected ‘people

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who keep close ties to the party’. Clearly, villagers recognize that the CCP is the most important organization in rural China and a major channel through which the state distributes resources. Consequently villagers benefit when their leaders have good party ties. Yet, people are not keen on electing current village leaders – selected by only 16.8 per cent – probably because they are perceived as being corrupt. Villagers also want people with high cultural values (54.9 per cent), but not necessarily people with high social status (6.8 per cent) or business leadership (7.3 per cent).

Alternative forms of political action in rural China Other than election related activities, what other forms of political activity occurred in these villages? To assess this issue, we asked two questions. First, we asked the following hypothetical question: ‘If you heard that village cadres were considering carrying out what you considered to be inappropriate policies, what would you do?’ The responses show that over 30 per cent of villagers people believe they would speak their mind and directly confront the local officials. They also show a willingness to work with others to solve these problems. Yet cynicism is also strong, as 37.6 per cent did not want to get involved or felt that doing so would be of no use. But what had they done in real life? To assess this fact, we asked people to select from a list the main problems they confronted in their day-today lives and then asked whether they had done anything to solve those problems. Of 2637 people interviewed, 441 (16.7 per cent) said that they had done something to solve their problem, taking part in 739 different types of actions. First, while the Village Committee and its leaders were directly elected by villagers, only 20 per cent of their responses involved approaching them for help when problems arose, while over 30 per cent involved approaching the local Communist Party committee or its members. Second, villagers in our four counties rarely engaged in protest, as public assemblies or protests combined only 2 per cent of the behaviours adopted.16 Third, a very common strategy – and a key part of the informal democracy in rural China – is to contact higher-level officials directly. Villagers often see local officials as highly corrupt, while they see higher-level officials at the province or above, as less corrupt and amenable to solving problems; therefore villagers may prefer to petition upward depending on the problem. Thus, 237 or 44.3 per cent of the responses involved going over the heads of local officials and petitioning higher levels to get involved.


Finally, what is the relationship between elections and democratic structures on village stability? Elections do build support for the regime and its policies. When asked if people support government policies because of elections, 23.2 per cent ‘strongly agreed’, and 42.8 per cent ‘agreed somewhat’. Only 3.9 per cent ‘totally disagreed’. When asked a close-ended question about why former officials were not re-elected, the main reason suggested was a lack of leadership ability (28.5 per cent), followed by corruption (15.3 per cent), being unfair in their decision making – ban shi bu gong – (14.3 per cent), and an inability to develop the local economy (11 per cent). Thus people truly saw leadership ability as an important factor affecting electoral outcomes, not party manipulation or personal relationships. As for the direct relationship between democratic institutions and village stability, 17.8 per cent said that elections greatly increased the level of stability within the village, while 53 per cent thought it brought some stability. Only 1.4 per cent of people thought that elections somewhat decreased the level of stability, with only 0.7 per cent believing that it had significantly decreased stability in the village. Because in each village we interviewed 20 randomly selected people, we determine the general view within each village and use their responses to create village-level measures. Thus while we were not able to get good measures of social unrest in the localities which we studied,17 reports from China suggest that direct election of Village Committees has decreased villagers’ complaints, largely because the establishment of such committees also led to greater transparency in village finances. In Pingyuan Village, Shandong Province, collective complaints and crimes were reduced by 21 per cent and 18 per cent respectively in 1997 due largely to the more open political atmosphere in the village. To assess this relationship we created a model based upon village level data to explain why villages had experienced an increase in their level of social stability over the past five years. The model employs 14 independent variables and explains 71 per cent of the variation in the outcome variable (R2 = .711) – villager perceptions of increased stability. The two most outstanding independent variables were where people perceived the ‘contract with cadres’ as useful – one of our key democratic innovations – and whether individuals felt that ‘their overall level of participation had increased in the previous five-ten years’.18 Also, when we used ten years of stability as our dependent variable, whether or not people perceived the elections as becoming fairer was also an important factor.19

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It is important to note that the CCP has itself sanctioned alternative forms of ‘democratic’ activity beyond village elections in its drive to limit social unrest and cadre corruption. Villagers are allowed to petition higher-level officials – in part because they inform the CCP about local problems – and in 1990 it instituted the Administrative Litigation Law, through which citizens can sue public officials. The success of these measures, and this strategy of establishing alternative democratic institutions, remains questionable. Rural protests remain widespread and continue to threaten the regime’s stability (Bernstein 1998: 93–110). But while the state has legitimized these alternative forms of political behaviour, which reflect greater political liberalization and the institution of more open procedures, it has remained adamantly opposed to the formation of autonomous NGOs and the emergence of civil society. According to a report by Human Rights in China, the ‘Regulations on the Registration and Management of Social Organizations’ introduced in 1998 were even more comprehensive and controlling than similar rules introduced after the 1989 Tiananmen crackdown. As we have seen in its dealings with the Falun Gong religious movement, the Party/state sees autonomous religious organizations as equally threatening and seeks to crush them.

Conclusion In this concluding section, I will deal with three general issues, two raised by Dr. Rocamora in his chapter – the role of external forces in promoting (or retarding) democracy, and the power of the ruling oligarchy – and a third which focuses on the relationship between political culture, political structure, and political development. International pressure has contributed significantly to the form of democracy – full, partial, or village – extant in all three Chinese societies, though the direction of influence varies across the three cases. While foreign forces greatly affected democratic development in Taiwan, and played a positive, albeit less important, role in the PRC, external influences have by and large slowed the pace of democratization in Hong Kong. In the PRC, domestic advocates of village democracy consciously played the ‘international card’ as part of their strategy to overcome domestic opposition to village elections. They also needed financial support for training, publications, overseas education, and for gaining the attention of local governments throughout China. Foreign funding


from The Ford Foundation, the International Republican Institute, Asia Foundation, United Nations Development Program, the Carter Center for Democracy, the European Union, and other donor agencies, all helped this home grown drive to promote ‘village democracy’. Advocates of village elections in the central government used incentives, in particular trips overseas to study how self-government and elections were implemented, as a way to pressure officials in the local bureaus of the Ministry of Civil Affairs to introduce democratic practices in the villages in their county. In fact, Jimmy Carter helped bring village elections to the attention of Party General Secretary Jiang Zemin, whose recent support for village democracy has increased the pressure on local officials to carry them out (Jakobsen 1999: 15). At the same time, officials within China, including the top leaders, have come to recognize the great public relations value of grassroots democracy in the international realm. This newly found value has particular significance vis-á-vis the United States, as it presents an otherwise dismal record of political reform in a far more positive light. For Taiwan, all observers agree that the loss of international status in the 1970s, beginning with the loss of Taiwan’s UN seat and culminating in the breaking off of diplomatic relations with the US in 1979, increased pressure on the KMT to ‘turn inward and to rely more on the legitimating function of electoral institutions’ (Chu 1994: 103). As a result of these external pressures, then president Chiang Ching-kuo made the critical decision to lift martial law and institute widespread democratic reforms. Also fear of international condemnation made it harder for the KMT to crack down on elected officials who became opponents of the regime in the early 1980s. Therefore, contrary to analyses of the World Systems approach, Shiao argues that the assimilation of Taiwan into the world capitalist system was a positive force for the emergence of civil society as it reinforced society’s capacity to resist state domination (Shiao 1999: 113). Finally, Taiwan’s effort to position itself in a positive light vis-á-vis the continuing authoritarian regime on the mainland, further propelled it to adopt democratic structures. Yet international pressure is most significant in the case of Hong Kong. First, in 1987, the British ignored popular demands for democracy and postponed political reform, by doctoring the findings of its own survey, which contrary to the public pronouncements, actually showed strong support for political change. Then China, through its control over the committee establishing the constitutional arrangement that would govern Hong Kong after the 1997 reversion, created a

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legislature with minimal authority and instead vested almost all political power in the post of Chief Executive, whom they then proceeded to hand-pick. As for the issue of local oligarchies, the dominance of local elites in Philippine politics is mirrored in both Taiwan and the PRC. Yet particularly in Taiwan, electoral politics allowed for the emergence of new local elites in the 1970s and 1980s that challenged the dominant local factions. Ironically, in the 1990s, their economic power has allowed these local oligarchs to reassert their influence over an increasingly competitive and expensive democratic process. However, while Filipinos elected a president, who reinforced the tendency towards cronyism in Philippine politics, popular demands for political reform and an end to ‘black money politics’ helped Chen Shui-bian defeat the KMT candidate in the presidential elections of March 2000. His challenge now is to reform the political system and undermine the authority of local oligarchs. In China, while ‘village democracy’ has taken root, there is little sign that it is challenging the local power structure. Villages in my survey selected candidates who were acceptable to the local party elite or were the party elite. Local cadre corruption at the township and county level, remains rampant and beyond the reach of village democracy. As a result, villagers must turn to alternative forms of democracy. They have many other choices besides democratic choices including flight, violence, and so on, particularly petitions to higher level officials, or illegal local organizations, if they wish to solve their problems. Finally, the rule of the oligarchs seems secure in Hong Kong. Due to their dominance of the functional constituencies and the Election Committee, which still comprise over 60 per cent of the seats in Legco, they can prevent serious political and economic reforms that challenge their dominance. Also the business elite holds all but one seat on the Executive Committee, which advises the Chief Executive. Having successfully transferred their political allegiances from the British to Beijing, the business elite of Hong Kong has utilized this alliance, and Beijing’s desire for stability and economic growth in Hong Kong, to protect is own economic and political position. Thus, pro-worker legislation passed on the eve of the handover was overturned after July 1997. Lastly, what does the perspective espoused in this paper suggest about the future of democracy and political development in these three societies? First, relatively high levels of political consciousness in all three societies, despite different political structures, means that the


available structures and structural reform, rather than socio-economic development or modernization, are the critical variables that will determine each society’s political future. Thus China may not need further changes in people’s values before it is ready for a democratic transition. In fact, on the eve of democratization, mass culture in Taiwan was more authoritarian than the political culture today on the Chinese mainland; therefore, there is little reason to believe that the political culture on the mainland is a deterrent to democratic breakthrough (Shi 2000). While Shi may argue that the key to democratic development lies with the values and attitudes of the ruling elite, as Chiang Chingkuo’s role in Taiwan shows, the experience of Taiwan also suggests an alternative source of democratization, the experience of electoral politics itself. Thus the PRC may have indeed opened the genie of democratic transition by instituting ‘village democracy’. Indeed the willingness of the KMT to use elections to co-opt local elites and legitimize the KMT’s authoritarian rule had major implications for the democratic process in Taiwan. According to Chu, Elections became the institution in which the local political elite found their self-identity and on which the entire local power structure, rested. Increasingly, the national ruling elite found out not only that they could not do without elections, but that they had to deal with the rising pressure from both inside and outside the party for electoral openings at a higher level (Chu 1994). Moreover, as discussed above, Hu strongly believes that elections themselves fostered democratic practice and democratic consciousness within the entire population (Hu 1999). Interestingly, Peng Zhen, a member of China’s old guard who strongly supported village democracy in the late-1980s, argued the same for the mainland back in the 1940s. In a 1941 report, he wrote that ‘if we conduct popular elections, we should seriously follow democratic principles and the spirit of rule of law in doing so… This will enable the majority of people to understand, from their own personal lives, that democratic politics is far better than authoritarian politics’ (Li & O’Brien 1999: 131). The case of Hong Kong probably supports this argument as well, in that the political reforms introduced by Governor Patten in the early 1990s appear to have taught Hong Kongers the value of democracy and energized them to want to participate. Yet it is precisely in Hong Kong where we may find the greatest mismatch between levels of democratic

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consciousness and the established political structures. While Hong Kongers are strong supporters of democracy, their political structures may be the least democratic of all three countries, in that in village democracy the elected representatives do have direct control over the funding for village programs. If the elites in Hong Kong do not respond to this incongruity, by speeding up the process of democratization, one of two possibilities is likely. First, cynicism could set in, and rather than ‘partial democracy’ transforming into full democracy, as it did in Taiwan, citizens might give up on the formal political process entirely. However, if they do so, they may turn instead to largescale protests, resulting in increasing political instability. Notes 1 Funding for the research on rural China embodied in this paper came from a grant from the United States Institute for Peace, Washington, DC. Research assistance by Ms. Zhang Lijuan was funded by the Division of Social Science, Hong Kong University of Science and Technology. Special thanks to Ms. Chung Siu Fung, my irreplaceable assistant and advisor, who managed the data from the USIP survey and found some of the data on Hong Kong and Taiwan used in this paper. Please note that an earlier version of this study was published by the US Institute of Peace as an occasional paper. 2 Hu (1993), citing McClosky, suggests that a 75 per cent threshold is necessary to argue that a certain level of culture has become the national consensus. 3 Part of the change in articulated values may have been due to the greater freedom of expression felt by Taiwanese after the lifting of martial law, rather than changes in their real attitudes. Under martial law, they may have simply been afraid to express those views. Thanks to William Tabb, who pointed this out during the discussion of my paper during the conference. 4 Utilizing the same data set, Shi Tianjian came to the same conclusion. See Shi 2000. 5 Personal communication with the author, 22 July 2000. 6 For the concept of ‘restricted democracy’, see So 1999: 254. For the idea of ‘partial democracy’, see Lau 2000. 7 Of this missing 10 per cent, 23 had cut their viewing to 1–3 hours/week, while 13 were still viewing television 4–6 hours a week. 8 The change in values for these two different periods was statistically significant at the .05 level. 9 Unlike the passage of a government bill, which requires a simple majority of the legislators present, the passage of a private member’s bill entails the division of the legislature into two sections: legislators returned by functional constituencies and those returned by geographical constituencies, with majority support in both sections. The Chief Executive can also veto private member’s bills, which must be overturned with a 23 majority. 10 In the run-up to the September 2000 elections for Legco, the largest Hong Kong conglomerates are creating dozens of new companies solely for


11 12

13 14

15 16

17

18

19

the purpose of increasing their ballot rights in the functional constituency elections. In both cases, probability measures show that these declines are statistically at the .00 level. In early 2000, a series of articles in the local press, penned by members of the political oligarchy, particularly Peter Woo, asserted that Hong Kong people were not ready for full democracy. One reason was that people who did not pay taxes should not have the right to vote, and since 23 of Hong Kongers did not pay taxes, the functional constituencies should be maintained. We interviewed 2,637 villagers from 120 villages in four countries, two each in Anhui and Heilongjiang provinces. Selecting ‘don’t know’ is an extremely common choice in surveys in the PRC. In many cases it may really express a particular attitude. For a discussion of this point, see Jennings (2000). To get a score of 7 or more, one had to get a +2 on at least one question. In this sample survey, Li Lianjiang also found that only 2 per cent of villagers across China reported being involved in some form of social protest activity. Personal communication with the author. We were not able to get information on numbers of protests, collective resistance, or other forms of public action, as only the police have this type of data. Therefore, it has not been easy to demonstrate a direct causal relationship between democracy and the level of political unrest. The standardized coefficient for these two variables, which reflect the strength of the relationship, were .471 and .442 respectively, and both were significant at the .000 level. The standardized coefficient was .179 and p > .004.

References Bernstein, T.P. and L. Xiaobo (2000), ‘Taxation without Representation: Peasants, the Central and the Local States in Reform China’, The China Quarterly, 163: 742–763. Bernstein, T.P. (1998), ‘Instability in Rural China?’ in David Shambaugh, ed., Is China Unstable? Assessing the Factors, Washington, DC: The Sigur Centre for Asian Studies: 93–110. Chandler, C. (2000), ‘From “City of Light” to “City of Protest”’, International Herald Tribune, 29 June: 7. Degolyer, M.E. and J.L. Scott (1997), ‘The Myth of Political Apathy in Hong Kong’, Max J. Skidmore, ed., Hong Kong and China: Pursuing a New Destiny, Singapore: Toppan Company: 68–78. Hing, L.S. (1998), ‘Political Parties Elite-Mass Gap and Political Instability in Hong Kong’, Contemporary Southeast Asia, 20(1): 67–87. Hu, F. (1993), ‘The Electoral Mechanism and Political Change in Taiwan’, in Steve Tsang, ed., In the Shadow of China: Political Development in Taiwan since 1949, Hong Kong: Hong Kong University Press: 134–168. Jakobsen, L. (1999), ‘Blazing New Trails: Villagers’ Committee Elections in P.R. China’, UPI Working Papers: Helsinki: 19: 13–16. Jennings, K. (2000), ‘Surveying China’, paper presented at the conference at George Washington University, Washington, DC, June 9–10, 2000.

David Zweig 139 Kau, M.Y. (1996), ‘The Political Structure in Taiwan’s Political Economy’, Asian Survey, 36(3): 287–305. Lau, S. and K. Hsin-chi (2000), ‘Partial Democratization, “Foundation Moment”, and Political Parties in Hong Kong’, The China Quarterly, 163: 705–720. Lau, S. (2000), ‘Hong Kong’s Partial Democracy under Stress’, paper presented at the 10th Anniversary Conference on Into the 21st Century: Challenges for Hong Kong and the Asia-Pacific Region, The Chinese University of Hong Kong, 13–15 April 2000. Li, L. and K. O’Brien, ‘The Struggle over Village Elections’, in Merle Goldman & Roderick MacFarquhar, eds., The Paradox of China’s post-Mao Reforms, Cambridge, MA: Harvard University Press: 129–44. Mitchell, M. (2000), ‘The Party’s Over’, Far Eastern Economic Review, June 8: 26, 28. National Police Administration (1998), Shehui zhibiao tongji (Social Indicators), Taipei: Ministry of Interior. Parish, W.L. and C.C. Chang (1996), ‘Political Values in Taiwan: Sources of Change and Constancy’, in Hung-mao Tien, ed., Taiwan’s Electoral Politics and Democratic Transition: Riding the Third Wave, Armonk, NY: M.E. Sharpe: 27–41. Pennock, J.R. (1979), Democratic Political Theory Princeton, NJ: Princeton University Press. Pye, L.W. (1985), Asian Power and Politics: The Cultural Dimensions of Authority, Cambridge, MA: Belknap Press of Harvard University Press. Rocamora, J. (2000), ‘Formal Democracy and Its Alternatives in the Philippines: Parties, Elections and Social Movements’, paper prepared for conference on ‘Democracy and Civil Society in Asia: The Emerging Opportunities and Challenges’, Queen’s University, Kingston, Ontario, 19–21 August. Shi, T. (2000), ‘Political Culture: A Prerequisite for Democracy?’ American Asian Review, 18(2): 53–83. Shiao, C. (1999), ‘Civil Society and Democratization’, in Steve Tsang and Hungmao Tien, eds., Democratization in Taiwan: Implications for China, New York: St. Martin’s press: 101–15. Tang, S. and C. Tang (1997), ‘Democratization and Environmental Politics in Taiwan’, Asian Survey, 37(3): 284–95. Woodman, S. (1999), ‘Less Dressed up as More? Promoting Non-Profit Organisations by Regulating Away Freedom of Association’, China Perspectives, 22: 17–27. Zakariah, F. (1997), ‘ The Rise of Illiberal Democracy’, Foreign Affairs, 76(6): 22–43. Zweig, D. (2000), ‘The “Externalities of Development”: Can New Political Institutions Manage Rural Conflict?’ in Elizabeth J. Perry and Mark Selden, eds., Contemporary Chinese Society: Social Conflict and Popular Protest, London: Routledge: 120–42.

7 From Victimized Communities to Movement Powers and Grassroots Democracy: The Case of the Assembly of the Poor Suthy Prasartset

Introduction This chapter intends to explain the process by which victimized communities are transformed into powerful grassroots movements and how in this process they are contributing to the emergence of grassroots democracy in Thai political context. The role of the Assembly of the Poor (AOP) will be highlighted to illuminate our arguments. These communities have suffered from the process of marginalization or development aggression as a direct result of state’s growth-oriented development policies during the last three decades. While most peasant communities were displaced by state and corporate projects in the name of development, some of them were participants in failing state-sponsored agricultural projects in partnership with corporate sector. With more open political opportunities since the mid-1980s, they started to organize into local groups to assert their rights and demand state compensations. Such a situation brought about numerous protest rallies at local level in various parts of the country. These local movements later aligned themselves into provincial and regional groups and networks. Confronting difficulties in pressing their demands on the state, leaders of these diverse movements learned to achieve political synergy by combining their struggles into one national network (AOP) to coordinate their activities. Their struggles at various levels have contributed to the making of grassroots democracy and the strengthening of civil society. As their plight was unattended by the existing representative democratic system, direct actions towards the state had to be taken to assert their rights and press their demands for corrective action. Their struggle is 140

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indicative of a change in the nature of Thai politics both in pressing for grassroots demands for direct state corrective actions and grassroots participation in some areas of policy issues, involving legal and institutional changes, their implementation and monitoring of results. Although the latter aspect is still at an incipient state; this is an area where grassroots and other civic organizations seek to ally in their struggle for a better society and are building on the 1997 Constitution which both took active part in drafting. In the following sections we will discuss the structural factors in the activation of grassroots movements; the rise of the Assembly of the Poor (AOP) and its goals; AOP’s organization, strategies and tactics and the counter-movement of the state; as well as the outcome of the movement and the problems faced by it. The last two sections will present some brief case reports of the struggle followed by the concluding section.

Socio-economic causes of the activation of the grassroots movement The emergence of grassroots movements in Thailand in recent years results from Thai state’s neoliberal development policies, with attendant processes of polarized development: concentration of income and wealth on the one hand, and marginalization (social exclusion) of the majority of population on the other. This can be testified by high income inequality. In 1992, inequality of per capita welfare in Thailand reached its peak, showing the Gini index, the most widely used measure of inequality, at 49.9. In this year, the top 20 per cent of the households commanded a major share of per capita welfare of 55.6 per cent. The share of the poorest or those in the bottom 20 per cent was a paltry 4.5 per cent. Considering the poor in general (those in the bottom 40 per cent), their share was only 12.4 per cent and compared unfavourably to the share of 14.2 per cent in 1988 (NESDB 1999: 5). Although several studies point to a decline in the share of population under the poverty line, from 17.9 million people in 1988 to 7.9 in 1998, it is noticeable that the so-called poverty line was defined rather low, being a per capita monthly income of 473 baht in 1988 and 991 baht in 1998 (NESDB 1999: 2). Such a definition tends to show a smaller proportion of population under the poverty line. The study also pointed out that inequality in Thailand had been ‘increasing monotonically since mid-1970s. This has resulted in Thailand having the highest inequality in the East-Asian region’

142 Victimized Communities to Movement Powers

(NESDB 1999: 6). This testifies to the fact that the process of marginalization had occurred in Thailand for almost a quarter of a century. As the criteria to determine the poverty line is debatable, we can safely state that more than ten million people, both rural and urban poor, constitute the great majority of the poor in Thailand, who were marginalized by the urban-biased state’s development policy during the last three decades. Although, it was reported that inequality has declined somewhat since 1992, the recent economic crisis since mid1997 has caused a reversal in this trend (NESDB 1999). The past development efforts of the Thai state, while succeeding in the improvement of the productive forces, created big business groups with a concomitant rise of the ‘middle class’. It has also resulted in a high degree of social marginalization with the resultant socially and politically excluded classes, especially participants of the Assembly of the Poor (AOP). The former aspect can be conceived of as ‘development success’, the latter as ‘development aggression’ or in some specific cases, ‘acts of state terrorism’. The marginalized social groups are ‘victims’ of the same process, which has brought about ‘development success’. By ‘development aggression’, the AOP implies a process of development that displaces, marginalizes, impoverishes the people and destroys their communities. They were made involuntary sacrificers in the name of development for ‘the nation’. More often, measures to evacuate these people and communities were in direct violation of their basic human rights, in some cases involving what amounted to ‘acts of state terrorism’. In the following, we will briefly discuss state and corporate projects affecting rural communities. Government projects, comprising dams, reservoirs, highways, airports, industrial estates, new provincial government centers, etc. displace countless numbers of peasant farmers and rural as well as certain urban communities. In agriculture, state promotion of new crops and livestock that did not bear fruit caused great debt burdens for the farmers involved. Also, the state’s promotion of prawn farming for export has destroyed mangrove forests and the coastal ecosystem, resulting in the destruction of livelihood of small coastal fisherfolks. In the manufacturing industries, the promotion of industrial estates has caused dislocation of farmers and destruction of their communities, families and culture. Inadequate labour protection has resulted in poor health and safety standards. Likewise, low environmental standards and lack of enforcement has also brought about severe pollution to the neighbourhood. In many areas, chemical and toxic substances affect canals, rivers and lakes. Government initi-


atives of building new provincial centers has also caused countless cases of forced eviction of peasants from their farms and communities. In the service industry, the state promotion of the tourist industry, tourist resorts and golf courses has produced similar environmental impacts as mentioned above. In addition, the service industry lies at the root of severe social problems, such as child prostitution and the rapid spread of AIDS. Impacts of the corporate sector can be clearly seen in the agribusiness projects, most notably Eucalyptus plantations which require acquisition of vast tracts of land, hence the peasant land owners are forced out through diverse means. There are various polluting activities from the corporate sector, for example pulp-making plants with Eucalyptus plantations. Salt-mining to supply the caustic soda industry pollutes rivers and paddy fields with saline water, destroying the peasant’s life support system. Stone quarrying to supply growing urban construction and other infrastructure projects are also environmentally hazardous. All these activities can be seen as state and corporate ‘aggression’ that snatches away communities’ resources, destroys people’s livelihood, and calls for sacrifice for the ‘nation’, all in the name of development. These activities resulted in a great upsurge in the demand for land, and waves of land speculation, all over the country since 1987 and until the recent great crisis. Although there were voluntary sales of farmlands, there were also countless cases of forced selling and eviction of the peasant farmers from their lands, usually with violence. The Thai state, on its part, declared, ex post, several vast tracts of land as forest reserves, animal and plant conservation areas, and national parks. Although peasant farmers had been settled in such lands for more than one generation, their rights were not taken into account. As a result, there were approximately one million families living in the socalled forest reserves and national parks. The incidence of such forced evictions has been increasing markedly (Prasartset 1996). Forced eviction by both the state and corporate sectors to acquire lands for profitable activities was met with strong resistance from the rural communities and this has formed a strong base for the activation of grassroots movements.

Political opportunity structure and activation of grassroots movement Thailand has the experience of a long period of authoritarian rule. The first wave of the activation of grassroots movements occurred between


1973 to 1976, for a short period after the students’ movement led to the overthrow of a dictatorial regime. During these three years, the peasants and workers in alliance with student activists organized several demonstrations and protest rallies to voice their grievances and demands for state action to redress their problems. Several trade unions and farmers’ organizations were established. The now defunct Farmers’ Federation of Thailand was established in 19 November 1974 and it operated in 41 provinces with the participation of 1.5 million families. Their demands included reduction in rents and a rent control law, a state land reform program, alleviation of farmers’ indebtedness, cancelling of construction projects which caused hardship for the people and adequate and fair compensation for them to buy new plots of land in the vicinity with similar size and quality, etc. (ESG-TU 1979). This last demand is similar to those put up in the recent struggles by farmers affected by government projects. In the forefront of the open struggles was samprasarn or a three way alliance comprising of workers, peasants and students. However, this brief democratic period was followed by the October 6 military coup in 1976. With activation of the samprasarn, the rightwing groups also organized a counter-movement to confront mass organizations. Several worker and farmer leaders were assassinated in this confrontation during months before the coup. The extreme rightwing suppression of mass activities had driven countless numbers of students, farmers, workers and social activists to flee to the jungle, and this had given the Communist Party of Thailand (CPT) an unprecedented boost in its ‘revolutionary struggle’ in the late 1970s. To contain this thriving underground movement led by the CPT, the ruling power blocs decided to carry out a certain degree of political liberalization, by crafting a new Constitution, giving rise to what might have been called a semi-democratic regime. This particular regime type was characterized by a sharing of power between the military and business groups through the latter’s influence and control of political parties. By this political arrangement, the military was in direct control of the appointed Senate and the political parties were left to contest among themselves for the control of the Lower House in the national election. In spite of the rising political role of business groups, technocrats were given a prominent role in policy formulation (Samudavanija 1995). The press and other mass media were also given more freedom although some restrictive clauses had been maintained. Since early 1980, under the eight-year rule of Prime Minister (General) Prem who was supported by shifting coalitions of political


parties, the popular sector started to regain some degree of political opening, where backlog of their complaints and grievances started to spur an increasing number of protest activities (Prapas Pintoptang 1998: 121) which demonstrated that during a period of more open political space, the frequency of protests and rallies increased sharply. According to his tally, in 1967 when Thailand was under full sway of the military regime, there were only 2 cases of protest rallies reported. By contrast, during 1975/76 with the military overthrown by a mass uprising led by student movements, the number rose to 153. This dropped to 42 during a brief return of extreme right-wing government. With a renewed political liberalization under the so-called semidemocratic regime, the number of popular protest activities had consistently increased from 61 in 1982 and continued to reach 170 in 1990. In the 1990s, with a higher degree of democratization of Thai politics, the number of various forms of protests and demonstrations grew sharply, topping 739 in 1994 followed by a surge to 1,200 in 1997 (Pintoptang 1998: 121). Thus, we can say that the 1990s was a period of mass mobilization and activation of grassroots movement in Thailand. Such a process was further spurred by a political system that did not function to serve popular demands.

Dysfunction of the political system Being marginalized, the poor people often lack an effective channel of interest representation. After the parliamentary election had been established, the popular sector had pinned their hope on the political parties to solve their problems. However, from a few years of their experience with this new political institution, their expectation came to naught. The political as a mediating structure between the state and the popular sector has increasingly been delegitimized by its involvement in money politics, internal power struggles, and incapacity to serve its own constituencies, and so on. Political parties are mainly under the influence of business groups. They tend to ignore people’s problems and grievances. In general, we can say that there is a weak state capacity to force the bureaucracy to implement its programs for the poor. As a consequence, the marginalized people, both urban and rural, increasingly feel that elections do not serve their interests. They have to rely on their own efforts to get organized to stake their claims on the state, to defend or to advance their rights. In most South and Southeast Asian countries, including Thailand, fairly similar socio-political factors contributed to the rise of social


movements in a more or less similar manner. Economic growth has become stagnant, the state has lost its ability to meet popular expectations, and the process of development has continued to marginalize the poor. More importantly, as Kothari suggests, democracy has become ‘the playground for growing corruption, criminalization, repression and intimidation for large masses of the people whose very survival is made to depend on their staying out of the political process and whose desperate economic state incapacitates them from entering the regular economic process as well’ (Kothari 1988: 41). In Thailand, as Nithi Eowsriwong argues, ‘the democracy we are familiar with … is the forum for the bargaining [interests representation] among the powerful or those in advantageous positions in society. Thai democracy is the forum for bargaining among financiers and industrialists; it is not the forum for bargaining of the small farmers, the slum people or the aids patients’ (Eowsriwong 2000: 1–2). In response to state oppression and hopelessness in formal political institutions, people are looking for alternatives. They are making efforts to organize themselves into social movements to demand justice, freedom and equality (Nunez 1989). This is how a diversity of social movements have sprung up to challenge the established structure of exploitation in spite of the limited political space and severe repression in some cases. These emerging social movements can be viewed as autonomous (non-party) political formations. By their very nature, these movements represent an alternative political space that can be used as an effective instrument against injustice and oppression (Kothari 1983). When the so-called representative democracy does not function for the masses, they will surely take direct political action and press their demands on the state for active participation in political decisions affecting their livelihood and bio-system as well as gender relations via diverse forms of social movements.

The rise of the Assembly of the Poor With a continuing open political space since the late 1980s, a diversity of protest movements have sprung up to challenge the established structure of domination and exploitation. As export-oriented economic growth of Thailand continued strongly in these years, vast tracts of farmland in the countryside were transformed into industrial estates, tourist resorts, golf courses and Eucalyptus plantations and other agribusiness projects. This process amounted to a national resource conflict as it caused a rapid collapse of rural communities by large-scale evic-


tion of farmers from their lands, often with violation of human rights (Prasartset 1996: 5–6; Thabchumpon 1997: 35–36). Under an open political space, such a situation brought about numerous protest rallies at the local level in various parts of the country. Around 1990, there emerged several loosely organized protest groups in local communities affected by state and corporate projects, demanding government price support for certain farm products (for example, pigs, tapioca) and compensation for the losses incurred by governmentpromoted programs (for example, cashew planting and cattle-raising). These local community movements later organized themselves into provincial and regional networks. Establishment of the Small Farmers Assembly of the Northeast (SFAN) in March 1992 was a major landmark in the struggle of contemporary farmers. It can be seen also as a precursor to the AOP in uniting diverse struggles under one banner. Several independent groups of farmers suffering from different problems in the Northeast staged separate prolonged protests in several provincial towns. In the process, leaders of these groups came into close contact with each other, paying solidarity visits, exchanging information and comparing experiences of struggle. They had learned from their concrete experiences that by acting separately as was their way, their bargaining power was rather weak in pressing their demands on the state. So, after several rounds of joint discussions regarding the nature and structure of a regional network, they decided to establish SFAN to put up a united front to coordinate their movements in a forceful way. In this way, they became aware of what might be termed as the benefits of ‘political synergy’. From 1992 to 1995, SFAN led several protest rallies, including long marches from the Northeast towards Bangkok. It united several communities affected by the following problems: low farm prices; failed government-sponsored projects; dam projects; and land rights and forests. In March, SFAN along with other NGOs and allied group campaigned against a draft government bill to set up a national agricultural council as it did not truly represent the voice of the poor farmers. In mid-1992, SFAN, other farmers groups in the Northeast and allied groups, including NGOs, students and teachers organizations, united their campaign against the so-called Land Allocation Scheme for the Poor (Khor-jor-khor), organized by a military internal security office. This scheme, even in its early phase, had displaced several thousand farmer families from their villages and communities. To focus on the land right and forest issues, they decided to establish the Northeast


Farmers’ Assembly for Land Rights and Recovery of Natural Resources (NFA) for the final and crucial negotiation with the Anan care-taker government, which eventually agreed to abolish the project on the 3rd July of 1992. (Thabchumpol & Supsomboon 1997: 74–76) Similarity of problems, different from those involving SFAN, encouraged other groups to form issue-based networks to achieve ‘political synergy’ in the manner mentioned above. These include the land rights and forest network (NFA), dam network, alternative agriculture network and the urban poor network. In addition, worker-patients who suffered from health hazards at workplaces in different locations joined together to form an assembly of worker-patients affected by industrial hazards. Each of these issue-based networks had organized several protest rallies and negotiations to defend or advance their rights, with varying degrees of success. However, up to a point leaders of these movements became aware of their own limits in pressing their demands further, especially those involving large sums of money and policy and legal changes, to facilitate fair settlement of their problems, e.g. land rights, community rights to local resources, habitats for urban poor, compensation for those affected by dams constructed 30 years ago, etc. As each issue-based network, acting alone, could not proceed further, they reached a joint understanding to pool their efforts together to form a national coordinating network in the name of Assembly of the Poor (Smatcha Konjon). In the words of Vanida Tantivithapital,1 an advisor of the AOP ‘The idea to unify existing issue-based networks into the AOP was to achieve full capacity to solve all our problems. To do so, it was necessary to think about a common movement symbol in order to unite all issuebased networks and also to solicit support and sympathy from the general public. With the concept of the poor, they would be able to explain our reasons why we were impoverished by pointing our fingers to the state and corporate projects. In this way our constant struggles and protest rallies can be understood and gain legitimacy’. In addition, as Boonthan T. Veerawongse pointed out, the poor were victims of displacement by several mega projects, which destroyed their communities and violated their human rights, therefore the issues of human rights and rights to development for the poor naturally formed a common aim in the establishment of the AOP.2 The poor are not only vulnerable economically, but are also helpless in terms of their rights. The AOP was established on 10th December, 1995, a symbolic day for the Thailand, as Constitution Day, as well as International Human


Rights Day. Starting with a day of symposium on problems of the poor and the violation of human rights at Thammasat University, the participants moved on to Pakmool Dam, Khongjiam District, bordering on Southern Laos, where they came up with the Pakmool Declaration on the 15th December, 1995. After criticizing the state development policies that lay at the root of bankruptcy of the farmers, tragic industrial hazards and dangerous working conditions for workers, environmental destruction and violation of human rights, the statement proclaimed, ‘Development is a right. But it is meaningless unless it is grounded in the international human rights framework. … Without the realization of economic, social and cultural rights, development remains unsustainable.’ The declaration also calls on all states to ‘Ensure the participation of the people in decision-making at village, local, provincial and national levels through more rapid decentralization, democratization and a recognition of the role of peoples organizations and nongovernmental organizations’ (Asian Action 1995: 29–30). The founding groups included representatives from several people’s organizations (POs) and networks from Thailand; most of them were issued-based networks mentioned above and SFAN, before a new leadership took over. Foreign solidarity groups from six countries, namely farmers’ organizations from Australia, Cambodia, India, Japan, Malaysia and South Korea, also joined them. Their respective representatives had endorsed the declaration.

AOP’s movement goals According to one AOP document, the AOP ‘is a common platform of the oppressed people who share the same faith. Almost all of them are affected by a process of “development aggression” committed in the name of “national development” imposed/manipulated by either the state or private sector. The AOP is also a venue for mutual learning and exchanges of ideas and experiences among the grassroots people towards a resolution of their problems at both local and structural levels’ (Thabchumpon 1997: 37). As such, the AOP was launched to ‘pursue their collective struggle for legitimate rights, and social justice’. Other related goals, both immediate and long-term, include the struggle for land rights for both rural and urban poor, communities’ customary rights to resources management, upholding agriculture as a mainstay of the Thai society, sustainable or alternative agriculture, people-centered development policy, political reform including decentralization and the reform of the bureaucracy, and participatory democracy or grassroots democracy.


It will be seen that the goals of AOP range from the demand for immediate benefits, such as various rights relating to livelihood, to demands which are beneficial to the society at large, such as, political reform. The AOP contends that the rights of the local people, which constitute basic human rights and form the foundation of political rights, have been violated. Therefore, it proposed people’s participation and customary rights as ‘a common goal for all peasantry in order to uphold their rights, freedom, justice and peace in Thai society’ (Thabchumpon 1997: 37). In general, we can also say that AOP is highly critical of the state’s growth-oriented development policies. As the Pakmool Declaration puts it: ‘The people always become merely the “commodity” or “raw materials” for the production process to feed factories for the sake of “Economic Growth” and achieving “Newly Industrialized” status from which ordinary people never benefit.’ As a result, the AOP demanded: ‘the People must decide on the direction on national development and their own future, and reaffirm that the people must be the real beneficiaries of the development process’. The poor must also participate in decision-making in development projects that have a bearing on their lives. In addition, the AOP is emphatically against mainstream agriculture, based on mono cropping and chemical farming, so that it proposes alternative agriculture as a movement goal. For the grassroots people to take active part in deciding the direction of national development and to be the beneficiary of development, major structural reforms have to be undertaken. A political system based on participatory democracy or grassroots democracy has to be instituted. Realizing this fact, since its establishment, the AOP had been actively involved in the process of political reform, in alliance with other social forces. It took an active part in the drafting of the new Constitution (promulgated in October, 1997) by proposing several clauses related to the above-mentioned goals. Based on their bitter experience with local bureaucrats, AOP also campaigns strongly for the reform of bureaucracy and decentralization and for the state to genuinely support civil and political rights as well as human rights and cultural rights. AOP’s active participation in these latter campaigns distinguishes it as a new social movement. (Diani and Della Porta 1999: 11–13).

AOP’s organization AOP is a coordinating network of several local and regional POs and networks of people suffering from ‘development aggression’. While


some member organizations have been in existence for several years before joining the AOP (for example, Slum Organizations for Democracy), some others were established more recently (for example, Network of Worker-Patients). The AOP is composed of 6 major networks on local issues, namely: people affected by the dam projects, land and forest conflicts, government infrastructure projects, urban poor, workers affected by industrial hazards, and alternative agriculture. In addition, a network of southern small fisherfolk, having linked activities with alternative agriculture network, has joined activities of the AOP informally at most rallies since 1997. Each of the six major networks has its own working committee with representatives of various groups of local issues. The supreme decision-making body of the AOP is the Conference of Poh-Kruar-Yai, literally ‘the big chefs’, comprising core representatives for each local issue. At the moment there are 121 formal representatives from all six major networks of local issues. Each major network holds its separate meeting to formulate solutions to its problems and relevant policy proposals for negotiation with the government. These resolutions and policy proposals are then submitted to the Conference of Poh-Kruar-Yai for final deliberation and decision. The outcome of negotiation with the government is well explained to the various groups of local issues and their critical views are widely discussed. Through this process, we can see that the AOP has adopted a collective leadership and decentralized decisionmaking process. In addition to the Poh-Kruar-Yai, there is the Conference of AOP Advisors, comprising experienced people’s leaders, NGO workers and some academics. The advisors play a supporting and facilitating role, such as preparing documents and assisting in negotiations with the government. In addition, they also play a key role in coordinating with transborder allied groups and social movements. A small secretariat office to coordinate all activities of the AOP is assisted by an NGO, Friends of the People. The secretariat is involved with three major functions: a) coordinating AOP movement activities and following up with relevant government implementation; b) coordinating policy and legal reform campaigning of the six AOP networks; and c) general secretariat work, especially in resource mobilization. During the movement activities of the AOP, the leaders of various local issues are responsible for their own food supplies and necessary expenses and to take care of the security of the compound they occupy, which is usually done by a volunteer youth group.


It is interesting to look into how movement participants undertake their struggle with self-reliant efforts. Before each prolonged protest rally, usually from one month up to 100 days or more, leaders and advisors of each network of local issues discuss with participants how to prepare for the provisions and cash contribution. Usually in most communities there are the so-called central funds, collected as an agreed amount, say 200 baht per month per family, from the participants. In cases where participants do not have money to contribute, they form a team to search for forest products (bamboo shoots, and so on) and offer the proceeds to the central fund for movement activities of the network.3 This self-reliant effort is also supplemented by donations from allied groups. Since March 1999, AOP’s networks of people affected by dam construction has built up several protest villages by squatting on a space near the dams or in areas directly affected by the dams, in protest of government negligence of their cases. Now there are seven such protest villages. With such a prolonged struggle, a new strategy of self-reliance is discussed and adopted by AOP participants. This new mode of selfreliance in the struggle is referred to as ‘three-leg strategy’. According to this strategy, a participant family is committed to undertake three activities. One leg requires a person to take care of household activities. Another leg requires a person to be responsible for income generation, mostly as a worker in urban centers or plantations. The third leg calls for one person to participate in activities of the protest village to keep on the collective struggle and thereby maintain the family’s rights. It is expected that this self-reliant and participatory strategy ensures that the struggle will be strengthened, both in terms of the movement and the family’s livelihood.4 The AOP also develops close relationship with several allied groups. In some of its campaigns and protests, about 200 allied groups, comprising mostly NGOs, other mass organizations, students’ organizations, pro-democracy groups and certain professional groups, notably lawyers and teachers, supported the AOP. The AOP as a coordinating network has developed a horizontal relationship among member organizations or major networks of local issues. In this way, each member organization maintains its own autonomy, seeking unity amidst diversity as one advisor put it. In addition, the decision-making in general is based on consensus, especially on the principles and ends of the movement. Decisions regarding means may be based on majority votes. The idea of forming the AOP into a coordinating network with flexible organization and ‘collective leadership’ was to prevent the AOP from turning


into a vertical structure with top heavy leadership or charismatic leaders. This was the case with the Farmers’ Federation of Thailand and SFAN. Therefore, the position of the Secretary General had no place in the AOP structure, which functions only as a coordinating network. By combining their political resources such as organizational, campaigning and negotiating skills, the AOP structure has been an embodiment of the law of synergy, whereby interactions among its constituent parts result in greater overall strength than the sum of all its separate parts. As mentioned above, the motive for the formation of the AOP was to devise an organization with enhanced political synergy. This process amounts to what may be designated as ‘political innovation’ on the part of the marginalized people and their allies in the grassroots movements.

Strategy and tactics of movement In its demands for state action to redress their problems and change certain policies, the AOP has consistently resorted to a strategy of collective mobilization supplemented by negotiations. In line with most other social movements, AOP’s use of public protest gives it a distinct character, as opposed to ‘conventional style of political participation’ (Diani & Della Porta 1999: 15–16). However, where appropriate, it also resorts to lobbying politicians and relevant authorities. In most cases, it either organizes a rally at relevant provincial cities and/or several protest groups directly converge at the Government House and occupy a rallying space nearby in order to press their demands, attract public attention and start a negotiation process. To maintain the legitimacy of the movement in all its activities, all organizational members of the AOP are to act as autonomous social movements, free from political partisanship, and adhere to the principle of non-violence. In any mobilization, leadership must be careful not to cause unnecessary public inconvenience. During the rally, press conferences are called in order to explain to the public their specific problems and how they suffered from state and corporate measures and their demands and policy proposals. Seminar or round table discussions of people’s problems are also jointly organized with some academic institutions. Moreover, allied groups and networks lend a helping hand by organizing a festival-cum-rally for public information and fund-raising. In carrying out a successful negotiation, it is important to negotiate from strength. The most important thing is to ensure that the issues of


the struggle attain wider and sustained public interests (i.e. the movement issues become ‘public issues’) so that the government is pressured by the public into taking direct responsibility to solve the problem. The presentation of the struggle through rituals and cultural symbols that will relay a correct message of the people’s plights and sufferings to the society at large, is highly instrumental for the purpose. To this end, it is also essential to build up strong alliances within civil society, forming into powerful allied networks. Their support could lend strong political weight to the movement in its negotiations with the government (Thabchumpol & Supsomboon 1999: 77). In addition, the networks concerned must be well equipped with the necessary information, media co-ordination, and certain forms of lobbying and negotiating skills. Equally important is the command of the logic of numbers, as numbers imply strength. There appears to be a positive relationship between bargaining strength and the number of people involved in the rally and its duration. As Vanida Tantivithayapitak, an advisor of the AOP, put it: If a few of us come here, we will only meet a security guard in front of the Government House; 10–20 and we will meet a secretary of Public Service Center; 100 or so, we will meet a secretary of a minister; If we come in a thousand, a deputy minister would come to see us; if we are ten thousand strong, the Prime Minister would start a negotiating table. If we want him to visit us here, we must come in twenty thousands (as Quoted in Pintoptaeng 1998: 152). Through their experiences in the struggle, AOP participants have concluded that without the pressure of the protest rally, the government and bureaucrats, both in Bangkok and in the provinces, tend to ignore their demands. Even when the government agreed to solve certain groups of problems as a result of prolonged mobilization, the implementation at a local level in most cases has to be speeded up by a protest rally.

Counter-movement by the state The Thai state is prone to maintaining the privileges of the dominant power blocs, with a strong tendency to counter grassroots demands. Before political opportunities opened up in the late 1980s, most popular movements, such as farmers’ organizations and trade unions, were either severely repressed or demobilized. In most cases the state


resorted to coercive force to suppress mass mobilization. Use of violence against leaders of mass organizations was common. Such repressive measures have rarely been used on a large scale in recent times (except the May uprising in 1992). With this backdrop of authoritarian tendency, the activation of grassroots movements in Thailand is bound to face opposition from the state and established interest groups, although the brute use of force has been used rarely except in remote provincial towns. Before finally yielding to strong reasons as well as public pressure, state functionaries usually deal with popular demands with delaying tactics by proposing to set up committees to look into the matters. Very often, they undertake smear campaigns in the media to delegitimize the movement’s claims. State related media often conduct programs to misinform the public about the true nature of grassroots’ demands. At the local level, the participants’ family is often misinformed about the rally and derogatory rumors are spread to delegitimize the movement. There are also attempts to co-opt popular leaders by promising special benefits. A tactic of divide-and-rule is often deployed to demobilize mass rallies. In some cases, some yellow organizations are established, on an ad hoc basis, to counter a particular protest rally through intimidation or threat of force, to terminate the rally. For example, the pro-dam groups often mobilize (or rather hire) their own supporters to rally against people’s anti-dam campaigns. In some cases, this results in violent clashes between the two groups, an event known as ‘mob-against-mob tactics’. In other cases, arrest warrants are issued to leaders of the protest movement in order to cause confusion among the rank and file. Nowadays the direct use of force to disband the rally is rare. However, where necessary the state functionaries tend to use the mobagainst-mob tactics. Against all of these counter movements, movement organizers have to find ways and means to survive these demobilizing tactics by making the aim of the movement transparent and the rationale for various demands clearly spelled out to the public. Proper coordination with media and alliance building and networking with similar groups in civil society are indispensable for a viable and fruitful struggle.

Movement outcome as movement power There are four aspects of movement outcome, which can be justifiably considered as movement power, which we want to emphasize as follows. First, although a number of the AOP’s demands on the Thai


state have yet to be totally fulfilled, the AOP has achieved certain tangible gains such as compensations for some groups in the network. It also succeeded in reconfirming the rights of the displaced peasants to return to their villages and make use of the disputed lands, pending final decision by the government, which requires legal changes. In addition, the AOP has also demanded certain institutional and legal arrangements such as a revolving fund for retraining and adjustment for new occupations and the establishment of workers’ health hazard protection institute. Several draft acts have been proposed, for example a community forest act, an act to protect local plant varieties and biodiversity, a slum development act, a rights to information act. etc. These demands fall within a framework of policy advocacy activities to be undertaken in alliance with other social movements. Hopefully, these campaigns and struggles will confer long-lasting social benefits for the popular sector in general. Second is the activation of other social movements. As people suffering from state and corporate projects were shown the example of AOP’s protest rallies on the media, both TV and newspapers, they also started to form their own groups to struggle at local levels. Some of these groups have come to join AOP or asked for advice from AOP. In a sense, AOP activities have contributed to the emergence and maintenance of other grassroots movements, an indispensable aspect of the process of democratic consolidation in Thailand. AOP’s campaigning in collaboration with other social movements has played a crucial role in strengthening civil society in Thailand. Third, the movement activities of AOP and its organizational members have become a major breeding ground for the rise of ‘organic intellectuals’ in the Gramscian sense: the movement’s own intellectual leaders with political skills, such skills in the analysis of political situations, in mobilization, in the articulation of people’s problems and grievances, negotiation, and so on. Moreover, we can observe changes in the personal worldview of individual participants in the AOP, from submissive and fatalistic peasants to ones with self-confidence, assertiveness and self-reliance. Their participation is the assertion of their own dignity. This writer was informed by one advisor of the AOP that, now they wanted to delete the phrase ‘we have … no honour nor prestige …’ from the quotation at the beginning of this paper. Now AOP participants are conscious of their personal honour and dignity as human beings. In addition, they have discovered a collective identity: Smutch KonJon or the Assembly of the Poor, comprising victims of state and cor-


porate projects. This can be seen from the fact that the peasants and workers joining AOP are so proud of the organization that they are not reluctant to reveal their association with it. The logo of AOP as a symbol of collective identity is displayed in their houses. While a few hundred AOP participants have assumed this new personality, most of them are still at the beginning of such a process, which is a potentially transformative experience. Finally, as a direct consequence of the above processes, AOP has been instrumental in the process of ‘political diffusion’, or the diffusion of grassroots political activities. This is a process in which several experienced local leaders are able to act as advisors or resource persons for other groups of people suffering from devastating impacts of state and corporate projects. After some years of participation in protest movements with AOP or in its member organization before joining AOP, both at local and national levels, several local leaders managed to acquire the following capabilities: systematic collection of relevant data; analysis of local problems and formulation of a strategy of protest; preparation of documents and necessary evidence in support of particular demands; and mobilization and negotiation with government officials. Equally important is their ability to lead a local organization and social networks. In fact, we can say that the local leaders manage to master what Tarrow (1994: 19) calls ‘the modular repertoire’, or the collective action routines, which can be ‘employed across wide territories, broad social sectors and for different kinds of issues’. Such a repertoire of collective actions can be transferred to other communities suffering from similar problems. Given the diffusion of information through various kinds of media and even words of mouth, activities of the AOP at the national and local levels have been brought to the attention of the public, especially in the villages surrounding those within the AOP network. Communities facing similar problems turned to AOP leaders for advice to start their own protest movements or, in some cases, to join the AOP network to address such important local issues as land rights and community forests (Noparatvarakorn 1998: 148–156).

Some problems of AOP Every movement has its own internal contradictions. The crucial point is whether these will develop into severe antagonisms such that the whole movement is in jeopardy. In spite of several achievements of the


AOP, it may be said that there are several problems that need to be tackled collectively. The following are some of the problems: Firstly as information about AOP as an active movement for the poor has been disseminated via national media, several groups or communities suffering from similar problems want to join. However, the number of these groups is too large and beyond the capacity of the AOP to manage, in terms of the experienced persons required to take charge of all aspects of the new cases. At the moment there are some 30 such groups not yet admitted into AOP’s formal structure but which are allowed to attend relevant meeting as observers. Some of these came to join the protest rallies with AOP. It seems that the AOP is reaching the limit of allocation of movement activities to its key workers, especially to its advisors and peasant leaders. However, this problem can be tackled through the process of political technology transfer mentioned above. Second is the issue of personality clashes among the core groups, which often recurs. As of now, there are some cases of misunderstandings that are not really conflicts among the core group. What is at issue is not so much the competition for leadership as the problems of working styles stemming from different political experiences. The following are some examples: firstly, some are more militant while others are more compromising. While this type of difference in a certain situation may become a liability for the movement, some leaders consider it an asset as different perspectives will counterbalance each other. Secondly, there are differences regarding analysis of the situation pertaining to a decision to launch protest mobilization and when to demobilize and ‘return home with honour and victory’. Thirdly, misunderstandings may occur regarding some persons in the core group inadvertently joining a certain kind of activity in the name of AOP instead of doing so in the name of their own organization or network. Another important problem is that there is still a big gap in the understanding of the linkages between local and structural problems, between AOP advisors on the one hand and some peasant leaders and participants on the other. This is a problem of micro-macro linkages which presents itself to most movements. However, this problem is expected to be gradually resolved in the process of the struggle when peasants become disillusioned with law enforcement of local officials and appreciate the need for campaigning for structural reform. A successful case of this was the involvement of AOP participants in the discussions leading to the final draft of the community forest act. The success was a result of their concrete understanding of the local experience. However, more efforts and consciousness-raising activities need


to be carried out regarding reform at structural levels and in AOP’s trans-border solidarity works. Judging from past activities, AOP has accumulated a lot of experience in what may be labeled as Ngarn-ron (literally meaning ‘hot work’). This includes mobilization and organizing for protest rallies and demonstrations to pressure the government into negotiation and to demand fair compensation from state actions affecting the people, as well as preventing certain environmentally destructive projects. Such activities also involve coalition building and include campaign activities in terms of advocacy with other social forces. The latter activities are naturally less of a Ngarn-ron, which involve continuous and careful coalition building and lobbying. It has been admitted among the core groups that they still lack the capability to carry on the Ngarn-yen (‘cold work’), such as to carry on various activities at the community level to strengthen members’ economic base, such as those which help alleviating members’ economic problems, and local activities to deepen the consciousness and commitment of local participants. It is expected that the participation of alternative agriculture network in AOP since 1997 will help bolster the local Ngarn-yen aspects of AOP in the future. In a similar manner, at the national level, the alternative agriculture network is responsible for proposing draft bills to the government for the benefit of the peasantry. Finally, as history of various social movements has shown, we cannot discount the possibility that AOP might break up or fade away in the future. In other words, AOP as a social movement organization might follow a pattern similar to a protest cycle, which is expounded by Sidney Tarrow (1994: chapter 9). If that is to be the case, it is still reasonable to believe that each member organization will be able to act as an independent network by itself to defend and advance the interests of its members as well as to support alternative social goals. The bond of friendship and comradeship for most of the participants from different parts of the country will still be maintained, at least on a personal basis. Insofar as people’s problems still remain unattended to by the state, it is expected that some kind of realignment of grassroots movements will emerge again under a new concrete situation within a given political opportunity structure. More important is the existence of a community of social activists, mostly comprising former student activists, who are ready to offer their help to a genuine protest movement. They have experience and political skills in organizing such a movement, in negotiation and lobbying.


These social activists come from different occupational backgrounds: mostly from NGOs and POs, small businesses, and professional groups such as teachers, lawyers, medical doctors and academics. When a situation of Ngarn-ron arises, they are certain to lend their support and assistance to such a movement. Their involvement is akin to a kind of Ngarn-boon or a community’s cultural function with spontaneous and voluntary help from the neighbourhood, according to each person’s skills and availability without anyone being in command.

The case of Nong-Yor community forest5 The Land and Forest network covers the largest number of local issues in the AOP. In early 1997 there were 117 cases of disputed land rights, including land for family houses, land for cultivation and community forests claimed by AOP participants. This category of lands has been, to a certain extent, superimposed by the category of state lands, such as general public lands, national parks, conserved forests, wildlife sanctuaries, national reserved forests and state enterprise’s lands. Such a superimposition was caused by state and corporate projects such as Eucalyptus plantation schemes and more especially the ex post declaration of certain areas as state lands, mentioned earlier. The general demand is to exclude such categories claimed by the state from those lands occupied by farmers and community forests. Also farmers should be given appropriate documents and their rights to manage community forests must be granted. Nong-Yor community forest is one such case where the Forestry Department claimed that it was a national reserved forest and rented the community forest to the Forest Industry Organization (FIO), a state enterprise in the Ministry of Agriculture. FIO in turn started its ‘forest plantation’ at the Nong-Yor community forest in 1979. But according to the procedure of reforestation generally conducted by the state agencies, all existing trees were to be wiped out before the land was replanted with new trees, usually Eucalyptus. This method of re-forestation was favoured by the loggers and was prone to illegal logging. In fact, it is highly destructive to the environment. Formerly, the Nong-Yor forest was in good condition, full of natural vegetation and fauna. The peasants in nearby villages depended on the forest for their livelihood for a long time by collecting forest for their livelihood products, such as bamboo shoots, mushrooms, vegetables and herbs as well as game. They could also raise cattle in some parts of the forest. However, on April 30, 1979 a major part of the Nong-Yor


community forest was declared as national reserved forests and a project for the so-called reforestation was conducted during 1979–1982 in an area of around 610 acres and was mostly planted with Eucalyptus trees (Committee of Villagers 1997). The re-forestation by planting Eucalyptus trees had caused vicious environmental impacts in 8 villages surrounding the plantation. Cultivated lands of farmers around the forest suffered from sands blowing in from upland Eucalyptus forests, as a result of soil erosion associated with such planting methods. This happened during the rainy season. During in the dry season, January to early June, they suffered from dwindling water sources as the ground water level was sinking every year. The various impacts of Eucalyptus plantation were fully felt by the villagers; wells in the villages became dry for several months whereas formerly water was available all the year round. Equally significant was the diminishing of forest products, formerly available for their livelihood. Peasants in the 8 villages were therefore suffering from dwindling life support systems and a degraded environment, owing to the Eucalyptus plantation project. Faced with these severe problems, peasants in the 8 villages set up the Committee of Villagers for Conservation and Revival of Nong-Yor Community Forest. The committee sent a written request to relevant government offices, detailing all the problems facing them and requested the latter to de-list the reserved forest status of the land area now planted with Eucalyptus trees, so that the communities could help revive and replenish their community forest. The request and offer to revive Nong-Yor forest were ignored by relevant state agencies, mainly because they lacked the bargaining power and since the matter had not been brought to wider public attention it had not become a public issue. Being a small and rather isolated protest group, the Nong-Yor villagers could not press their demand further. Subsequently, however, the matter took a positive turn for the villagers when they put up their demands within the framework of an AOP negotiation with the government. After the negotiation, a solution was reached in principle by both sides that the Eucalyptus trees grown in Nong-Yor forest had to be removed or harvested by FIO so that the surrounding communities could start a forest revival project. This was the content of the Council of Ministers’ Resolution dated April 22, 1996. It was also agreed that if within one month FIO did not do so, the villagers would be entitled to remove the Eucalyptus trees, but must not squat on the newly recovered piece of land.


In July 1996, FIO had cut down the Eucalyptus trees and sold them. However, it had not come back to remove the stumps. Later the NongYor committee agreed that if the stumps were not removed, other trees must be planted so that they outgrew the stumps. The remaining problem was the heavy work of reviving the devastated forest into a community forest. This matter was brought to a negotiation table during the AOP’s 99-day rally in early 1997. Within the AOP negotiating framework, the Nong-Yor committee therefore proposed to the government the following changes (Committee of Villagers 1997): firstly, the government would provide financial support for their efforts in reviving the harvested Eucalyptus plantation and transforming it into a community forest. The amount of financial aid proposed was based on official support for the State replanting scheme, around Bt 7,500 per acre and the total amount was about Bt 4.5 million. Secondly, they would change the Nong-Yor FIO Office into the Coordinating Center for Conservation of Nong-Yor Forest, which would function as a people’s organization. Thirdly, they would grant this people’s organization the rights to manage Nong-Yor forest as ‘a community forest’, in which the communities take charge of its protection and conserve it for sustainable exploitation with the support of the State. According to an AOP advisor, the government negotiators appreciated the community’s effort to revive the former Nong-Yor forest into community forest. However, they were afraid that this case would set a precedence for countless others to follow if it was to be supported by a government budget, so they proposed that the Forestry Department would arrange for support funds from private sources. This arrangement was considered as a special pilot project for the revival of deforested areas. A serious discussion ensued among AOP negotiators whether to agree to the proposal, or to press further for the support from the government budget. The majority agreed to such an arrangement insofar as this benefitted the people and that no strings were attached. Eventually, both the AOP and the Forestry Department concluded that half of the funds would be available within April 1997 and the rest by the end of the year.6 In sum, the case of Nong-Yor villagers’ struggle indicated that a small and isolated campaign to regain the community forest would not have been possible without relying on the power of the AOP. Similarly, other small movements, which managed to succeed in pressing their demands on the state, also benefitted from their linkage with a larger network of struggle, testifying to the political synergy effects mentioned earlier.


The case of Pongkhunpet Dam While dam construction is part of necessary infrastructure for a country’s economic development, it also entails massive displacement of people, which caused untold suffering and severe hardship for their lives, destruction of communities and environment. Their houses, lands and properties were flooded. Some of them lost an opportunity to carry on their occupation (fishing) and sustain natural life support systems (forest or natural products), owing to dam construction. Although government agencies paid the affected persons some compensation, their lives never regained the level of livelihood from before dam construction. The compensation remains incomparable to their sufferings, considering the severe and long-lasting impact they have to bear. Even worse, there are still cases in which the displaced families have not been compensated. The above problems still persist because state agencies are concerned with mega projects without due regard for human rights and the rights of displaced persons. In addition, state regulations and operating procedures are not consistent with the extent of the adverse impact suffered by the people, and they do not acknowledge the livelihood made locally. According to the AOP, their major complaints are about the problems of unfair compensation caused by a lack of transparency in the process of determining their occupation and use of lands. Such a process is not consistent with the reality and local conditions of the affected families. Also, severe hardship is caused by the loss of their livelihood after dam construction (AOP Jan. 1997: 7–8). The general demands of the network of people affected by dam construction include: a) the state must provide fair and just compensations for the affected persons, including lands submerged by the impoundment of water, and impacts on the loss of their occupation in the case of the dams already finished; b) for the dams that have not yet been started, the state must cancel the projects as they are not likely to be worthwhile if full economic, social, environmental and community costs and damages are taken into account. Also, AOP proposed that the government seek alternative water resources based on sustainable water resource management and community participation in order to avoid social and environmental impacts. Such alternative water resources include dike and small water reservoirs; revival of forests along watershed with measures which do not cause severe impacts on the villagers; and revival and making effective use of existing water resources. In its decision on mega projects, the state must arrange for genuine public


hearings by fully disclosing all relevant information. The public hearing committee must comprise of members acceptable to both sides. In addition, all rights of the affected people must be respected and state agencies must not arrange for or encourage the mobilization of supporters to vote at the hearing so as to impose their will on the affected people (AOP March 1996: 7–8). Pongkhunpet Dam7 is in the second category. The pro-dam groups at both local and national levels have campaigned and lobbied for its construction, but the communities around the dam site have staged quite a persistent struggle against dam construction. The affected peasants and forest-product gatherers (about 250 families in 3 villages) in the area first started their campaign to demand fair compensation if the dam was to be constructed. But, in the process, it has turned out to be a campaign against dam construction as the original group of villagers who are against dam construction increasingly gained more support. After succeeding in convincing the villagers to build Lamkunju Dam in the nearby district around 1990, the Department of Irrigation turned its attention to the Pongkhunpet Dam project. Major causes for resistance from the villagers were conflicting information about the level of water retention which determined the area under the water and the fact that criteria for payment of compensations were not transparent. The relevant state agency was, of course, directly responsible for this. While the majority of villagers were struggling for just compensation, there was also a small group of those opposing dam constructions. The first group of leaders was inquiring from various sources whether their case (living off the forests) could be compensated. They learned about the people affected by Pakmoon Dam demanding compensation for the loss of fishing occupation and came to discuss with the latter at the protest rally in front of the government house. Later, they set up the Villagers’ Committee to Solve Problems from Pongkhunpet Dam (hereafter, Pongkhunpet VC) In late 1993 the Department of Irrigation proposed to pay them Bt 20,000 per acre for compensation if they moved out. However, most villagers disagreed as they were not paid for other losses such as planted trees and natural sources of livelihood. In June 1994, the governor of Chaiyapoom visited the dam site and tried in vain to convince the villagers to agree to dam construction. In early 1995, the Villagers’ Committee joined the Small Farmers Assembly of the Northeast. A statement regarding their problems revealed the


corrupt practices among government officials in the payment of compensations, in collusion with local capitalists and bureaucrats. It further showed that there were no standard criteria for compensation. The concerned state tried to lower the amount of compensation without considering its impact on the affected people and communities (SFAN 1995). Within the framework of SFAN’s negotiation with the government, they demanded that the government set up a non-partisan committee to conduct a fair feasibility study of the Pongkhunpet Dam, including its impacts on environment, natural resources, and ecological system and on society, as well as impacts on affected people regarding occupations, properties and the loss of livelihood. They also requested that a public hearing should be conducted before the construction of the dam. In addition, the Pongkhunpet VC also demanded that the state agency should not proceed with this project, pending the above stated matters (AOP March 1996: 12). Experiences from several rounds of struggle offered them two lessons. First of all, it is useless to negotiate with politicians and state functionaries as the solution involves policy change. Only through direct negotiation with the government or its representative with full decision-making power can there be some assurance of implementation of mutually agreed upon decisions. More importantly, the joint decision has to be endorsed by the Cabinet and released as a Cabinet Resolution. Secondly, most villagers fully realized that the dam brings more damage than benefits, so that they then must demand the abolition of the project and join AOP. In December 1995, the Pongkhunpet VC joined AOP, which decided to support all those who are against dam construction and insisted on the earlier demands submitted on behalf of SFAN. During the AOP protest rally in March, 1997 Pongkhunpet VC submitted its demands again and after direct negotiation with the government their case was resolved in the Cabinet Resolution of April 29, 1997. According to this resolution, the government agreed to cancel the plan to construct the dam, pending a genuine public hearing and an impartial feasibility study. It is interesting to note here that this successful demand was the precursor of the substantive points included in Section 56 and 59 of the October 1997 Constitution. While several families agreed to get some compensations and moved out, there are now about 130 families, rallying against dam construction up from 50, four years earlier. Those waiting for compensations have now become a silent minority.


The struggle against pro-dam coalition It is interesting to discuss how such a small community managed to survive huge pro-dam mobilization and constant pressures from what might be dubbed as ‘pro-dam coalition’, including members of parliament (MPs), local politicians, the department of irrigation, the provincial governor, border police, district officers, Tambon and villager leaders and pro-dam media. Some MPs and local politicians are believed to have a strong vested interest in dam construction and are the prime movers of the coalition. During April 1998, when AOP staged a rally near the government house, the pro-dam coalition also mobilized about 10,000 supporters in front of Chaiyapum provincial office to demand that the government revoke the Cabinet Resolution of April 29, 1997. Again, in August 1998, they mobilized more than 10,000 people at Bua-Rahwe District office, calling on a visiting deputy minister of agriculture to start building Pongkhunpet Dam.8 The prodam coalition also submitted more than 10,000 signatures to the Prime Minister, mostly with the encouragement from local officials, in support of dam construction. In addition, the pro-dam coalition tried to put their case to the Cabinet in August 1998, asking to rescind an earlier cabinet resolution. But it was objected to by two state agencies, the National Economic and Social Development Board and the Budget Bureau. Having failed this, they submitted the dam project to Parliament’s Commission on Environment for approval by showing a new set of data on output and area under irrigation, resulting in a higher rate of return on investment (18 per cent against 11 per cent in the first version). The Commission on Environment then set up a subcommittee at the provincial level, chaired by the MP from Chaiyaphoom, to investigate matters regarding payment of compensation and the number of trespassers on the land of the Department of Irrigation. All these attempts were in fact in violation of Cabinet’s Resolution of April 29, 1997.9 With the backing of the Commission on Environment where a key member of the pro-dam coalition has a foothold, the coalition started its campaigns in earnest. Between October 1998 and March 1999, the villagers at Pongkhunpet suffered from a heavy campaign against their efforts. When the villagers went to the market at Bua-Rahwe District, they were criticized as the ones who obstructed the progress of the country through anti-dam protests. They were told not to demand much compensation as the country was suffering from severe economic crisis. It was also said that higher officials ordered people not to


buy products from these villagers. In some cases, their children were threatened with action to de-register them. Media reports about Pongkhunpet activities were mostly one-sided and in favor of the prodam coalition. The provincial governor had his own radio program every weekend, where he bombarded AOP activities at Pongkhunpet. Apart from this seemingly peaceful counter-movement from vested interest groups, Pongkhunpet communities also suffered two ‘unknown’ attempts to burn down the whole village: 5 houses were burnt down on November 19, 1998 and two on January 7, 1999. On both occasions, on the morning following the arson, AOP and allied groups in Bangkok called a press conference at the government house and went to protest in front the house of the Minister of Interior and demanded immediate investigation and asked that the perpetrators be brought to justice. In actual fact, the heaviest ‘attack’ on the Pongkhunpet communities had occured during the previous four days. The pro-dam coalition came directly into the village with anti-riot commandos and a helicopter hovering above the villages. One member of parliament, a deputy provincial governor, a top-level military officer of the 2nd Army, members of the provincial council and about 500 dam supporters came in about 50 pick-ups to the village, with the pretext of coming for negotiations. They cursed the Pongkhunpet villagers as traitors, accusing them of being communists and of wanting to form an independent state. This was the biggest threat ever faced by the villagers. However, they stuck to their non-violent method of resistance, by staying inside their houses with the doors closed and did not respond. They also showed themselves to be aware of various rights according to the new Constitution. They wrote at the front gate into the village: ‘Article 26: in exercising state power, every state agency must take into account human dignity’. At another place, it was written ‘We have rights and liberty according to the Constitution’. Directly relevant to their demand is the following quotation: ‘Article 56 (2): Any projects or activities that may cause severe impacts on the quality of environment cannot be undertaken unless there is a feasibility study to assess the impacts on health and environment’. At other places, they also wrote several slogans against the dam, for example: ‘Constructing the dam to kill people’. At the front of one house was written ‘The May 29 Resolution of the Cabinet revokes the construction of Pongkhunpet Dam’. Indeed, any viable movement needs both internal and external strength. The Pongkhunpet villagers had staged struggles with their


own efforts for about three years before joining SFAN and later with AOP in 1995. They have developed a capable leadership and a strong organization. This can be testified by the fact that apart from organizing against dam construction, the villagers also set up the ‘Chiang-Ta [Canal] Conservation Group’ to protect and conserve the forest and ecology around their villages. Their conservation efforts were awarded a prize for forest conservation by the Ministry of Science, Technology and Environment. According to Pra Pichet Yasintharo who was an AOP advisor at Pongkhunpet, ‘We need to launch our struggle on two fronts: one negative and one positive. If we are fighting only on the negative front, i.e. against the dam,10 the prodam group will always accuse us of destroying the forests. Therefore, we thought that we had to prove that we could keep the forest in its natural condition. So we established “Chiang-Ta Conservation Group” in 1994’.11 In addition, the internal strength of Pongkhunpet group also depends on the bountiful forest products, for example, bamboo shoots, mushroom, palm leaves, medicinal plants etc. These are natural sources of income and provisions, which help sustain a long period of struggle. Its external strength lies in its networking with AOP and allied groups. In addition, the basic legal training for the villagers by the Thongbai Tongpao [Legal] Foundation also confirms their rights and strengthens their commitment to non-violent struggle. Presence of the Foundation as the Group’s legal advisor offers the villagers a strong legal shield against the intruders. Their resistance against the pro-dam ‘attack’ in early January 1999 was fully supported by AOP and allied groups, including the Students’ Federation of Thailand, the Campaign for Popular Democracy, the Alternative Energy Group, etc. Moreover, in order to stop the ‘attack’ in early January 1999, a high level lobbying activity was crucial. Some advisors of AOP went to lobby the leader of a political party of which the pro-dam Member of Parliament was a member and asked him to instruct the latter to withdraw from the village. At the same time, an arrangement to have an advisor of the minister of interior to visit Pongkhunpet for a fact-finding mission also caused confusion among the pro-dam coalition. In sum, in defending their rights and pressing for their demands, the Pongkhunpet villagers have adopted a strategy of non-violence and of appealing to the rule of law as a means of self-defense in the face of several threats and attempted attacks. The supporters of AOP and allied groups have written protest letters to draw public attention to such


crucial issues as the misuse of state power and the violation of basic human rights by local officials. In addition, lobbying at a higher level also added to the successful resistance against the pro-dam coalition. Although the anti-dam struggles of the Pongkhunpet villagers have not gained general approval from the civil society, they succeeded in obtaining unswerving support from the activist fraction in the civil society, providing a ‘protective shield’ against the misuse of state power to impose the will of pro-dam coalition on the villagers. However, the pro-dam coalition with strong vested interests in the dam project is always seeking an opportunity to put up its case to the government and to campaign against the Pongkhunpet villagers and their allies. The pro-dam coalition has resorted to campaigns of misinformation to the public, lobbying the media and conducting smear campaigns against anti-dam villagers and activists. The latter were charged with violation of law and order and instigation of being communists, drug-trafficking and forming an independent state. The coalition succeeded at certain points in soliciting the endorsement of dam construction from the Parliament’s Commission on Environment. They have also downsized the scale of the project to avoid the mandatory environmental impact assessment (EIA). The outcome of Pongkhunpet villagers and their struggle within the AOP network remains to be seen.

The case of Alternative Agriculture Networks12 The role played by the Alternative Agricultural Network (AAN) under the banner of AOP is another concrete example of ‘movement power’. As an organizational member of AOP, it has succeeded in pressuring the Ministry of Agriculture (MoA) to comply with the agricultural policies stated in the 8th National Development Plan. It was discovered that bureaucrats still hold a considerable amount of discretionary power in interpreting key policy aspects of the Plan and are able to exercise their own organizational bias and vested interest. If AOP had not intervened at the implementing process, alternative agriculture projects, which would directly benefit small farmers, would not have materialized. Within the framework of AOP negotiations, the MoA had to substantially revise its plan by integrating AOP’s proposal of an alternative agriculture plan. Such an inclusion also means acceptance of people’s organizations’ alternative ideas vis-à-vis mainstream, large-scale, chemical agriculture. Such a successful proposal is much less likely to be accepted by the government without the practice of karnmuang


pakprochachon or literally ‘people’s politics’ or in our context, grassroots democracy. The alternative Agricultural Network (AAN) was established about 10 years before it joined AOP. It has united a network of NGOs and a network of POs on alternative agriculture into one single major network. The network has twin objectives of promoting the theory and practice of alternative agriculture and campaigning against the socalled Green Revolution. After close consultation with farmers’ groups, the practice of alternative agriculture, especially chemical-free agriculture, has been widely accepted and has proved successful and viable in several parts of the country. In an effort to find markets for their products, the network started to promote these products among urban middle class consumers, mainly because of their awareness about chemical-free products, such as vegetables. This will eventually form a strong base for the growth of alternative agricultural outputs and livelihood of farmers. However, after a few evaluating sessions, members of the network realized that their efforts were not supported by government policy; therefore, they felt an urgent need to actively undertake policy advocacy campaigns. They found an appropriate channel to disseminate the concept of alternative agriculture by participating in the drafting of the 8th National Development Plan (1997–2001). As part of Thai state’s policy to encourage ‘people participation’ in the planning process, the AAN, along with several NGOs, was invited to participate in the process of drafting of the 8th National Development Plan. It made full use of this opportunity to propose several policy recommendations, namely, communities’ rights to natural resource management, coastal resource management by small fisherfolks communities, coastal environment protection by promoting appropriate use of fishing gears, an alternative agriculture plan (sustainable agriculture plan, in official terminology) and a law for the protection of indigenous plant varieties. Only the last two were accepted as part of the plan for the agricultural sector. When AAN members carefully looked at MoA’s Plan and its budget allocations, it was discovered that ‘sustainable agriculture’ was not included in the Ministry’s programs. Dominant among various programs were those involving raising the agricultural sector’s productivity, mostly construction of mega dam projects, promotion of agricultural production for export, promotion of ‘progressive’ agriculture, etc. Regarding the sustainable agriculture plan, it was stated in the 8th National Development Plan that the government would promote this new agricultural practice to cover up to 20 per cent of the total national cultivated land.


AAN members were disappointed that their policy proposals were not integrated in the Ministry’s plan. During the second assembly of AAN in 1996, there were some discussions among participants, both from NGOs and Pos, that it was difficult to make a major impact on the state’s agricultural policy. They were thinking of taking their own initiative by attempting to develop markets for products of alternative agriculture and to establish a direct connection between consumers and farmers, but this was also quite a difficult task. Key members of the AAN admitted that they had tried several times to convince senior officials of the importance of people participation and alternative agriculture, both during private discussions and in several academic and technical seminars. Increasingly, members of the AAN had learned an important lesson that policy advocacy via ‘the soft pressure’ (participation in planning with national planning agency) brought no tangible result. Such efforts were meaningless as government officials only gave lip service to people’s organizations. In order to gain concrete outcomes, they felt the need to take ‘the hard pressure’ route with mobilization and protest rallies. This realization was growing steadily within AAN. On April 7, 1996, AAN paid a solidarity visit to the AOP rally outside the government house, bringing them some food items and a cash donation. A representative of AAN made a speech in support of the rally as well. AAN leaders have since maintained close discussions with AOP, with the result that AAN was admitted as an organizational member of AOP towards the end of 1996. For some years before joining AOP some senior leaders of AAN were against ‘the hard pressure’ through mobilization and protest rallies carried out by other grassroots networks or groups. They viewed such actions as working with the feet rather than the brain. As it was proved time and again that ‘the soft pressure’ was to no avail, a tacit understanding was made that instead of those leaders only middle tier leadership would represent AAN in AOP activities. Such was a drastic shift in the campaigning strategy of AAN. During the AOP mobilization and protest rallies in January 1997, AAN joined by setting up their camps along with others and demanded that the MoA’s 8th Plan should strictly follow the 8th National Development Plan. More important, to demand a concrete commitment to the promotion of sustainable agriculture, the network insisted that appropriate budgets and related schedules for implementation during the plan period had to be given priority. This negotiation was carried on with strength within the framework of AOP negotiations with the government, including other problem


issues such as dam issues, land and forest issues, etc, while AOP was rallying near the government house in Bangkok. The following are some of the proposals which were finally accepted in MoA’s plan during 1997–2001. These proposals were not part of the official plan. A joint Committee to Review Proposals held several sessions for Development of Alternative Agriculture, comprising key members of AAN and senior government officials to discuss the reviewing of the plan. There are two important proposals, which did not exist in the MoA plan (MoA 1997). The first proposal was a concrete plan to promote the development of sustainable agriculture, being agricultural activities, which support sound environment and reduce the destruction of natural resources, to which both sides agreed. AAN gave a clear definition of the term sustainable agriculture and proposed to give examples of the said activities. It includes integrated farming, natural farming, organic farming and agroforestry. Also, in the promotion of chemical-free products, cultivated lands under sustainable agriculture must account for a minimum of 20 per cent of total national cultivated lands. The second proposal centred on support for farmers’ efforts to form groups and organizations and for empowering farmers, farmers’ organizations and farmers’ institutions by promoting the learning process and networks as well as the enlargement of opportunities in developing the potentials of farmers and small farmers. The following are some interesting proposals, which aimed to ensure that the MoA’s plan included dimensions of effective participation and rights of small farmers and other measures for their benefit. The plan must ensure effective participation of small farmers as well as the development of small-scale water resources in the farmlands. Safety standards also need to be enforced for organic farm products. In addition to the promotion of biotechnology, local wisdom relating to biodiversity is to be promoted in order to conserve natural resources and develop sustainable agriculture through the participation of farmers. Farmers’ participation in management, and support for farmers’ information exchange networks and in information dissemination to the farmers were also demanded. Instead of the official phrase ‘supporting the private sector to participate in developing farmers’ organizations, especially in marketing and management’, AAN proposed to change it to ‘supporting the non-government organizations and private sector to participate in developing farmers’ organizations in production, primary processing, marketing and management, with an aim to achieve selfreliance in farm management of farmers’ organizations’.


In March 1997, the Cabinet approved the revised plan of the MoA after embracing the sustainable agriculture program and other supporting measures and budgets and the time frame proposed by AAN. The highlights of the revised plan stated that the MoA will promote sustainable agriculture in an area of 25 million rai or 20 per cent of cultivated land within the planned period of five years and that the pilot projects will be conducted by AAN. The Cabinet approved a budget of 633 million baht for the promotion of sustainable agriculture among small farmers by carrying out pilot projects in three years. However, not long after that, Thailand was plunged into deep economic crisis, followed by a change of government. On April 22, 1998 the AOP organized a brief rally in front of the MoA to call on the Minister responsible to put the pilot project on the agenda of the Council of Minister for approval. The project was postponed a few times in spite of the fact that the MoA had also agreed with the proposal (AOP 1998: 60). However, it took about two more years before the final budget and detailed activities for the pilot project to develop sustainable agriculture were finalized. On May 16, 2000 the Council of Ministers finally approved the 633 million baht for the three-year pilot project that will, for the first time, be managed by an NGO, Alternative Agriculture Foundation. The first year allocation beginning in October, 2000, was 224 million. In sum, the success of AAN in proposing alternative agriculture as part of state policy was made possible by its new strategy of shifting from directly interacting with relevant state agencies (the soft pressure) to mass mobilization in alliance with AOP (the hard pressure). The strength of AAN negotiations was based on its novel and practical aspect of the proposed policy as well as on the political synergy from overall movement of AOP. It has presented us with an example of political reform effort by a grassroots movement which is later enshrined in Section 76 of the Constitution which states: ‘The State shall promote and encourage public participation in laying down policies, making decision on political issues, preparing economic, social and political development plans, and inspecting the exercising of State power at all levels’.

The role of AOP in political reform Apart from putting up direct action through mass mobilization to press its demands on state agencies, the role of AOP in campaigning for political reform by participating in the drafting of the new Constitution (promulgated October, 1997) was also instrumental in the


making of grassroots democracy. In their struggles, participants of AOP have realized that within the existing framework of legal and political structure, their rights and claims are much restricted, thereby hampering efforts to demand state’s redress for their plights and grievances. Narumol Tabchumpon (1997: 46–47) classified AOP’s role in political reform, into three types: namely the process of participation, mobilization and networking with civil society groups, and proposing a people’s constitution. In co-operation with allied NGOs, AOP set up its Political School to enable its participants to have dialogue with prodemocracy organizations, academics and civic groups on substantive political reform. Constitution drafters, politicians and other progressive social groups were also invited to discuss relevant matters with AOP participants. At the local level, AOP was able to mobilize villagers to voice their problems and present their version of a new Constitution, based on their concrete experiences, to the Constitution Drafting Assembly members at the provincial levels. AOP also became part of a national network on constitution drafting, comprising about 30 NGOs, POs and civic groups. Apart from these two major activities of AOP, its proposals for substantive political reform are at the core of strengthening grassroots democracy in the sense of being ‘a democratic system that responds to the needs and aspirations of those at the grassroots’ (Tabchumpon 1997: 47). We will focus our attention on this issue in what follows: During the 99-day protest rally ending May 2, 1997, AOP submitted the ‘Proposals on Constitution to the Constitution Drafting Committee’ to the Chairperson, who came to receive it on March 26, 1997 at the ‘rally village’ near the government house. The process leading to this 50-page proposal attests to democratic practices within an organization as well as to the making of grassroots democracy, in alliance with other social forces in the civil society. At the 99-day rally, there were 121 local issue groups. Each group discussed its concrete problems and proposals for state actions and measures. Each group then elected 2 representatives to discuss the matters at the AOP Political School.13 These concrete proposals which related directly to local problems were then translated into conceptual concepts or legal terms with the help of allied NGOs such as the Civil Liberty Association and academics. Participants in the AOP Political School were also encouraged to attend public hearing sessions organized by pro-democracy organizations to offer their points of view and learn about others’ proposals. AOP’s proposals were many and varied; some were concrete demands or claims on the state, while others were


general principles and concepts, which were aimed to defend and extend the rights of grassroots people. The following are some examples of AOP’s proposals: The first proposal was related to the right and freedom of association, with special emphasis on groups or organizations formed by the people; their rights to be acknowledged, protected and supported with budgets by the state; and freedom to assemble peacefully without weapons. This proposal arises from the fact that very often when AOP organizes a rally, the opposing state agencies tend to charge them as being ‘an illegal group and organization’ in violation of law and order and thereby misinforming the public. Now these rights are enshrined in Section 44 of the Constitution, which states: ‘A person shall enjoy the liberty to assemble peacefully and without arms’. And more specifically, Section 45 states: ‘A person shall enjoy the liberty to unite and form an association, a union, league, co-operative, farmer group, private organization or any other group’. The proposal for ‘the community’s rights to protect and manage local natural resources’ was based on the concrete problems facing the peasants and indigenous people. The state did not recognize the community’s rights over fair use of natural resources and very often they were unfairly evicted from their lands, in some cases with violence. This was the case of state’s ex-post declaration of reserved forests and national parks. With an aim to attain forest areas of 40 per cent of the total national areas, the Forestry Department used satellite mapping methods to draw demarcation lines between different categories of protected forests on the map, without the knowledge that on a particular area, reported by satellite mapping as forests, communities had been located there for decades. It is an irony that communities, which had taken good care of nearby forests, were reported to have settled in the national forests. In actual fact, the forests were superimposed on existing communities. Thus, the categories of protected forests in government satellite records were ex-post ‘legal classification’ of forests, imposed on rural communities, as well as a number of rural market towns and even some local government offices. This process had inevitably caused large-scale eviction and displacement of tens of thousands of people and their communities. The Network of Land Rights and Forests and the Assembly of Indigenous Peoples of Thailand in AOP have been actively campaigning for communities’ rights to manage local resources. Fortunately, this proposal was included in Section 46 of the Constitution which states: ‘Persons so assembling as to be a traditional community shall have the right to conserve or restore their customs,


local knowledge, arts or good culture of their community and of the nation and participate in the management, maintenance, preservation and exploitation of natural resources and the environment in a balanced fashion and persistently as provided by law’. Right to information is another proposal which had been widely supported by the civil society, and so is also part of the new Charter. At the concrete level, the grassroots people had no rights to information, a situation in which state agencies often misinformed them about the true nature of the impacts of mega projects. When a dam was being proposed, people in the affected areas were often informed that their lands would not be flooded or that their fish crops would not be affected enough to destroy their livelihood. More emphatically, they were told the dam would bring them a better life. Instead, the reverse was the case. Secrecy and misinformation remain a major mode of operation in many government projects affecting the people, both urban and rural, so the proposal for the right to information was given strong support by all groups campaigning for political reform. The right to information in general was integrated into the Constitution in Section 58. In addition, AOP’s proposal also included the right to hold public hearings with civil participation before a project is approved, so that they can fully gain all the information and explanations to understand both the positive and negative sides of the state projects or other activities which may affect the quality of environment, health and quality of life. According to Section 59, ‘A person shall have the right to receive information, explanation and reason from a State agency, State enterprise or local government organization before permission is given for the operation of any project or activity which may affect the quality of the environment, health and sanitary conditions, the quality of life or any other material interest concerning him or her or a local community and shall have the right to express his or her opinions on such matters in accordance with the public hearing procedure, as provided by law AOP is now empowered to invoke Section 59 to challenge the state’s proposal to construct four dam projects. Although there was a widespread demand for the decentralization of power from the central government in most public hearing sessions of the Constitution Drafting Assembly, for participants of AOP this call was rooted in a concrete situation facing them. They have encountered countless cases of red tape in dealing with (appointed) local officials, who often fail to take action for the poor, even in cases where the government has approved certain measures to solve their problems. So


they were in full support of the decentralization of power, especially for the direct election of provincial governors and district officers. They correctly view appointed provincial officers as lacking in accountability and cooperative spirit for the rural masses. However, such proposals have not yet fully materialized, only the election of sub-district or Tambol Administrative Organizations is to be held every four years. It is hoped that the election of officials for higher offices in the provincial administration will also take place in the future. AOP also proposed that the state decentralize its fiscal power to local authorities and provide a fair proportion of national budget for local and central government spending. This matter is also taken up in the new constitution. AOP also called for the decentralization of power to local authorities in education as well as in administration of justice. On state policies, AOP proposed that the state must provide a fair social welfare system for farmers; the state should compensate the people for all the damages and loss of [occupation] opportunities as a consequence of state or public enterprise projects by ensuring them a better life and by the establishment of a fund for revival of their communities. There were also proposals for the state to implement a genuine land reform, a progressive capital gains tax to prevent land speculation; and that the state will not pass any laws that violate the farmers’ land rights and implement measures to protect and support small farmers and support alternative agriculture. However, these proposals were only partly recognized by the Constitution in two sections regarding directive principles of state policies. Section 83 states: ‘The State shall organize the appropriate system of the holding and use of land, provide sufficient water resources for farmers and protect the interests of farmers in the production and marketing of agricultural products to achieve maximum benefits, and promote the assembling of farmers with a view to laying down agricultural plans and protecting their mutual interests’. The Thai state also affirms its commitment to promote, encourage and protect the co-operative system. AOP also supported and endorsed allied pro-democracy organizations’ proposals on organizations and mechanisms for the inspection of the exercise of state power. This included the following proposals for the establishment of several autonomous bodies such as administrative courts, with civil participation through public hearing processes; an election commission to supervise elections at all levels; parliament’s ombudsmen; a national counter-corruption commission and a commission on human rights. In addition to other rules and procedures, there was a proposal for civil participation in the removal from offices


of persons holding political positions. This proposal was recognized in Section 304 of the Constitution which states: ‘Voters of not less than fifty-thousand in number have the right to lodge with the President of the Senate a complaint in order to request the Senate to pass a resolution under Section 307 removing the persons under Section 303 from office’. In sum, the role of AOP participants in the political process leading to the promulgation of the 1997 Constitution is a hallmark of the AOP’s new strategy, which involves legal and institutional reforms, in addition to mass mobilization. In this process, AOP had become part of a national network on constitution drafting, comprising about 30 NGOs, POs and civic groups. Their proposals follow naturally from their struggles at local, provincial and national levels where legal and structural impediments prevented them from attaining their demands and claims. While some of the proposals to the constitution drafting committee were marked by material claims, there were several others pertaining to general political reform, especially in extending and strengthening rights of the civil society and in circumscribing and inspecting the exercise of state power.

Conclusions During the last three decades countless communities have suffered from the process of marginalization or development aggression as a direct result of the Thai state’s growth-oriented development policies. Lacking an effective channel of interest representation, these victimized communities, both urban and rural, have staged their struggles by taking direct political actions to stake their claims on the state, to defend and advance their rights in what might be labelled as a counter-hegemonic project against mainstream development policies of the Thai state. In doing so, the AOP has contributed significantly to the political activation of the popular sector. As such, the AOP is prominent among Thai social movements aiming to strengthen civil society and working towards achieving grassroots democracy. Judging from its activities, we can say that AOP has contributed to a redefinition of politics as something beyond the ballot box. Indeed, AOP activities, along with allied groups and networks, underpin the process of transformation of Thai politics towards grassroots democracy. AOP participants aim to achieve democracy that is able to solve their problems or, in the words of some leading participants, ‘democracy that they can eat’.


Another important point is that the rise and consolidation of AOP can be designated as a form of ‘political innovation’ by a popular movement, based on the principle of ‘political synergy’. AOP’s activities offer participants a kind of ‘political technology transfer’ or ‘political diffusion’, which greatly bolsters the process of people empowerment. Its repertoire of collective actions, participatory and decentralized organizational structure and collective leadership are instrumental in strengthening and ensuring its movement powers and fairly successful outcome as shown by the four case reports. Finally, AOP can be considered an innovative grassroots movement in that it has the following features: having a structure with informal networking and autonomy, being a kind of non-party political formation (Kothary 1983); not contesting for state power; going beyond the confine of parochial interests; and adopting a trans-class alliance in its quest for alternative development or alternative mode of collective life by participating with other networks of voluntary groups and progressive social forces in the struggle for political reform, human rights, social justice, gender justice and ecological sustainability. Besides, AOP is presently among the most powerful grassroots movements in Thailand and represents the hopes and aspirations of the poor. Notes 1 2 3 4 5 6 7

8 9 10 11 12

13

Interviewed with Vanida Tantivithayapitak, April 29, 2000 Interviewed Boonthan T. Veerawongse, May 18, 2000. Interview with Pra Pichet Penamrod April 25, 2000. Interview with Vanida Tantivithayapitak, April 29, 2000. Located in Sangkla District, Surin Province, Northeast Thailand, Interview with Boonlert Wisespreecha on April 22, 2000. Pongkhunpet is the name of the dam to be constructed, located at KokeSaard Sub-district, Nongbua Rahwe District, Chaiyapum Province. For our convenience and consistency, Pongkhunpet is also referred to as a location. Interview with Pra Pichet Yasintharo, May 12, 2000. Ibid. This means ‘negative’ from the perception of the general public or audience. Interview with Pra Pichet Yasintharo. This section draws heavily from interviews with Supha Yaimuang on May 19, 2000 and with Witoon Lianchamroon on May 31, 2000. Both are advisors to AOP and key members of AAN. During a long 99-day rally in 1997, AOP established (March 6, 1997) its ‘Political School’ as an important educational activity to promote critical understanding about economic, social and cultural aspects of Thai society. Participants were also introduced to several relevant legal aspects as well as training for non-violent actions. Lecturers were recruited from some advisors of the AOP and academics, NGOs staffs and social activists from prodemocracy organizations. This learning activity coincided with the call for

180 Victimized Communities to Movement Powers proposals related to the new constitution to be officially deliberated by the Constitution Drafting Assembly. So, the AOP Political School became an important venue for the practice of grassroots democracy.

References AOP (1998), Chronology of Pakmoon Dam and AOP Struggles: December 1967 to 21 June 1998, in Thai, Bangkok, AOP. AOP (1996), Demands submitted to the Government, Bangkok, Memo, March. AOP (1997), Proposals on the Constitution to the Constitution Drafting Committee, in Thai, Leaflet, Bangkok, 26 March. Asian Action (1995), Forum [Assembly] of the Poor: Pakmool Declaration, Pakmool, Ubon Ratchathanee: Thailand. Committee of Villagers (1997) Project for Conservation and Revival of Nong-Yor Community Forest for the years 1997–2001, in Thai, mimeo. Diani, D. and M.D. Porta (1999), Social Movement: An Introduction, Oxford: Blackwell Publishers. Eowsriwong, N. (2000), ‘Democracy on the Popular Direction’, in Thai, a keynote speech at the 20 Anniversary of the Campaign for Popular Democracy, 23 January, 2000. ESG-TU (1979), Development of Farmers’ Struggles: from Past to the Present, in Thai, Bangkok: Memo of Economic Studies Group (Klum Sethasuksa) of Thammasat University. Kothary, R. (1988), State Against Democracy, in Search of Humane Governance, Delhi: Ajanta Publications. —— (1983), ‘Party and State in Our Times: The Rise of Non-party Political formation’, Alternatives 9: 541–64. MoA [Ministry of Agriculture] (1997), Document for consideration of Council of Ministers Negotiation Group No. 6, Alternative Agriculture, in Thai, prepared by The Committee to Review Proposals for Development of Alternative Agriculture, Bangkok, Ministry of Agriculture. NESDB (1999), Poverty and Inequality During the Economic Crisis in Thailand, Bangkok: National Economic and Social Development Board, Newsletter, 3(1). Noparatvarakorn, P. (1998), A Study of Peasant Movement in the Struggle for Land Rights: A Macro Perspective and the Case of Pa Dong Lann Movement, in Thai, M. Ec. Thesis, Department of Political Economy, Chulalongkorn University. Nunez, O.S. (1989), ‘Social Movements in the Struggle for Democracy, Revolutions, and Socialism’, Rethinking Marxism, 2(1): 7–22. Pintoptaeng, P. (1998), Politics on the Street: 99 Days of the Assembly of the Poor, in Thai, Bangkok: Krirk University. Prasartset, S. (1996), An Introduction to The Rise of NGOs as a Critical Social Movement in Thailand, ARENA’s Communique, July–October. —— (1991), Democratic Alternatives to Maldevelopment: The Case of Thailand Occasional Papers Series No. 10, PRIME, International Peace Reserach Institute Meigaku: Meiji Gakuin University. Samudavanija, C. (1995), ‘Thailand: A Stable Semi-democracy’, in Larry Diamond, et al., eds., Politics in Developing Countries Comparing Experience with Democracy, Boulder, CO: Lynne Rienner: 323–367. SFAN [Small Farmers Assembly of the Northeast] (1995), Why There Must be ‘the 4th Round’ [of Protest Rally], in Thai, mimeo.

Suthy Prasartset 181 Tarrow, S. (1994), Power in Movement: Social Movements, Collective Action and Politics, Cambridge: Cambridge University Press. Tubchumpon, N. (1997), The Role of Grassroots NGOs in Political Reform in Thailand: Democracy behind Civil Society, unpublished M.A. Dissertation: University of Leeds. Thabchumpol, N. and N. Supsomboon, eds. (1999), The Direction of Thai Farmers: A Commemoration Volume for 25th Anniversary of the Farmers’ Federation of Thailand, in Thai, Bangkok: Children Foundation.

8 Grassroots Democracy and Community Empowerment: The Quest for Sustainable Poverty Reduction in Asia Leonora C. Angeles

Introduction Poverty reduction has made a comeback in the agenda of international development agencies in the early 1990s, after almost three decades of being on the back burner.1 The unquestioned belief in the trickle-down model of development underlies the focus on market-oriented growth and global economic integration since the 1970s. As the benefits of economic liberalization have failed to assist the world’s poorest populations, various forms of social movements challenge the Asian states to become more accountable and responsive to basic human needs. Many grassroots organizations and NGOs look everywhere but the state to bring change based on alternative development paradigms. Simultaneously, development practitioners within the interstices of international agencies, national governments and civil society have begun to move in various directions to bring about alternative forms of sustainable development. The mantra of sustainable development has undergone modifications from its original formulation as the ability to meet current needs without sacrificing the welfare of future generations to include many variations promoted by non-state intermediaries and NGOs (Singh & Titi 1995). At the core of these anti-development or alternative development discourses is the belief that the goals of human development would not be achieved unless extricated from the narrow lens of economic growth and economic interpretations of development. Human development therefore entails the elimination of conditions that produce poverty and related conditions of hunger, vulnerability, deprivation, violation of dignity, social isola182

Leonora C. Angeles 183

tion and powerlessness, that is, the path to sustainable poverty reduction. The view of human development as the sine qua non of sustainable poverty reduction has already animated the thinking and activities of various state and non-state or civil society agents at the macro (national/international), meso (institutional) and micro (local/ programs/ projects) levels. However, the conditions under which sustainable poverty reduction could take place, remains relatively under-explained. Schneider (1999: 7), writing for the Organization for Economic Cooperation and Development (OECD), considers participatory governance as ‘the missing link in poverty reduction’. Participatory governance refers to the involvement of different stakeholders, especially poor people, in decision-making processes, based on the tenets of accountability, transparency, rule of law and good and complete information, to guide decision-making outcomes. Good governance also requires ‘the move from discussing “what poor people need” to what access to resources and political influence should low-income people have to allow them to ensure that their needs are met, their rights respected and their priorities addressed’ (Editor’s Introduction 1996: 4). Therefore, it is critical to examine the quality and outcomes of state-elite-civil society interactions in the course of governance of poor communities, particularly in the delivery of basic services. Participatory governance is essentially about the empowerment of communities and grassroots organizations to enlarge their share of political and social power so that they can better control their lives. It is not so much the creation of competent government programs for the poor, but the creation of competent communities within the poor that matters in participatory governance. Joseph Stiglitz, former World Bank Chief Economist, introduces one of the Bank’s participatory poverty assessments saying, ‘we now need to expand our conceptions of poverty focusing on income, expenditure, education and health to include measures of voice and empowerment. That is the challenge that the poor make to us’ (Narayan et al. 2000: ix). In their foreword to the same report, Clare Shorts, British Secretary of State for International Development and World Bank President James Wolfensohn, reiterated the book’s emphasis on poor people’s political perspectives. They noted the powerlessness of the poor to negotiate fair market prices, their experiences with corruption and lack of accountability; their own positions of irrelevance and the subjugation to abusive behaviour on the part of formal state institutions and certain NGOs (Narayan et al. 2000: ix).

184 Grassroots Democracy and Community Empowerment

What is largely missing in much of the World Bank’s analyses, however, is the question of how to use the results of its consultation with the poor in meaningful and responsive policy changes, particularly in restructuring its structural adjustment policies. Do states and international development agencies, whose policies often represent the interests of governments and market agents, still have a role to play in poverty reduction? How can states and agencies of international development together address this problem of alienation from segments of civil society, particularly organizations of the poor who have given up not only on their governments but also on aid and charities? Some caveats on poverty reduction discourse are perhaps necessary. Poverty reduction is different from mere poverty alleviation. Poverty alleviation does not imply the reduction of the number of people who are poor, but only the lessening of the suffering by the poor, or slightly improving their condition. Although poverty reduction is now the dominant global discourse, the strategies for achieving this have not become sustainable. Sustainable poverty reduction is the systematic or programmatic attempt to increase the number of people released from poverty and sustain that success with the eventual goal of poverty elimination. This chapter first examines the genealogy of international development discourses in Asia, particularly the co-existence of the dominant neo-liberal paradigm and alternative perspectives on social, participatory, and capacity development. It then examines the paradoxes in the relationships between states, markets and civil society in light of globalization and the rise of anti-poverty organizations in Asia. This chapter also analyses the Philippines as a case study to explore the institutional, political and policy requirements in a country where democratic institutions do not guarantee an increased ability of the poor to effect or influence state policy. The last section of this chapter looks at the prospects for community empowerment and grassroots democracy in light of the current push for holistic thinking and integrated interventions around sustainable poverty reduction.

Community empowerment, grassroots democracy and the genealogy of international development discourse in Asia Poverty reduction discourse in Asia is examined here from the development decade of the 1970s up to the recent resurrection of the poverty agenda. This three-decade roundabout journey provides interesting insights into the mindset and operations of development mandarins,


mercenaries and missionaries who generate new knowledge and recycle old ones as they navigate through the bureaucratic mazes of national and international agencies. The recent discourse on poverty promises to show more analytical rigor, resource commitments and recognition of poverty as multidimensional and requiring the integration of complex economic, political, environmental and social concerns, including the gender dimension.2 Western governments and international agencies have determined the contours and components of development discourse from the postwar development efforts under the Marshall Plan to current interests in social capital and participation. The Bretton Woods institutions, that is, the IMF-World Bank and UN specialized agencies simultaneously pushed for trickle-down models of development and appealed to universal human rights in the early post-war period. In the last three decades, they have integrated views on human development, sustainability and globalizm, as nation-states commit to various international documents,3 thus homogenizing the terms of development discourse. Now, international development and government planning agencies in Asia, as well as grassroots organizations and NGOs that access funds from these bodies, need to pay attention to sustainable development, environmental awareness, good governance, gender equity and social capital in their plans, programs and projects. Since the late 1960s and 1970s, a growing movement of grassroots advocates and activists in Asia inspired by Freirean pedagogy and human rights discourse, have challenged the bureaucratic pathologies of donor agencies, particularly their preoccupation with aid and trade that come with a string of conditionalities. They were also highly critical of the outcomes of mainstream development practices, as they advocate participatory approaches in action and research and decisionmaking processes at the grassroots, from the bottom-up. The harsh impacts on the poor of fiscal austerity measures and other policies associated with Structural Adjustment Programs (SAPs) managed by the IMF and the World Bank provided an opportunity for grassroots, national and regional alliances in Asia to organize against state compliance and IMF-WB interventions. They also tried to improve their use of participatory approaches and visions of alternative development practices.4 The participatory development movement was partly a reaction against how community development was introduced in the 1950s to promote rural development through the participation, or more appropriately the mobilization of labour by people in the implementation of projects designed by outsiders (Atal 1997). There are numerous


examples of how outside agencies continue to consult local communities on a pre-determined agenda to enlist local participation and which is often limited to receiving material inducements such as foodfor-work, wages and credit and which provides these outside agencies information for research or analyses that do not necessarily lead to positive local transformation (Mukherjee et al. 1997: 5). Taking the cue from development NGOs, the World Bank commissioned its staff and hired consultants to introduce a form of organizational learning so that its staff could play the role, not of external experts, but of participating stakeholders who initiate, facilitate and nurture participatory processes (Bhatbanagar & Williams 1992; World Bank 1996). These initiatives led to the subsequent interest of the World Bank Poverty Division to use participatory approaches in poverty assessments, culminating in the production of various consultations with the ‘poor’ reports and books. This interest in popular participation recognizes the non-economic and micro-foundations of the new Keynesian macroeconomics by broadening the constitution of market imperfections to include households, family decision-making and other social dynamics. This has allowed World Bank analysts to explain social structures and institutions on the basis of individual optimization, thus setting the stage for its increased interest in the government-civil society nexus, governance issues5 and social capital as useful concepts in development (Fine 1999: 2–4). Social capital generally refers to the norms of trust and cooperation that are essential or conducive to economic activities (Putnam 1995; Woolcock 1998).6 The various definitions of the concept suggest that social capital is capable of doing anything and everything vis-à-vis public goods, networks, culture, community, with the only proviso that it should be attached to economic performance in a functionally positive way for growth (Fine 1999: 5). The current interest of international development agencies in social capital and participation as a development strategy could be interpreted as another way of building on the micro social foundations of market solutions and deflecting attention from the developmental role of the state (Fine 1999: 12–13). In line with social development views that go beyond narrow economic perspectives is the realization that while problems like poverty may be universal, their solutions need not be universal and have to be specific and context-based (Atal 1997: 12–13). This realization springs partly from the dissatisfaction with proposals for single and unilinear models of development, be it of the Marxist socialist or capitalist variety. Complementing this is the view that the reorientation


of development efforts must recognize historical and cultural specificities, as well as the uniqueness of formal and informal institutions. Thus, international development agencies now invoke popular participation, local knowledge and capacity development, based on the view that local capacities must develop through decision-making by actual beneficiaries at the local levels and necessary institutional change at the national and international levels of governance (Jackson et al. 1999). The alternatives proposed by participatory development advocates have not captured the popular imagination in Asian NICs because of rising incomes and spectacular market growth rates in the early 1980s to 1990s, that have largely benefitted the burgeoning middle class (Goodman & Robison 1993). It was the 1997 Asian economic crisis that provided an opening for activist groups to question not only the industrial development strategies pursued by states, but also the wisdom and sustainability of market-oriented growth and the increased reliance on markets and the private sector as main engines of development. The crisis has led to a number of studies on the social impacts of financial instability,7 as well as anti-poverty programs and social safety nets in countries most affected by the crisis (Knowles et al. 1999; Reyes et al. 1999; McGee & Scott 2000). It has also initiated discussions around ‘endogamous development’ based on the integration of export industries to the domestic economy and priority placed on human resource development.

Why is poverty reduction not working? Civil society, participation and the rise of anti-poverty movements in Asia Globalization has been transforming the traditional relationships between states, markets and civil society, particularly the roles and functions of states and civil society as neo-liberal ideas guide market economies. International governance bodies, from the World Bank to the World Trade Organization are better known for their commitment to market mechanisms and unquestioning faith in market-led growth as the means to poverty reduction. Poverty reduction efforts have been largely ineffective because of the minimal attention paid by states, civil society and development agencies to the structural causes of poverty, including the role of market-led economic growth in exacerbating income inequalities and poverty. The main reason behind failed efforts to reduce poverty is the common perception that poverty is largely caused by individual


deficiencies, as seen in international standards of measuring and assessing poverty based on incomes, literacy, calorie intake, or lack of something. Hence, the focus of most poverty reduction programs is to make poor people function more effectively and to improve the delivery of social services such as education, job training, health, welfare and legal aid programs to help them compete more successfully in the job market and to perform at higher levels in the work force. In contrast to this orientation on effective programs is the emphasis on efficient communities. This view regards persistent poverty as structurally inherent in inequitable social and economic systems, leading to the powerlessness of the poor. Poverty could only be addressed effectively, according to this position, when poor people acquire enough political influence to change community and national policies and conditions that keep them from getting their fair share of goods and services in society (Kramer 1969). This reason is connected to the issue of ‘scale mismatch’ in the comparative power, reach and resources of local NGOs and grassroots organizations, on the one hand and that of corporations, states and international bodies of global governance, on the other (Barker 1999: 17–18). Even among international organizations and development agencies, there exists an uneven distribution of resources, power and ideological influence. The relative power of the WTO, IMF, the World Bank and large multinational corporations, compared to smaller agencies like the UNICEF and UNDP partly explains the greater influence of neo-liberal policies than social development agenda. Development agencies are not monolithic, although they may appear to speak with one voice based on their official policy pronouncements. The recent departure from the World Bank of Joseph Stiglitz and Ravi Kanbur, editor of the World Development Report, is indicative of ideological and policy tensions within the Bank. More importantly, this scale mismatch relates to the relative weakness of social and participatory development advocates, grassroots organizations and NGOs in promoting development alternatives in the light of what happens to civil society and states under globalization. The combined trends of devolution, decentralization, budget cutbacks, restructuring and social policy reforms have also created cracks in the social contract between state and citizenry, communities and governments. Since the states could not carry out much of its former functions and tasks, non-state organizations and informal institutions in the community have taken up the responsibility of carrying these


out. They range from welfare provision, disaster preparedness and rehabilitation, environmental protection, livelihood promotion and job creation. On the other hand, there are occasions where states feel that development NGOs and other civil society forces have been undermining their authority and reducing their power, esteem and respectability in the eyes of the public. In this context, attempts on the part of NGOs to emphasize participation are looked upon with suspicion by governments that see NGOs as challenger-competitor, or worst, as subversives out to topple them from power. Encouraging participation could be problematic as it has the potential for creating conflicts that societies have managed to keep under wraps. It can also create tensions between intermediaries and outsiders and people being encouraged to participate (Fals-Borda & Rahman 1991; Burkey 1990), or worse, create a new mode of social control or ‘tyranny’. More importantly, there are still many gaps in the current thinking and practice on the interface between capacity development, participatory development and North-South partnerships that need to be addressed to make their practice a meaningful and sustainable alternative (Angeles & Gurstein 2000). These challenges of participation are most telling in poor people’s participation in civil society. Participation by the poor in civil society and governance bodies, by and in itself, does not necessarily lead to effective poverty reduction results. Prescriptions of participation by the poor to alleviate poverty seem to be based on a faulty assumption that, if only the poor were participating more actively in programs designed to improve their conditions, then they would be on the road to redemption. Not only is this view patronizing, it is also ignorant of the complexities surrounding the human experience and causes of poverty. States often lack the political will and resource commitments to implement community-based poverty reduction programs, often preferring the ‘roads, pumps and electricity’ approach. Given that participation of the poor in civil society suffers from poor quality, small scales and susceptibility to manipulation, the poor are unable to influence the state to enact policies beneficial to their interests. Globalization has provided transnational avenues for various networks to attack poverty by creating global and regional alliances doing development work. However, it is still in the domestic or national state level and the government-civil society nexus where more effective work, in terms of policy design, implementation and evaluation, needs to be done.


Community empowerment and grassroots democracy in the Philippines: challenges to unsustainable poverty reduction efforts The Philippines is an interesting case to highlight the paradoxes of democracy and civil society and their implications for promoting community empowerment and grassroots democracy as a means to sustainable poverty reduction. The country is known to have a vibrant civil society and an NGO sector and yet, has the most persistent and widespread poverty incidence, particularly in the rural regions, among the original five Association of Southeast Asian Nations (ASEAN) membercountries (Gerson 1998: 46; Monsod & Monsod 1999: 51–94). The non-state agents doing community development and other poverty alleviation programs may be roughly divided into several categories. (1) NGOs or non-government organizations, private voluntary organizations run by government-connected groups, church organizations, professional advocacy and consulting groups, women’s organizations, farmers, credit and multi-purpose cooperatives and other private sector groups. (2) POs which are people’s grassroots mass organizations which may or may not have their own NGO expression and be organized into different sectors (i.e. farmers’ groups, fisher folk groups, urban poor, trade unions, women, home workers, indigenous peoples, students).8 Philippine NGOs and POs have also formed national multi-sectoral coalitions, networks, or alliances to make their campaigns more effective.9 Some of these NGOs and POs rely on local resources, government funding and international development funds coursed to them directly or through intermediary agencies. Despite this active civil society, the participation of the poor in governance and their impact on it’s policymaking and program implementation remains limited, as the state continues to enact policies that are insensitive to the needs of the poor. Philippine democracy, like other formal democracies in Asia, does provide a forum for negotiations with the state by urban poor people, small farmers and street vendors. However, it is also a place for bargaining between and among state officials, bankers and industrialists. Formal, not substantive, democracy has only perpetuated the practice of showcase planning and the inability of government leaders to extricate poverty reduction efforts from electoral politics and patronage political culture. Elections, freedom of assembly and other formal democratic institutions are not a guarantee that the poor would influence the distribution of material goods and political power. In


fact, many believe that Philippine democracy has the rather insidious effect of corrupting the poor for electoral mobilization and leading them into believing the rhetoric and empty promises of their government. Perhaps a more interesting question is how democratic institutions can be transformed to recognise not only the legitimacy and efficacy of poor people’s demands, but also the beneficial effects to society of ensuring that poverty is reduced, if not eradicated. This section provides, first, a brief summary of poverty debates in the Philippines. Second, it gives an analysis of how and why poverty reduction efforts of the Philippine state have failed historically, including an analysis of the challenges posed by community organizations to such state failures. And third, it provides a discussion of the political and policy requirements in strengthening community empowerment and grassroots democracy, pointing to some policy directions required for sustainable poverty reduction in the Philippines that might be relevant to other countries.

Poverty incidence and debates in the Philippines There are at least three major debates on poverty in the Philippines. The first is on the relationship between growth, poverty and inequality. Some believe that the reduction of absolute poverty in Asia in the two decades before the 1997 economic crisis has been made possible by sustained economic growth that accompanied improvements in income distribution (Balisacan 1999: 83). Following this argument, the slow pace of economic growth is seen as the main cause of higher poverty incidences in the Philippines. Any decrease in overall economic activity, such as the financial crisis in 1997, could result in increased poverty rates in Asia as a whole (Knowles et al. 1999), including the Philippines (Reyes et al. 1999; Lim 1998). Others argue that the episodes of economic growth have not benefited the poor, either absolutely or relatively. Thus, it has been concluded that a growth-led poverty alleviation program is not appropriate for the Philippines, the focus is, instead, on other micro-level models such as the creation of an apex bank for the poor (Balisacan 1999: 83). Another debate concerns the appropriate measurement of the poverty incidence and setting of the poverty level line. The most used information sources on poverty incidence and income distribution in the Philippines are statistics from the National Statistics Office (NSO) based on its nation-wide annual Family Income and Expenditure Survey (FIES). It captures a wide-range of implicit household expenditures, such


as the use of durable goods, including dwelling units, consumption of home-produced goods and services, gifts and assistance and relief goods received by households from various sources. The data is good for household welfare comparisons between rural and urban areas and among socio-economic groups (see Table 8.1). Official government statistics showed the incidence of poverty, using FIES data, at 40.6 per cent of the population which remain poor in 1994 with regional variations ranging from the lowest in the National Capital Region (Metro Manila) at 10.4 per cent, and highest in the Autonomous Region of Muslim Mindanao at 65.5 per cent (Balisacan 1999: 101; Srinivasan 1993: 3). Other poverty estimates such as the May–June 1999 survey of Pulse Asia showed a much higher poverty incidence rate: 70 per cent of all families remain poor, based on the P6,000 monthly income for a family of five (roughly based on World Bank’s $1 per person daily income) (Miranda 1999). Among the unemployed (51 per cent) or working less than 40 hours per week (19 per cent), 16 per cent are actively looking for work, with half being unsuccessful for the past six months. The use of various thresholds leads to different estimates of poverty incidence. One poverty threshold set for the Philippines, that is, income needed for a family of five to no longer be poor, is P6,000 per month, with median monthly food expenses at P3,000. This is approximately based on the World Bank’s approach to quantifying absolute poverty trends in developing countries, using the $1 per day per person (at 1985 purchasing power parity) absolute poverty threshold. The government’s approach to identifying poverty lines begins with the construction of representative food menus for rural and urban areas of each region. The menu prepared by the Food and Nutrition Research Institute is based on local consumption patterns and a minimum nutritional calorie requirement of 2,000 calories per person Table 8.1 Year 1985 1988 1991 1994

Poverty Incidence in the Philippines Poverty head count 49.3 45.5 45.3 40.6

Poverty incidence of families 44.2 40.2 39.9 35.5

Subsistence incidence of families 24.4 20.3 39.9 35.8

Source: Llano & Sanchez (1998). Data based on the annual Family Income and Expenditures Survey (FIES) of the National Statistics Office (NSO).


per day and 80–100 per cent of recommended daily allowance for vitamins and minerals. The menus for one year may be based on the Food Consumption Survey done on the previous years, hence yielding poverty lines that are not consistent as estimates of food thresholds for prosperous regions tend to be higher than for poorer regions. Hence, ‘the food poverty lines employed for various regions and years are not comparable since they imply different living standards [and] cannot be, therefore, suitable for either national poverty monitoring or assessing comparative performance across regions or areas of the country’ (Balisacan 1999: 97–98). Another major debate is on the identification of causes of poverty and appropriate solutions to poverty. This is connected to the first debate on how macro-economic policies on economic growth affect poverty. Table 8.2 summarizes the different causes of poverty and interventions required, as proposed in various studies. Each of the causes and interventions could be applicable at the macro (policy), meso (institutional) and micro (project) levels. They also promote the creation of an enabling policy and political environment necessary for the self-empowerment of the poor. Such analyses suggest the accumulation of sophisticated knowledge available in the area of poverty reduction. Hence, it is not so much the lack of adequate knowledge and relevant information about the causes, effects, and solutions to poverty that make poverty reduction programs unsustainable and ineffective. Rather, the lack of sufficient, politically astute and policyrelevant analysis of the available knowledge and information and the structural barriers to the translation of that analysis to political action are at the root of why poverty reduction efforts have largely failed in the Philippines.

Why state poverty reduction efforts are not working The efforts of the Philippine state to address the poverty situation have miserably failed because of the character of Philippine state-elite relations and state-civil society relations and the weakness of the executive and administrative bureaucracy and national and local political cultures. These could be best analyzed when placed in their proper historical and political economic contexts. The reign of President Marcos for almost 20 years saw restrictions on civil society. Legislative and executive powers were concentrated in the presidency; the opposition was immobilized; and the opportunities for public participation in governance were effectively eliminated. The 1986 EDSA uprising ushered a

194 Grassroots Democracy and Community Empowerment Table 8.2 Causes of Poverty and Required Interventions in the Philippines, Summary of Various Studies Causes of poverty

Interventions required

Failure of growth and lack of employment opportunities

• Sustained economic growth • Labour intensive growth • Removal of discrimination against activities in rural areas where most of the poor reside • Asset redistribution, i.e. agricultural land, natural resources, credit access • Aggressive population management program • Removal of price distortions • More investments in R & D particularly in agriculture • Protecting the social sector budget • Increasing internal efficiency, that is, more basic education and primary health care • Better management of resources under open access • Encourage popular participation and consultation in policy formulation and project design

Inequality of incomes, wealth and access to resources High population growth Declining factor productivity

Inadequate provision of social services

Poor or degraded resource base Unresponsive and graft-ridden politics and bureaucracy

Source: Llanto & Sanchez (1998).

post-Marcos era that reformed the State’s constitutional framework,10 and created new mechanisms under the 1991 Local Government Code for civil society to engage the state and make a direct impact on government policy-making and program implementation (Wui and Lopez 1997: 7–8). Some of the frameworks that resulted from civil society’s influence in policy-making are the Philippine Agenda 21 for sustainable development, the Peace Agenda and the Social Reform Agenda (Brillantes 1997). The mechanisms for civil society participation, however, suffer procedural problems and structural obstacles in the effective participation of the poor in civil society and their engagement with the state, due to several factors. First is the character of state-elite relations in the Philippines. Strong landed capitalist and financial interests and other political rent-seekers have penetrated the Philippine state and have influenced the enactment of national and local government policies that show little concern for the plight of the rural and urban poor. In many cases, these very policies trample the rights and further the social marginal-


ization of the poor. Successive post-war governments, from Roxas to Macapagal, from Marcos to Estrada, were elected on a platform of reforms that purport to eradicate poverty. However, they have failed miserably to enact effective land reform laws, taxation and fiscal policies that expand social programs and industrial and agricultural policies that create widespread economic opportunities. The insensitivity of political regimes to the plight of the poor is shaped by the persistence of state patrimonialism, best epitomized by the Marcos-led government. The Marcos government pursued a limited agrarian reform program covering only rice and corn lands, whose implementation was hampered by legal loopholes and bureaucratic inefficiency. The state embarked on an export-oriented industrialization policy, used centralized state planning and relied heavily on foreign loans to build a massive infrastructure program to promote market-oriented growth as an indirect way of reducing poverty. Such state policies, however, were the result of the alliance between the state, foreign capitalists and the emergent domestic bourgeoisie, largely composed of the relatives and friends of the Marcos family who engaged in almost 20 years of ostentatious lifestyle, corruption and plunder of the economy. These factors, combined with state mismanagement and unsound industrial policies, prevented the Philippines from experiencing high economic growth rates similar to East Asian NICs (Angeles 1992). Under President Aquino, the pre-martial-law elite composed of the old comprador bourgeoisie, import substitution industrialists and Aquino supporters came back to power. They regained their economic holdings seized by Marcos and many appointive and elective state political positions, from the Senate, House of Representatives, various executive departments and boards of state corporations, down to the local town levels. While the Aquino government had taken steps to go after the Marcoses and their cronies, they were ineffective in recovering lost public assets, while other cronies reached a settlement in exchange for immunity from prosecution. Intricate kinship relations, membership in college fraternity/sorority, interlocking corporate board directorates, common property holdings and other social and economic ties link the pre-martial law elites and Marcos’s cronies. Such ties prevent them from totally clipping their powers or from annihilating each other, even as they compete for profits, power and prestige (Angeles 1995).11 The resilience of the elite families who supported the Marcoses was very striking. A large percentage of the elected House of Representatives in 1987 and 1992, under President Aquino and her


successor, President Ramos, were composed of Marcos-identified supporters during martial law and intricately connected networks of a few political families (Gutierrez 1994). The ability of the pro-Marcos elite faction to make an easy comeback became even more pronounced under the administration of President Estrada, who served for several consecutive terms as mayor of Manila under Marcos. The second factor is the character of state-civil society relations in the Philippines. While civil society has played an important role in testing the state’s limits in forging social transformation and democratic consolidation, it has not effectively learned to ‘permeate, access and engage the state… [which] entails greater political adeptness and maturity in penetrating state policy-making institutions’ (Wui & Lopez 1997: 1). The various legal mechanisms and organizational venues for active civil society participation, however, are hampered by a number of procedural problems and structural obstacles that limit participation and utilization by the public. In the first place, some of these laws work against the interests of some civil society groups, such as the continued eviction of slum dwellers and the decree criminalizing squatting on private and public lands (Angeles 1997: 107–100; Elago 1997: 113–124). At both levels of policy-making and implementation, the avenues for citizen participation are limited by lack of transparency, poor dissemination of information, lack of consultation, lack of financial resources and over-centralization of decision-making on the part of the state. On the part of civil society, the weaknesses are underutilization of existing avenues, the lack of technical expertise, poor organizational capacities, fear of co-optation by and general distrust of the state and ideological differences that hamper coordination, collaboration and taking a united position towards government (Wui & Lopez 1997: 5–18). These problems and weaknesses are particularly striking in the case of state-civil society interactions in the policy areas on agrarian reform (Villanueva 1997), trade, taxation and fiscal policy (Cajiuat & Regalado 1997; Gutierrez 1997) and rights and welfare of migrant workers (Tigno 1997; Villalba 1997). In contrast, women’s groups achieved relative success in the passage of the anti-rape law (Reyes 1997) and local-level implementation of women’s reproductive heath programs (Pasion 1997). Women’s issues receive more attention from legislators because these are seen as soft issues and not directly threatening to the interests of big power brokers. On the other hand, national policy areas like agrarian reform or taxation and fiscal policy reform are controversial issues which involve a direct clash of interests between the poor and


the economic elites. There is often no solid and widespread public support for these issues, as local organizations are either polarized in their respective positions, or in some cases, disinterested because these issues seem to be highly-technical debates that have no direct impact on local communities. For example, Congress blocked the proposal for a more progressive tax regime under the Comprehensive Tax Reform Package due to the strong anti-reform lobby of the business community. There was also a lack of widespread public support from NGOs and population groups that stand to benefit from the tax reform, particularly fixed income-earners, wage workers and low-salaried professionals (Gutierrez 1997).12 The state and civil society, of course, have mutual distrust and ambivalence towards each other. The negative perception of the state by civil society is borne out of its direct past experiences in dealing with the state that is largely seen as corrupt, inefficient and lacking the autonomy to mediate conflicting elite interests and uphold the public good. This cynicism had deepened under the Marcos regime and the Estrada administration. Although the Aquino, Ramos and Arroyo administrations were more open to the democratization process, they also attempted to use civil society organizations to create their own base of political support and marginalized those critical of their policies. The Estrada government did the same, but ironically, its bad policies brought a considerable degree of unity and cooperation among opposition groups that were alienated by the government. Indeed, ‘the weakness of the Philippine state is reflected in the relative strength of Philippine civil society’ (Miranda 1999: 165). However, civil society organizations are also considerably weak in effecting policy changes, not so much because they have no alternative programs, but because of lack of state and social support. The third factor relates to the character of the Philippine bureaucracy in the delivery of social services. All post-war governments have proclaimed poverty alleviation and agrarian reform as the centrepiece of their administration. Poverty alleviation programs are integrated into the delivery of basic social services through the various government line agencies and advisory bodies.13 The Aquino government specifically mentioned poverty alleviation in its Medium-Term Development Plan, but it was not until the Ramos administration that a comprehensive and coherent anti-poverty reduction framework emerged: the Social Reform Agenda (SRA).14 The SRA uses the following strategies to achieve its goals: promote and sustain economic growth to create employment and livelihood opportunities, sustain growth based on people-friendly strategies, expand social services to provide minimum


basic needs and build capacities of the poor. The future of the SRA was sealed when the Estrada administration created its own poverty alleviation strategy, thus, refusing to support the continued implementation of SRA by government line agencies. The post-war delivery of social services has been historically hampered by the perennial lack of resources because of the narrow tax base and priorities given to other government programs. In areas like education and agricultural credit where fund allocations are relatively high and comparable to other Asian countries like Malaysia and Thailand, the delivery of basic services are often characterized by inefficiency and inability to partner with and mobilize local communities, NGOs and the business sector. There is a lack of continuity in the implementation of good programs, as seen in the uncertain fate of SRA under the Estrada administration, largely because of the egos of presidents and bureaucrats who would rather see old programs die and create new programs to build their political capital. More importantly, the SRA program is limited in its view of how the organizing and capacity building of the poor in general and poor women in particular, could be harnessed for policy-making and program implementation. Capacity building of the poor appears to have been narrowly understood in the Agenda as synonymous to leadership training accompanied by the formation of people’s organization and their assistance by voluntary organizations. However, these human resource development strategies are necessary but not sufficient conditions for poor people’s involvement in participatory governance. They need to be combined with the enlargement of decision-making powers by the poor and their involvement in policy-making and program implementation and integration of gender analysis, at the local and national levels.15 A good case to illustrate this is the provision of agricultural credit and loan guarantee schemes. In the 1960s–1980s, the government directed subsidized credit programs for farmers, such as the Masagana 99 (rice productivity) and Maisagana (corn productivity) programs of the Marcos government. Some directed credit programs were eliminated in the late 1980s because of the burden of paying for loan defaults and interest rate subsidies. The government also used loan guarantee schemes as a policy tool for job creation, housing and improving agricultural and industrial productivity.16 These programs were criticized for being ineffective in reducing poverty, for their negative effects on investment and production decisions and for weakening financial institutions’ role in serving as intermediaries between savers and borrowers.17 A 1997 study documented the waste of public


resources involved in the complex implementation of directed credit programs,18 particularly in the top 20 of these 86 programs in 1997, which have not been effective in assisting the poor (Lim & Adams 1998; Llanto et al. 1997).19 A 1998 study on three loan guarantee programs for small businesses and farmers concluded that their outreach has been limited, with no positive impact on poverty reduction (Orbeta et al. 1998: 9). The main weakness of many social safety nets and poverty alleviation programs in the Philippines, like the existing mechanisms for participatory governance, is that they are not reaching or being utilized by the poorest of the poor. The poor are still largely too unorganized and disorganized to be able to push the limits of both civil society and the state to recognize the need for their participation and empowerment. For example, while there is an increasing realization that people’s organizations can serve as effective institutions for credit provision (Llanto et al. 1998), micro-credit programs are still largely run by intermediary NGOs on behalf of grassroots organizations. Perceptions of some NGOs by poor people were not positive, according to participatory poverty assessment results (Narayan 2000: 136–141). Capacitybuilding and strengthening of grassroots organizations are still in their infancy. Their interventions are often limited, with low sustainability and marred by petty politics. Many NGOs remain dependent on foreign donor-driven projects and in some cases, the availability of funding opportunities have either created ‘fly-by-night’ NGOs, or diverted attention away from organizing and developing closer partnerships with communities. Lastly, the structures and dynamics of state-elite and state-civil society relations in the Philippines have shaped the character of the local and national political cultures. The political culture that breeds extreme familism (or nepotism in public office), patronage, low trust and a weak sense of the public interest, remains inimical to valueformation, the exercise of citizenship and to the process of nationbuilding (Zialcita 1997; Doronila 1997; Karaos 1997). Thus, Filipinos are generally observed to have an inferior national identity complex, a low regard and respect for public property and spaces and a generalized disinterest in the performance of civic duty. The multi-cultural, multiethnic, multi-linguistic and multi-religious character of Philippine society, compounded by centuries of national political discourse in foreign languages (first Spanish and then English) also presents challenges to the consolidation of democracy and citizenship. These challenges prevent states, elite groups and civil society from engaging in


collective efforts to solve their common problems. Hence, they require interventions not only in economic policy and development planning, but also at the social and political levels.

Policy and political requirements of community empowerment Poverty breeds misery and dependency that prevents one’s performance of civic duty and exercise of citizenship, which are essential to grassroots democracy and empowerment. The economic policies required for poverty reduction have already been explored in a number of studies (Paderanga 1996; Ferreira et al. 1993; Balisacan 1999). Thus, the discussion will focus on the political and non-economic policy requirements of sustainable poverty reduction through community empowerment and exercise of participatory grassroots democracy.20 The existing policies of participatory governance under the 1991 Local Government Code (LGC) must be reviewed and strengthened so that there is greater public awareness of its provisions and mechanisms for popular participation, especially by organizations of poor people, small farmers, urban street vendors and others. There should be cooperation between state and civil society groups in assisting poor people to create their independent organizations. Provisions under the LGC could be strengthened so that policy setting and implementation of programs on poverty reduction could include the broadest representation of all stakeholder groups and the involvement of grassroots organizations in local governance. They could be involved in areas of governance such as fiscal policy, budgeting, land use and industrial policy, especially towards foreign and local investors that make use of local or community resources. The state and civil society groups would benefit from inputs and support from farmer and fisher folk organizations and NGOs, especially those promoting community-based natural resource management, agrarian reform and industrial co-management. Communities most affected by resource extraction by domestic and foreign capital should be given the powers to negotiate with the local and national government the terms under which they would accept new investment schemes. States, local communities and businesses should have a mutual interest in maintaining well-defined negotiation rules and minimum labour standards to enhance the productivity gains induced by stable industrial relations (Angeles and Magno 2001). Using participatory governance in improving the local tax collection systems could help restructure the national tax administration, as well


as the national budget and fiscal policies. An efficient and progressive taxation system could provide welfare transfer to highly vulnerable social groups and expand the tax base through increased direct taxation of wealth and less use of indirect taxes. This move would require gradual implementation and widespread public campaigns to get massive political support as it would likely face intense opposition from business lobby groups, landlords and other state-based rentseekers. This would require a strong political will on the part of the government to demonstrate to opposition groups that a progressive taxation policy to strengthen social programs would be beneficial to business interests by raising overall ‘social capability’, particularly its educational, institutional and organizational components (Abramovitz 1986). Domestic consumer demand could be stimulated and local markets expanded through an effective, pro-poor social development agenda that would develop human resources, provide on-the-job training and engage the poor in local resource mobilization through small rural and urban enterprises and expanded micro-credit, strong cooperatives and similar programs. The above institutional reforms for active participatory governance could only succeed if there is a competent democratic government; as well as equally competent, democratic and progressive communities of NGOs and civil society organizations that would work together to reach creative solutions to common problems. There is a need for strong inter-government agency coordination and cooperation with local communities in the delivery of social programs to tackle poverty reduction. The approach should move away from the beneficiary model to the creation of an enabling environment to support programs aimed at developing the capacities and entrepreneurial energies of poor households and communities. On their part, labour unions, farmer organizations, advocacy groups and NGOs need to re-examine the factors behind the splintering of their ranks, internal ideological differences and other weaknesses that led to poor influence on the legislative agenda. Government agencies and officials also need to examine their role in exacerbating such weaknesses and their poor bureaucratic operations. The success of institutional and political reforms would also require an active, well-informed and well-educated citizenry, especially among the youth. Herein lies the importance of the educational system to the exercise of citizenship rights in the political, economic and social spheres and to making poverty studies and interventions a core part of the school curriculum. A restructuring of the educational system is


needed to make it more socially relevant, by emphasizing locallyspecific market and community needs and a community economic development orientation so that universities, colleges and schools could develop their capacity to assist communities in solving local problems. The public school education system could provide more resources for teacher training, curriculum development and scholarship programs to students from poor families. The mobilization of teachers, students and school administrators is crucial in a restructuring that would reorient the curriculum to emphasize analytical, technical and problem-solving skills. It is also critical in realigning national science and technology policies with educational needs, creating nation-wide programs for teacher training; and modernization of educational facilities, especially the use of new information and communication technologies.21 Priority could be given by development agencies to assisting local communities in their organizing and capacity-building efforts around poverty, welfare and sustainable livelihood issues. At present, many development agencies like CIDA and USAID prefer to work with the government and closely connected intermediary NGOs. CIDA, for example, has channelled more of its bilateral aid to government capacity-building in the post-Marcos period than to NGOs and other civil society groups, except for a few programs such as the Canada Fund, Promoting Participation for Sustainable Enterprises (PPSE) and the Philippine Development Assistance Program (PDAP). There needs to be increased attention to lobbying by civil society groups in ensuring that international development programs include their inputs and participation in their design and implementation. On their part, international development agencies could rethink their preference for working mainly with governments in governance issues and hesitance to work directly with local communities. They could make it a requirement for the government to partner with NGOs and grassroots organizations with long-standing records of assisting poor communities rather than with ‘fly-by-night’ or quasi-government NGOs that are closer to big business interests only.

Prospects for promoting community empowerment and grassroots democracy: connecting, policy, poverty reduction and civil society The discussion above underscores the policy and political requirements for community empowerment and grassroots democracy to become an


effective means of poverty reduction. However, attention should be paid to the more fundamental attitudes and ideologies that inspire governments, corporations and some civil society forces to prioritize market over social needs, thus producing not only a market economy but also a market society. There is an increasing realization among ecological economists that poverty is not the underlying problem, but merely the symptom of a more fundamental malaise in our society which is the promotion of market-oriented growth that aims at increasing productivity and incomes, not the improvement of human welfare and well-being. As life in the affluent West and among the rich in the South has shown, there is no necessary correlation between increased wealth and incomes and improved public welfare. The creation therefore of a sustainable future for the planet depends primarily not only on the reduction of poverty or provision of basic needs, but also on the emphasis on quality of life rather than on increasingly higher material standards of living. It also depends on global redistribution of means of production, devolution of power and increased selfreliance of communities and organizations on a smaller scale (Deval & Sessions 1985; Naess 1984). It also depends on the global, regional and local respect for and operationalization of sustainable development principles (Bello 1997: 158). The ability of some North American, West European and East Asian countries to institute various social policies and programs eventually contributed to reducing high rates of absolute poverty. 22 History shows that these policies and programs would not have been in place without the support of the middle classes and elite groups which felt threatened by the possible consequences of popular social unrest that thrives on the immiserization of the majority (Toye 1999). Asian countries would have to follow a different historical path, but not without the support of the intellectual and political economic elite groups who have a role to play in social transformation. Social and economic elites in Asian countries could no longer afford to remain adamant in preserving their wealth, power and privileges. They could use part of that wealth and privilege for the purpose of creating a vibrant civic society, better quality of life and welfare for the poor. This quality of life derives not so much from higher incomes but from upholding public welfare and interest in safer neighbourhoods, decent jobs that fulfil basic human needs, cleaner air, healthier water and food supply and cooperative communities. These elites in fact, stand to lose more in the event of violent social upheavals and also to gain the most from stable social environments.


This reclaiming of the ‘public interest’ and the ‘public realm’ seems like a hard sell in the face of intellectual cynicism towards the so-called ‘phantom public’ (Lippmann 1925). The collapse of centralized communist states, the power of neoliberalism in re-shaping social programs and ‘the rhetoric of privatization – that government can do no right – distorts the possibility available for creating democratic publics by assuming that all government, not just bad government, is the problem’ (Eisenstein 1998: 25). This erodes the idea of any forms of public responsibility for health, education, housing and pension, which are increasingly seen as market commodities and not as public goods. Thus, social movements need to recognize the power of ideas in organizing people to reclaim the public realm as both, an ‘imagine idea – an attitude and a real place where people are interconnected, have individual freedoms and are still able to uphold their responsibility towards each other’ (Eisenstein 1998: 5–6). A serious reclaiming of the public must be accompanied by a rethinking of what Asian regional cooperation, grassroots participation and North-South partnerships really mean. Instead of allowing regional competition to bring down barriers to inter/intra-corporate trade, an alternative form of regional integration could address common problems that destroy the environment and people’s welfare, for example, when MNCs move into low-cost areas. Common regional labour and environmental codes with tight and uniform standards; as well as a ‘people-based economic bloc’ could be developed to connect trading communities or regions directly, thus eliminating high transactions costs and cuts of corporate middle-men. Mechanisms must be developed within these forms of co-operations so that the initial disparities or cleavages arising from comparative advantages and division of labour do not lead to permanent cleavages, but instead enable the weaker trading communities to develop their internal capacities (Bello 1997: 158). Community empowerment and grassroots democracy could become effective tools of sustainable poverty reduction. This happens when communities, particularly its poor and underprivileged members, are empowered to use their democratic rights not only to press for individual and collective rights and freedoms, but also to reinvigorate the notion of public good and social responsibility. Only then can we have a truly civil and civic society where democracy does not only mean elections and political parties, where the term ‘grassroots’ does not get equated with the poor, where empowerment of the poor does not mean dictatorship of the proletariat and where communities, both


virtual and real, truly care and work together to aspire to the common good. Notes 1 I am grateful to Jayant Lele and Lawrence Surendra for comments on the first draft of this paper and to my colleagues at the Center for Human Settlements, University of British Columbia, especially Peter Boothroyd for his valuable insights and skills in re-framing important development questions. This paper has benefitted from participants in the ‘Democracy and Civil Society in Asia: The Emerging Challenges and Opportunities’ International Conference held at Queen’s University, 19–21 August 2000 and the ‘Sustainable Poverty Reduction Through the Democratization of Planning’ workshop held at the University of British Columbia, 15–17 June 2000. I also thank the Social Science and Humanities Research Council of Canada for financial assistance, Steffanie Scott for sharing readings, and Cynthia Banzon-Bautista for sharing materials and insights on the Copenhagen Summit. 2 Toye (1999: 6) argues that this may be the start of a development era based on multidisciplinary poverty research, where there is a decline of economics as the ‘dominant discipline’, and the increased importance of political science and other disciplines in poverty discourses, relegating poverty economists to ‘play the role that Keynes once envisioned for them, similar to that of humble but competent dentists’. 3 These include, for example, the AGENDA 21 document from the 1992 Rio Conference on Environment and Development, and the 1995 Beijing Platform of Action for Women. 4 For good introduction to participatory development, see Nelson Wright (1995); Chambers (1997); Fals-Borda & Rahman (1991); and Burkey (1990). 5 The World Bank defined governance as ‘the manner in which power is exercised in the management of the country’s economic and social resources for development’. Good governance therefore is ‘epitomized by predictable, open, and enlightened policy-making (that is, transparent processes); a bureaucracy imbued with professional ethos; an executive arm of government accountable for its actions; and a strong civil society participating in public affairs; and all behaving under the rule of law’ in World Bank (1994: vii). 6 On the intellectual origins of social capital, see Harris & De Renzio (1997). 7 As a result of the Asian economic crisis, Philippine unemployment rates increased from 10.4% in April 1997 to 13.3% in April 1998, while underemployment rose from 19.4% in 1996 to 20.8% in 1997 and 23.7% in 1998. The crisis also reduced the number of overseas contract work in the East Asian region, affecting many Filipino families dependent on remittance money from abroad. The deployment of Filipino overseas contract workers decreased, by 18.3% in Hong Kong (64,160), by 16.7% in Singapore (13,373) and 65.7% in Malaysia (4,660), while deployment to the Middle East slightly increased by 2.6%. Remittances of overseas workers declined by 13.4%, from $5.15 billion in January–November 1997 to $4.46 billion during the same period in 1998. Retrenchment of industrial workers


8

9

10

11

12

13

14

increased, thus exacerbating the already low real wage levels and unequal income distribution. The income share of the poorest 10% of the population declined by 7.3%; while 17% of families expected reduced wages in 1998. Poverty incidence decreased from 35.5% in 1994 to 32.1% in 1997, but the absolute number of poor families increased by 22,217 to 4,553,387 families, 70% of which are based in the rural areas (Reyes et al. 1999: 24–35). For example, a PO or farmer organization such. Kilusang Magbubukid ng Pilipinas or Peasant Movement of the Philippines may be assisted by an NGO like Philippine Peasant Institute. For example, development-oriented organizations have created CODENGO in 1991. Another example are NGOs and POs that have formed part of the 15-year old Freedom from Debt Coalition (FDC) which links poverty issues in the Philippines to the foreign debt and structural adjustment programs. Other examples are the Alliance of Philippine Partners for Enterprise Development (APPEND) and PHILNET, two networks that link local credit-granting NGOs and grassroots community self-help groups and cooperatives. Article XIII, Sec. 16 of the 1987 Constitution proclaims, ‘The right of the people and their organizations to effective and reasonable participation at all levels of social, political and economic decision-making shall not be abridged. The State shall by law facilitate the establishment of adequate consultation mechanisms’. For example, it is well known that Eduardo Cojuangco, Marcos’ crony, is Corazon Aquino’s first cousin. Fidel Ramos is Ferdinand Marcos’ second cousin. The Comprehensive Tax Reform Package would have created a more progressive tax regime by restructuring individual and corporate income tax, improving tax administration, and removing tax evasion and tax shelter privileges of the business sector. See Gutierrez (1997). The government line agencies directly involved in service delivery for the poor include the Department of Social Welfare and Development (DSWD), Department of Education, Culture and Sports (DECS), Department of Health (DOH), Department of Labor and Employment (DOLE), Department of Trade and Industry (DTI), and Department of Finance (DOF). Those in the policy advisory group such as the National Anti-Poverty Commission (NAPC), National Commission on the Role of Filipino Women (NCRFW), Agricultural Credit Policy Council (ACPC), etc. The 1994 Social Reform Agenda (SRA) is the umbrella framework for poverty alleviation created under the Ramos administration. It utilizes the ‘minimum basic needs’ (MBN) approach based on the principle of ‘comprehensive and integrated delivery of social services’ (CIDSS). It is built on the following five principles: (1) a continuing and coordinated effort; (2) partnership between government and the private sector; (3) provision of minimum basic needs to disadvantaged groups; (4) explicit targets and commitments; and (5) a conducive policy environment for a sustainable implementation. The seven disadvantaged target beneficiaries for the SRA are (1) farmers and landless agricultural workers, (2) fisherfolk, (3) urban poor, (4) indigenous cultural communities, (5) informal sector workers,


15 16

17

18

19

20 21

(6) others including women, youth, disabled and elderly, and (7) victims of disasters and calamities. On participatory governance and gender implications of the Social Reform Agenda, see Angeles (2000, 2002). As of mid-1998, there were 6 government-sponsored loan guarantee programs directly assisting small businesses, agricultural producers, and homeowners: (1) Guarantee Fund for Small and Medium Scale Enterprises (GFSME); (2) Small Business Guarantee and Finance Corporation (SBGFC); (3) Quedan and Rural Credit Guarantee Corporation (Quedancor); (4) CARP-Credit Guarantee for Agricultural Landowners; (5) Fisheries Sector Program of the Philippines Crop Insurance Corporation (PCIC-FSP); and (6) Home Insurance Guarantee Corporation. The USAID and the World Bank supported these criticisms of government rural credit programs that discouraged deposit mobilization and efficient resource allocation and viewed directed credit as counter to the new market-oriented development paradigm, as opposed to central state planning. See Lim & Adams (1998: 2–3). Directed credit programs actually expanded from 68 in 1992 to 86 in 1997, although the amount of subsidies decreased. Of the top 20 of 86 programs in 1997, a study revealed that 7 programs, which accounted for 12.3% of loans for the 20 programs, are funded by the national government and the rediscounting windows of the Central Bank. About 13 programs, which accounted for 87.63% of loans, were funded by foreign multilateral agencies such as the World Bank, Asian Development Bank, Overseas Economic Cooperation Fund and the Export-Import Bank of Japan. These funds were managed by the Development Bank of the Philippines (DBP) for manufacturing enterprises; the Land Bank, Department of Agriculture, and Agricultural Credit and Policy Council for rural credit and food productivity programs. See Llanto, et al. 1997; Lim and Adams (1998: 1–2). The above study of the top 20 directed credit programs revealed these findings: (1) The government assumes large expenses in terms of interest and default subsidies (1.897 billion pesos in 1996 for the 20 programs). Government agencies and non-financial conduits (cooperatives, NGOs, selfhelp groups) assisting farmers, fisherfolk and micro-enterprises use the bulk of these subsidies to cover administrative and operating expenses, transaction costs, and payment defaults; (2) The credit programs have large default subsidies, indicating that they may not be that effective in helping the poor; (3) The poor borrowers are subsidized for defaults while other endborrowers are given market rates, or more appropriately ‘cost recovery rates’. In other words, many non-poor end borrowers pay relatively high interest rates comparable to prevailing market rates, which they would have received without the credit programs; (4) Deposit mobilization is discouraged because of the presence of rediscounting facilities or loans with low interest rates. In Lim & Adams (1998: 1–3); Llanto, et al. (1997). The recommendations are drawn from Angeles (2000b, 2001, 2002a; 2002b). The recommendations of the 1991 Congressional Commission to Review and Assess Philippine Education (EDCOM) have yet to be pursued. These include adjusting curricular relevance to the labour market, and improvement

208 Grassroots Democracy and Community Empowerment of quality of teachers through salary increases and incentives to teachers to develop teaching skills, and attract bright students into the teaching profession. See Cortes and Balmores (1992). 22 What is disappointing is that much of these welfare/social programs are now being eroded in countries with neo-liberal and neo-conservative governments.

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9 Civil Society and Good Governance: A New Chapter in Thailand’s Political Reform? Chantana Banpasirichote

Introduction The Asian economic crisis of the 1990s raised some fundamental questions about the future of politics and economic development of the region. Much of the analysis in the past had pointed to the fact that although Southeast Asia had achieved high levels of economic growth, political development had lagged far behind economic success. The socalled East Asian development model claimed a clear link between economic growth and semi-authoritarianism, which contradicted the Western neo-liberal notion of compatibility between economic development and political democratization. These differences in views are also reflected in the contradictory analyses of how the crisis emerged. Neo-liberal analysts claim that the failure to introduce pro-market reforms strengthened prevailing cronyism, which eventually led to the economic crisis. A vast majority of Asian academics believe, however, that too much and too rapid liberalization, resulting in a highly speculative and irrational market, contributed to the collapse of the financial institutions in the region. Some of them also claim that the current process of political liberalization played a role in deepening the crisis. In much of Southeast Asia rapid democratization, which took power away from the state, made government institutions incapable of changing the direction of the economy (Lim 1998; MacDonald 1998). Thailand does not fit too well into this debate because of its history of democratization and the presence of a constitutional democracy for some 15 years before the crisis. Its political system is characterized not by the absence of democracy, but rather by the persistence of ‘bad politics’, which has negatively impacted its ability to manage the 213

214 Civil Society and Good Governance

economy. The report of a committee investigating the financial crisis indicated that poor decisions made by the Bank of Thailand made it almost impossible for the country to escape the financial turmoil. Given the lack of transparency and public accountability, the Bank was able to ignore the early warning signs and could refuse to quickly respond to the growing crisis with appropriate policy measures. In other words, the absence of good governance was one of the most important contributing factors. This chapter reviews how civil society became involved in social and political reforms to achieve good governance. It argues that although economic crisis provided an important impetus, the emergence of civil society has been a historical process during which anti-state consciousness was continuously raised. The collective popular response to the crisis was not spontaneous. It was based on the prior construction of social networking resulting from previous social and political actions. The financial crisis enabled civil society groups to press the demand for a well-defined political reform program. Yielding to such pressures, the government began to address such crucial issues as corruption, cronyism, transparency and accountability. How well these initiatives of civil society towards good governance will be nurtured in the political culture and tradition of Thai society remains to be seen. So far Thai development has not overcome the widening social and economic gap. Hence, major challenges for the emerging civil society lie in its ability to break through the traditional asymmetry of its relation to the state.

The dynamics of civil society in Thai bureaucratic polity Modern Thai politics has a rather short history. As seen in Table 9.1, civil society emerged in the last 50 years through a series of popular movements that aimed at democratizing the state in Thailand. The earliest even dates back to 1932 when, as a result of popular demand, a constitutional monarchy was installed. That was the first stage of Thai liberal democracy. It did not produce the expected reform of the power structure. Politics remained in the hands of a small power elite. After almost 50 years of political repression the state became quasi-democratic around the 1980s. The constitutional reforms of the mid-1990s mark the latest stage in the process of democratization. Each one of these changes was associated with events of political mobilization, some peaceful and others bloodstained (as in 1932, 1973, 1976, and 1992).

Chantana Banpasirichote 215

However, the legacy of a highly centralized state and bureaucratic polity continues. The entire process of political change has involved the simultaneous presence of competing bureaucratic and extrabureaucratic polities. The expansion of extra-bureaucratic polity opened up a few political spaces. Although it has been subject to ongoing challenges, the state has managed to keep the extrabureaucratic polity confined within the civil sector. Citizens, by and large, still remain marginal to the political arena. By the second half of the 1990s, a ‘bourgeois democracy’ had begun to emerge (Bunbongkarn 1996: 106). Until then a form of corporatism had prevailed in state-civil society relations. Since the promulgation of the new constitution in 1997, when the new phase of political reforms began, civil society has been systematically challenging the actions of the state and is trying to monitor them through the new system of multiple checks and balances. Today the government administration remains highly centralized and operates within a paternalistic political culture. Civil society has emerged as an extra-bureaucratic force within a political environment where the non-state actors have not managed to become fully institutionalized within the political process. Hence we witness the presence of two competing forces, as bureaucratic and extra-bureaucratic polities. A student movement first led the growth of the extra-bureaucratic force. It seems to have been taken over today by the business sector. Anek Laothamatas (1993) suggests that business associations are now outgrowing the bureaucratic polity through extra-bureaucratic means of corporatism. However, Anek still does not see this as signaling an overall change in the tradition and culture of Thai politics. These transitions in Thai politics have not been discontinuous. Each political incident of the past produced a generation of active citizens, many of whom became important catalysts for subsequent political actions. For example, those involved in the student uprising of October 14, 1973 and in the incident of October 6, re-emerged as the proponents of the re-democratization process and were involved again in the May Incident in 1992. The student activists of the past who had fled into the jungle under conditions of political repression in the 1950s became gradually integrated into the new booming economy in the second half of the 1980s. That generation of former student activists now forms a part of the new middle classes. They took an active role in the 1992 political up-rising, as the ‘mobile phone mob’. That ‘May Incident’ of 1992 was an important trigger for political reforms in 1997 leading to broader public participation.


A large spectrum of political activities, by diverse civic groups across the country, has contributed over the years to the growth of civil society in Thailand. Such political actions have provided an important learning process that was essential for the dramatic expansion of civil society that was witnessed in the 1990s. The new constitution and political reform that came as a result are, therefore, only a beginning of legitimized people’s participation in Thailand’s politics. Democracy still lacks popular legitimacy though it was implanted and nurtured in Thailand by popular movements. Politics is still suspect; elected representatives cannot claim public trust because of bad or money politics through which politicians enter the political market. Even the multiple mechanisms of checks and balances, provided by the new constitution, such as the Constitutional Court, the National Election Commission (NEC), the National CounterCorruption Commission (NCCC), are subject to scrutiny, suspicion and criticism. At the same time, direct public participation is also not well received by the general public. It is feared that all political actions are motivated by the vested interests of rival political parties. Even civic actions against state policy are suspected, for being masterminded by elites with vested interests. As a result, democracy in Thailand is still rather fragile. The political atmosphere is clouded with distrust given the dominance of patron-client relations even in modern organizations. One must hope that the exercise of multiple checks and balances can work, over time, as a learning process through which the society will transcend its distrust of politics. The political reforms of 1997 mark a new turning point in the development of civil society in Thailand. Popular movements, representing a new political culture, are still battling with the old politics of elite power. The implementation of the new constitution, involving recruitment of commission members, drafting of organic laws and enforcement of other constitutional provisions, has itself become a platform for competition over the newly created political positions. The meanings of the ideas enunciated by the constitution are also in contention. Pressure politics continues to be the only viable alternative to traditional parliamentary politics. So far, it has failed to establish a smooth relationship with the parliamentary system. As a result, pressure politics, now practiced mostly by the progressive elements in civil society, is walking a thin line in trying to maintain its legitimacy. Nonetheless, as a result of this tension, the political culture is gradually changing.

Chantana Banpasirichote 217 Table 9.1

A Synopsis of Thai Political History and Dynamics of Civil Society

Year

Important political events

Dynamics of civil society

1932

• Change from Absolute Monarchy to Constitutional Monarchy • Democracy by the power elite

• State initiated groups, for example, co-operatives, trade unions

1948

• Establishment of communist • Underground opposition party of Thailand (CPT) with an movement and armed armed force (Thippaporn 1987) conflict

1959–1960s Sarit, Thanom & Prapas regimes

• Short period of developmental • State initiated groups, for state, authoritarian government example, co-operatives, • Centralized planning trade unions, farmer • Strong bureaucratic polity groups • Corruption scandal • State mobilized participation • Continuing armed conflict

14 Oct. 1973 • The first student uprising against the authoritarianism • Democracy blooming until 1976

• Student movement • The Federation of Farmers Associations

6 Oct 1976

• Political violence, student massacre and the return of authoritarianism • Right and left ideological conflict

• Right and left wings in civil society • Violent conflict • Student movement joins CPT

End of 1970s–the beginning of 1980s Kriengsak and Prem Regimes

• Half-democracy (Jumbala 1992) • More liberalized polity • End of armed conflict with the CPT, amnesty • 4th and the latest CPT General Assembly (Dhitta 2001) (1982)

• Emerging extrabureaucratic polity, business in politics, state-corporatism • Ex-student activists turned to NGOs in community development • State-civil society reconciliation • The decline of communist movement

Late 1980s Chatichai regime

• ‘Buffet Cabinet’, money politics (Bunbomkang 1996) and the bubble economy • Legitimacy crisis of civilian government • Return of the military coup-the National Peace Keeping Council, 1991

• Expansion of business in politics, MPs and Cabinet members from business sector • Strong NGOs in environmental movement • Politicization of environmental issues


Table 9.1 A Synopsis of Thai Political History and Dynamics of Civil Society – Continued Year

Important political events

Dynamics of civil society

17–18 May 1992

• Bloody May Incident, missing victims in the protest against the military coup • ‘Mobile phone’ mob5 • Re-democratization and political reform

• Dominance of new middle class in politics • The legacy of 14 and 6 October student movement triggers re-democratization

1996 Banharn regime

• Constitutional reform process • Prevailing of bourgeois democracy (Laothamatas 1993) • Competing elitist and populist version of democracy

• Countrywide people’s participation in constitution drafting • Consolidation of grassroots and radical democracy, for example, the Assembly of the Poor • Localization of civic actions on political reform

1997 Chaowalit regime

• Economic crisis • The promulgation of the new constitution • Decentralization in progress

• Spontaneous civic groups on crisis • Good Governance and civil society as a ‘national’ strategy for economic crisis • Sustained grassroots movements against ‘national development’ scheme • Formation of anticorruption • civic network • Corporate good governance • State mobilized civic groups in national development planning exercise • NGOs and grassroots movements • NGOs and civic groups interface • Economic-nationalism in civil society

• Legacy of bureaucratic polity and resistance to change

2000

• New political institutions • New elected senates • Public sector reform in the process • Representative vs. participatory democracy • Political atmosphere of distrust


Thai civil society: visibility and legitimacy During the years of political repression opposition to state actions often took the form of resistance and rebellion. In the early years of democracy, legalized people’s organizations were mostly under the control of the state. It often mobilized people’s participation and encouraged formation of civic groups under its own patronage. People’s autonomous organizations, demanding a role in policy and political activities, were not allowed. Even the labour unions were interfered with and dominated by the state and by official political parties. This effectively weakened the overall labour movement. Civil society emerged slowly during this period as a challenge to state power. The student movements of the 1970s, environmental movements and policy advocacy initiatives of the NGOs in the 1980s, the new middle class mobile-phone mob in the May Incident of 1992, the Assembly of the Poor of 1995 and the People’s Anti-Corruption Network as well as several groups pushing for further political reforms in 2000, were all part of this ongoing anti-state extra-bureaucratic political process. They have all been the constituent elements of an emerging and developing civil society. During the early years non-state actors engaging the political and policy arenas were to be found in two categories: student movements and the NGOs. With greater political liberalization, student movements have subsided. By the mid-1980s, involvement of business associations into politics increased. This has transformed the traditional bureaucratic polity into a new form of liberal corporatism. At the same time, the extrabureaucratic polity has also expanded in the form of a growing NGO sector. With the recognition of an environmental crisis, a large number of former student activists from 1970s became involved in environmental NGOs which have become increasingly politicized, as a result. They now constitute a major anti-state group. After the May Incident in 1992, other new actors have emerged in the political public sphere. The Incident led to constitutional and political reforms, under pressure from several civic groups. After the promulgation of the new constitution in 1997, these civic groups have persisted and new ones have emerged to monitor the reform process. Among these are: the Campaign for Popular Democracy, the Federation for Democracy, the Protection of Civil Rights and Freedom Group and the Institute for Political Development. The constitution has thus opened up a wider political space where civic groups can engage in political campaigns and thus gain greater confidence while enjoying a new sense of legitimacy.


Formal politics in Thailand continues to be dominated by a limited elite. Corporatism dominates the political involvement of the business sector while much of the remaining politics is still dominated by the bureaucracy. The non-bureaucratic politics also appear to be dominated by sections of the middle class. This has important ramifications for an emerging contestation between the ideas of representative and participatory democracy. Today, the lower classes constitute only a mass base rather than a core group in the extra-bureaucratic polity and in the actions directed at further political reform. Hence, they are not noticeable in the formal public sphere. They have nonetheless provided a strong popular basis for some of these actions. The Farmers’ Federation of Thailand was, for example, an important organization in questioning the legitimacy of the authoritarian government during the 1970s uprising. It had joined hands with the student movement. Its demise came in the early 1980s after a sequence of assassinations of its leaders. Labour unions were also a significant presence in the May Incident of 1992. Farmers’ protests have re-emerged, either through independent interest groups or in alliance with a number of NGOs working for the protection of the environment and for autonomous natural resource management. In 1995, a new and more effective farmers’ protest emerged in the form of the Assembly of the Poor. It is a large network of the victims of the large dams and of other large-scale development projects (Banpasirichote 1998). The Assembly of the Poor made the poor politically visible, after having been forgotten completely during the era of the bubble economy. It succeeded in refocusing public attention on the discourse of poverty. Networking and alliance building has now become an empowerment strategy of most of the non-state actors. This organizational innovation, learnt from the Assembly of the Poor, is seen as an effective symbiosis between the interest-based groups (in this case, development victims) and the cause groups (policy advocacy NGOs in particular), in order to gain greater legitimacy for non-parliamentary politics. Apart from these organizational innovations implemented by the Assembly of the Poor and other alliances, there has also been a welcome move towards addressing other complex issues such as corruption, lack of fair elections, community right to natural resources, development justice as well as human rights and consumer protection. These issues demand structural changes in the political economy and call for a reform process leading to substantive democracy. In future, relevant social action will have to stand simultaneously on two stepping-stones: deepening of democracy and social justice.


The Thai term for civil society, pracha sangkom (literally, the society of the people) does not signify state, market and society as separate entities. It expands the earlier conception of collective action as the territory of student activists and NGO movements. Today its users often include the state and some of the institutions of the market in the idea of civil society. To many, civil society connotes consensus. Praves Wasi, a respectable social critic, proposes a coalition of benja parkee, or five partners in the civil society: the academic community, the people, the NGOs, the government and the business. In most cases, the idea of pracha sangkom is used by civil society activists to seek social synergy rather than to mark a political territory distinct from that of the state or the market. The constitutional monarchy also marks Thai democracy as distinct. The symbolic influence of the King and the institution of monarchy have, to an extent, contributed to the emphasis on consensus in the discourse on political community and civil society. Chai-anan Samudavnija, for example, argues that there is always a possibility, in the Thai political context, that the government itself might get involved in the process of civic action. In practice, different actors, attributing different connotations to pracha sangkom seem to use it primarily to justify their own political actions. For state actors civil society has become a concept that valorizes a corporatist relationship with the state, promotes consensus and calls for public responsibility. This is currently the dominant perception of civil society in Thailand. Many of the grassroots organizations and environmental and political reform NGOs do not find such corporatist relationship with the state fruitful. Their experiences of cooperating with the government in the past have not worked well. NGO representatives have often walked out and resigned from different government initiated missions. Hence, pressure politics through mass mobilization and public campaigns through mass media are still the preferred approaches for the grassroots movements. The bureaucracy and the urban middle class fear their pressure politics because it tends to disturb the existing social order. For the conservative majority population it also threatens the stability of the government. Civil society, as pracha sangkom, seems softer than the politics of pressure groups or of social movements. In turn, it tends to delegitimize the grassroots movements engaged in direct action. Actions of groups seeking protection of their own interests, although a reality of democratic politics, also does not go over well in contemporary Thai society, which is still caught up in the unresolved debates on the antagonism between and relative priority of national, local and


private interests. The dominant conception of civil society tends to exclude radical grassroots movements as incompatible with the notion of pracha sangkom. If conceived more broadly, civil society may be seen as a contested space where active citizens seek to exercise their own voice. It can thus encompass conflict, confrontation as well as consensus, as possible approaches to the relationship with the state. The dynamics of Thai politics today can be seen as a tug of war between elitist and populist conceptions of civil society. The new constitution captures both the compromises and the unresolved conflicts between these two opposed conceptions. This could be seen as being favourable for further evolution of democracy and yet, at the same time, rather discouraging for the future expansion of civil society in Thailand. Given the continuing domination of a paternalistic political culture geared to consensus at any cost, this tug of war could generate a strong counterforce that may challenge the demand from the popular sections of civil society for a march towards substantive democracy. Even though civic actions are encouraged by the new constitution, a large part of the society seems to have some reservations about the consequences of broad-based public participation. Many of the NGOs and civic groups that challenge state power and address structural issues are routinely dubbed as too radical. The situation today appears to be favourable of the evolution of a healthy civil society, judging from the progress it has made since the economic crisis and the start of political reforms in 1997. The change is visible both in terms of quantity (diversity of groups) and quality (engagement of complex issues). On the surface at least, things are changing fast, triggered by the new constitution. This does not, however, mean that the old power relations are rapidly changing. Even though the political infrastructure for better public participation is in place, people have also witnessed major abuses of the new constitutional mechanisms such as public hearings and the provisions in the new Information Act. High ranking bureaucrats and business representatives have come to occupy the most influential spaces in the newly established autonomous organizations such as the National Election Commission, the commission on information disclosure, the commission on telecommunication or the commission on mass media. The old bureaucratic polity also seems to be taking a new form in order to control the new constitutional mechanisms of multiple checks and balances. Despite the gains made in the reform process, it is clear that the elite-mass divide has not lessened as a result. It produces


serious differences in the perceptions of civil society and about the appropriateness of the different avenues for political action. This is also reflected in the limited advances so far made in the transformation of political culture. Although action groups have become more and more vocal; many remain vulnerable to co-optation or suppression in the absence of a broad citizen base. Right wing populist and elitist groups are also very active in the reform process and are attempting to undermine progressive elements of civil society. The rural urban divide also affects the ability of Thai civil society to have a positive impact on the state. While urban public opinion appreciates the call for good governance, or for fighting corruption, it often seems indifferent to social justice issues. The strong urban middle class bias of Thai civil society is clearly reflected in the fact that the networks of the rural poor who have gained so much strength in the past few years are still struggling to find enduring support for their actions from the other sectors of society. A vast majority of citizens still remains ill-informed about the political process while the bureaucracy is afraid of any direct participation in the form of people’s protests.

Good governance and the invention of Thammarat The strongest reaction to the financial crisis came from the dominant urban civil society segments, in the form of a demand for good governance. The Thai term for good governance, Thammarat (meaning ‘the righteous state’), was invented by a group of academics from Thammasat University who urged in a letter, written soon after the onset of the crisis, demanding that the government apply the principles of ‘good governance’ in handling the crisis. It also insisted that Thai people must be able to monitor the performance of the state and for that purpose need to build a strong civil society. A few other terms have come in vogue so as to counterbalance the centrality of the state as the main agent of good governance. They are Thammapiban (governing righteously), Thammaraas (righteous citizenry), and Suprasaatkarn (good public administration). The term Thammapiban has become increasingly popular since it refers to the quality of governing and not the quality of the state. Thammarat, however, still remains dominant in public discourse. Neither of those terms carries its own operational meanings. Both have been influenced, in practice, by seemingly similar ideas found in the discourse of supernational organizations such as the World Bank, the International Monetary Fund (IMF) and the United Nations Development Programme.


The definition of good governance, spelled out by these organizations is generally understood as a mechanism to maintain efficiency of a neo-liberal market economy. Five conditions promoted by those international institutions are accountability, transparency, participation, predictability and efficiency. Kasian Thechapira (1998) observes that there are at least three different versions of good governance in circulation: the autocratic, the liberal and the communitarian. These three versions hold different positions on power, market and democracy. The autocratic approach certainly emphasizes social order and strong state command for clean politics while the liberal version sees a broader involvement of civil society for a fair competition in the open market system. The communitarian version focuses on people’s participation to regulate both state performance and the influence of the market to ensure social justice. An explicit critique of the official version of governance comes from populist scholars and grassroots activists. They claim that the call for good governance does not address the structural problem of inequity and, therefore, the poor do not see how it can be of any benefit to them. On the contrary, its link to neo-liberalism excludes the consideration of the poor and the underprivileged. The grassroots activists find that Thammarat perpetuates the same national policy claims that put the emphasis on national interest while sacrificing local interest. They support their argument by pointing to the fact that good governance advocates are mostly members of the elite from the new middle classes. Some have therefore argued that Thailand needs the establishment of democratic socialism for meaningful good governance (Ungpakorn 1998). Such a system of governance will allow grassroots organizations to lobby the state for policy reforms (Sapsomboon 1998). For example, labour unions had joined hands with the new nationalist groups to challenge the policy of privatization of state enterprises, required by the Asian Development Bank, because of anticipated higher economic disparity due to the growing control of the market by foreign companies. Despite such contestations about its meaning and impact, good governance was made a national strategy to respond to the crisis. A leading advocate of good governance, Theerayuth Boonmee, added the prefix ‘national’ to good governance, as Thammarat hang chat, so as to promote its acceptance by all. The emphasis on nationalism was added in the hope that this ideology can help get the country out of the crisis. Surichai Wungaeo (1998) points to the dangers of such nationalistic strategies. They could lead to another crisis instead of creating a


unity as expected. Nationalism, he argues, is a double-edged sword, as demand for unity may result in the marginalization of a large section of the population if the vast socio-economic disparities are not recognized and addressed.

Civil society and the making of good governance All the meaningful political changes in Thailand have occurred due to the efforts of the people. The public sector reforms, for example, had remained a mere rhetoric for a long time, until the mass media and civic groups took them up as an issue, bolstered of course by the influence of the super-national organizations like ADB, IMF and the World Bank (Wesaraj 1996). Without constant pressure from the public, the new constitution would have brought about no substantial difference in Thai politics. Normal electoral politics had failed to produce results even after two general elections were held under the new rules. Direct citizen actions, on the other hand, have at times produced an effective response from the state over diverse publicly debated issues. Table 9.2 gives a glimpse into the diversity of civic actions around a mix of issues and identifies the main constituents of the various civil service groups. These actions also point to diverse perceptions of good governance held by different groups within civil society. These and other NGOs are an important catalyst for civic action. However, they operate under many adverse conditions. Thai NGOs are yet to be fully recognized as legitimate political actors in their own right. Individual actors within them are often invited to sit on government-initiated task-force committees as experts. For their organizations, forming alliances and networks seem to be the only way of gaining some influence and legitimacy. Although the number of civic groups is increasing, the pool of activists remains small. The core members of all of these groups seem to belong to the generation of activists involved in previous major political events. Thailand is in a highly competitive situation of human resources where the expansion of the political market has absorbed a fair number of former activists into political parties. During the economic boom, social activists were also hard to find because university graduates were drained into the new economic sectors such as finance, media, and information. Work in the social service and NGO sectors was regarded as a ‘broken-hearted occupation’, intended only for those disappointed with and frustrated by state policies. Policy advocacy organizations have received far less support and attention from

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Table 9.2

Civic Groups and Good Governance in Political Reform

Groups

Issues

Constitutional tools/organic laws

• Campaign for democracy (NGOs – membership based with former and present student activists) • Confederation for Democracy (former student activists and citizen groups) • The Institute of Political Development (mass communication businessmen, academics and public intellectuals)

• Democracy and ‘new politics’ – people’s politics • Democratic consolidation • Human rights and development justice • Corruption Bill

• NHRC • Rights and freedoms

• Assembly of the Poor (grassroots organizations and NGO networks)

• • • • • •

Development justice Alternative development Anti-dam movement Accessibility to natural resources Victims of development Against resettlement scheme

• • • • • • •

• Union for Civil Liberty (NGO) • Foundation for Local Government (former high ranking officials) • Women’s Network for the Constitution (academics and NGOs)

• • • •

Decentralization\local government Local election campaigns Recruitment of new blood into politics Women in local and national politics

• Steps and Plans for Decentralization Act • Local Government Act

Impeachment 50,000 signature for bill Administrative court Public hearing Information act NCCC Standing committee for the house of representatives • NHRC • The new elected Senates

Table 9.2

Civic Groups and Good Governance in Political Reform – Continued

Groups

Issues

Constitutional tools/organic laws

• Anti-corruption campaign (monitoring and scrutiny)

• Information Act • Constitutional Court • NCCC

• People’s network for elections – PNET (volunteers, local and national NGOs)

• Election monitoring in collaboration with the National Election Commission

• The National Election Commission

• Maha Bua Movement – Buddhist Monk fund raising for the national reserve (a country wide follower network) • Chomrom ruam jai Thai goo chaart – (Thai One Heart for the National Recovery) (the fraction of academics in political economy, businessmen, state enterprise workers, lawyers)

• New-nationalist movement • Anti-neo-liberalism • Anti-privatization

• 50,000 signature for a bill and policy advocacy • Impeachment

Chomrom chua chat (help the nation group) (social critics, businessmen,)

• Democracy Pause • Campaign supporting pardon for PM in his scandal

• Overrule the constitution • Anti-Constitution Court

• Transparency International (Thailand Chapter – mostly academics) • 30 NGOs Network for anti-corruption • The Protection of Rights and Freedom Group (former student activists) • The Construction Development Committee

227

Sources: Relevant information is collected mainly from the author’s previous contacts with various organizations.


common citizens than charity organizations. A tradition of public donation for such advocacy work is not well established. Thai people donate far more for religious and charity purposes than for social and political activities. The government also systematically derides organizations that challenge its policies and accuses them of being used by other political parties or by international radical movements, as paid protesters.

Problematizing governance The proponents of good governance and social action have targeted several aspects of politics including election monitoring, corruption, economic recovery and unjust development. In terms of public enthusiasm and results of their actions, the anti-corruption movement appears to have dominated the scene. It has attracted people from across the entire society, even politicians and businessmen who were part of the old political vicious circle. Anti-corruption drive is an example of a civic action that cuts across groups and organizations, including political institutions such as the senate and the NCCC as well as the business sector. However, even though election monitoring may have led to a decline in vote buying, other forms of fraud have already been invented to replace it. Actions that target corruption and election fraud emphasize clean politics. They have led to some significant accomplishments. Grassroots movements for just development, on the other hand, have achieved nothing equivalent in terms of policy change. The Assembly of the Poor made the poor visible to the Thai public, but could not convince the power elite to adopt real pro-poor agendas. It remains in isolation as the only major organization that is concerned about development justice. It has been fighting to win the rights of access and use of community forests for more than 10 years. Grassroots battles against the dams have also dragged on without significant results for as long as a decade. Good governance is often equated with the rule of law, particularly in the case of corruption. To achieve that is no doubt an uphill task. However the concept of the rule of law also needs a deeper interpretation. The poor have often called for civil disobedience when they have been the victims of unjust laws that deny them access to their own common natural resources. Those who protest against such injustices are treated as criminals, for example, the way the poor were, when they climbed the fence of the Government House, demanding a meeting with the Prime Minister.


The proponents of good governance have failed so far to reconcile good politics with social justice and the poor have remained the underdog of civil society. The Assembly of the Poor, for instance, which successfully gained visibility in the liberal civil society, has failed to effect significant policy change. In fact, as a result of its actions, a large number of urban Bangkokians seem to think that the poor are too demanding and too aggressive. The economic crisis also brought into being a strong nationalist reaction. A charismatic Buddhist monk, Luangta Maha Bua, led the largest patriotic movement. His preaching of love of the nation and the responsibility of citizens attracted hundreds of thousands of followers. His nationwide fundraising collected hundreds of millions of Baht and a few thousand kilograms of gold as deposits in the national reserve fund. The nationalist reaction was stirred by the policies of privatization of state enterprises, the sale of commercial banks and the companies with non-performing loans to foreign companies, and the arrival of high-price foreign financial consultants. It attracted many groups including the followers of Luangta Maha Bua as well as executives of companies threatened by liberalization. There was a nationwide campaign followed by a survey to prove that Thai people wanted to buy the shares of such companies and not have them sold to foreign companies. These nationalist pressures did slow down the implementation of the privatization policy and foreign takeover of domestic enterprises. People across class boundaries converged in this new nationalist movement. Capitalists, owners of companies, workers, conservative nationalists as well as neo-Marxist academics, all joined hands. Public support has been crucial in effecting successful policy change. Take, for example, the case of a grassroots movement, such as the Forum of the Poor. It could not achieve much in terms of policy change. Its direct action approach may have killed positive public sentiment because of fear of its radical message. However, the increased visibility of the marginalized people in the public sphere was in itself, a valuable outcome of the movement. Pressure politics by marginal groups is often ineffective because the government remains protected by the anti-rural bias of the urban middle classes. The legacy of an authoritarian bureaucratic polity has also not yet disappeared, so the fear of state authority still haunts Thai society. Unlike the business sector, a corporatist relationship with the state does not work for the poor because they have little to offer in return for favours received from government leaders.


Civic actions are therefore intended for establishing communication with the rest of the society. Good governance cannot be the business of the government alone; it requires that individual citizens take responsibility for their actions. Progress towards good governance requires greater communication between different sectors of society. Only a well-informed public will be able to grant legitimacy to the agendas that seek to compel the government and the political parties to respond to the interest of all citizens.

Conclusions The growth of civil society has created a wider space for public participation. Civic groups have become more diversified and localized. They are dealing with more complex social and political issues. But so far they have failed to develop broad-based citizen organizations. There are still not enough social activists to support much needed public action to sustain the ongoing reform. Even the radical political uprisings of the past produced only incremental changes. They failed to flush away bad politics. The highest achievement of civic actions so far has been the promulgation of the new constitution of 1997. It gave the ideology of good governance a more concrete agenda. The framework for change toward democratic consolidation has also been provided by the constitution. This should enhance the capability of civil society through actions directed towards the implementation of rights and responsibilities and should improve the quality of representative democracy by imposing new rules for political institutions and the election process. The reality also indicates that the new constitution is only a beginning. Civil society is now being called upon to play a far more complex role than it did in the period of democratization when dismantling the authoritarian regime was the main concern. A common fear, a feeling of distrust, that the new mechanisms will also be abused by the old politics, still affects popular response to the democratic process. This will persist as long as Thai civil society is structured on the foundations of asymmetric power relations and while everyone is still not able to equally share the so-called free public space. The opening up of the public space is a necessary but not a sufficient condition for achieving good governance in the broader sense of that term which includes social justice. For that, civil society will need to develop relatively autonomous organizations. Major policy advocacy groups, unlike charity organizations, are caught in the dilemma of maintaining autonomy and depending on the state for


resources. Many have come to rely on external funding for their activities. Such dependency for financial and other resources greatly hinders the action capacity of these organizations. Civil society organizations also need to become more broad-based. This will increase their public accountability and enhance domestic fundraising. These are essential for the establishment of a healthy civic culture. Civic education has received little attention in the current transitional period. A misinformed citizenry contributes to public distrust about civil society organizations. Prospects for future steps towards substantive democracy can be threatened by the conservative elements within civil society. The progressive groups in civil society will have to overcome this obstacle and demand affirmative action to increase visibility and create political opportunities for the marginal groups. Careful efforts to nurture and implement the constitutional provisions for participatory democracy will also help reduce popular distrust of the political process. Given its history, state-civil society relations in Thailand will require an adequate mix of cooperation and contestation, without the fear of state retaliation in any form, including state mobilization of mass support through information distortion, media control and defamation of protesters and their leaders. This chapter has outlined the significant role civil society can play in reinforcing the new concept of good governance, a concept that includes a righteous state, a good society and social justice. Civil society in Thailand will not be able to fulfill that role if it does not meet the challenges outlined above. References Asian Development Bank (1999), Governance in Thailand: Challenges, Issues and Prospects, Manila: Programs Department (West) Division III and Strategy and Policy Office. Banpasirichote, C. (1998), ‘Opening Up Politics: The Advocacy Role of NGOs’, paper presented at 2nd Chulalongkorn University – University of Hong Kong Political Science Conference, Bangkok, March 13–14. Bunbongkam, S. (1996), State of the Nation: Thailand, Singapore: Institute of Southeast Asian Studies. Boonmee, T. (1999), ‘The Imagined Civil Society’, paper presented at 7th International Conference on Thai Studies, Amsterdam, 4–8 July. —— (1998), ‘Strong society: good governance of Thailand to – A Strategy to salvage the National Crisis’, Bangkok: Saitarn Publisher. Callahan, W.A. (1994), ‘Black May, NGOs and Post-State Politics’, Journal of Social Science, 29(2): 82–89. Campaign for Popular Democracy (1999), ‘Two Decades of Campaign for Popular Democracy on the Road to People’s Politics’, Leaflet, Bangkok.

232 Civil Society and Good Governance Chen, P-H. (1999), ‘Reforming Thai Politics? The Politics of Thailand’s Reforms’, paper presented at 7th International Conference on Thai Studies, Amsterdam, 4–8 July. Doneys, P. (1999), ‘Non-state Actors and Political Reform: Women’s Groups and the Public Sphere in Thailand’, paper presented at 7th International Conference on Thai Studies, Amsterdam, 4–8 July. Hann, C. (1996), ‘Introduction: Political Society and Civil Anthropology’, in C. Hann and E. Dunn, eds., Civil Society: Challenging Western Models, London and New York: Routledge: 2–26. Hewison, K. (1996), ‘Emerging Social Forces in Thailand: New Political and Economic Roles’, in R. Robinson and D. Goodman, eds., The New Rich in Asia, London and New York: Routledge: 137–162. Jumbala, P. and C. Banpasirichote (1999), ‘The Thai Middle Classes: Between Class Ambiguity and Democratic Propensity’, a research paper submitted to Academia Sinica, Taiwan. Jumabala, P. (1992), National-building and Democratization in Thailand: A Political History, Bangkok: Chulalongkorn University Social Research Institute. Khon, K. (2000), Corruption, Democracy and Development Report, A Proceedings of the International Conference, organized jointly by Asian Forum for Human Rights and Development (FORUM-ASIA), Center for Social Development Studies (CSDS) at Chulalongkorn University, Constitutional and Legal Policy Institute (COLPI) and Open Society Institute (OSI), Bangkok, September 18–19. Kotler, P. and K. Mermawan (2000), Repositioning Asia: From Bubble to Sustainable Economy, Singapore: John Wiley and Sons (Asia). Laothamatas, A. (1993), Mobile Phone Mob: Bourgeoisie and Businessmen and Democratic Development, Bangkok: Matichon. —— (1992), Business Associations and the New Political Economy of Thailand: From Bureaucratic Polity to Liberal Corporatism, Boulder, CO: Westview Press. Lim, L. (1998), ‘Whose “Model” Failed? Implications of the Asian Economic Crisis’, The Washington Quarterly, 21 (3): 25–36. LoGerfo, J.P. (1997), Civil Society and Democratization in Thailand 1973–1992, Ph.D. Thesis, Ann Arbor: University Microfilms International. MacDonald, S.B. (1998), ‘Transparency in Thailand’s 1997 Economic Crisis: The Significance of Disclosure’, Asian Survey 38(7): 697–702. McCargo, D. (1998), ‘Alternative Meanings of Political Reform in Contemporary Thailand’, The Copenhagen Journal of Asian Studies 13: 5–30. Far Eastern Economic Review (2000), ‘People’s Advocate: A Once-Jailed Activist Turned Lawyer is in the Forefront of a Grassroots Campaign for Political Reform’, Far Eastern Economic Review March 23: 28. Promkerd, P. (2000), ‘Good Governance and Social and Political Reform’, Rattasapa Sarn, 48(3): 27–48. Puangsamlee, A. and K. Archvanitkul, eds. (1999), ‘Thai Civil Society: the Making of Thai Citizens’, Bangkok: Project for Civil Society Research and Development, Faculty of Environment and Natural Resources Management, Mahidol University. Rodrik, D. (1999), ‘The Asian Financial Crisis and the Virtue of Democracy’, Challenge 42(4): 44–59. Sapsomboon, N. (1998) ‘Mal-governance’, Siamrat Sabdawijarn, May 3–9.

Chantana Banpasirichote 233 Suppawong, C. and Y. Kadkarnklai, eds. (1997), ‘Civil society: Views of Thai thinkers’, Bangkok: Maticon. Tangcharoen, C. (2001), ‘The Role of Civil Society in Consolidating Democracy: Towards a Liberal Civil Society in Thailand’, paper prepared for the First Korean-Thai Political Scientists Dialogue on ‘The Challenges of Democratic Consolidation and Regional Security: Korean and Thai Views’, organized by the Korean Political Science Association and the Political Science Association of Thailand, Bangkok, Thailand, 20–21 July. Tesrien, T. (1987), The CPT and the CCP: A Study of the Ideological Relationship between the Two Communist Parties in 1969–1982, M.A. Thesis, Chulalongkorn University Thabchumpon, N. (1998), ‘Concepts and Discourse on Good Governance as the National Agenda’, in P. Wongkun, ed., Good Governance: The Turning Point for Thailand, Globalization Series No. 6, Bangkok: Thailand Research Fund and Poompanya Foundation: 119–142. Thechapira, K. (1998), ‘Good, Bad Governance’, People, 10(101) 30–32. Ungpakorn, Ji (1998), P. Wongkun, ed., Good Governance: The Turning Point for Thailand, Globalization Series No. 6, Bangkok: Thailand Research Fund and Poompanya Foundation: 163–174. Wesaraj, P. (1996), ‘Public Sector Reform for the Future: The Strategy for Development’, Proceedings of the TDRI Year-End Conference 1996, Bangkok: Thailand Development and Research Institute. Wongkul, P. ed. (1998), The Asian Crisis, Vitheethat Series on Globalization, No. 5, Bangkok: Vitheethat Project Wungaeo, S. (1998), ‘Avoiding Nationalist in Good Governance’, Siam Turakit, July, 12–18.

Index Afghanistan 18, 90 Africa 31 AIDS 59 Anderson, B. 98 Asia Foundation 134 Asia-Pacific Economic Cooperation (APEC) 78 Asian communisms 83 Asian Development Bank 225 Asian financial crisis 1, 23, 56, 229 Asian values 19, 82, 91, 92, 104 Assembly of the Poor (AOP) 8, 140–179, 229 Association of Southeast Asian Nations (ASEAN) 78, 190 Australia 22, 149 Bhutan 54 Bretton Woods institutions 185 British liberalism 16 bubble economy 64

69, 93,

Canadian government 5 Canadian International Development Agency (CIDA) 202 Cambodia 149 Carter Center for Democracy 134 caste-based pluralism 15 Chiapas 24 chaebol 67 Chile 70 China 20, 22, 45, 61, 70, 85, 111, 114, 126–133 political culture 113 Chinese Communist Party (CCP) 126, 129 Chinese immigrants 23 Chinese oligarchies 127 grassroots democracy 134 National People’s Congress 128–131 Tiananmen crackdown 121

rural China 126–131 village democracy 133–134 civil society 1, 2, 6–10, 17, 81–82, 92, 99–100, 105, 140, 154, 178,186–187, 189, 214–216, 219, 221, 229–231 Cold War 75 Colombia 18 communitarianism 19 commodification 105, 106 Comte, A. 13 Confucian values 82, 104 Confucianism 91 contagion 37 contemporary capitalism 106 co-optation 9 corporatism 220 crony capitalism 64, 76 cultural homogenization 30 Czeckslovakia 23 democracy 1, 5, 13–15, 25, 66, 216 constitutional 8, 9, 213 democratization 5 formal 75 grassroots 149, 204 liberal 81–83 participatory 149 democratic development 1 democratic socialism 224 development aggression 150 developmental state 94 Doi-moi 91 East Asian development model 62 East Asian financial crisis 60, 71 economic liberalization 3, 7, 29, 182 deregulation 57 deregulation of capital markets 70 devaluation 57 exchange rate stabilization 71 financial deregulation 34 234

Index 235 financial liberalization 23, 46 privatization 23, 204 trade liberalization 44 Ecuador 18 elite pluralism 17, 20, 24–25 emerging markets 34, 37 Engels, F. 13 Environmental Impact Assessment (EIA) 169 Eurocentrism 85 Europe 49 European Union 134 fascism 83 financial crises 37 flexible specialisation 36 Ford Foundation 134 Foreign Direct Investment (FDI) 33, 34, 44, 45, 46 French Revolution 19, 21 Fujimori, Alberto 21

Kashmir 17 Kerala 24 Indonesia 19, 53, 68, 69, 72, 77, 85 Habibie, B.J. 77 Golkar Party 19, 77 Jakarta 24 Suharto 19, 77 Wahid, Abdurrahman 77 industrial revolution 22 International Financial Institutions (IFIs) 2 International Monetary Fund (IMF) 18, 42, 60, 64, 69–70, 75–76, 94, 185, 223, 225 Japan

3,

G-7 18, 21, 25 GATT 42 Gellner, E. 98 global economic governance 2 globalization 1, 3, 29, 31, 33, 37–38, 44, 45, 48, 53–54, 56–59, 75, 78, 89, 95, 189 globalization of culture 48 good governance 5, 214, 223–224, 228–229, 231 Hindutva 82, 91, 104, 107 Hong Kong 73, 93, 111, 114, 119–126, 134–136 Democratic Alliance for the Betterment of Hong Kong (DAB) 122, 124 Democratic Party (DP) 121 democratization 121 Hobsbawm, E. 87–88 human development 182, 183 Human Development Report 2, 39 human rights 5, 150, 185 imperialism 36, 56, 60 India 16–18, 54, 61, 85, 100, 103, 149

35, 40–41, 62, 149

Khomeini, Ayatollah 19 Kim Young Sam 68 Kissinger, H. 68 Korea 54, 65, 67, 75 late capitalism 48 Latin America 32, 37, 42, 65 Lenin, V.I. 86 liberalization 4, 38, 57, 71 Malaysia 53–54, 68, 72, 77, 149 Marx, Karl 13, 106 McWorld 54 Menem, Carlos 21 Mexico 23 Michels, R. 14 Mill, John Stuart 15 Modigliani-Miller (M-M proposition) 66 Mohamad, Mahathir 20, 77, 78 Mosca, G. 14 multi-culturalism 104 Multi-national Corporations (MNCs) 33, 45, 204 Myanmar 18 national bourgeoisie 86, 95 National Bureau of Economic Research 69 nationalism 76 Asian nationalism 81 bourgeois nationalism 101

236 Index nationalism – continued cultural nationalism 82, 92, 96, 103–107 developmental nationalism 92 xenophobic nationalism 78 national capitalism 95, 102 neo-liberal/neo-liberalism 8, 204 new economy 71 Newly Industrialized Countries (NICs) 3, 187, 195 New Zealand 22 New York 30 Non-governmental Organizations (NGOs) 6–7, 24, 111–112, 147, 170–171, 174, 182–183, 185–186, 188, 190, 197–202, 219–220, 222, 225 North-South partnership 189, 204 old economy 73 Organization of Economic Cooperation and Development (OECD) 183 Pareto, V. 16 participatory development 9, 187, 189 participatory governance 183, 200 participatory internationalism 54 paternalistic political culture 215 People’s Organizations (POs) 149, 170–171, 190 Philippines 53, 73, 85, 184–204 Aquino, Corazon 195, 197 civil society 196, 199, 201–203 Estrada, Joseph 196 Local Government Code of 1991 200 Marcos, Ferdinand 195, 196, 197 patrimonialism 195 Philippine Agenda 21, 194 Philippine Development Assistance Program (PDAP) 202 Promoting Participation for Sustainable Enterprises (PPSE) 202 Ramos, Fidel 196–197 Social Reform Agenda (SRA) 197–198

state-elite relations 193 state-civil society relations Polanyi, K. 99 political culture 112 post-Cold War era 75 pro-market reforms 6 pluralism 15 Russia 39, 65 Russian financial crisis

193

23

Shah, Husain 17 Shah, Nusrat 17 Singapore 70, 93 South Korea 22, 62, 72–73, 76, 93, 149 Soviet Union 39, 83, 87 state-led development 62 Stiglitz, Joseph 60, 183, 188 structural adjustment 18, 184, 185 sustainable democratic development 10 Taiwan 70, 73, 93, 111, 114, 116, 136 black money 118 Ching-kuo, Chiang 115, 136 Democratic Progressive Party (DPP) 119 democratic transition 115 democratization 136 Dangwai 116 Kuomintang (KMT) 116–119, 134, 136 political culture 115 political liberalization 117 Thailand 6, 64, 69, 72–73, 140–179, 213–230 Alternative Agricultural Network 169–173 Alternative Energy Group 168 Assembly of Indigenous People in Thailand 175 Bank of Thailand 214 Bangkok 147, 154 Campaign for Popular Democracy 168, 219 Civil Liberty Association 174 Communist Party of Thailand (CPT) 144

Index 237 export-oriented economic growth 146 Farmers’ Federation of Thailand 144, 220 Federation for Democracy 219 Forest Industry Organization (FIO) 160–162 grassroots movements 141, 143, 173 Institute for Political Development 219 Land Allocation Scheme for the Poor 147 Land Rights and Forest Network (NFA) 148, 175 National Counter-Corruption Commission (NCCC) 216, 228 National Election Commission (NEC) 216 Ngarm-boon 160 Ngarm-rom 159 Ngarm-yen 159 political democratization 213 political liberalization 145 Pongkhunpet Dam 163–165 pracha sangkom 221, 222 Protection of Civil Rights and Freedom Group 219 Small Farmers Assembly of the Northeast (SFAN) 147–149, 165 social movements 146 Thammarat 223–224

Students’ Federation of Thailand 168 1997 Constitution 141, 178 Third World socialism 79 United Kingdom 20 UNCTAD 41 UNESCO 49 United Kingdom 32 United Nations (UN) 3, 38, 185 United Nations Development Program 134, 188, 223 Uruguay Round 43 USA 5, 20–21, 35, 40–41, 50, 52, 67–69, 74–75, 78, 134 United States Agency for International Development (USAID) 202 USSR 83, 88 Uzbekistan 90 Vietnam

85, 91

Washington Consensus 70 Washington Consensus-privatization 57 Wolfensohn, J. 183 World Bank 5, 18, 46–48, 60, 71, 94, 183, 185–186, 188, 192, 223, 225 World Trade Organization (WTO) 18, 23, 43, 59, 61, 76, 188 Zainuddin, Daim 77 Zain-ul-Abidin 17

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