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The ASEAN Economic Community Project Accumulating Capital, Dispossessing the Commons Juego, Bonn

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Citation for published version (APA): Juego, B. (2014). The ASEAN Economic Community Project: Accumulating Capital, Dispossessing the Commons. In More or Less?: Growth and Development Debates in Asia (pp. 12-19). Heinrich Böll Stiftung. Perspectives Asia: Political Analyses and Commentary No. 2 http://www.boell.de/en/2014/01/22/perspectives- asia-213-more-or-less-growth-and-development-debates-asia

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More or Less? Growth and Development Debates in Asia This edition of Perspectives Asia is published jointly by the offices of the Heinrich-Böll-Stiftung in Asia Contents

Kabul Beijing Islamabad NeW Delhi

2 Introduction Bangkok Phnom Penh Development Debates in Asia 4 Current Growth Debates in Asia – How They Miss the Point Chandran Nair 12 The ASEAN Economic Community Project – Accumulating Capital, Dispossessing the Commons Bonn Juego

East Asia 20 China: 35 Years of Reform and Opening Up – Achievements, Costs, and Critiques of China’s Unprecedented Economic Growth Michael Büsgen 24 Debating Global Sustainable Development from a Chinese Perspective Qin Hui 27 The Global Green Growth Institute and Korea’s «Green Growth» Strategy Heinrich-Böll-Stiftung Kim Hyunji

The Heinrich Böll Foundation is a publicly funded institute that is closely affiliated South Asia with the German party Bündnis 90 / Die Grünen. From our headquarters in Berlin and 36 Toward an «Islamic Welfare State» – Alternatives to the Western Economic Model 29 overseas offices, we promote green ideas and projects in Germany, as well as Britta Petersen in more than 60 countries worldwide. Our work in Asia concentrates on promoting civil 40 The Big Indian Development Debate – Growth and / vs. Inclusion society, democratic structures, social participation for all women and men, and global Axel Harneit-Sievers justice. Together with our partners, we work toward conflict prevention, peaceful 45 The Indian Growth Story – Achievements and Future Challenges dispute resolution, and search for solutions in the fight against environmental degrada- Interview with Ashish Kothari tion and the depletion of global resources. To achieve these goals, we rely on dissemi- Southeast Asia nating knowledge, creating a deeper understanding between actors in Europe and Asia, 54 Myanmar: Development at a Crossroads – Challenges and Debates and on a global dialogue as a prerequisite for constructive negotiations. Zeya Thu 59 A Development Model for Myanmar Interview with Kyaw Thu 66 Donor Accountability and Local Governance – Development Assistance to the Cambodian Land Sector Mark Grimsditch 73 Challenges for Poverty Reduction and Sustainable Development – A View from Laos Speech by Sombath Somphone given at Asia-Europe People’s Forum 2012 (excerpt)

Cover photo Workers repairing steam-powered machinery installed more than a century ago at Pangka sugar factory in the central Java city of Tegal. © Tomasz Tomaszewski Back cover photo Two men are walking on a muddy road just outside Taman Negara national Park. The road offers loggers access to the giant trees of this virgin forest near Kuala Loh in the state of Kelatan, Malaysia. © James Whitlow Delano 2 Introduction Introduction 3

Introduction

Since the beginning of this millennium, Asia Asian Development Bank also questions traditional growth model and point out at the top of their wish lists, but rather better has become the growth engine of the world. whether the current development model its shortcomings. Their assessment is that access to education, a more tolerant and secure Today, Asian economies already generate can work, given the statistics on poverty, it produces far too many losers, with one society, and equality of the sexes. about 40 percent of global GDP, and the and is calling for a change in course toward example being how that growth model often Development policies in Asia will have upward trend continues, despite a slow- integrated growth that is no longer meas- leaves the cultural rights of indigenous pop- enormous relevance for the rest of the world. down of growth in China and India. It is not ured solely by GDP and average income. ulations by the wayside. This magazine is an invitation to readers to only economic power that is on the rise; the This magazine provides a forum for In addition to the articles on develop- familiarize themselves with the issues under average per capita income in Asia has tri- the voices of authors from various Asian ment prospects for Asia, we have also gath- discussion and gain insight into the debates pled since 1990, and the number of people countries to express their thoughts on pos- ered together here voices of people from being conducted in the region. living in poverty has declined by half in the sible development models for the region China, India, Pakistan, and Myanmar, who same time period. that could achieve prosperity for all, with- describe their visions of a good life. For most Katrin Altmeyer Nonetheless, two-thirds of the world’s out doing long-term damage to nature or of those surveyed, material goods were not Head of Asia Department poor live in Asia, and more people suffer threatening the subsistence of entire popu- from hunger there than anywhere else in lations. the world. The most recent estimates by In his article, Chandran Nair from Hong the Asian Development Bank (ADB) indi- Kong cautions that Asia should not adopt cate that some 660 million Asians live on Western standards of consumption. He less than $1.25 per day. If we include people advocates for Asians to seek their own path whose subsistence is under constant threat, of development that would above all regu- then every other person in the region lives late the exploitation of resources. Chinese on the brink of poverty. sociologist Qin Hui sees the solution to the Extensive investment in infrastructure, worldwide environmental crisis in rigor- education, and social welfare systems is ous globalization, in which states not only still necessary almost everywhere in Asia in integrate their markets into a globally net- order to improve the situation for individu- worked economy, but also set democratic als, or to allow people to create and share standards that would serve to globalize both in the prosperity exemplified by Western environmental protection and social justice. societies. How can that money be gener- Philippine social scientist Bonn Juego con- ated and what effect will that have on global tributes a critical analysis of the growth-ori- development? Will our planet’s capacity be ented economic vision of the Association of sufficient to allow the current four billion Southeast Asian Nations, which, in his view, people in Asia – or the nine billion people leads to an even greater marginalization of expected to populate the Earth by 2050 – to poor populations in the region. enjoy a life of dignity and without poverty? From Pakistan comes the idea of an «Many factors indicate that we have Islamic welfare state, and the article from reached a turning point in the development India illustrates how contentious the issue of the Western growth model. Continuing of growth and development models on the on the path we have followed to date has subcontinent can be. no future.» This was the determination of Authors writing from the poorest coun- the German government’s Commission of tries in the region – Laos, Myanmar, and Inquiry in its final report, issued in 2013. The Cambodia – are particularly critical of the 4 Development Debates in Asia Current Growth Debates in Asia Current Growth Debates in Asia Development Debates in Asia 5

Current Growth Debates in Asia How They Miss the Point

Chandran Nair

In this article, Chandran Nair argues that Asia cannot and should not attempt to replicate the Western measured by GDP, is good, and that there- elections being held. The payoff would be at doing others, such as properly reflecting consumption-led economic model, which fore high GDP growth is what countries not only increased prosperity but also the true price of the vast majority of goods should aim for. improved transparency and accountabil- and services we consume. To take just one thrives on undervaluing resources. So the so-called debate is really a disa- ity, better governance, less corruption, and example, markets will never – on their own He calls for Asian governments to reject greement over a very narrow issue – will greater individual freedom. They were told, accord – factor into the price of timber the this model and adopt policies Asian countries continue to grow as quickly in sum, that not only could free markets cost of the damage done to the environ- that reshape capitalism and challenge as everyone has come to expect? This is help make everyone richer, they could also ment from collecting it, or the further dam- the Western liberal narrative of growth seen as all the more important now that help them be better. age that is done to the atmosphere if it is and development. shaky Western economies have increasingly Much as the shape of the American burned. The plain truth is that companies pinned their hopes on the emergence of bil- financial system was determined by its have every incentive not to pay for the dam- lions of new consumers to bolster demand banks and other institutions – which spent age they do, because doing so would drasti- Most of the debates about Asia revolve for their goods. Throughout all this, the real hundreds of millions of dollars on lobby- cally increase their production costs – and around its critical and turbo-charged con- questions people should be asking are never ing to free themselves of regulatory con- yield no benefits for them. In many cases, tribution to the global economy over the mentioned. Why is high growth the target in straints – so too across Asia did Western and this behavior is justified with the argument last two decades. Many of the discussions the first place, and what is the true price of Asian businesses alike lobby to be allowed that the company’s savings are passed on to are also tinged with disbelief at the fast rates consumption-led growth? Or should 5 to to act as freely as possible. In many cases, us, their customers. of growth, which can only be dreamt about 6 billion Asians in 2050 aspire to live like they did not have to do much persuading. Of course, the truth is that we still pay in the developed world. people in the West – and is it even possible? Most Asian governments were desperate for the full price of the timber we consume – China is often the center of attention the approval of the Western world and the it is just that we do so in the form of rap- in these discussions, which then swiftly chance to finally take their seat at the table – idly shrinking forests, polluted air, and the descend into sweeping statements about How did we get here? a fact supposedly exploited by international desertification of large parts of the Earth – the shift of economic power from the West institutions (which always happened to be even as the artificially low cash value of to the East and even hubristic ideas about The notion that growth is good is presented Western-run), such as the World Bank and timber encourages us to consume far more an «Asian century» – whatever that means. as a god-given fact, but it is really a conse- the World Trade Organization, with «advi- A lot of this passes as conventional wisdom quence of a particular ideology, often called sory» missions to Asian governments and Asian governments remain persuaded enough of and therefore sits comfortably with Asian «free-market capitalism.» This is an ideology report cards that praised economies that politicians and business leaders. that stresses individual rights but ignores had liberalized while criticizing backsliders. the benefits of the free market to continue to allow What is often missing in these debates collective welfare, focuses on short-term Superficially, the results were promising. traditional practices to be pushed aside. is a bit more intellectual honesty to lay bare gains rather than long-term damages, and Export-oriented Asian economies boomed, the ugly underbelly of the consequences creates an illusion of progress by hiding and with growing levels of affluence came of unfettered growth at all costs. This is the the true costs of consumption. It is also the hundreds of millions of Asians able to afford a than we should. And what is true of timber false promise that conveniently ignores the ideology that was pushed on Asian govern- new life of abundance. But the lie at the heart is true of oil, food, fisheries, electricity, and Chandran Nair s the founder and high price being paid through subservience ments throughout the latter half of the 20th of free-market capitalism is that the benefits practically everything else we consume. The CEO of the Global Institute For Tomorrow (GIFT), a think to consumption-led economic growth poli- century. that flow to corporations and, to a lesser market is even worse at valuing some of our tank dedicated to advancing cies, which are in turn reliant on the under- For the better part of 50 years, Asian extent, the general population are a direct most precious resources, such as clean air an understanding of the impacts valuing of resources and the externalization states were told that the path to develop- result of continuing to evade the true envi- and water, because they are largely free. of globalization. He is the author of Consumptionomics: of true costs. ment follows the establishment of market ronmental and social costs of consumption. The result is that the average American con- Asia’s Role in Reshaping The problem is that those on both sides economies, opening up to trade with – and As much as markets are extremely effec- sumes more than three times the amount of Capitalism and Saving the Planet, of the debate – both the bulls and the bears – investment from – the rest of the world, tive at doing some things, such as lifting water than the average Chinese, and more which calls for a new approach to growth and development share the same key assumption. They all with the rule of law protecting property hundreds of millions of people in China than one hundred times more than the in the emerging Asian economies. take it as a given that economic growth, as and contracts, and, ideally, with democratic out of poverty, they are also extremely bad average Angolan. 6 Development Debates in Asia Current Growth Debates in Asia Current Growth Debates in Asia Development Debates in Asia 7

As a result of its embrace of Western eco- lion. It will likely be 6 billion by 2050. The Fertilizer use has increased by a factor of megacities – whose lives will be devastated by nomic models, this overconsumption has consequences of a full-scale emulation of five worldwide since 1960. It has increased a lack of water and desertification, extreme spread to Asia as well. In India, still home to a 20th century Western habits of consump- by a factor of 55 in China, where 1.3 mil- weather, rising sea levels, and the other significant number of undernourished peo- tion by this number of people would be cat- lion tons of pesticides are also used every impacts of climate change and environmen- ple, well over half of the women between the astrophic. Which means that, ironically, the year. In India, levels of fertilizer application tal degradation. For them, the era of Ameri- ages of 20 and 69 years old are overweight. In pundits are correct to say that whatever hap- have risen from less than 1 kg per hectare in can-style consumption will never arrive. China, the number of people considered to pens in Asia will determine what happens in 1951 to 133 kg in 2011.8 As a result, the Food be clinically obese is approaching 90 million the rest of the world in the 21st century. and Agriculture Organization of the United people, with forecasts suggesting the num- To take just one example, there are cur- Nations estimates that a staggering 25 per- Why technology is not ber will rise to 200 million by 2015. Within rently a billion cars on the road.2 More than cent of the world’s total landmass is highly the answer two decades, two out of three people in the 60 percent of oil produced in the world degraded9 – including 50 percent of India’s country will be overweight or obese, the already goes toward transportation.3 Were land10 and 37 percent of China’s.11 At this juncture it is worth briefly men- same proportion as in the United States now.1 China and India to reach Western levels of The social costs of overconsumption tioning technology, which has become the Asian governments remain persuaded car ownership, as they are currently being are equally great. The forced urbanization modern deus ex machina whenever we enough of the benefits of the free market actively encouraged to do, they would have of hundreds of millions of Asians is driven are confronted with problems that require to continue to allow traditional practices, two billion cars between them.4 Just keep- in large part by the false belief that more difficult solutions. Technology will almost often frugal ones, to be pushed aside. In ing that number of cars on the road would city-dwellers will mean more middle-class certainly be a key part of creating a sustain- India, more and more people are replac- require 120 million barrels of oil a day, four consumers. As a result, 60 million people able future, but it will not be the only part. ing vegetarian diets with meat ones, much times OPEC’s current output,5 to say noth- will be added to slums this decade on top Technology will certainly not produce the to the satisfaction of the food industry. ing of the disastrous effects that a total of of the 825 million already living in such results we want if we continue to invest Average meat consumption per person three billion cars would have on the envi- places. And, despite being home to just over hundreds of times more money into ever- is currently six grams a day; the Ministry ronment and infrastructure. half the world’s population, cities account more destructive methods of consumption, of Food Processing Industries sees that To return to the earlier example of meat for more than 70 percent of its waste12 and such as fracking, than we do into sustain- rising to 50 grams within a decade or so. consumption, equally important is the greenhouse gases.13 able technologies such as renewable energy, «When such a phenomenal increase in choice Asia decides to make regarding its The flip side is that the billions of Asians carbon capture, and energy-efficient indus- meat consumption occurs,» says a minis- approach to agriculture. The same agricul- who continue to reside in rural areas are try. It is also worth remembering that the try spokesperson, «the sector will witness a tural chemicals that prevented mass star- largely neglected. In China, for example, tremendous growth.» vation in the developing world during the less than 10 percent of government spend- so-called Green Revolution are now being ing in the 1980s and 1990s was allocated to Whatever happens in Asia will determine what overused to the point where they are actu- the rural economy, despite the fact that the happens in the rest of the world in the 21st century. Why any of this matters – ally damaging the fertility of huge swathes rural economy supported 75 percent of its Asia and the world of agriculture land. people.14 In India, 400 million rural citizens The broad-based dependence of today’s have no electricity in their homes.15 technological revolutions of the past have It is precisely this «tremendous growth» that agriculture on chemicals often comes as a Adhering to current policies of consump- been based on the discovery or exploitation we should be worried about. What free- shock to the uninitiated. The agrochemical tion-fueled growth has brought middle-class of new resources, such as the revolution in market advocates simply refuse to either industry is worth an estimated $125 billion affluence to many people across Asia – prob- production brought about by the advent of accept or acknowledge is that the economic a year worldwide – an amount that may ably hundreds of millions, and perhaps even coal-powered industry, or the revolution in model they revere more or less works only double within the next five years.6 (By com- more. But their ranks will be far outnum- agriculture that came from the invention of when a relatively small proportion of the parison, India and China spend just $60 bil- bered by the many more across the region – chemical fertilizers. It remains to be seen world population is using it. Asia’s popula- lion educating a combined 36 percent of the especially those living in rural areas or recent what technology will be able to do if our tion, by contrast, is currently well over 4 bil- world’s population.7) migrants to Asia’s ever-growing number of resources run out. 8 Development Debates in Asia Current Growth Debates in Asia Current Growth Debates in Asia Development Debates in Asia 9

What, then, is to be done? tural waste in many rural areas and enable The fact that such solutions exist is cause farmers to produce value-added foodstuffs for optimism. However, as with any addic- The problems confronting us today are that consumers pay a premium for. Rural tion, the first step is acknowledging the many. The efforts to find a solution must areas would no longer be considered back- problem. When it comes to our addiction likewise be many. On the policy front, waters for poor and uneducated people but to consumption, the treatment is no differ- one obvious solution would be for mar- would be seen as places with a future and ent. Government and business leaders must kets to be more properly regulated. This central to the national economy. have the courage to wake up and face the is nothing new, but the vast majority of But it will not be enough for govern- reality of the situation before any real pro- regulation has been either ineffectual or ments to simply impose top-down policies gress can be made. misguided. In many countries, regulation and hope that corporations and individu- with respect to automobiles places a floor als abide by them. What is required is also a on a vehicle’s fuel efficiency, but no major more fundamental reframing of the public country places a limit on the number of debate so that the current generation will be cars allowed on the road. Similarly, the able to recognize and confront the key chal- majority of chemical manufacturers follow lenges of the 21st century. This will involve strict guidelines regarding their produc- scientists in Asia ensuring that their research 1 Chinese obesity statistics from http: / / articles.economictimes.indiatimes.com / tion processes to ensure the safety of their is disseminated to the public through http: / / www.urbanatomy.com; Indian ones from 2011-03-22 / news / 29174681_1_soil-health- products, but no nation limits the total research institutes and the institutions of Imprimis Knowledge Series III, Fact Sheet: Obesity chemical-fertilisers-soil-test-based. 9 amount of harmful chemicals it allows to higher learning. They will need to cooperate in India, page 3; available at: Nicole Winfield, U.N. Food and Agriculture http: / / www.imprimispr.com . Organization Warns 25 Percent of Land Highly be produced and dispersed into the envi- with political institutions and the media so 2 Daniel Sperling and Deborah Gordon, Two Billion Degraded, Huffington Post, November 28, 2011; ronment. This kind of regulation is rather that the public become aware of their results Cars Transforming a Culture, TR News No. 259, available at: http:/ / www.huffingtonpost.com / like missing the forest through the trees. and that these are reflected in policy. November–December 2008; available at: 2011 / 11 / 28 / un-food-agriculture-organization_ http / / :onlinepubs.trb.org / onlinepubs / trnews / n_1116039.html. Business schools will also need a new trnews259billioncars.pdf. 10 Government of India, Ministry of Environment and curriculum that properly equips students 3 Paul Tullis, «Peak Oil» Is Back, but This Time It’s a Forest, State of Environment Report, 2009; available Young people must be given the intellectual with an understanding of economic his- Peak in Demand, Bloomberg Businessweek, May 1, at: http:/ / www.envfor.nic.in / mef / State%20of%20 tools to come up with solutions and then given the 2013; available at: http: / / www.businessweek.com / Environment%20Report_2009.pdf. tory and policy rather than inculcating into articles / 2013-05-01 / peak-oil-is-back-but-this-time- 11 UN News Center, Land Degradation among power to implement them. them long-discredited ideas about efficient its-a-peak-in-demand. China’s Food Supply Challenges, Says UN Expert; 4 markets. Young people must be given the http: / / data.worldbank.org / indicator / available at: http: / / www.un.org / apps / news / story. IS.VEH.NVEH.P3. asp?NewsID=37151&Cr=food+security&Cr1=#. intellectual tools to come up with solu- 5 Daniel Tencer, Number of Cars Worldwide Surpasses UIC5V1HvoS4. Governments must take an honest look at tions and then given the power to imple- 1 Billion; Can the World Handle This Many Wheels?, 12 New Tool Helps Cities Assess Progress toward Huffington Post, August 23, 2011; available at: Zero Waste, Green Biz, May 1, 2013; available at: the sustainability of current levels of pro- ment them. A less hierarchical corporate http: / / www.huffingtonpost.ca / 2011 / 08 / 23 / http: / / www.greenbiz.com / blog / 2013 / 05 / 01 / new- duction and place appropriate constraints structure would be a good start. For all that car-population_n_934291.html and Nayla Razzouk, tool-helps-cities-assess-progress-toward-zero-waste. on society where necessary. the West purports to stand for democracy, Maher Chmaytelli & Grant Smith, OPEC Keeps 13 A Global Opportunity for Cities to Lead, Output Target Unchanged, Content With $100 Oil, Climate Leadership Group; available at: The misguided forced-urbanization it also tolerates an unabashedly dictato- May 31, 2013; available at: http: / / www.c40cities.org / whycities. policies of governments must likewise be rial corporate system where junior staff http:/ / www.bloomberg.com / news / 2013-05-31 / 14 Dennis T. Yang, Urban-Biased Policies and Rising reversed. They should be replaced instead have absolutely no say in setting company opec-keeps-output-target-unchanged-content-with- Income Inequality in China, The American Economic 100-oil.html. Review 89 (2): 306–310. May 1999, retrieved with an effort to create rural areas that are policy. This is not a model that can accom- 6 http: / / www.businesswire.com / news / home / September 16, 2011. linked to cities by outstanding infrastruc- modate the kind of drastic changes in cor- 20120419005832 / en / Research-Markets-Analyzing- 15 http: / / web.worldbank.org / WBSITE / EXTERNAL / ture. Investment in transport, irrigation, porate structure and culture that must be Global-Agricultural-Chemicals-Industry. TOPICS / EXTENERGY2 / 0,,contentMDK:22855502~ 7 http: / / www.gov.cn / 2012lh / content_2093446.htm. pagePK: 210058~piPK:210062~theSitePK: communication, and storage would elimi- implemented if continued environmental 8 Fertiliser Use on the Rise in India, Soil Health 4114200,00.html. nate the appallingly high levels of agricul- destruction is to be avoided. Deteriorating, March 22, 2011; available at: hong kong From 9 o’clock in the morning until 7 o’clock in the evening, Mr. and Mrs. Lau, both in their early 40s, collect Despite the smell and the dirt, every day the couple makes an effort to find time to batteries, electric motors, wire, and other waste materials to recycle and resell. At their tiny warehouse eat and watch television together in what after 20 years has become their space in Mongkok, one of Hong Kong’s most crowded districts, Mr. Lau repairs whatever equipment he can, sanctuary. «Sometimes life is hard, but I’m the big boss of our ‹cozy› cave, and here © Leo Kwok then sells it along with the other materials the couple has gathered to nearby hardware stores and garages. we can live our lives in our own way,» says Mr. Lau. 12 Development Debates in Asia The ASEAN Economic Community Project The ASEAN Economic Community Project Development Debates in Asia 13

The ASEAN Economic Community Project Accumulating Capital, Dispossessing the Commons

Bonn Juego

Since the end of the 1990s, ASEAN has been working toward a vision of a political, economic, and social alliance. foundation of all the regional integration The year 2015 is only symbolic, at best, of of the process of neoliberalization in South- But how realistic is achieving that declarations and plans of action. It serves a much deeper ideology being used by par- east Asia. True to its neoliberal character, as a legally binding agreement among the ticular sections of the elite class and social the AEC fundamentally embodies capitalist ambitious goal, given the tremendous 10 member states of Brunei, Cambodia, forces to advance their specific worldviews social relations and values that put priority heterogeneity of the region? ASEAN Indonesia, Laos, Malaysia, Myanmar, Phil- for the preservation and promotion of their on the private over the public, on profits unites countries at vastly differing levels ippines, Singapore, Thailand, and Vietnam. material interests. To complement existing over peoples, and on markets over the com- of development. Author Bonn Juego At the heart of the envisioned ASEAN Com- debates, it is thus a worthwhile analytical mons in the organization and governance takes a closer look at the ASEAN Vision munity is the expressed commitment to the endeavor to examine the ideas and inter- of the economy, the polity, the society, the 2020 platform, as well as the ongoing creation of a highly competitive and glob- ests behind the AEC. In doing so, the task is ecology, and the whole of humanity. This is debate about it in the individual member ally integrated ASEAN Economic Commu- to address the problematique: What does evident in the crafting of the «inter-related states. He examines the potential nity (AEC) by 2015 – whose blueprint was the AEC project mean for socio-economic and mutually reinforcing» characteristics of this ASEAN program, which is aimed adopted in 2007 – through the establish- development and democratization, par- of the AEC vision for an economic regional ment of norms, rules, and institutions of ticularly for the general well-being of the bloc: a single market and production base, at equal participation in society and free-market capitalism for goods, services, peoples and environments from society to highly competitive, equitable, and fully the equitable distribution of economic investments, money, and labor.4 society in the region of Southeast Asia? integrated into the global economy.8 resources, and concludes with Two years before 2015, academic debates In this paper, I attempt to unpack the The centerpiece of the AEC is the pro- some thoughts on how those rights and policy analyses have mostly centered on AEC Blueprint to reveal the project’s neo- ject to build a competitive single market could be ensured. the questions of how, why, and why not AEC liberal capitalist strategy of «accumulation whose core elements are the free(r) flow targets will be realized. On the one hand, the by dispossession,» whereby the drive for of goods, services, investments, capital, ASEAN Secretariat continues to coordinate the acquisition of more wealth and power and labor. Immediately after the adoption On December 15, 1997, the heads of states implementation mechanisms and remains by the economically wealthy and politically of the AEC Blueprint and the Charter, a and governments comprising the Associa- relatively upbeat, or at least hopeful, about powerful necessitates the deprivation of the series of trade and investment agreements tion of Southeast Asian Nations (ASEAN) the integration goals, noting recently that peoples’ collective rights and access to the by ASEAN have been signed and adopted agreed on the region’s vision for the year 2020 ASEAN has already implemented «79.7 per- economic, political, social, and ecological within Southeast Asia itself and with Aus- to realize fully a «Zone of Peace, Freedom cent of measures under the AEC Blueprint commons.7 I therefore offer a critical reading tralia, New Zealand, South Korea, India, and Neutrality,» a «Partnership in Dynamic as of 15 August 2013.»5 On the other hand, of the AEC project in the analysis, specifically Japan, and China. These are institutional- Development,» and a «Community of Car- several analysts have assessed serious con- its agenda for the establishment of a compet- ized commitments to the management of ing Societies.»1 This «ASEAN Vision 2020» straints on deepening the AEC process due itive single market, and conclude with some the neoliberal order through the further- thus provided the general framework for the to a combination of complex and interde- important pointers on forging an alterna- ance of free trade, competitiveness, and subsequent Bali Concord II in 2003, which pendent factors, such as the absence of pub- tive regionalism process for Southeast Asia’s an open market economy. ASEAN’s unwa- defined the three pillars that the «ASEAN lic legitimacy, the institutional deficiency development and democratization. vering embrace of neoliberal capitalism is Community» is built upon: a political-secu- of the Secretariat, the non-committal and telling of its envisioned development par- Dr. Bonn Juego, a Filipino rity community, an economic community, non-compliant behavior of member states, adigm for the present and future shape of scientist, wrote his PhD disser- and a socio-cultural community.2 With an the ostensible skepticism toward regional the region’s economies. In fact, it is in the tation on the political economy The AEC competitive single of capitalist development in air of confidence during the 12th summit integration arising from the prolonged cri- contexts of the region’s obvious vulnerabil- contemporary Southeast Asia. in 2007, the state leaders signed the Cebu sis of the European Union, and the realpoli- market: Accumulation by ity to ecological, climate-related disasters Currently, he is a postdoctoral researcher at the Department of Declaration to accelerate the integration tik of entrenched vested interests in varying dispossession and neoliberalism’s three successive major Asian and International Studies, process – thus hastening the group’s desired domestic political economies.6 economic crises in the last decade – the City University of Hong Kong, realization of the ASEAN Community by Yet, understanding the AEC project The AEC project is an institutional blueprint 1997 Asia crisis, the 2001 dot-com bubble and a guest researcher at Global 3 Development Studies, Aalborg 2015. The ASEAN Charter entered into force appears to be more important now than based on the ideology of neoliberalism, collapse, and the 2008 Atlantic crisis – that University, Denmark. on December 15, 2008, as the institutional making prognoses about the 2015 target. which is designed to guide the continuation a daring project for a competitive ASEAN 14 Development Debates in Asia The ASEAN Economic Community Project The ASEAN Economic Community Project Development Debates in Asia 15

single market by 2015, patterned after the Although the ASEAN Community vision imply the limiting of development policy telecommunications, maritime transport, rules-based European Union, has been respects and keeps diversity in the politi- options, especially of developing countries – construction, waste management, tourism, launched and is being pursued. cal-security and socio-cultural pillars, its the AEC rules on the free flow of goods have education, healthcare, and water supply. By authoring their accession to the AEC, agenda for the economic sphere is one of adverse implications for the prospects of With liberalization as its central thrust, the states have effectively locked themselves unity. This means that the master plan for economic development and sustainable AEC provides greater «market access» to in the disciplines of neoliberalism and its the modernization of Southeast Asia’s accu- development in the countries of the region. domestic economies – that is, in the context attendant principles and policies of pri- mulation structure – through the formation Firstly, the thorough elimination of of Southeast Asia’s developing countries, vatization, liberalization, commodification, of competing states and competitive econo- tariffs and non-tariff trade barriers effec- foreign (ASEAN) companies doing business and other market-oriented governance mies within the single market – entails the tively denies Southeast Asia’s developing of providing services in domestic econo- reforms. Through a top-down approach, fact that capitalism can be accommodated economies the important economic tools mies – and, in effect, prohibits governments state leaders have committed their respec- to or embedded in: (a) different political to create infant industries and strengthen from regulating the behavior and business tive governments, economies, communi- regimes (from authoritarianism in Singa- their domestic productive structures while conduct of multinational and transnational ties, peoples, and resources to economic pore and elite democracy in the Philip- providing for social welfare. The history of corporations. activities that are led by and centered on pines to monarchy in Brunei and military economic development – from England There are legitimate grounds to ques- the interests of the private sector – inter- rule in Myanmar); (b) disparate economic and Continental Europe to the United tion the rationale of the AEC’s scheme to ests that are not necessarily reflective of, structures and levels of development (from States and East Asia – shows the crucial role liberalize trade in services from the per- or leading to, the welfare of the commons. Malaysia’s exported-oriented industrializa- played by the strategic use of tariffs in the spective of development and democratiza- Underpinning this process of forming a tion and Thailand’s newly industrializing industrial policies of these now-developed tion. A couple of interrelated issues reveal region-wide economic bloc is the strategy economy to Vietnamese-style central plan- countries during the catching-up phase of the scheme’s contradictions. Firstly, in rela- of «convergence club,» which focuses on ning and Laotian pastoralism); and (c) vary- their economic progress (e.g., increasing tion to the argument above on the impor- policy reforms and institutional restructur- ing cultural orientations (from Indonesian export duties on raw materials and increas- tance of building domestic manufacturing ing at the level of national states in line with Islam to Cambodian Buddhism). This also ing import duties on foreign manufactured industries for development, under the AEC the logic of – and in preparation for – global means that proponents of neoliberaliza- goods as carrot-and-stick economic poli- agreement on trade in services, the devel- tion have strategies to align the neoliberal- cies to encourage the development of local oping countries in the region are being ism ideology with the interests of local elites. technological capabilities and domestic deprived of the strategy of infant industry 12 The centerpiece of the AEC is the project to build Likewise, these established local elites have manufacturing industries). protection that successful developers from ways to capture or utilize said ideology in Secondly, the mad rush for growth Europe to America to East Asia have utilized a competitive single market whose core pursuit of their interests in the expansion of through the overproduction of goods for in the past. Budding local service indus- elements are the free(r) flow of goods, services, their personal stakes as the AEC amplifies profits and trade perpetuates the culture tries are expected not to withstand fierce investments, capital, and labor. the circuit of capital accumulation within of consumerism, which has negative envi- competition from well-established firms and outside the national state while main- ronmental consequences. Moreover, the from technologically advanced developed taining its class power and social status. In outward orientation of production of goods countries. It would be ideal for the long- competitiveness.9 The domestic economies the neoliberal policies of privatization and for exports does not encourage the devel- term and vibrant economic development of these states will have to simultaneously liberalization, for instance, established opmental goal of self-sufficiency, such as of Southeast Asian countries if the demand cooperate and compete with each other so domestic elites with access to, or control of, the importance of food security. This is, for for private services were to come from the as to secure the conditions for free trade, cir- government resources might have the first- instance, tantamount to making the large needs of the manufacturing and agricul- culation of money, and production systems mover advantages in business or the needed agricultural sectors of the region’s devel- tural industries, and that the wealth created conducive to the survival and expansion of political connections to secure contracts in oping countries grow crops for export that from these sectors form the tax base for the the region’s capitalist market. the transfer of state assets to private compa- their peoples cannot afford to use or eat. government’s resources for the responsible At a regional level, a key challenge for nies and to get illicit support mechanisms – public provisions of social services. the convergence club model is to resolve an through activities such as rent-seeking and Secondly, the agreement does not make emergent two-tier bloc between the relatively corruption – in opening up a particular eco- Free flow of services a clear distinction between private and pub- more globally integrated ASEAN-6 (Brunei, nomic sector.11 It is because of this adapt- lic services, and as such between economic Indonesia, Malaysia, Philippines, Singapore, ability of capitalism to a variegated set of The AEC desires to completely liberalize and social policies. It therefore enlarges the and Thailand) and the latecomers (Cambo- social regimes and the consistently elitist trade in services where «there will be sub- scope of market access beyond the purely dia, Laos, Myanmar, and Vietnam). ASEAN and elite-led nature of neoliberalism that the stantially no restriction to ASEAN services economic to encroach on the fundamen- recognizes this «development divide,» and ideas and interests of the AEC neoliberaliza- suppliers in providing services and in estab- tal principle of a social compact between a hence the AEC is considered both the means – tion project have to be critically examined. lishing companies across national borders government and its citizen-taxpayers in the through its Initiative for ASEAN Integration – within the region, subject to domestic regu- provision of public services. This particular and the ends for accelerating and realizing lations.»13 This is obviously in line with the privatization of social services means the the regional integration process.10 However, Free flow of goods contentious agenda of the General Agree- private appropriation of the assets of oth- an even greater challenge to the creation of ment on Trade in Services – together with ers, whereby private property rights are pro- the single regional market appears to be the The AEC enjoins member states to continue those of other international agreements on tected while stripping off peoples’ access to specificities of domestic socio-economic for- with the efforts of the ASEAN Free Trade investment measures (TRIMS) and intel- their originally held – and supposedly inal- mations, characterized by a diverse nature of Area toward the goal of zero tariffs and the lectual property rights (TRIPS) – that have ienable – social rights and entitlements. capitalist regimes, or the so-called varieties removal of non-tariff barriers to free trade been negotiated since 2000 under the Uru- of capitalism, with historically entrenched of goods. Consistent with the ideas of the guay Round of the World Trade Organiza- political-economic elite class interests from World Trade Organization – whose aims at tion. The AEC packages encompass a wide country to country. regulating international economic relations range of services to be liberalized such as 16 Development Debates in Asia The ASEAN Economic Community Project The ASEAN Economic Community Project Development Debates in Asia 17

of private accumulation of investors does driven and foreign dependent – which mean a truly free socio-cultural and polit- Free flow of investments not carry their share of social responsibility undeniably resulted in a massive inflow of ical-economic community where a South- and public accountability. Thus, the modus FDIs but eventually proved to be vulnerable east Asian human being can settle, work, The AEC Blueprint section on the free flow operandi is to privatize the accumulation to unhealthy speculation and capital flight, and live in any place or country where s / he of investments has evolved into the 2009 drive of investors while socializing the risk as shown in the crisis experiences of Thai- decides to lead a good life. ASEAN Comprehensive Investment Agree- and cost of market operations. land, Indonesia, Malaysia, and the Philip- ment, which is a revision and consolida- pines. Indeed, the 1997 crisis has revealed tion of earlier protocols and two major the problems of liberalized financial sys- Toward an alternative investment agreements, namely, the 1987 Freer flow of capital tems and the financialization of the econ- regionalism of the commons ASEAN Investment Guarantee Agreement omy, as well as the structural weaknesses (an agreement for the promotion and pro- The AEC’s agenda for «capital market» of the real economies of Southeast Asia’s The ASEAN Economic Community project tection of investments) and the 1998 Frame- integration refers to financial capital, par- export-oriented productive sectors. intends to institutionalize and get legiti- work Agreement on the ASEAN Investment ticularly on furthering the liberalization of macy for the ideology of neoliberalism and Area.14 The main objective of the ASEAN capital and current accounts and the whole the process of neoliberalization toward a Comprehensive Investment Agreement is to question of money, finance, or exchange. In Free flow of skilled labor single market. It seeks to protect and pro- make Southeast Asia an attractive regional recognition of the fact that the region’s gen- mote the material and ideological interests market, especially for foreign direct invest- eral capital market is already free, the AEC Labor-market flexibility is central to ASE- of the private sector, private property, and ments (FDIs), by creating an economic wants to make the flow of capital «freer» AN’s neoliberalization strategy of securing private profits at the expense of the public system where businesses are competitive, than what Southeast Asian economies have the hegemony of capital over labor. South- weal and social values of the commons. Its profitable, mobile, and secure through the become, despite the financial restructur- east Asian open regionalism envisages the neoliberal capitalist form is substantially protection, facilitation, promotion, and ing and banking reforms done before and free mobility of capital in the form of goods, elitist in character that – while it attempts liberalization of the overall investment immediately after the 1997 Asian financial investments, and money, but it does not to «modernize» the varieties of capitalism regime. State resources and social institu- crisis. Still, it is important to be reminded really promote the «free» movement of in Southeast Asia, it does so by encouraging tions are oriented toward the creation and of the effects of financial liberalization in labor. Within a neoliberalizing economy, «new» (transnational) capitalist and elite maintenance of this system, which is more Asia, particularly during the early 1990s, the region will be a market with a huge classes to replace, compete, or ally with responsive and favorable to capital than the which contributed a great deal to criti- reserve army of «flexible,» unorganized, and the «old» (national) ruling elites. The AEC commons, and to market forces than popu- cal factors that caused the 1997 crisis. As a insecure workers who are adaptable to the project is, however, contradictory. On the lar-democratic forces. result of market reforms through financial accumulation interests and requirements one hand, it drives convergence by repro- A high degree of certainty, predictabil- liberalization, the growth strategy of making of capital – often through race-to-the-bot- ducing the institutions, policies, and rela- ity, and security are to be accorded to capi- Southeast Asian economies FDI-attractive tom competitiveness strategies such as the tions associated with neoliberal capitalism tal through state-guaranteed institutions. encountered the consequences, whether lowering of labor costs and environmental from society to society within the economic Key to this agenda are the AEC’s straight- intended or unintended, of «irrational exu- standards – and who are subjected to poor bloc. It does so, however, by also repro- forward provisions on the protection of berance» of investors, the rapid inflow of working conditions and the hiring / firing investors’ properties, interests, and activi- short-term capital, portfolio-based invest- prerogatives of those who pay them wages. ties, specifically: ments in the stock market, and the domi- Even though the AEC Blueprint specifi- The AEC project is already embroiled in conflicts nation of finance (money) over productive cally identifies «skilled labor» to be prior- with the realpolitik of a variety of capitalisms in investor-state dispute mechanism; (real economy) capital. itized in migration policy, the agreement Southeast Asia. transfer and repatriation of capital, The AEC plan is to guarantee freer capi- has implications for the general condi- profits, dividends, etc.; tal mobility by streamlining rules, regula- tions of the labor and employment struc- transparent coverage on the expro- tions, and controls that are perceived to ture. In particular, the AEC is silent about ducing divergent tendencies, resulting in priation and compensation; constrain the growth and accumulation addressing current challenges and realities socio-economic, political, and ecological full protection and security; and activities of the private sector. States are in Southeast Asia’s economic relations at antagonisms, inequalities, hierarchies, and treatment of compensation for losses thus urged to ensure the easy «entry» and the national and regional levels. Firstly, it injustices. resulting from strife.15 «exit» of capital in domestic markets. Rather ignores the character of transnational labor No doubt that the AEC project is already than encouraging longer-term investments as a consequence of uneven development in embroiled in conflicts with the realpolitik What do these injunctions mean? First, the and enlarge the tax base for economic and the region where labor follows capital – that of a variety of capitalisms in Southeast Asia – provision on investor-state dispute reso- social development, the AEC will be replete is, workers migrate from poorer to better-off especially from sections of entrenched class lution signifies the encroachment of the with short-termist investors, making the countries. This migration process involves interests – resisting or usurping the com- global / regional strategy of capital on the region vulnerable to capital flight – and not only documented but also undocu- petitiveness agenda in their local accumu- national sovereignty of states. It thus gives hence financial and economic crises. More- mented migrants, as well as skilled and lation regimes. But it is still very important greater legal rights to foreign investors than over, resolving, if not preventing, recurrent unskilled workers. Secondly, it does not take to challenge the neoliberal project in the to domestic businesses; at the same time, financial crises would be all the more dif- into account the palpable predominance of arenas of politics, policy, and discourse in corporations are vested with the right to sue ficult without the government resorting to the informal sector in the region’s economic the same way that the old and enduring elit- governments. Second, states (in this con- monetary policies such as exchange-rate activities. The regional integration project is ism in the region’s social relations is being text, the peoples of Southeast Asia) shall be and capital controls to arrest capital flight. wanting in plans to bring informal labor to opposed. The analysis in this paper has the absorbers of business risks and also of The lesson of the 1997 Asian crisis is that the formal employment, let alone the aspiration highlighted the contradictions in the AEC market failures. In effect, the private sector neoliberal restructuring processes, both in to crafting development strategies for full project – thus, pointing the way to which is virtually exonerated from losses, bank- the real economy and finance, in the region employment. And thirdly, its emphasis on alternative politics, strategies, vision, and ruptcy, or social conflicts. Third, the pursuit had made the region’s economies export- managed mobility of skilled labor does not movements can be forged and advanced at 18 Development Debates in Asia The ASEAN Economic Community Project The ASEAN Economic Community Project Development Debates in Asia 19

the level of states, and coordinated at the Second, there is a need for socio-political regional and international levels, based on movements that take the points of view of the ideology of the commons and the inter- people power, labor, the natural environ- est of the common good. ment, and human life itself and regard the An alternative to the AEC neoliberaliza- «social commons» as an appropriate, timely, tion project will have to take the perspective strategic, and progressive ideal for the socio- of the commons in the context of contem- economy, ecology, and humanity shared by porary Southeast Asia, which has been his- peoples in the region. The concept of the social commons here is: critical of neoliberal «social protection» remedy, which connotes There is a need for socio-political movements safety nets for the inevitable dispossessions 1 ASEAN, ASEAN Vision 2020 (Kuala Lumpur, that take the points of view of people power, labor, that necessarily come with the process of Malaysia, December 15, 2007). the natural environment, and human life itself. capital accumulation; essentially protective 2 ASEAN, Declaration of ASEAN Concord II (Bali Concord II) (Bali, Indonesia, October 7, 2003). of peoples’ collective socio-economic rights; 3 ASEAN, Cebu Declaration on the Acceleration of and transformative of existing unjust social the Establishment of an ASEAN Community by 2015 torically ridden with underdevelopment, and international relations. (Cebu City, Philippines, January 13, 2007). 4 ASEAN, ASEAN Economic Community Blueprint poverty, privation, conflicts, and injustices. Third, a counter-hegemonic process (Jakarta: ASEAN Secretariat, 2008). I sketch out here a few important themes for of «democratization» as a political-eco- 5 AEC Council, Key Outcomes of the 10th AEC Council this alternative vision and movement. nomic and socio-ecological ideal has to be Meeting (Bandar Seri Begawan, Brunei Darussalam, August 18–21, 2013). First, it is crucial to develop a particular urgently set in motion. Democracy, in this 6 See, for example, John Ravenhill, Fighting «mode of production» for wealth creation sense, means people power at all levels of Irrelevance: An Economic Community «with ASEAN that is economically productive, socially organizing human relations – from states Characteristics,» The Pacific Review 21:4 (2008): 469–488. acceptable, and ecologically sustainable – to workplaces to communities to the natu- 7 I borrow the concept of «accumulation by it shall be the foundation of the goals of ral environment. In this democratization dispossession» from the critical social theorist David redistribution toward a life of dignity. This process, it shall be democracy – rather than Harvey. See David Harvey, Spaces of Global Capitalism: Towards a Theory of Uneven requires a development strategy that under- market forces and elite classes – that is the Geographical Development (London: Verso, 2006). stands a suitable economic development driving mechanism of the polity, economy, 8 ASEAN Economic Community Blueprint, 6. 9 policy for developing countries – where a society, and ecology. Relations in the demo- Cf. Paul Cammack, The Politics of Global Com- petitiveness, in: Papers in the Politics of Global technologically green manufacturing sector cratic alternative regionalism project for Competitiveness, no. 1 (Manchester Metropolitan is in synergy with the agricultural, service, Southeast Asia will therefore be based not University, 2006). 10 ASEAN Economic Community Blueprint, 5–6, 24–25. and small-and-medium enterprise sectors; on the logic of competition but on the values 11 Cf. Bonn Juego, Capitalist Development in Contempo- and where progress leads to higher wages of solidarity, equality, and social justice. rary Southeast Asia: Neoliberal Reproduction, for workers, higher earnings for enterprises, Elite Interests, and Authoritarian Liberalism in the Philippines and Malaysia, PhD Thesis (Aalborg and a larger tax base for the government’s University, Denmark, 2013). social welfare provisions. At the moment, 12 See Erik Reinert, How Rich Countries Got Rich and there is an urgent need to alter economic Why Poor Countries Stay Poor (London: Constable, 2007). See also Ha-Joon Chang, Kicking Away policy objectives from growth obsession the Ladder: Development Strategy in Historical (i.e., through investments driving GDP) to Perspective (London: Anthem Press, 2002). the goal of full employment, which is good 13 ASEAN Economic Community Blueprint, 10. 14 ASEAN, ASEAN Economic Community Factbook for the economy and can be beneficial for (Jakarta: ASEAN Secretariat, 2011). the environment. 15 ASEAN Economic Community Blueprint, 13. 20 East Asia China: 35 Years of Reform and Opening Up China: 35 Years of Reform and Opening Up East Asia 21

micro bloggers. For the first time, the digital in the 1990s has generated additional finan- media provides a space where debates on cial burdens for low-income families. The China: 35 Years of Reform and Opening Up a broad variety of topics can take place. In primary reason for households falling under 2012 about 400,000 Chinese students stud- the poverty line today are soaring medical Achievements, Costs, and Critiques of China’s ied abroad, gathering first-hand experi- costs. Despite economic growth, social ences from many different parts of the world. mobility today is lower than at the begin- Due to the withdrawal of the state from the ning of the reforms back in the 1980s. One Unprecedented Economic Growth private sphere, lifestyles and professional key reason is the education system, which development choices for the young genera- provides many more opportunities for chil- Michael Büsgen tion have become increasingly diverse. Even dren of wealthy families and is increasingly without fundamental political reforms, this difficult for the children of low-income par- probably constitutes the fastest transforma- ents to access. tion in human history on such a scale – and China’s environmental record over the many developing countries (and increas- past three decades has been equally prob- ingly developed countries, too) look with lematic. This is partly manifested within envy at China’s impressive economic per- China’s boundaries in the form of dete- The global economic downturn, growing formance and growth rates. riorating air, soil, water, and food quality. social inequality and a looming But despite all these achievements, Hardly a week goes by without reports of climate crisis have brought the concept of low per capita income, performed relatively China has had to pay a high price for its new food scares, record levels of micro- 1 planetary boundaries to the center well on social indicators, including a high development, most obviously in social and particles in the air, cancer villages, and average life expectancy, high literacy rates, environmental terms. The gap between the like. Hardly any Chinese citizen is unaf- of the debate on sustainable development and low child mortality. the rich and poor has grown larger than fected by these issues. Rural populations are once again. This has led to loud critiques The freedom of movement was ex- ever before in the history of the People’s even more affected by a wide range of issues, of development approaches that are tremely limited due to the rigid enforce- Republic, so much so that, according to including soil depletion, water shortages, based on the pursuit of GDP, particularly ment of the household registration system the International Monetary Fund, China’s and pollution, as well as the excessive use in Western societies. Thanks to and by the absence of free labor and hous- inequality has already overtaken that of of fertilizers and pesticides, etc. But apart economic reforms, China has experienced ing markets in the cities. Career paths were Brazil and India. Hundreds of millions of from the situation on the national level, 35 years of rapid economic growth and determined by authorities, rather than migrant workers and their families have there is a more complex impact of China’s benefited tremendously from the by individuals. Access to information was become the social «collateral damage» economic growth on the global ecology. The opportunities provided by globalization. curtailed by the instrumentalization of the of China’s economic miracle. Uprooted shift of production from Western industrial- media as a propaganda tool. from their rural hometowns and with their ized nations to China has also been a shift What are the benefits and the costs of Thirty-five years later, China has dra- families torn apart, they have turned into toward an economy with significantly lower this transformation? And how do matically transformed itself. Not only has today’s urban cheap labor force; without a energy efficiency and higher environmen- independent Chinese thinkers view global it significantly reduced poverty (down to local household registration, they do not tal externalities. Despite improvements development, environmental sustainability, 120 million people, or less than 10 percent qualify for social security and lack access over the past years in this regards, this trend social justice and the role of politics? of the population, after the official poverty to affordable urban housing and educa- is currently reinforcing itself through the The following two articles attempt to line was raised to $1.25 / day in 2011), it tion for their children. Although they have «going-out strategy»2 of China’s economy. provide some answers. has also built up its entire infrastructure, contributed greatly to China’s economic As a result, China’s ecological footprint has moved 260 million rural migrant workers success and modernization, they often increased massively beyond its national into cities, qualified its workforce, attracted describe themselves as second-class citi- boundaries. Today, it uses a significant pro- When China embarked on its economic investment and high-tech industry, and zens. Well-known university professor and portion of all global resources (although, reform process in 1978, a large part of its eventually turned itself into the manufac- outspoken public intellectual Qin Hui (see admittedly, much of what China produces population lived in poverty. Even according turing hub of the world. In this process, next article) has described their fate as the is consumed elsewhere), and it has become

to China’s own rather low poverty thresh- China had accumulated a record $3.6 tril- «Southafricanization» of China, comparing the biggest emitter of CO2 in the world, with old (which until 2011 was about $0.60 / day), lion in foreign reserves by 2013. In addition, it to the treatment of blacks and Coloureds per capita emissions almost reaching the 31 percent of its people were living below it; China’s companies are increasingly invest- as a disposable work force in South African levels of European economies. if one had applied the $1 / day standard – or ing in economies all over the world. In 2012, cities during the apartheid era. In addition to the environmental and Michael Büsgen is a sinologist even the current $1.25 / day standard – the China’s foreign direct investment outflows Due to inflation and rapidly rising liv- social costs, there is also a growing aware- and holds an MA in development poverty count would have reached 54 per- reached $62.4 billion – roughly one-fifth ing costs, particularly in the urban centers, ness that decades of rapid economic studies. Since the 1990s, he has worked for a variety of cent and 85 percent, respectively. At the end of US foreign direct investment – and it is which provide most of the employment growth – and the emerging materialist val- international and Chinese NGOs, of the 1970s, more than 80 percent of Chi- growing at an annual rate of 15–20 percent. opportunities, real incomes have not ues that it has brought with it – are threat- including Doctors Without Bor- ders and Misereor, and as a CIM nese were living in rural areas, there were no Within a little more than three decades, increased for many ordinary Chinese. Free ening the rich and diverse cultural heritage advisor for NGO development. highways in the entire country, and per cap- one of the world’s most isolated and uni- healthcare, education, and pensions, which of China. The symbols of fast food and con- His research and published work ita energy consumption was only a tenth of form nations has transformed itself into a were provided through the work units until sumerism are all too visible in every Chi- focus on environmental issues, development of China’s what Romanians – then among the poorest highly diverse society and established itself the 1980s, were gradually abolished and nese city (there even has been a Starbucks civilian society, and the role of nations in Europe – used at that time. But as the key engine in an increasingly inter- replaced by a mix of market mechanisms in the Forbidden City and a KFC in Beijing’s international donor organizations to leave it here would sketch an incomplete connected world. Today, China has 1.2 bil- and a still incomplete social welfare system, famous Beihai Park). Monetary values in China. He has been the head of the Heinrich Böll Founda- picture. China in those days was one of the lion registered mobile phones, 600 million organized by the state. Particularly the com- have become the key indicators in judging tion’s Beijing office since 2012. few examples of a country that, despite very internet users, and more than 300 million mercialization of healthcare and education individual success in life. But also the non- 22 East Asia China: 35 Years of Reform and Opening Up China: 35 Years of Reform and Opening Up East Asia 23

urban indigenous cultures of China’s many 2025, China is planning to move another and to reduce poverty. But today, the ques- ment, it is also seen by many to have sig- ethnic minorities are disappearing at a fast 250 million rural residents into newly con- tion of what kind of development – for what naled the end of the political excesses of rate. Under the current Five-Year Plan, all structed towns, and thereby hopes to turn purpose and for whose benefit – is best the Cultural Revolution. And despite all the nomads of China will have to settle down them from largely self-reliant peasants into cannot be answered that easily. valid criticisms of China’s growth-driven and thereby end centuries of a traditional urban consumers. While the social and eco- Despite these burning questions and a development approach, who wants to go non-sedentary lifestyle. The end of their nomic costs of this plan may be enormous, lot of official rhetoric around sustainable back to those days? traditional livelihoods will also substan- it follows the established logic of China’s development, there is surprisingly little tially alter some of the most unique cul- modernization narrative, in which eco- public debate within China questioning tures on this globe. nomic growth remains the foundation of the role of economic growth in develop- The social and environmental chal- development. It is seen as the only way to ment. The first reason for this is that while lenges are not new to the government. further increase material living standards, the benefits of the reform era are claimed Since the 1990s, sustainability has become which in turn are regarded as a prerequisite by the state to enhance its legitimacy, its one of the key topics of Chinese politics. for social – and thereby political – stability. critique has been largely instrumentalized Recent leadership figures had made «har- But although this recipe may have worked by China’s political left to discredit Western monious society» and «scientific develop- in the past 35 years, it is questionable capitalist influences. In this way, the report ment»3 the major slogans during their time whether it will be sufficient for the future. The Limits to Growth by the Club of Rome 1 Since the 1990s there have been many reports in and outside of China about so-called cancer in office. But within the last 10 years, the In light of the social and ecological chal- was introduced in China in the early 1980s villages; these are characterized by above-average environmental crisis has arguably wors- lenges, it is unlikely that more of the same as a critique of the new policies of reform incidence rates of different forms of cancer, ened and China’s income gap has grown (growth-driven approach to development) and opening up, not as a reminder of the allegedly related to air, water, and soil pollution from carcinogenic chemicals. In 2013, a study that larger than ever before. This makes the with a bit of green economy will suffice to need to rethink growth or make it more sus- was led by the Chinese Centre for Disease Control success of similar announcements by the ensure a socially just and ecologically sus- tainable. Secondly, many of China’s leading and Prevention and based on water surveillance new leadership, which has coined a slogan tainable future. Given the high concentra- economists today studied in the United data and cancer rates along the Huai River has confirmed the link between pollution and increased of building an «eco-civilization,» doubtful tion of power in the one-party state and States during the 1990s and have been cancer rates in these regions. In one case, the lung in the eyes of many critics. Although mas- the intransparent merger between politi- highly influenced by neoliberal economic cancer rate among women had increased twentyfold sive investments have been announced to cal and economic elites, the question is theories. Their critiques focus primarily on in the period between 1973 and 2005. 2 The going-out strategy was first articulated by the clean up the air in Beijing, develop low- if – and who within – China will be able to the dominant role of the state and state- Chinese government in 1999 to encourage its carbon energy (mostly hydropower and change course. Many independent intel- owned enterprises in China’s economy and enterprises to invest abroad. This strategy aims at nuclear energy), and build «sustainable lectuals in China argue that there will be are less concerned with issues regarding the internationalization of China’s economy, but it is also partly a result of the huge foreign reserves cities,» the development strategy of the no sustainability without political reforms. sustainability. Thirdly, the environmental that China has accumulated. new government is still based on generat- But this debate is rather sensitive. Political movement in China is still rather weak and 3 The «scientific development concept» was put forward in 2005 by the previous leadership of the ing more growth, which will continue to reforms do not seem to be on the agenda has limited influence on the debate con- Chinese Communist Party. It aimed to correct the depend largely on the exploitation of Chi- of the new government, and questioning cerning sustainable development. Most of overemphasis on GDP growth and instead na’s brown energy reserves. the achievements of the Communist Party the arguments from environmentalists are promoted a «people-centered» development approach, which focuses more on the development of social With demand declining in the wake has just been declared a no-go area in the limited to issues concerning the destruc- welfare and the reduction of social inequalities, as of the global economic crisis, the new notorious Document No. 9,4 circulated ear- tion of nature through human activity, and well as addressing excessive environmental pollution. strategy for sustained growth in China lier in 2013. Indeed, in a meritocracy such they fail to generate a more holistic reflec- 4 The so-called Document No. 9 refers to a partly leaked memo that was circulated to Chinese leaders is to encourage domestic consumption. as China, economic success has been the tion on sustainable development that links in April 2013. It defines the ideological no-go One key pillar of this strategy is a massive major source of legitimacy for the Commu- social justice and economic development areas in China and is mostly directed against using urbanization plan, which was announced nist Party. In the early days of the reforms, with environmental sustainability. Finally, Western concepts such as constitutional democracy, civic participation, human rights, press freedom, by the new government late in 2012. The there was broad consensus on the need to the reform and opening-up era not only etc., to undermine the authority of the party and the target is ambitious, to say the least: By raise the material living standards in China started China’s rapid economic develop- state in China. 24 East Asia Debating Global Sustainable Development from a Chinese Perspective Debating Global Sustainable Development from a Chinese Perspective East Asia 25

Debating Global Sustainable Development from a Chinese Perspective

Qin Hui

Establishing China’s own The relationship between indicators for evaluating political perfor- responsibilities of the government are too mance. Some people have even designed limited, due to the lack of bargaining power reflection on «green» sustainability and political new indicators, such as «green GDP.» But of the people. In such a context, we are lack- development structures from my perspective, the question of who ing the conditions for both effective pub- has the right to pursue and to evaluate is lic intervention as well as effective market China’s environmental movement emerged Some people think that the pursuit of GDP even more important than the question of mechanisms. Frankly speaking, I worry that during the reform era in the 1980s under growth after reforming and opening up what to pursue. In a system of unrestrained in this situation, carbon trading will only the influence of Western green ideas. Trans- caused the ecological and environmental power and lack of accountability, anything be used as an excuse to shift responsibili- lations of the report The Limit to Growth disruptions that China is facing today. Of the state pursues carries the risk of deviat- ties away from the government to the mar- by the Club of Rome and of the book Silent course, this is one important reason, but it ing from people’s expectations. ket, whereas carbon control would further Spring1 were very important for China’s is not that simple. China already had severe increase the power of the state. Both carbon «green enlightenment.» Therefore, China’s environmental problems long before the trading and carbon control will encounter understanding of the need for environmen- economic reforms began in the late 1970s. Green public interventions problems at the national levels, where dem- tal protection is universal in terms of basic The Great Leap Forward (1958–1961) caused ocratic governance does not exist. Before values, but the problem is that the ideas are unprecedented ecological disasters, includ- or green market transac- initiating the debate on market mecha- highly Westernized. People tend to think ing massive deforestation for steel-making tion? China’s dilemma nisms versus government intervention in that China’s environmental problems fol- and flooding caused by hydropower plants. China, the first thing is to reform the gov- low the same patterns of Western countries. But the most severe problem at that time There are basically two ways to deal with ernment and ensure fair play in the market. This is the «curse» of the environmental was the great famine,2 so nobody was talk- environmental challenges: The first is The participatory democracy approach discourse introduced to China by the West. ing about environmental problems. During through public interventions, while the of the Green Party implies that constitution- Whereas those advocating Western green the Cultural Revolution, increasing GDP second is through market mechanisms. The alism alone is still not enough to protect the ideas present distinct traits of self-reflection, was not the state’s objective at all; environ- former is based on regulations and restric- people, and that citizens should also partici- some Chinese reflect more on the West than mental problems, just as with other social tions from the government and through pate in social governance through channels on China. Many people in China still think problems at that time, were not caused by interventions by civil society. This could be such as NGOs. But in China, it is not even that environmental problems are caused by the pursuit of economic growth, but rather called «ecological socialism.» The second allowed to talk about constitutional democ- Western countries and are a result of capi- by the pursuit of political power. approach is based on pricing of so-called racy, and NGOs can hardly survive under talism, modernity, and especially indus- Environmental protection is not merely externalities and on the assumption that the strong pressures from the authorities. trialization. China’s New Left particularly a question of awareness, but also of political markets work better than administrative Recently, even the term «civil society» has likes this idea. In my opinion, this argu- structures. Without an effective institutional interventions; this could be called «ecologi- become too sensitive politically to be men- Qin Hui is an economic historian ment might hold in the West, but we cannot arrangement, the emphasis on environ- cal capitalism.» An example of such a mar- tioned. Under such circumstances, what and specialist in Eastern Europe. simply repeat it in China. Personally, I am mental protection would be hollow. Since ket-based approach is carbon trading. I have would «participatory democracy» be like? He is one of the most prominent of the «lost generation» of young in favor of environmental protection, but I the beginning of the reform and opening- noticed the debate over the two approaches «Public opinion» under such a system could urban intellectuals and students think that although ideas can be imported, up era, we have put economics in command in the Western world, but I believe both only be the views offered by obedient sub- banished to rural farms during the 1960s. Since the 1990s, questions need to be defined by the local instead of politics. Since the 1990s, GDP has practices could be used together to achieve jects. Therefore, a participatory democracy Qin Hui has taught at the Institute context, and our thinking has to be inde- become the primary objective of China’s a greater impact and that they do not neces- in China can only be meaningful when it is of Humanities and Social Sciences pendent. Green thoughts in China need to development; it was subsequently also used sarily contradict each other. based on constitutional governance. at Beijing’s Tsinghua University. His research into transformation have their own focus. as the key criteria for assessing the perfor- But in China neither of the approaches in China focuses especially on the mance of government officials. Due to the can function: Due to the highly concen- privatization of collectives and a worsening environmental situation, many trated power of the government, we do critical, comparative analysis of the situation of peasants in China people have been calling for changing the not have a free market. At the same time, and Eastern Europe. objectives of development and adjusting we also do not have a welfare state, as the 26 East Asia Debating Global Sustainable Development from a Chinese Perspective The Global Green Growth Institute and Korea’s «Green Growth» Strategy East Asia 27

spending – and are at the same time under The global impact of pressure from the political Right to lower China’s development taxes – increased state borrowing has been The Global Green Growth Institute the only way out. The context of globaliza- Environmental protection and pollution tion makes an international loan mecha- and Korea’s «Green Growth» Strategy prevention are different from ordinary nism possible. Whereas Western countries national governance, fundamentally for like to borrow money, China particularly the reason that pollution tends to extend loves to lend money. The fact that China has Kim Hyunji beyond national boundaries. Both pollu- the richest government of the entire world tion regulation and carbon trading face the is a result of a huge surplus of productivity. challenge of a lack of global governance This surplus is, in turn, generated by a lack mechanisms. An obvious example is Ameri- of bargaining power of the population and ca’s rejection of the Kyoto Protocol. Specific by an ideological constellation in which the interests overwhelm abstract values, espe- Chinese political Left calls for enhanced tax cially without effective mechanisms for collection, while the political Right helps enforcement. the government to shirk its responsibility But it is not only the global environment in redistributing its wealth. This leads to Since 2008 South Korea has been active- that is affected by development; instances insufficient domestic consumption and the ly promoting its vision of «green growth.» of social injustice are also increasing, in need to transfer financial surpluses to other Kim Hyunji explores this new Korean agencies – GGGI (Global Green Growth both Europe and China. The economic countries in the form of loans. development paradigm and examines the Institute), GCF (Green Climate Fund), and integration among countries with differ- The current globalization brings about GTC (Green Technology Center) – were set activities of the Global Green Growth ent political structures and human rights many challenges, but we can neither address up in Seoul under an umbrella of a «green Institute (GGGI), the Korean govern- standards is an important reason for this them through trade protectionism, nor can triangle» to respond to strategy, finance, situation. When capital flows into coun- we further enlarge the deficits to maintain mental think-tank-turned-international- and technology issues, respectively.1 tries with low human-rights standards, it the welfare system. What we can do, though, institution that globally advocates Since February 2013, when President will create the sweatshops we see in China. is to further the process of globalization to for green growth. Since GGGI is a rela- Park Guen-hye took office, the governmen- Simultaneously, workers’ wages in devel- promote other important aspects, such as tively new institution, this article only tal agenda has shifted from green growth oped countries will come under pressure global democratization, ensuring human serves as an introduction to the topic. The toward the creation of a «creative economy» due to a loss of employment opportuni- rights, and establishing global govern- Heinrich Böll Foundation will continue to as a driver for future growth. The presi- ties at that end. Although globalization ance mechanisms. In this sense, I hope watch and analyze the activities of GGGI dential Committee on Green Growth was also drives economic growth in developed that Europe can play a leading role. The downscaled and relegated to the directive as its green growth paradigm spreads to countries, it also increases income inequal- EU, although not a global system, is still the of the prime minister. However, the most the developing world. ity. On the other end, powerful players in most successful cross-border mechanism. prominent institution on green growth, countries with low human-rights standards Global governance requires global democ- GGGI, had already expanded to the inter- associate with international capital, and racy. To realize it, all countries involved national arena. increase their wealth, often far beyond the should be democracies at a national level, Introduction levels of the wealthy in the West. This trend just as in the EU. In China, therefore, green is causing severe social tensions on both ideas must be democratic ideas first. Eco- Green growth played a prominent role in The Global Green sides. In the West, it leads to a deepening of nomic globalization without global democ- the five-year term (2008–2013) of former Growth Institute the debt trap. As political parties are keen ratization is clearly not enough. But without South Korean President Lee Myung-bak. to meet the needs of the public in a demo- China’s democratization, global democratic While other developed and emerging coun- GGGI was created by former President Lee cratic country in terms of social welfare structures will remain a distant dream. tries were desperately trying to find a way as a think tank for green growth in order to out of the fiscal downturn, he was offering spread the idea of green growth to the world the vision of «low carbon, green growth» as a new paradigm of development. It started for Korea as the centerpiece of his political as a non-profit organization under Korean agenda. By advocating green growth inside law in June 2010, but went through a pro- and outside of the country, the Lee adminis- cess of internationalization in late summer Kim Hyunji has been working tration tried to make Korea the hub of a new 2012 in conjunction with the Rio+20 confer- for the Korean Federation for Environmental Movements green development movement. ence. With Norway having ratified GGGI’s (KFEM) / Friends of the Earth In December 2009 the Korean Assembly Establishment Agreement on August 26, Korea since 2010. She is passed the Basic Act on Low Carbon Green 2013, there are now 13 of the 20 member international coordinator of the 2 environmental NGO and attended Growth, which had been submitted by the countries that have ratified the agreement. Rio+20 in Brazil with Korean Lee administration and has been in force Also, since June 2013, the Organisation for civil society representatives in 1 Silent Spring by Rachel Carson, published in 1962, since April 13, 2010. It has dealt chiefly with Economic Co-operation and Development 2012. She studied political is widely seen as being the initial spark for the global economy at the graduate school environmental movement. the creation of a nationwide inventory for (OECD) has granted GGGI official devel- of Sung-Kyun-Gwan University in 2 The great famine lasted for three years, from 1958 greenhouse gas emissions, established a opment assistance (ODA) eligibility status. Korea. She has been writing an to 1961, and probably led to more than 30 million National Energy Plan, and installed a Com- This enables the institute to receive large article on international environ- deaths; it was mostly a result of the agricultural mental issues and is interested policies during the Great Leap Forward, but it was mittee on Green Growth under the direct donations from multilateral organizations in international governance, also aggravated by drought. authority of the president. Meanwhile, three and governments and enhances the ability capitalism, and animal rights. 28 East Asia The Global Green Growth Institute and Korea’s «Green Growth» Strategy The Global Green Growth Institute and Korea’s «Green Growth» Strategy East Asia 29

to intervene in a growing number of devel- Green growth is about to be experimented gated by GGGI – does not seem to be aware Economic developmental plans focused oping and emerging countries. Following with in places where growth is desired but of existing planetary boundaries and the on target industries while offering govern- its one-year anniversary as an international where the environment should be protected current environmental crisis. mental support. First under dictatorship organization in October 2013, and now with as well. However, with regard to the rela- and later under a democratic government, offices in Copenhagen, London, and Abu tionship between the environment and the Korea not only emphasized rapid growth Dhabi, GGGI is now a truly globally operat- economy, the common belief in the 1970s GGGI’s activities in a but also massively increased its export- ing organization. was that the relationship was a negative one. recipient country dependent economic structure. Environ- Germany is not yet a member country of The report The Limits of Growth, published mental considerations played only a minor GGGI but is listed with the Federal Ministry by the Club of Rome in 1972, insisted that Sharing knowledge about green growth role, if any. But the environment of Korea for the Environment, Nature Conservation economic growth itself would be limited in with – and building capacity in – develop- became severely polluted, and an environ- and Nuclear safety (BMU) as a project-spe- part due to the consequences of the massive ing countries is GGGI’s main activity. In mental movement grew in response to dis- cific donor and partner. destruction of the environment caused by particular, GGGI is helping in establishing eases caused by this pollution. Although GGGI is composed of an Assembly, a unsustainable industrialization. According Green Growth Plans (GGPs) for its members the government has attempted to manage Council, an Advisory Committee, and a Sec- to this ground-breaking report, developed and other developing countries. GGPs are a the environment, conflicts between the retariat, but the Council has much weight in countries should discontinue policies for good example of GGGI’s preference for a development industry and environmental decision-making. As the supreme organ, the economic development and developing whole-of-government approach for a para- advocates are still taking place, even at the Assembly is comprised of member states countries should give up the strategy of digm shift toward green growth.6 policymaking levels. Conflicts surround- that meet every two years. The Assem- industrialization. The first step of a GGP is to assess a ing the Four Major Rivers Project or the bly elects member states to the Council, In the 1980s the Ecological Moderniza- country’s own strategy for achieving eco- expansion of nuclear power plants – pro- appoints the director-general, and receives tion Theory (EMT) in Germany offered a nomic development.7 After that, GGGI moted as a clean form of energy – are good reports from the Secretariat. The Council different perspective. Proponents of EMT helps to identify where potential economic examples of this. is GGGI’s executive organ, consisting of no insisted that economic growth does not benefits can overlap with environmental The Four Major Rivers Project is the more than 17 members, among which are always cause environmental degradation, benefits, hence it diagnoses the compat- most representative green growth project of contributing and participating members, and that eco-innovation in the industrial ibility of a country’s development priorities the Lee administration. Spending 22 trillion non-state actors, the host country, as well sector could bring economic growth in the vis-à-vis its green growth potential. It also Won (more than $20 billion), the adminis- as the director-general, who has no voting long term. The key factor of EMT is that with helps in evaluating political options and tration tried to build 16 dams on the Han, rights. The Council nominates the director- the given resources and ecosystem, both assists with investment analyses in order Nakdong, Guem, and Yeongsan rivers. The general to the Assembly, appoints experts or eco-efficiency and economic efficiency can to attract public and private donors. In fact, government claimed the project is needed non-state actors, approves Advisory Com- be improved at the same time. the creation of public-private financial in order to prevent floods and droughts mittee membership, and is responsible for According to an article by Lee Yeonho, a cooperations is one of the cornerstones of and that it will improve both the economy directing the institute’s activities as well as professor for political science at Yonsei Uni- green growth planning. and the environment. Opponents, includ- for approving the annual budget. The Advi- versity, green growth is based on the Kuznets However, achieving real success with a ing civil society groups, insisted that the sory Committee is a consultative and advi- Environmental Curve Hypothesis.4 The GGP seems to be difficult. Due to the way Four Major Rivers Project is unnecessary sory organ consisting of relevant experts Environmental Kuznets Curve is a hypoth- GGPs are created, there is no way to check for the environment, and they cast doubt and non-state actors. Finally, the Secretariat esized relationship between environmental their validity and effectiveness. Even though about claims of flood prevention, since it is is GGGI’s operational organ, headed by the degradation and income per capita.5 In the they are drafted by recipient countries, it not the major rivers, but rather the smaller director-general, who reports back to the early stages of economic growth, degrada- does not mean they respond to local needs streams, where regular floods occur. They Assembly and the Council. tion increases, but beyond some level of or fit the social-economic context. go on to say that the whole campaign was income per capita, the trend reverses and nothing more than a large infrastructure economic growth leads to environmental Korean experience of failed project and that the beneficiaries would be Environmental protection improvement. As incomes grow, economic only the handful of companies involved in growth becomes the most powerful means green growth the construction of the dams and in land or just another way to to protect the environment, and improved speculation in waterside areas surrounding promote economic growth? technologies help to advance environmen- Korea, now an active promoter of green the construction sites. tally friendly economic growth. In this «ideal growth, had based much of its spectacular Despite the criticisms, the Lee admin- Richard Samans, former director-general of relationship» between green and economic economic success on «brown growth» in istration pushed forward with the project, GGGI, stated that GGGI views itself more as growth, the importance of sustainable the past. Having been one of the poorest promoting it internationally as an impor- an economic institution and not as an envi- development – paired with environmental countries in Asia in the 1960s, Korea now is tant part of its green growth vision. The ronmental institution.3 It means that GGGI protection – is never overlooked. a driver of regional economic development project was announced in December 2008, puts more weight on achieving economic It is this optimistic expectation of and an active member of the G20. Subse- its master plan was set in June 2009, con- growth by enhancing resource efficiency green growth – that it can equally push quently, Korea has changed its position from tractors were selected in September 2009, than on meaningful environmental policies. economic growth and environmental being a recipient country of ODA to being a and construction was almost finished The important question here is: Can conservation – that is the driver behind donor country.8 In 2009 it became the 24th within three years. However, the Board of economic growth go hand in hand with envi- this new green development paradigm of member of the OECD Development Assis- Audit and Inspection of Korea said in its ronmental conservation? Facing this age- GGGI. However, compared to the concept tance Committee, which is a leading multi- second project audit in January 2013 that old question, supporters of green growth of sustainable development, it is hard to lateral body that allocates ODA in the world. reservoirs had many design flaws and that often answer that economic growth and find any social context in the green growth Over the past five decades, however, a severe degradation in water quality was environmental protection do not necessar- paradigm. Most worryingly, in terms of the the Korean government has put a major a serious concern. ily need to be seen as conflicting concepts. environment, green growth – as propa- emphasis on rapid economic growth only. 30 East Asia The Global Green Growth Institute and Korea’s «Green Growth» Strategy The Global Green Growth Institute and Korea’s «Green Growth» Strategy East Asia 31

November 2012 that its budget transpar- it should take into account the social and Domestic criticism of GGGI ency and efficiency fell far below what is environmental contexts first before apply- required. It was pointed out that operat- ing market principles. Pro-market logic The Four Major Rivers Project by former ing expenses were carelessly enforced and will correlate with the obvious shortcom- President Lee is an example showing the that money was recklessly spent by private ings of green growth, as shown above, and risks of a top-down approach to green contracts and poorly managed. At that time, therefore undermine the credibility of green growth. After the government changed in GGGI said that they recognized the problem, growth as a serious development alternative. early 2013, when the project was near com- but that it had happened in a trial-and-error However, if GGGI becomes more flexible in pletion, the validity of the project was still period during a process of internationaliza- finding ways to engage local civil society, it being questioned due to the occurrence tion, and that they would promote open could drastically reduce the risk of unneces- of adverse effects, such as the large-scale competition for the contracts thereafter.10 sary failures. death of fish, unusual algal blooms, and a In order to do so, strategists, planners, bridge collapse due to retrogressive ero- and executives of GGGI should ask some of sion. Why did the project have to be pushed Conclusion the following questions: What if economic forward, even though it could not meaning- growth can cause environmental degrada- fully prevent floods or accelerate economic GGGI has since become international and tion? What if a market solution does not growth and only degraded water quality and is no longer the responsibility of Korea. achieve the desired outcomes? Is it enough destroyed nature? President Lee pressed for However, something can be learned from to create separate national Green Growth a fast execution of the project without con- the unsuccessful experiences with green Plans in order to bring sustainable develop- sulting local communities and civil society growth as well as the risks posed by top- ment to the world? How can the validity of groups. This indeed reflects one of the major down approaches in Korea, so as not to a given project effectively be checked and concerns of GGGI’s strategy. For the success repeat the same mistakes internationally. transparently communicated? Do we listen of any development project, it is now inter- The term «bottom-up,» as used by GGGI, enough to the local voices? national credo to consider how well projects does not include the concerns of local peo- Korea successfully set the agenda of meet local needs and how the concerns of ple, but refers only to the voluntary decision green growth on an international level. local civil society can be addressed. This of a country to collaborate with GGGI. The Green growth is now stepping onto the would not only ensure the support of – and institute can reach out to local governments, international stage, where it needs to ownership by – local communities, it would but what if there is a lack of communication prove its validity as a meaningful develop- also prevent the waste of natural and finan- and consultation between local govern- ment paradigm. It is not yet clear whether cial resources while giving credibility to the ments and the citizens of a given country? GGGI can deliver on its aim to combine validity of a given project prior to its execu- With the Advisory Committee, GGGI fea- green growth and sustainable development, tion. Some other international initiatives tures a forum composed of non-state actors nor whether green growth is an answer to of GGGI should be carefully scrutinized to advise and comment on its initiatives. global environmental challenges. As a first and reconsidered in this respect as well: for However, it seems to be a place for experts step toward convincing its Korean and 1 Korea won the bid to host the GCF Secretariat in October 2012 and opened GTC in March 2012. example, a REDD+ project in Kalimantan in and consultants rather than civil society international critics, it would therefore be a 2 Countries that have signed the Establishment Indonesia and a Mekong River project.9 and local voices. good idea to rethink the approach of green Agreement: Cambodia, Denmark, Ethiopia, Guyana, As a result of the serious shortcom- The possibilities offered by green growth growth by focusing more on the environ- Kiribati, Norway, Papua New Guinea, The Philip- pines, Qatar, Republic of Korea, United Arab Emirates, ings of the Four Major Rivers Project and might be good news for developing coun- ment and less on the economics. United Kingdom, Vietnam; process of ratification other green growth initiatives of the Korean tries, where there are both developmental under way: Australia, Costa Rica, Indonesia, Mexico, government, domestic criticism of green needs and environmental risks. It is good Paraguay, Mongolia, Rwanda. 3 Jill Kosch O’Donnell, The Global Green Growth growth in Korea – and especially for its un- that GGGI will share its green knowledge Additional literature Institute: On a Mission to Prove Green Growth, environmental policies in the name of green and technology with developing countries, Green Growth Quarterly Update (2012): 4. 4 growth – has grown in the last years. Indeed, as it will help to build the capacities of their Editing Committee of Green Books. Yeon-Ho Lee, Developing Countries in APac and Green Growth, Korean Journal of International opponents of green growth have pointed out public sectors. However, it would be far bet- 2013. Green growth 1.0. Gyobomungo. Studies 51(4) (2011): 41. that it is solely a «greenwashing,» and that it ter if GGGI also considers sustainable devel- Koh, Moon-Hyun. 2010. Concept 5 David I. Stern, The Environmental Kuznets Curve, is even causing severe environmental dam- opment rather than just promoting green of green growth and the Basic Act on International Society for Ecological Economics, 2003, 1; available at: http: / / isecoeco.org / pdf / age. Civil society groups in Korea wanted to growth or focusing only on the economy Low Carbon Green Growth. stern.pdf. draw a line between green growth and the and growth. If it really wants to create a new Korea Public Land Law Review 49. 6 GGGI, Annual Report 2012, 12. As of 2012, projects and programs in the following countries were «green economy» when it was referred to in developmental paradigm, GGGI should pro- Lau, Blazekjaer. 2012. The emer- ongoing: Brazil, Cambodia, China (Yunnan), Ethiopia, Rio+20 in 2012, since they thought that green foundly reflect on the blind spots that green gence and spreading of the green India, Indonesia, Kazakhstan, Peru, Mongolia, growth had moved too far from the context of growth does not address. Green growth all growth policy concept. Paper Morocco, The Philippines, Rwanda, Thailand, United Arab Emirates, Vietnam, among others. sustainable development, which is intended too often only aggressively adopts market prepared for Earth System Govern- 7 O’Donnell, The Global Green Growth Institute, 4. to respect the balance between the environ- principles that directly contradict sustain- ance Conference 2012. Available at: 8 Korea had been a recipient country from its establish- ment, society, and the economy. However, able development.11 Financing a given pro- http: / / www.earthsystemgovernance. ment in 1948 to the early 1990s. It ended its position as a recipient country of official development GGGI should not export the green growth ject is important for its implementation, org / lund2012 / LC2012-paper370.pdf. assistance from the World Bank in 1996. path that Korea took … and failed with. but market solutions are not always the Yu, Yeong-Seong. 2010. The check 9 The 2012 annual report of GGGI stated that its In addition, further criticism of GGGI’s right answer to environmental challenges. and improvement of green growth program includes both projects, but they are still controversial at the local level. finances emerged when the Board of Audit If GGGI really wants to be a serious advo- policies. Institute for Development 10 Available at: http: / / www.e2news.com / news / and Inspection of Korea warned GGGI in cate of green and inclusive development, of Gyeonggi. articleView.html?idxno=66545. china The city of Shenzhen in south China is primarily known for its spectacularly success- ful economic achievements. In just over three decades, it has grown from being an insignificant village on the border with Hong Kong into one of the country’s richest cities, home to 10 million people. Most of Shenzhen’s population are newcomers who have moved to the city from other parts of China. But now there is also a group of young people, who were born in the city at the start of the economic upturn, whose entire outlook on life is shaped by their experiences of hyper-growth – people known as the «80s generation».

Top: Xiao Lang, 25, dances at a karaoke club near his college. The son of a successful Shenzhen-based businessman, he expresses little concern about how life may turn out after he graduates. With dyed hair and tattoos, his friends say he behaves more like a gangster than a college student.

Middle: Zhen Peng, 25, wears his favorite luxury sunglasses on the way to a friend’s wedding in Shenzhen. A physical education student in college, after graduating he launched a furniture company. Having found the business not to his liking, he gave it up and now teaches physical education at an elementary school.

Bottom: Li Guanhao, 23, kisses his girlfriend during a graduation trip. A year later, the couple split up after the salary at Li’s first job proved not enough to keep their engagement going. Wei Ran, behind Li, joined an investment bank after graduating and is now preparing to marry his fiancée, the daughter of a successful local businessman.

south korea South Korea is a mountainous country with a scarcity of flat land for agriculture. Even in large cities such as Busan, people carve out small farms and gardens along terraced hillsides, often next to their homes and apartments. Produce from these plots feeds families and is also sold in traditional street markets. The growth of mega super- markets, as well as the unrelenting pace of urban development, threatens these farmers, their land and their markets. Few farmers are young – 40 percent are over 60 years old – and most have seen their children and grandchildren move to other professions.

Left: A farmer harvests produce from her small hillside plot in Sasang, a working class neighborhood of Busan. More than half of South Korea’s farmers are women.

Above: A farmer pauses while spreading manure on his plot, also in Sasang. South Korean farms are small, averaging just 1.4 hectares, © Ben Weller or 3.5 acres. © Chen Jianhua china pakistan

Yang Yunbiao, «The current development is all about material development, not Kulsoom Monica, «I am very worried about my country. Farmer, Founder and about ethical development. People’s values are measured in material Program Coordinator, We are troubled by terrorism and Director of the terms. The newly modelled villages and towns are also modeled Islamabad sectarian violence. Religious minori- Tangxing Peasant according to material criteria. It is no problem for us as a peasant asso- ties especially have almost no oppor- Association, ciation to make money, but if we want to get involved in community- tunities and have to fear for their lives. Anhui Province building, the local government will not allow us to do so. I am Many want to emigrate. If things always joking that when we want to organize a worker and farmer continue this way, in 10 years there song contest, it’s not allowed by the local government. But if we would may be no Christians or Hindus left in organize a strip-tease show, it would be allowed, as long as it is for Pakistan. But the same is also true making money. of experts and people with skills. Any- If 30 years ago people were not allowed to engage in economic activities, one who has the chance goes abroad. we would not have today’s material prosperity. Similarly, for the How can things ever get better under next 20 years society must be allowed to engage in social construction.» those conditions?»

Gao Zengyun, Director of «China’s law is slowly improving, and Saima Jasam, «Our fate as a nation is highly dependent on how the situation in Afghanistan Development Department, China’s experiences with development Development and develops. Will there be civil war there? Will the Taliban resurgence grow stronger? Beijing Huiling Community are increasing. The trend for the Gender Expert, All of that influences our domestic policy. I have been an activist for a long time, Services for People with future is very good. The new premier, Islamabad and I consider myself a patriot. I campaign for women’s and human rights and Learning Disabilities Xi Jinping, put forward the slogan I’m determined to continue that work. Civil society needs to be better coordinated of the ‹China Dream.› Previously the and put greater pressure on the government. Thankfully, as single women in Paki- United States also had the ‹American stan get older, it becomes easier for them to openly criticize the status quo.» Dream,› and that dream propelled America’s rapid development. Under the leadership of Xi Jinping, China will also experience rapid development. But in contrast to the United States, the Bai Shengyi, «For ordinary citizens, sustainable devel- ‹China Dream› will be more affected by Abdul Sattar «The government of Nawaz Sharif plans Director of opment is an important issue. Our structural and legal limitations. Research to concentrate on stimulating the economy. current way of exploiting resources can Gansu Xingbang The remaining challenge is to improve Consultant at The biggest challenges in that are the best be described by (the Chinese proverb Social Work China’s legal system, and that the the Sustainable energy crisis, urbanization without plan- of) ‹draining the pond to get all the Service Centre government will give more support for Development ning, the dangerous security situation in fish›. For example the mines which are public welfare and charity.» Institute, many parts of the country, and the lack of being dug all over the place and of which Islamabad religious and ethnic tolerance. But I think many are collapsing, will lead to the we can solve the problems if we make exhaustion of our natural resources. Bal- a greater investment in education. Pakistan anced development should preserve the has an abundance of young and energetic environment while developing the econ- people.» omy, but the sustainability of our ecology is threatened by pollution; and there is the problem of food safety and there are health problems due to the lack of super- vision. In the end, these are structural problems.» 36 South Asia Toward an «Islamic Welfare State» Toward an «Islamic Welfare State» South Asia 37

Toward an «Islamic Welfare State» Alternatives to the Western Economic Model

Britta Petersen

There has been much debate in Pakistan over the last few years about establishing an «Islamic welfare state.» In a country when one ‹socialist› states that he never ber that Pakistan was not created only as a based on Islamic principles would work, that is politically gridlocked by trench heard of Umar’s law. I will ask Mr. Khan the geographical entity. Rather, Pakistan was to whether it would be a viable alternative context and origin of his claim.» become an ideal Islamic welfare state that to the current capitalist system, and how warfare and corruption – and in which Khan did achieve at least one thing with would showcase how Islam’s golden prin- true to Islam an economic system could a great proportion of the population lives his verbal thrust – bringing the eternally ciples can form the basis for a modern and or should be. Akbar Zaidi, former profes- below the poverty line – conventional simmering debate in Pakistan about the tolerant society.» sor of political economy at Karachi Univer- economic models are increasingly unable concept of an equitable economic system sity, is of the opinion that there really «is no to provide adequate solutions to to the top of the agenda. This is a burn- Islamic economic model,» but rather only a pressing problems. However, the questions ing issue in a country where, according to Islamic economic principles collection of relatively vague ideas from the are: What precisely constitutes Islamic the UN Human Development Index, some pre-modern era. But Ejaz Akram, a political economic principles, and how does 60 percent of the population must survive That all sounds very noble. But what really science professor at Pakistan’s elite Lahore an Islamic welfare state differ from other on less than $2 per day, and which was just distinguishes an Islamic welfare state from University of Management Studies, says recently saved from a severe financial crisis other models, and what precisely is an «On the basis of ideals, Islam is definitely models? This article by Britta Petersen with a bailout of $6.7 billion from the Inter- Islamic economic concept? Experts agree capable of offering an alternative paradigm attempts to address those questions. national Monetary Fund (IMF). that Islamic economic principles do exist. to capitalism.» The belief that Islam could provide solu- Some differ from the prevailing capitalist Akram, who is also a member of a tions is gaining more and more support in model, such as the ban on charging inter- Sufi order, stresses that Islamic principles conservative Pakistan. Socialist and com- est (riba); others are not at variance with it, were developed at a time when the mod- Is an Islamic welfare munist parties have lost virtually all ground such as the Muslim obligation to give alms ern form of economic growth did not exist state overdue? since the 1990s, and this year the domi- (zakat). The source for these tenets is found and a subsistence existence was the rule. nance of the Pakistan People’s Party (PPP) in both the Qur’an and the Hadiths (records He says, «From the spiritual perspective Imran Kahn, a politician and a former came quietly to an end as it sank under the of the sayings or deeds of the prophet of Islam, poverty is not a lack of prosper- Pakistani cricket star, is always good for weight of profligate corruption. The PPP Muhammad), and parts of the societal ity, but rather a surfeit of desires.» He adds making a bold statement. In the Pakistani has always positioned itself as the party of model draw on early Islam, the era of the that the Islamic approach is not to create general elections this year, his party, Paki- the poor, yet in the last five years, it has gen- four «Rightly-Guided Caliphs» (632–661 AD). a social welfare state in the Western mold, stan Tehreek-e-Insaf (PTI), fell short of the erated few real ideas for economic reform, In addition to the concept of a welfare but rather to ensure that everyone has the hoped-for majority. Shortly thereafter, the apart from the Benazir Bhutto Income Sup- state, which goes back to the Qur’anic tenet necessities of life. newly-minted opposition leader said, «The port Program, which provides cash pay- of success or well-being (falah), there is The Islamic scholar and television lec- Britta Petersen has been the director of the Pakistan founding of Pakistan would be meaningless if ments to some families earning less than a well-developed Islamic finance sector turer Javed Ahmad Ghamidi buttresses that office of the Heinrich Böll it does not become an Islamic welfare state.» about $70 per month. around the world, which provides believ- argument by saying, «The goal of Islamic Foundation since 2010. Before Kahn then went on to astound the public at a Nor is it just Islamic parties such as the ers with financial products that adhere to economies is to establish social and eco- assuming that post, she was the South Asia correspondent for press conference in Islamabad by saying that Jamiat Ulema-e-Islam bloc or the Jamaat- religious strictures and sharia. Falah is nomic justice. That also implies that Mus- the Financial Times Deutschland the Scandinavian welfare states are actually e-Islami, who include the establishment of often interpreted as a comprehensive aim lims are better able to concentrate on Allah in New Delhi. As founder of the non-profit organization modeled on ideas propounded by Caliph an «Islamic welfare state» in their platforms. for the spiritual, moral and socio-economic if the necessities of life are taken care of.» «Free Press Initiative,» in Kabul, Omar (584–644 AD) and that it was time to Even business-friendly politicians such as well-being of citizens. «The financial system Although the reference to God sounds Afghanistan, she won the 2005 «bring our culture back to our own land.» Shabaz Sharif, chief minister of Punjab and and the idea of a welfare state exist side-by- radical and monastic to Western ears, the Leipzig Prize for the Freedom and Future of the Media, and Many Pakistani intellectuals ridiculed brother of Prime Minister Nawaz Sharif, reg- side, but they are not the same,» says Habib approach is, at its core, in full concord with in 2009, the Gisela Bonn Prize Khan for these claims, and even the general ularly mention the issue in their speeches. Ur Rehman, director of research for Imran common criticisms of the capitalist growth awarded by the Indian Council for secretary of his own party, Arif Alvi, felt the And Pakistan’s chief of army staff, Ashfaq Khan’s PTI. model. As Ejaz Akram says, «For ecological Cultural Relations in honor of her contributions to fostering need to backpedal when questioned, saying Kayani, speaking at independence day cel- It is not only in Pakistan that opinions reasons, it is neither possible nor desirable German-Indian friendship. «I am not a scholar and I can understand ebrations, said «We should always remem- are divided on whether an economic model to introduce American or European con- 38 South Asia Toward an «Islamic Welfare State» Toward an «Islamic Welfare State» South Asia 39

sumer standards worldwide.» Islam, he person’s bank account at the beginning of Economic growth via hibits interest, but also trading in debt, and says, teaches an economy of self-restraint, Ramadan, the Islamic month of fasting. The Islamic banking? speculation. So it is capable of eliminating in which the state is obligated to take care money collected this way is given to local the massive inequity that characterizes the of the material survival of its citizens, as well intermediaries elected in Muslim commu- With population growth running at about current economic system.» as their spiritual well-being. nities, who distribute it to the needy. 2 percent per year, Pakistan will have to Given the fact that Islamic banking so far But that aspect has seldom been But the system’s capacity to create the depend on economic growth in the future accounts for only 2 percent of the global brought to the fore in the public debate. kind of justice called for in the Qur’an seems if it hopes to raise large segments of the financial markets, realizing that proposi- When they hear the term «welfare state,» limited. Although the money distributed to population out of poverty. tion seems unlikely. Dar’s suggestions for Pakistani voters – much like Imran Khan – those in need is often their only salvation, That is where men such as Humayon Pakistan’s economy, by contrast, sound like tend to think more of the Swedish model the flow of donations remains haphazard, Dar come into play. The economist is one a neo-liberal austerity program: cut back than the ascetic theories propagated by and many of the needy fall through the of the leading masterminds behind the idea subsidies, reduce national debt, and trans- the Sufis. There is very little discussion of cracks. «Many people distrust the govern- of Islamic banking. Dar lives in London, a fer social services such as education, health, abstinence and alternatives to economic ment, so they withdraw the money from financial center where he is strategically well- and the like to private charitable trusts growth. Instead, there is a boom in cam- their accounts before Ramadan to keep placed. He develops financial products that (auqaf), while making sure that the reform paign promises. it out of the hands of the state,» says Maz- comply with sharia law and also preaches measures demanded by the IMF are in com- «According to the Constitution of her Zaheer, financial coordinator for the the value of the Islamic financial system as pliance with sharia. Median [the basis of the first Islamic state], Heinrich Böll Foundation in Islamabad. He being an important source of foreign invest- The debate over whether an Islamic the state is your mother, who looks after you himself admits that he would rather donate ment in Pakistan – particularly from other economy means public welfare from cradle from birth to death,» says Habib Ur Reh- money to institutions with which he is famil- Muslim countries, believing it could provide to grave, self-restraint, and slashing con- man from the PTI. He enumerates that in iar, saying «There have been many cases of solutions for the global financial crisis. sumption, or whether it should be a liberal- an Islamic system, the right of all citizens corruption and political abuse of zakat.» «In the current financial system, the pro- style minimalist state is bound to continue to food, medical care, education, security, That system cannot guarantee every ducers of goods and services receive only unabated for some time, and not just in and freedom must be guaranteed. He says citizen even the fundamentals of existence, 10 percent of the yield, whereas 90 percent Pakistan. In the final analysis, it seems that he sees no contradiction in that to the glob- never mind the universal health care and goes to bankers and financers,» says Dar. He Akbar Zaidi, the political economist from ally dominant economic system. From that education that the PTI platform calls for. On goes on to point out that the Islamic finan- Karachi, may indeed be right when he says point of view, an Islamic economy seems top of that, Pakistan has one of the lowest cial system, by contrast, is aimed at broad- that there is no Islamic economic system. to be something along the lines of social tax quotas in the world (only 9 percent of all ening prosperity, reducing poverty, and at But the Qur’an can certainly provide food democracy plus sharia. «Our goal is for citizens pay taxes), so it would seem there the equitable distribution of income. He for thought for economists and politicians. Pakistan’s economy to be as Islamic as pos- is little chance of the country instituting a points out that «Islamic law not only pro- sible while still remaining part of the inter- welfare state in the foreseeable future. The national system,» says Habib Ur Rehman. government of Nawaz Sharif, acting under The idea of charity already plays an pressure from the IMF, has just committed important role in Muslim societies. In to comprehensive reform of the tax system, Pakistan, the faithful are expected to give aimed at raising the tax quota to 15 percent. 2.5 percent of their wealth to the poor. That wealth is calculated as any money that is not used in any given year. Individuals can provide proof that they have donated that amount through private channels. If they do not, the state gives them a helping hand by collecting the contribution directly from the 40 South Asia The Big Indian Development Debate The Big Indian Development Debate South Asia 41

The Big Indian Development Debate Growth and / vs. Inclusion

Axel Harneit-Sievers

For more than a decade, fast-growing India appeared to be well on the path to becoming another superpower. However, tional role and as a member of the BRICS as its huge market size and the country’s The proportion of the poor population, a considerable part of India’s population group of leading emerging economies. youthful demographic structure – remain according to Planning Commission figures, Many believed that India appeared to be on valid, and a new government in power from fell from 44.5 (1983) to 27.5 (2004 / 2005) has remained poor and India’s growth China’s heels, on a development path that mid-2014 is likely to have greater capacity percent. Taking population growth during lacks social inclusion. The debate is not was perhaps a bit slower than China’s, and to make strong economic policy decisions. this period into account, they estimate that new, but it is gaining increased attention certainly more chaotic, but nonetheless on Thus, it is very probable that the economy 187.5 million people left the status of pov- in the current economic downturn, the right path. With India’s democratic polit- will recover from its current slump, though erty (at least in its most extreme form) in with elections pending for spring 2014. ical system and its more widespread use of it remains open whether it will return to the the same period.1 Bhagwati and Panagariya the English language, it was even consid- high GDP growth rates of earlier years. then identify persistent impediments to ered as having some strategic advantages India’s continued growth: inflexible labor Once upon a time, many Indians, and many over China. legislation operating against rapidly grow- people in the rest of the world, believed that «Growth matters» vs. ing companies; the difficulties of land India was well on its way to becoming one of «uncertain glory» acquisition for public and private industries the next superpowers. In fact, this time was India’s development and housing; the poor state of public infra- only a few years ago. model in crisis? However, the question about the Indian structure, most dramatically so in the field Since the era of liberalization in India development and growth path is far more of power supply. began in earnest in 1991, the country has Today, however, with general elections difficult to answer, and it is being debated Although Bhagwati and Panagariya also experienced consistent rates of growth expected for April or May 2014, the entire extensively in India today. India is a country argue for innovation and reform in the social in its gross domestic product (GDP) of Indian development path suddenly appears with a strong debating culture, and the array sector, for example by favoring competition around 6 to 7.5 percent per annum and has to be in crisis. There is an acute economic of print and electronic media offer much and privatization in the educational services, exceeded growth rates of 9 percent several downturn: The GDP growth rate has fallen commentary on this topic every day. Four redistributive reforms are clearly lower on years since 2005. For many years, India below 5 percent, the Indian rupee has lost of India’s leading economists recently pub- their list of reform priorities. Within India’s boomed. Well-known key drivers have been 18 percent of its value against major foreign lished two books that are widely acknowl- current political spectrum, their position is sectors such as information technology and currencies since early 2013, and growth edged to represent the two predominant broadly identified with (or seen to support) services, for example the business process figures for manufacturing and foreign positions in the ongoing debate about the Bharatiya Janata Party and its prime outsourcing industry that established call investment have been declining. There is development, growth, and inequality in centers for customers worldwide. India a widespread perception of political stag- India. became a major destination for interna- nation: The United Progressive Alliance Jagdish Bhagwati and Arvind Pana- The current economic downturn is likely to remain tional investments, with German chemical government, led by the Congress Party, is gariya take a liberal (some may call it «neo- a temporary phase: Positive fundamentals of companies, service (insurance) industries, tainted by large-scale corruption scandals. liberal») stance in their book Why Growth Axel Harneit-Sievers has been and car manufacturers being prominent It appears to have lost the capacity to drive Matters. They maintain that economic the Indian economy – such as its huge market size the director of the Heinrich Böll Foundation’s India office in among them. Vice versa, Indian companies reforms. And there is the more fundamen- growth – measured by GDP – constitutes and the country’s youthful demographic structure – New Delhi since 2011. appeared on the scene as serious interna- tal questioning of the direction of the Indian the foundation for any meaningful devel- remain valid. He is a historian with a profes- sional background in African tional players, even in Europe. In an ironic development and growth path. Has India’s opment and the reduction of poverty. Only Studies and was formerly head twist to the old colonial relationship, cen- economic growth been «inclusive»? Has it on the basis of fast growth, they say, do of the Heinrich Böll Foundation tury-old Tata Industries bought British lux- brought people out of poverty? And what redistributive reforms geared toward pov- ministerial candidate for 2014, Narendra offices in Nigeria and Kenya, respectively.Together with Sanu- ury car manufacturer Jaguar. type of development has growth – defined erty alleviation and the building of human Modi. As the Chief Minister of Gujarat, Modi sha Naidu and Stephen Marcks, «Incredible India» is not merely an primarily as GDP growth – brought about? capital become viable. has overseen a rapid rise of industrial and he edited Chinese and African advertising motto for the tourism industry – The current economic downturn is Bhagwati and Panagariya argue that export-oriented development in a state that Perspectives on China in Africa (Nairobi and Oxford: Pambazuku it seems to suggest far greater prospects. likely to remain a temporary phase: Positive India’s economic growth since the 1990s many acknowledge to be well-governed and Press 2010). Expectations rose about India’s interna- fundamentals of the Indian economy – such has indeed substantially reduced poverty: with low levels of corruption. 42 South Asia The Big Indian Development Debate The Big Indian Development Debate South Asia 43

By contrast, Jean Drèze and Amartya Sen help to provide growth, namely education, growth» (which they clearly are not), Bhag- them are of a global nature, and although look at the Indian growth story of recent health, and social support services. They wati and Panagariya are viewed as repre- experiences from abroad are sometimes years in their book An Uncertain Glory. point to the severe deficits that could lead senting a kind of market extremism (even used (such as the conditional cash transfer Their perspective could perhaps best be to India losing the «demographic dividend» though they clearly support well-designed schemes introduced in Brazil), the debates called «social-democratic.» it currently enjoys: poor education services social-support interventions). Personal ani- retain a thoroughly Indian flavor, and For Drèze and Sen, India’s main con- (except in a few top-level institutions) as mosities have entered the newspaper con- arguments about particular policies being tradiction is the persistence of poverty well as severe health and nutrition issues – tributions made by the authors themselves. applied (or rejected) elsewhere in the world combined with rising inequality during an aside from the death toll – make substantial Overall, however, the differences are more do not feature very prominently. extended period of rapid economic growth. parts of the population less productive than a matter of priorities in public policy. Nei- Of course, the four master economists Although measuring poverty figures in India they could be. ther side is seriously considering a radical discussed here do not cover the entire spec- remains notoriously difficult, it is clear that Drèze and Sen stress the need for sys- move to turn away from the basic policy of trum of Indian public opinion on economic even using the same Planning Commission tematic government health, education, liberalization and economic openness, nor and social policy. The political spectrum and social sector policies. For example, to turn away from the policy of social sup- extends far beyond them, especially to the they strongly argue in favor of social sup- port for disadvantaged groups, which India left of Drèze and Sen. There, commenta- Neither side is seriously considering a port programs such as the National Rural has been pursuing for some years now. Nei- tors remain fundamentally critical of the radical move to turn away from the basic policy of Employment Guarantee Scheme (NREGS), ther side fundamentally questions India’s policy of liberalization and view the coun- liberalization and economic openness. a cash-for-work program that has been crit- democracy, even though it is recognized as try’s opening up to international trade and icized by liberals for, among other reasons, a source of inefficiency, delay, and conflict, investment as being dangerous for the poor, its cost implications, but that in many parts Very few Indians regard it as an outright bar- as well as for India’s capacity to pursue sov- figures as Bhagwati and Panagariya (above), of India has indeed led to rising incomes rier to development. the absolute number of Indians in poverty for poor rural people, especially women. Sometimes the fight is also about the has declined far less – if at all – than the Drèze and Sen look positively at Kerala, a pros and cons of certain practical policy All these master economists, in their thinking high GDP growth rates may suggest. At least state in southern India, which has achieved proposals, informed in part by social and about «development» and economic policy, have 270 million Indians remain in abject poverty, a high level of human development (by economic philosophy, but also in part by an rather little to say about the agricultural sector. and many more millions are just beyond investing in education and health) despite impressive number of empirical research that threshold. rather low GDP growth rates. Within India’s studies that are conducted to evaluate spe- In its record of poverty reduction, India mainstream political spectrum, Drèze and cific aspects of the problem. One such case ereign policies. Some of these voices come falls far behind China, while at the same Sen are seen as standing closer to Congress is the issue of cash transfers for social sup- from the traditional left, represented by dif- time, inequality has rapidly grown. A signifi- Party positions, though they would most port, a system that will soon be expanded ferent political parties that claim the term cant new middle class has emerged while a likely not want to be seen as supporting the (as opposed to the more traditional Public «Communist» for themselves; others repre- growing number of super-rich Indians has current government directly. Distribution System, which sells subsidized sent more modern, independent critics of fueled the societal imagination – and the food to the poor on the basis of «ration globalization who finds support among civil scorn and anger of intellectuals. Despite all cards»). Bhagwati and Panagariya pre- society organizations, farmers’ associations efforts at affirmative action, Indian tradi- More debates, loose ends fer direct cash transfers to recipients as a and movements, etc. tions of caste oppression continue to further means to ensure efficient distribution and Especially the latter groups can rightly increase inequality. The debate between India’s master econo- to reduce corruption, whereas Drèze and point to one fundamental weakness of the Drèze and Sen see the developmen- mists is currently receiving much public and Sen maintain that cash payments should arguments presented by Bhagwati and Pana- tal process primarily as the need to grow media attention. It has become a slugfest not be introduced just to relieve the state gariya as well as Drèze and Sen: All these human capacity instead of relying merely that, at times, wrongly tends to reduce both of its duty to provide quality services. There master economists, in their thinking about on economic growth. They also advocate sides to stereotypes: Whereas Drèze and Sen are many more such debates. Although «development» and economic policy, have supporting the systems that enable and are sometimes criticized as being «against the basic economic philosophies behind rather little to say about the agricultural 44 South Asia The Big Indian Development Debate The Indian Growth Story South Asia 45

The Indian Growth Story Achievements and Future Challenges

Interview with Ashish Kothari

sector. This is somewhat surprising – but of them have already been overstepped in Undine Schmidt: The «Indian growth story» has received a lot of international perhaps also characteristic – for a country parts of the country. Although environmen- attention. How would you describe the developments of the last decades? in which 70 percent of the population still tal and rural activists have been pointing lives in villages, and half of the popula- out these problems for years, a more com- Ashish Kothari: In the last five decades, but especially in the last tion is employed in the agricultural sector. prehensive questioning of the very funda- 20 years, economic growth has been the predominant way of look- Overall, developmental thinking in India mentals of a GDP growth-based model of ing at development in India and a deep preoccupation for the politi- seems to view the rural world primarily in economic development has only emerged cal decision-makers. Every day in the papers you read about India’s terms of a labor reserve – at least once basic recently, for example by Ashish Khotari (see growth rate dropping or climbing up by half a percent. It appears that food needs are secured. It is also notable interview on p. 45 of this edition of «Per- growth, which was meant to be a means to an end, has become an end that urban development in India is strug- spectives Asia»). A debate on the «limits of in itself. Nobody speaks about the effects of 5 or 10 percent growth in gling to cope with rural-urban migration. growth» has not yet found many contribu- GDP. We have come to a point that a growth rate of 5 percent is per- Indeed, a common criticism (voiced promi- tors in an India that, despite impressive GDP ceived as a problem. What we have seen in the last few decades is that nently by economists such as Jayati Ghosh) growth figures, continues to be confronted growth per se has not necessarily benefited people, in particular the of India’s economic development is that it with mass poverty and growing inequality. poor – elsewise, why would the government put a law into place that has led to «jobless growth.» In China and Even India’s master economists dominat- provides food aid for 75 percent of the population? Clearly, this is not

other East Asian countries, a large number ing the public debates around development just an issue of redistribution: It is often argued that the fastest growth Ashish Kothari is a founder- of migrants were absorbed by a booming would be well advised to take greater note of possible should be achieved, which then could be fairly distributed member of the environmental low-wage, export-oriented manufacturing these limitations. through things like the Rural Employment Guarantee Scheme.1 Yet, it group Kalvapriksh. He has taught at the Indian Institute of sector. Apart from a few exceptions, such as is a structural phenomenon that this kind of growth – especially if it Public Administration the Tamil Nadu garment industry, no such is led by the private sector – inevitably leads to greater inequalities and coordinated India’s National Biodiversity Strategy and Action dynamics exist in India. In order to solve and the deprivation or dispossession of already marginalized people. References Plan process. He has been active this problem, Bhagwati and Panagariya But the second, equally important aspect is that there are very clear with various people’s movements advocate liberalization of the labor market Bhagwati, Jagdish and Arvind signs of its lack of sustainability. If you admit the existence of ecologi- and has authored and edited more than 30 books. He is the and a more export-oriented policy, all of Panagariya. 2013. Why growth mat- cal limits, the concept of «sustainable infinite growth» is a contradic- co-author of the book Churning which should create more industrial jobs. ters: How economic growth in tion in terms. However efficient your technology, it will always have the Earth: The Making of Global Drèze and Sen favor securing the survival of India reduced poverty and the les- an ecological impact. In India, the government says that sustainable India (published by Penguin Books India in 2012), which is a the rural population and relieving distress sons for other developing countries. development is the primary focus of its plans, and there is actually critique of India’s development migration by means of the NREGS cash-for- New York: Public Affairs. nothing that tempers the growth logic. There are no indicators in place, strategy and argues for a radical work program. However, none of the authors Drèze, Jean and Amartya Sen. 2013. for instance, that can help assess whether the development strategies ecological democracy based on the principles of environmental systematically address the development An uncertain glory: India and its are sustainable. sustainability, social equity, and needs of India’s rural population, nor offer a contradictions. London: Allen Lane. livelihood security. vision for the future of rural India. Another loose end is the question of To our international readers, could you explain what happened in 1991, Undine Schmidt, pursues her sustainability. Neither Bhagwati and Pana- given that you describe this in your book as a turning point for the people and the MA in Social Policy and gariya nor Drèze and Sen take much notice environment in India? Politics at Edinburgh University. of the environmental consequences of 1 Bhagwati and Panagariya (2013: 35). The latest She completed her International Planning Commission data published in July 2013 Baccalaureat at the United India’s GDP-focused model of economic (using a different type of metric) note a further Prior to 1991, or rather in the late 1980s, when some of the neolib- World College of India in Pune growth – and of the limits to growth that decline in India’s poverty rate to 22 percent, eral economic policies were initiated, the predominant economic (Maharashtra) in 2011 and exist in terms of the use of resources such from an even higher poverty rate of 37.2 percent model was to a large extent a socialist model. A lot of the production, returned to India in August / in 2004 / 2005, see http: / / www.livemint.com / September 2013 as an intern with as land, water, clean air, etc. India is get- Politics / 1QvbdGnGySHo7WRq1NBFNL / research, and development happened within the public sector. This the Heinrich Böll Foundation’s ting closer to its ecological limits, and some Poverty-rate-down-to-22-Plan-panel.html. was especially true for crucial sectors such as agriculture. Addition- office in New Delhi. 46 South Asia The Indian Growth Story The Indian Growth Story South Asia 47

ally, the domestic economy was given a much greater emphasis than In its accounts on the Indian growth story, the Western media strongly focus on the external economy and efforts were made to become relatively the supposedly growing and rising middle class. To what extent is that an appropriate self-sufficient. As we were still largely dependent on gas and petrol representation, and how big is this «middle» class actually? imports, there had to be some balancing exports. This is not to say there were no problems; in fact, state-centered governance, ineffi- First of all, the term «middle class» comprises enormous diversity, in ciencies, and corruption were rampant, but at least there was some terms of economic but also other sorts of situations. It is clear that attempt at being self-sufficient with a strong service and welfare com- there is a section of maybe 50 to 100 million that has significantly ben- ponent. This changed substantially in 1991 with an opening up of the efitted in the last 15–20 year from an income point of view. Looking at economy, making it much more led by foreign trade – exports and the upper middle class – those able to go to a shopping mall and buy imports – and therefore outward-looking. A lot of sectors, including foreign products – the Indian growth story appears to be a big suc- agriculture, were opened up – to both the Indian and the international cess. But if one considers the real purchasing power of what is said to corporate sector, and invitations and incentives were given for foreign be the wider middle class of maybe 200 million people, one quickly direct investment. Constitutional and legal regulations created in the notices that they face serious economic problems. Plenty of middle 1970s and 1980s, for instance on indigenous people’s territories and class families are not able to afford pulses, lentils, or most fruits, or the environment, were diluted and the state’s role declined. the values have changed such that they would prefer to buy consumer goods. This middle class is, in a sense, aspiring to be the upper class. In so doing, it has actually deliberately – or subconsciously, or uncon- Do these structural changes from 1991 also offer an explanation for the current sciously – separated itself from the billion people who have not made economic crisis in India? it yet. So the issue of poverty is something that this middle class is either not willing to look at or not capable of looking at. There are Yes. When the economic collapse happened in 2008, the Indian econ- exceptions, of course, and we need to work at expanding the num- omy was somewhat less affected than several others. Up to that point, bers and the roles of those in the middle classes who are able to look the Indian government had claimed how beneficial it was to open up beyond their own situations and status. India to the international economy. Then they argued that our econ- omy was less affected because of the remaining protections and its supposedly inward-looking character. But that was a brief phase. In Globally as well as within India, the consuming class hardly carries the ecological August of this year, the prime minister almost clearly admitted that costs of their consumption. Those who pay the externalities of this consumption are we have no control. For the rupee to slip virtually 10–15 rupees against economically, geographically, and socially separated from the consumption class. the US dollar in a few months – this had never happened before. And How do you think the gap can be bridged between those? it is clear that the government is either not in control or does not want to be in control. First of all, communities from whom resources are being taken away need to be empowered to say «no.» We refer to this in our book as «direct democracy»: that every community has a central voice in what India is about to elect a new government in 2014. The discourse of economic develop- happens to its water, its land, its resources, and so on. As a conse- ment and growth is predominant in the current election campaigns. Where do you see quence, what the urban rich people are used to, in terms of long-dis- space for the issue of environmentally sustainable development in the elections? tance access to resources, will not be there anymore. There are plenty of examples of empowered and protesting communities across India. Discussions and debates in the elections are highly simplistic and, Secondly, I think the urban rich consumer has to become much more consequentially, it is difficult to address the issue of sustainability. But aware of the impact of her or his consumption. The level of their land has become a major political issue, for instance. We need to get a awareness is very low. The best audience for this might be the chil- sense across to people that the current model of development needs dren, and education institutions should reach out to them. But there huge amounts of land acquisition, and that its infinite continuation is are also other possibilities. I have been arguing for the need of a «sane simply not possible or not desirable because it displaces unprivileged consumption line» or a «sustainable consumption line.» As we have a people, which leads to more questioning by the public. The Indian «below poverty» line and people are supposed to be above it, we also newspapers offer daily examples of communities protesting against need a measure of an upper limit that includes water consumption, displacement and evictions, and it is crucial to show alternatives to electricity, petrol, etc. Obviously, this is not to work according to «you the current model. The passing of the Land Acquisition Bill2 shows pay more thus you get more» principle, because we simply cannot that this issue is receiving significant attention. Addressing health is afford it – ecologically. another way the issue of sustainability can enter the election cam- paigns. More parents are concerned about pesticides and air pollution and the effects on their children. We must connect these concerns to In your book, you mention the concept of environmental imperialism. You also the current development model. Recently, the World Bank published mention the view of India being a microcosm of the world – accordingly, how does that environment-related damage, especially damage to human environmental imperialism play out within India? health, knocks 5 percent off of GDP in India. This effectively means a net growth of 0 percent. Such messages must be integrated into the Environmental Imperialism is a narrow environmentalist viewpoint elections – if not now, then certainly in the next one. that I certainly do not subscribe to. It attempts to try to protect the environment by looking at people as enemies and then pointing at the least privilege. For instance, for years we have been working on the marginalization of people in wildlife habitats, for the conservation 48 South Asia The Indian Growth Story The Indian Growth Story South Asia 49

policies are such that they alienate the people or keep them out of the In summary, what would your message be to readers within Europe, or Germany habitat. Another phenomenon observable among some urban envi- even? What role could people in Europe take in strengthening this transboundary ronmentalists is that they do not want to see slums or dirt or garbage. collaboration? They will ask for – or will not say anything against – the displacement of people in poor slum areas. But of course, very large segments of The simplest task would be to financially facilitate this collabora- environmental groups do understand these issues. tion – even for things such as exchange visits, people working across countries, etc. Unfortunately, independent of how much we talk about emerging economies, the financial resources are still elsewhere. Sig- In your book you suggest a «radical ecological democracy» (RED) as an alternative. In nificantly more complex would be the exploration of pathways of this model a lot of importance is given to the local level. What would be the role of the sustainability by establishing connections between, for instance, the federal state in such a scenario, in particular with respect to sustainable development? de-growth movement in Europe and pathways of sustainability in India. The third and certainly most difficult task is for Germans and National policies are currently disincentives to localization and eco- Europeans to understand the impact of their consumption. Given the logical democracy, for instance on agriculture. One example of heavy limited ecological space on earth, Europe’s occupation of a dispro- centralization would be the public distribution system of cheap sub- portionate chunk needs to change. This is the only way in which we sidized food to the poor. It is not only centralized in its decision but can credibly talk about overcoming growth as a primary objective in also based on narrow cultural preference for only rice and wheat – the India. Otherwise, people will understandably argue that we need to grains come from a few regions in the country with high levels of pro- increase the size of the pie for the majority in Indian society to help duction. Based on current experiences on the ground, we have been them escape poverty. recommending to localize the food distribution system by incentiv- izing local farmers to produce locally and organically. A policy shift of this kind could greatly contribute to sustainable food production. Similar localization needs to happen with regard to water, energy, shelter, sanitation, livelihoods, education or learning, health, and political governance; there are already hundreds of initiatives across India showing that this is possible. We think that appropriate federal policy decisions, such as that on PDS suggested above, are essential for the transformation into a radical ecological democracy. Despite the importance of decentralization in RED, the central government will have to maintain a crucial role in at least three areas in the near future: besides the maintenance of large-scale activities such as the railway or the postal system, the federal state has to offer social ser- vices to counter the high rates of poverty and promote social justice through social protection schemes. From our experience, localization itself is not sufficient to counter deeply engrained social divisions along the lines of caste, ethnicity, and gender.

Given that many environmental issues transcend borders, what role do you ascribe to the global level? What potential do you see for collaboration, in particular within Asia, on a sustainable pathway?

One level of collaboration is at the level of governance, whether it is the Association of Southeast Asian Nations, the South Asian Associa- tion for Regional Cooperation, Asia as a whole, or the Group of 77 at the United Nations. I am glad that some government such as Bolivia and Ecuador are raising the issue of sustainability and countering the growth paradigm not only within their region but also globally. In particular, the governments of India and China need to pay far more attention to this. But I do think that collaboration will happen, more on the level of people collaborating across national boundaries. The 1 Mahatma Gandhi National Rural Employment Guarantee Scheme is a job guarantee scheme for rural Indians that was enacted by legislation on August 25, 2005. The more we can build solidarity and cross-learning among people’s scheme provides a legal guarantee for at least 100 days of paid employment every movements across South Asia – for instance, uniting the sustainable financial year to adult members of any household willing to do unskilled manual work farming groups – the more we will be able to push the region as a related to public work at the statutory minimum wage of 120 rupees ($1.80) per day. 2 Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and whole toward sustainability and equity. There is not nearly enough Resettlement Bill, 2013, was passed on August 29, 2013 in the Lok Sabha (lower transboundary collaboration happening. house of the Indian parliament) and on September 4, 2013, in the Rajya Sabha (upper house of the Indian parliament). The bill has provisions to provide fair compensation to those whose land is taken away, brings transparency to the process of acquisition of land to set up factories, buildings, or infrastructural projects, and assures rehabilitation of those affected. kolkata, india

Mohammed Komrulhoda, 57, works as a rickshaw puller in the streets around Kolkata’s New Market area, starting before dawn and usually carrying on until 9 o’clock at night.

From Purvi Champaran, a small village in northern India’s Bihar state, he averages around six or seven customers a day, each paying between 10 rupees and 30 rupees for a jour- ney – $0.15 to $0.50. His total daily earnings range between 50 rupees and 100 rupees, from which he has to pay 30 rupees for the rental of his rickshaw. At night he sleeps in a room shared with a dozen or so other men, paying 90 rupees a month for his bed.

Two or three times a year he travels by train to visit his family in Bihar, journeys which each cost him around 5,000 rupees. Any money he has left after paying for food and his other living costs he sends to relatives in Bihar. He has five children, two of whom – his youngest daughters – remain unmarried because he cannot save enough money to give them dowries big enough to attract suitable husbands.

Top: On the streets for around 15 hours a day, most of Mohammed’s time is spent waiting for his next customer. odisha, india Mount Niyam Dongar is a sacred place for the Dongria Kondhas, a people living in the Nyamgiri Hills of east India’s Odisha state. But it also holds a huge Middle: Mohammed takes an afternoon break with a cup of tea. deposit of bauxite, valued at $2 billion by Vedanta Resources, a United Kingdom- based metals company that wants to open a mine on the mountain. Bottom: Eating lunch at a street-side restaurant. Most days, Since 2005, Dongria Kondh villagers have resisted Vedanta’s efforts to develop Mohammed can only only afford a few chapati (unleavened the mine using demonstrations, court cases and – where necessary – direct flat bread), some dhal (lentils) and a bowl or two of rice. action. Along the way they have enlisted the support of other local peoples, Occasionally he treats himself to a little chicken or mutton. lawyers, and international nongovernmental organizations. Odisha, known as Orissa until 2011, is home to 62 different tribal peoples, more than any other Indian state. Together they account for 22 percent of Odisha’s population.

Above: Here, four men from villages around Niyam Dongar stand atop a jeep they helped destroy after it was found bringing engineers hired by Vedanta to the mountain.

© Olaf Schuelke © Roberto Caccuri india myanmar

Karan, «The impact of India’s growth has turned out to U Sein Di Da, «Myanmar has a really unique Khin Pa Pa Myo, «I think Myanmar is copying Entrepreneur, be very unequal, and what we need is an economy Head of Asia Anlinn opportunity for development in Coordinator for Western development models, New Delhi that everyone can benefit from. Also, I think that Yaung Foundation, Southeast Asia, since it is strategi- Gaihahita – Youth but we need instead to pro- what Indian society is lacking in many areas Sagaing Division cally located between China Environmental mote development, which is is an intellectual approach to certain issues. What and India – the two fastest-grow- Network, Yangon more suitable to our people I mean by that is that we don’t look at things in ing economies in the world – which and culture.» depth and, hence, we are lacking sustainability in is a dream for many investors. many areas. I feel that we need to evolve as a society This provides many opportunities and be more forthcoming and innovative toward for growth and development in the changes that will shape our future.» many sectors.»

Shikha, Finance «I want to see a sustainably growing India, with a significant Nan Ei Ei Phyu, «We cannot say that nationwide development is really happening in Coordinator in an drop in corruption levels and the implementation of the rule of Area Coordinator Myanmar. But if we can really apply the principles of democracy NGO, New Delhi law. I also want the country to become a safe place for women.» at Metta Foundation, and have equality among all the people – regardless of religious Shan State background, ethnicity, and race – I think we will have a great oppor- tunity for development. In order to achieve sustainable development, it is very important to think about how to manage the environment and the natural resources that we have in the country. I am learning about Indigenous Knowledge on Natural Resource Manage- Julu, «The last decade has witnessed increasing levels ment and I hope that I can contribute somehow by collaborating Economics of globalization, and I believe that, overall, India with rural communities on environmental protection and natural Student, has gained from this process. But India still needs resource management in one way or another.» Cochin (Kerala) to bring the population growth under control and to improve the human capital of her citizenry. Once a country has an educated citizenry that is capable of making responsible decisions and Sudeepa, «The current situation is alarming: that has the ability to participate in public Aye Aye Nyeing, «It is good that the government’s Accountant Most members of my family life in an informed manner, several key issues can Program Officer at policy is focusing more on inclusive in an NGO, are residing abroad, and they don’t be solved. The treatment of women is another Golden Plain, Yangon and rural development. Of New Delhi want to come back. I believe we all concern. The media has publicized several course, although the previous must take political responsibility rape cases. Such attitudes toward women reduce Khin Yu Yu Win, «In my opinion, concerning the economic government started doing rural and participate in the upcoming the level of their participation in public life and Project Officer at development and political changes in development decades ago, we can elections. We need better jobs, could lead to the involuntary retreat of women EcoDev, Yangon Myanmar, there have been some changes in see that the current government rule of law, an end to corruption – into the domestic sphere. I aspire to work particu- the urban areas but not in the rural is increasingly focusing on and this must be equally enforced larly on issues relating to women’s empowerment. areas, especially on the grassroots level. doing bottom-up development in in all states of India. India is a This is a population that I believe has borne Their living standards and livelihoods have the country.» big nation, and although this some of the most horrific atrocities in the country. remained the same. In the next 10 to explains the number and diversity Finally, it is important for India to legislate 20 years, I hope we will have true democracy of problems, it is by no means a strong policy and implement it. This requires in Myanmar and there will be more an excuse. We cannot be divided if an efficient, transparent and accountable govern- social, economic, and political development we want a future.» mental mechanism, which is currently lacking.» at the grassroots level. In short, there will be more inclusive development in both rural and urban areas.» 54 Southeast Asia Myanmar: Development at a Crossroads Myanmar: Development at a Crossroads Southeast Asia 55

Myanmar: Development at a Crossroads Challenges and Debates

Zeya Thu

Despite its abundance of natural resour- ces and its favorable geographical location at the crossroads of China, India, simultaneously unfolded, following the the lack of a stable regulatory environment Before the country began opening up again, and Southeast Asia, Myanmar is one emergence of a quasi-civilian government for business, corruption, the lack of meri- the IMF, World Bank, and the Asian Devel- in March 2011. tocracy, and mismanagement. Sanctions opment Bank (ADB) had cut ties with Myan- of the least developed countries in the After decades of isolation and back- imposed by Western nations due to the mar due to a lack of support and sanctions region. However, decades of isolation and wardness, Myanmar is finally passing political situation also contributed to the imposed by Western countries, particularly backwardness ended in 2011, when a through a critical juncture in its history country’s poverty. the United States, which holds considerable quasi-civilian government under President regarding development. The key question According to President Thein Sein, Myan- influence in these organizations. Since most Thein Sein took a path toward demo- here is «How?» How do we go about attain- mar’s current development strategy is based of the sanctions against Myanmar have cratic reform and economic development. ing the development that has until now on the three pillars of sustainability: 1) eco- been dropped and the relationship with But what kind of development is eluded us? In order to address this impor- nomic sustainability; 2) social sustainabil- the United States is normalizing, the IMF desirable and how will it be achieved? tant question, we have to first take a look at ity; and 3) environmental sustainability. and the World Bank are now re-engaging The article of Zeya Thu offers insights the development models that Myanmar has The government has also mentioned with Myanmar and have become important experimented with in the past. «people-centered development» as part of stakeholders. about the range of development models its official strategy. According to Dr. Sai Mauk The IMF has held discussions with the that are being discussed at the moment Kham, the first Vice President of Myanmar, authorities and provided technical assis- in Myanmar as they attempt to find Previous and current people-centered development is «develop- tance. The World Bank has also scaled-up solutions for achieving real sustainable models of development ment to satisfy the demands of the people.» its analytical and advisory services and development in the country. A specific framework for development, resumed normal lending relations to Myan- After its independence, Myanmar embraced known as the «Framework on Economic mar since its debts to the World Bank were a welfare state with an agro-based economy. and Social Reforms,» was approved at cleared in January 2013. The ADB’s re- Myanmar has been attributed with consid- Although some successes were achieved in the planning commission’s third meeting, engagement has likewise included assess- erable development opportunities since its regard to infrastructure and agriculture, the held on December 26, 2012, in Naypyidaw, ments of key sectors and the provision of independence in 1948; however, its potential welfare state failed to meet its ambitious Myanmar’s capital. Ten priority areas, which technical assistance. And since Myanmar has largely remained unrealized. According objectives due to a lack of capital, political follow, were identified: paid back its debts to the ADB in January to official statistics, approximately one out of infighting, political instability, and a lack of 2013, the ADB has also resumed lending to every four people in Myanmar is poor. And human resources. The 1962 military coup Finance and taxation reforms the country. Zeya Thu is a development expert, since having officially received the status of a paved the way for socialism, which meant Monetary sector reforms Myanmar’s steps – whether initiated writer, and editor. He holds a «least developed country» in 1987, it has been a command economy, nationalization, and Liberalization of trade and invest- independently or due to the international master’s degree in International Development Studies from unable to pull itself back up. Once renowned isolation. This was then overturned by the ments regulations financial institutions’ influence – are in line Chulalongkorn University in in Southeast Asia for its educational stand- 1988 demonstrations, when people across Undertakings for private sector devel- with policy recommendations set by the Thailand that was supported with ards, the country now ranks among the the country showed their discontent in opment Washington Consensus, such as trade and a scholarship from the Heinrich Böll Foundation. He is the author lowest in the region. On the Human Devel- light of impoverished conditions in every Health and education sector reforms financial liberalization, increasing tax rev- of four books and writes, teaches, opment Index, it ranked 149 out of 187 coun- sector. The resulting military coup and Plan for food security and agricul- enue, currency devaluation, privatization, and speaks on development and leadership issues concerning tries in 2012. In short, Myanmar has become military government declared a market- tural sector development deregulation, and cutting budget deficits. Myanmar. He is director and a classic example of development failure oriented economic system, welcoming for- Plan for governance and transpar- Foreign direct investment-led growth with deputy chief editor of – as well despite its rich natural resources and favora- eign direct investment and private sector ency environmental and social considerations as columnist for – the leading na- tional newspaper, The Voice. He ble geographical location. actors, while still controlling all aspects of Plan for upgrading mobile communi- seems to be the dominant theme of the founded Myanmar Development To almost everyone’s surprise, Myan- the economy. Although exports and foreign cation service and internet system development strategy. Partners, a research and mar started to change unexpectedly a cou- investments initially rose, the country was Infrastructural development program consultancy firm, to act as a bridge between international and ple of years ago. The whole world watched held back by an unstable exchange rate, Program for developing an effective Myanmar development partners. in awe as economic and political reforms environmental degradation, high inflation, and efficient governing system 56 Southeast Asia Myanmar: Development at a Crossroads Myanmar: Development at a Crossroads Southeast Asia 57

Debate over development The Myanmar Development Resource being developed in the south of the coun- in development because – as is evident in Institute was established to identify devel- try, a proposed 4,000 megawatt coal power some of its East Asian neighbors – a state- Since the new quasi-civilian government opment policy options and to train the plant was canceled after facing public pro- driven development model can be success- has taken over, Myanmar has welcomed a personnel needed for the reform process. tests. In addition, the Letbadaung copper ful as well. Myanmar should strike a balance variety of ideas on development policies – President Thein Sein also established the mine project – a joint venture between a between the role of the state and the market from institutions such as the World Bank National Economic and Social Advisory military company and a Chinese investor – to get the best out of its potential. and the IMF to well-regarded critics of the Council, which includes intellectuals and faced long and protracted local protests After consultation with the interna- Washington Consensus, such as Nobel lau- key personalities from the business sector. across the country. After the protest at the tional financial institutions and receiving reate Joseph Stiglitz. Myanmar has held These think tanks are designed to provide mining site was crushed, the issue was more their recommendations, Myanmar has to numerous workshops and forums to gen- an independent and alternative source or less resolved with Daw Aung San Suu Kyi, adopt a «listen to advice, but make your own erate ideas and policy debates, attracting to public sector policy options. They also a prominent politician, intervening and choices» strategy. For instance, the IMF’s world renowned academics – including organize seminars and workshops where securing improved terms and conditions recommendation of keeping the budget some of Myanmar origin who have been intellectuals, businessmen, government for the country and compensation for locals. living abroad for various reasons – to con- officials, as well as civil society leaders Letbadaung set the precedent for consider- tribute to the formulation of development from inside Myanmar and abroad partici- ing environmental and social impacts, in Capacity will have a final say on Myanmar’s policy. Stiglitz came to Myanmar for the pate to generate ideas on key development addition to the usual economic cost-benefit development outcomes. Even if the policies are first time in 2009 to advise the govern- issues that the country faces during the analysis, in current and potential develop- right, the implementation of them may not be. reform process. ment projects across the country. Restored freedom of expression after 48 Though Myanmar’s political parties are Myanmar should strike a balance between the years of draconian censorship and freedom active in development issues, they do not deficit to 5 percent of GDP or less can be role of the state and the market to get the best from fear encourages policy debate and seem to have policies on development, or a double-edge sword. It pressures the gov- out of its potential. idea dissemination on the pages of newspa- they do not present them explicitly. This ernment to cut spending in areas of lesser pers. However, one can say that Myanmar’s may be due to the nascent nature of Myan- priority and may reduce wasteful spending, development path is not debated in the mar party politics. Still young or having but it also restricts spending in key areas ment on poverty-reduction strategies. Dur- public arena at all. It is more or less imposed faced repression by the previous govern- for growth and social importance, such as ing his second visit in 2012, he spoke at a on the country by the government, albeit ment, they are still trying to function as a transportation, health, and education. As seminar entitled «An Agenda for Equitable a well-meaning one. The public debate political party, which leaves little resources Myanmar is still in the process of construct- and Sustainable Development for Myan- focuses more on the specificities of devel- to develop specialized policies. ing the foundation upon which the country mar» in Yangon. Also participating in the opment practice. Prominent examples are will grow, budget constraints will be a formi- seminar were Professor Ronald Findlay, a in the areas of large development activities, dable challenge. former professor at the Yangon Institute of such as resource extraction, energy projects, Present and future Myanmar has to be aware of falling into Economics, who is now at Columbia Uni- and economic zones. the traditional trap of «catching up at all versity, and Professor Hla Myint, a former The Myitsone Dam is a case in point. With a long history of state dominance, costs.» The «grow first, clean up later» stance, economic advisor to the Myanmar govern- The mega hydropower project was to be proponents of reducing the government’s as exemplified, for instance, in China in the ment and a renowned pioneer in develop- developed by a Chinese company, but faced role can surely find many willing listeners 1980s and 1990s, is not an option. Pro-poor ment economics. Another notable example widespread public resistance and was then in Myanmar. Having had enough of the initiatives, despite moving in the right direc- is Francis Fukuyama, also an academic of eventually halted. This case was unprec- state’s incompetence for half a century, the tion, need more momentum, as 26 percent global stature who visited Myanmar in 2012 edented, given Myanmar’s long history of free market / free trade paradigm is not only of the population is poor and the per capita and lectured on private sector development ignoring the public and the power of Myan- a development model but may even work GDP – at $850 – is the lowest in the ASEAN through public sector reform. mar’s big neighbor, China. In the Dawei as an election slogan. However, it is not region, even lower than that of land-locked Special Economic Zone project, which is wise to completely dismiss the state’s role Laos or war-torn Cambodia. 58 Southeast Asia Myanmar: Development at a Crossroads A Development Model for Myanmar Southeast Asia 59

Myanmar, a poor country rich with natural others in the region. It could, for example, resources such as oil, gas, and gem stones, focus on attracting foreign direct invest- might be suffering from the resource ment in labor-intensive industries to take A Development Model for Myanmar curse – the tendency of countries with advantage of its young population. How- an abundance of natural resources to be ever, power shortages (only 26 percent of less developed than countries with fewer the population has access to electricity) are Interview with Kyaw Thu resources. Natural resource management – a major obstacle for industrialization. including, but not limited to, building Tourism is a low-hanging fruit, as Myan- resource governance capacity in various mar is quickly becoming a hot travel desti- levels of government; meeting international nation. Nonetheless, promoting ecotourism standards; conducting environmental and instead of mass tourism can be an answer social impact assessments; incorporating to the societal and environmental impacts local voices into decision-making processes; that are associated with hordes of tourists. and transparently distributing revenues Increasing public awareness of different from natural resources to its citizens – will development policy options – aside from be key in dealing with the resource curse the Washington Consensus recommenda- that Myanmar may currently be facing. tions that have already been put in place – is Encouragingly, Myanmar seems to essential to empowering the people. With- be moving in a positive direction when it out this knowledge, the public might be Nwet Kay Khine: Is the future of Myanmar’s development openly debated in the comes to natural resource management. at a disadvantage to effectively voice their country? Who is involved in the debates and what is mainly being discussed? It made a commitment to the Extractive opinions. Industry Transparency Initiative (EITI), Last but not least is the capacity issue. In Kyaw Thu: Debates are intense between those who favor relaxing rules which enhances revenue transparency fact, capacity will have a final say on Myan- for investors and those who are trying to minimize environmental and and accountability in extractive sectors mar’s development outcomes. Even if the societal impacts resulting from development. On one side, we have Kyaw Thu is the director of Paung Ku, an NGO with extensive net- such as oil, gas, and mining. «The most policies are right, the implementation of overseas investors and their local partners, who act on behalf of for- works to Myanmar’s civil society. important thing is to have completely them may not be. Both the capacities of state eign companies, demanding rules and regulations because they create A trained dentist who started his transparent financial accounting to ensure and non-state actors face similar deficien- a predictable environment for investment. On the other side, we have career in the public health sector, Kyaw Thu has gradually expanded everyone knows where the revenues from cies. Capacity-building at different levels local communities reacting to social injustices resulting from pro- the scope of his work to include these extractive industries are going,» said and in different areas should be the priority neoliberal changes. This is evident in the Myitsone mega-dam project, more politically oriented (though non-partisan) mobilization, net- President Thein Sein, who halted the con- for international donors and Myanmar. backed by Chinese investors; the Dawei special economic zone; the working, and advocacy projects. troversial Chinese-initiated Myitsone Dam The saying «better late than never» is Letbadaung copper mine project, also backed by a Chinese company; With his organization Paung hydropower project in 2011. For the first particularly fitting for Myanmar’s develop- and the China–Myanmar pipeline. These projects were successfully Ku, he focuses on strengthening civil society through small grants time in its history, Myanmar has a ministry- ment. One hidden advantage of Myanmar stopped, delayed, or altered in favor of the local communities after and capacity-building initiatives level institution that will deal with envi- being a latecomer is that it can learn from protests erupted; however, not every objection that the communities for local civil society organiza- ronmental conservation: the Ministry of the mistakes of neighboring countries that raise has been effective. tions and networks across a range of sectors, but especially those Environmental Conservation and Forestry. have already experimented with different Some civil society actors, such as environmentalists, human rights sectors pertaining to agriculture Foreign direct investment is currently policy recommendations and models. defenders, social justice advocates, or however you may call them, and sustainable development; concentrated in the energy, oil and gas, «Smart people learn from their own mis- have joined hands with the local communities. They have become key the environment; land rights and responsible investment; as well and mining sectors. Diversification of the takes; geniuses learn from the mistakes of players who emphasize the importance of local participation, calling as those promoting peace, justice, economy is now possible since most of the others.» Myanmar has to be both smart and for meaningful consultations between investors and local communi- and reconciliation. EU and US sanctions have been dropped. a genius in choosing a development path of ties, and stressing the importance of social licensing. In the long run, if Myanmar should find its place by figuring its own. After many lost decades, Myanmar poor local people do not benefit, growth across the country will stag- out how it can complement the needs of cannot afford to do otherwise. nate. And if environmental degradation exacerbates poverty, then Nwet Kay Khine is currently a PhD student in the International commercial-sector development cannot be sustained either. Program of Human Rights Also, the international community’s role is very crucial in Myan- and Peace at Mahidol University, mar’s transformation. Previously, Western countries were very critical Bangkok. Previously, she worked as Project Coordinator at of the military government. They never hesitated to condemn or take the Heinrich Böll Foundation in action against them whenever they saw wrongdoings. However, since Yangon. She has extensive experi- ence in the media and non-profit the new government has taken over, their policy stance has shifted – sectors, both as a journalist from criticizing the government to engaging with them. Their priority for various Burmese newspapers now is to aid Myanmar’s reform by supporting capacity-building for and as a trainer for development NGOs. For her master’s degree the new government. in International Development Viewing direct engagement with the Myanmar government as an Studies at Chulalongkorn inevitable task, at least for now, foreign players prefer not to disturb the University, Bangkok, she won a scholarship from the Heinrich normalcy of relations between the government and themselves. Govern- Böll Foundation’s Southeast ment policies can be unfair, particularly in the resources sector, but nev- Asia Regional Office. Nwet Kay ertheless, the international community does not welcome civil society’s Khine also holds an Erasmus Mundus Master in Journalism and demands for justice. This attitude of trying to accommodate and encour- Media within Globalization from age the government instead of helping the local poor is discouraging Hamburg University. 60 Southeast Asia A Development Model for Myanmar A Development Model for Myanmar Southeast Asia 61

for human rights defenders. We saw this in the case of the Letbadaung Moreover, some new policies are unfavorable for farmers and indig- copper mine, where international players focused on the reform pro- enous peoples in many aspects. For example, the 2012 land law gov- cess while remaining silent on the injustices stemming from the mining erning vacant and fallow lands allows domestic and foreign businesses project. Human rights violations in this area were by and large ignored to occupy agricultural lands belonging to farmers and indigenous by the international community. The voice of the affected communities peoples. Under this new law, farmers who have been growing on and that of their supporters were threatened by this silence. hereditary land for their livelihoods can only possess land by means of official registration. As the registration process is not easily acces- sible for rural people, the land policies put them at risk. In most cases, What do you think about the role of the media and think tanks in these debates? they are helpless. There are also similarities in the new environmental and investment laws. All of them are accommodating only to the busi- The media is trying its best to cover development issues to inform the ness side, at the cost of local communities. Although the rule of law public and their respective targeted audiences. However, they lack is, in general, weak in Myanmar, the implementation of pro-business the necessary skills to effectively analyze the current complex setting. laws is carried out in a hasty manner. On the other hand, there is no Sometimes journalists are sent to cover seminars and other events urgency when it comes to installing proper mechanisms to protect where debate is heated, but they are unable to identify a takeaway the vulnerable. message from the discussions. And sometimes the message may even Peace negotiations and the national reconciliation process will be be misinterpreted. The media is generally aware of these deficiencies, undermined if indigenous lands continue to be threatened. If we are but they are still in the process of building up the necessary skills and truly going to form a new Myanmar under a federal system, there is competencies after decades of censorship. an urgent need to resolve the land problem. Peace might pave the way Think tanks face their share of problems as well. The government for fair resource sharing, but fair resource sharing can sustain peace has formed its own think tank, but it does not have regular meetings or in the long run. We proposed to the Myanmar Peace Center that the an established mechanism by which members can feed policy advice land issue be put on the table during peace negotiations in order to to the government. The institution itself is struggling to provide input prevent future conflicts. through the right channels and garner meaningful participation, rather than just being a government showcase. Another example was Daw Aung San Suu Kyi’s interest in estab- You have mentioned that pro-poor development is the campaign agenda of some politi- lishing a think tank to deal with environmental issues. She talked to cal parties. Are there any particular dissenting or supporting voices from political par- environmentalists and invited them to join the National League for ties concerning the current development model? Democracy (NLD) as party members, but everyone declined because they wanted to maintain their independence. The role of experts, who can be independent voices, has been very Yes. However, party policies shaped by the precautionary approach important in many development issues. In the case of Letbadaung, are not in place yet. Most of them believe that faster growth should many voices from across the spectrum – ranging from water experts be prioritized to reduce poverty as soon as possible. The problem is and mining engineers to environmentalists and agriculturalists – could their understanding and acceptance of the GDP growth model, which be heard. However, their voices were toned down and calls for adequate has a proven record of having many serious problems. Furthermore, environmental protection measures were silenced by the release of the the top-down approach alone does not work in development. Notably, Aung San Suu Kyi-backed report, which recommended the continua- the idea of social licensing still has not been picked up by the parties. tion of mining operations. It is understandable that experts withdraw They do not recognize that local people can help businesses by solv- from public debate when they fear possible repercussions. The media ing problems together. Many famous politicians, including Aung San also does the same; they have not followed up on the copper mine Suu Kyi, say it is inevitable for some people to sacrifice for the sake of since the investigation commission led by Aung San Suu Kyi released collective prosperity. In the Dawei case, a parliament member from its report. The media has also shunned criticism against Aung San Suu the NLD party said the social activists must be crushed because they Kyi for the sake of preserving their popularity. Due to the media and key are protesting mega development projects in the Dawei region. Many politicians’ biases, local communities are left in the cold. believe that being anti-development is intolerable. But we should not see the issues raised by local communities and civil society as being anti-development. Everyone wants to develop the country. But it is Which development model has the current Myanmar government adopted, who shaped legitimate and good for us to have debates about what this means and it, and how do you assess its acceptance by the public? the best ways to accomplish it. We can say that sacrifices are needed for collective prosperity, but then this must really be collective. That The government focused on deregulation, privatization, and the means benefits for everyone, including those who sacrifice to make reduction of government control over the economy. The new business way for some kinds of projects. environment accommodates the investors under a neoliberal doc- The politicians’ limited knowledge is a tremendous challenge in trine. Although the term «neoliberalism» appears in the public sphere policymaking. Due to limited or weak capacity, most politicians are from time to time, do you think the majority of people residing in rural not aware of the UN framework regarding human rights violations areas know what it means? It is not clear to the public what they can committed by the business sector: «Respect, Protect and Remedy.» expect from neoliberal changes or how they can deal with the negative International governments and institutions supporting capacity impacts. It is very clear, however, that local values and resources are development could help remedy this knowledge deficit. increasingly being threatened by unjust privatization, and there are A further shortcoming is that some ethnic parties only focus on pro- few mechanisms in place to protect the affected communities. moting development in their own region. They think that investment 62 Southeast Asia A Development Model for Myanmar A Development Model for Myanmar Southeast Asia 63

will change the whole development landscape only for the better. It is What is your future projection for Myanmar society if current trends go unchanged? dangerous if we do not find a solution on how to mitigate the side effect Which scenarios are likely? of these investments. Most of the MPs are not in such a position yet. In Myanmar, the infrastructure is not ready to attract investors to the manufacturing and services sectors. Electricity is still scarce and water What are the impacts of current development policies on the communities, especially management is still inefficient. The most convenient way for eager rural communities, and how are ethnic minorities affected and involved? investors is to go for resource extraction. Of course, land is a major resource as well. And policies are favorable for investors. If the trend The current policies are business-centered, not people-centered. goes unchanged, more cases of social unrest will happen – ultimately, The current legal framework restricts the people’s choice rather than it will slow down or damage reform. expanding it. In policymaking for investment, especially extractive industries, the question is: «What will be the benefit to the people?» But this question never gets answered. Myanmar is open to investors, As a civil society actor and social movement leader, what priority issues are you but we do not have a clear spatial planning policy, a clear land policy, currently dealing with? or sound environmental laws. Protection for indigenous peoples is not a government priority. And protection measures for poor rural com- The urgency is in minimizing the adverse effects of neoliberalism and munities are even worse in the agricultural sector. Farmers have been supporting local communities’ abilities to respond. So far, in all pre- struggling with debt problems for decades. One presidential advisor vious sessions, our parliament has passed 58 bills. These new laws suggested that the farmers’ debt problem be eased by waiving over- will definitely have an impact on the people. We cannot intervene due loans. They could do this with the lump sum loans that they get in every aspect of change, so my organization concentrates on pro- from international financial institutions such as the World Bank and moting social justice in the investment sector. We can be optimistic the Asian Development Bank, but so far, there is no plan to use the because awareness of sustainability is strong in the community and money for improving the farmers’ situation. The farmers’ debt prob- civil society networks are strong. On the other hand, the biggest chal- lem worsened when the government forced them to buy fertilizers and lenge for civil society is that many issues are happening simultane- pesticides at a price higher than the market rate. These problems are ously and it has started to overwhelm us. We have realized that we not new. The problem is that policymakers are trying to solve the same should take some time to reflect on our work. Because of our limita- old problems with the same old solutions. tions and for efficiency’s sake, we need to consolidate our efforts. We have also seen that our space can be undermined by the opinions Is there any space for local communities and ethnic minorities to react to the policies? of influential leaders. Those who seek an alternative development model feel discouraged when Aung San Suu Kyi and the 88 Genera- Communities react to the negative impacts of the development par- tion talk about their preference for a growth-led development model. adigm in many ways. So far, from my observations of several land- That type of thinking is dangerous not only for the people but also grabbing cases, they have never chosen an aggressive way to respond. for the activists who stand with the local communities to fight against Their first step is usually to try to talk to the local authorities. If they do the unfair rules of the game. Now, Myint Myint Aye, a lady from Let- not get a proper response, they take their complaints to the regional badaung, has been arrested for her actions against the copper mine. and national levels. Some have even sent letters to the parliament and We have a list of other detainees in jail. To be precise, there are the president. If no result is achieved, only then do they choose to 120 people who are in prison for protesting against the investors. All demonstrate on the streets. Some political parties, such as the NLD, arrests are related to the China–Myanmar gas pipeline, land acqui- are interested in expanding the space for local actors, including com- sition in different provinces, and other investment projects. Still, munity-based organizations, as part of their political agenda. The many other arrests are unreported or underreported. Companies are 88 Generation group also tries to help the people, especially in land- accusing farmers of spoiling community interests. And the police are grabbing cases. Civil society working on the ground is reaching out always in the same boat with the companies, so it is no surprise that to every possible partner, including political parties. In some sectors, hundreds of farmers’ cases go unreported. especially the agricultural sector, hundreds of civil society organiza- tions have recently emerged. Farmers are forming associations, even though there is no regulation or law in place yet to do it under the What needs to be achieved in the next two years before the government might change? current legal framework. As the International Labour Organization is helping to institutionalize labor unions, the farmers are also inter- People are thinking inside the box of bipartisan politics. The majority ested in being recognized as workers in the farming industry so they hate the ruling party – the Union Solidarity and Development Party can legitimately function as an association. In Shan state alone, there (USDP) – for their affiliation with the junta. To reject the USDP, people is now a farmers’ network with around 8,000 members. But forming are tempted to vote for the NLD. But this scenario is likely to change an association does not necessary mean that they have full freedom to in the next election. People will judge the candidates based on their act as an association. The new association law, which was drafted and commitments and efficiency but not on partisan politics. Some new debated in the parliament, is equipped to curb the power of associa- faces, especially from the ethnic regions, are preparing to participate tions by forced registration. in the coming election. Young faces, especially from Kachin, are eager to be elected as individual candidates. Fewer people will vote due to personal affiliations in the future. Rather, they are likely to choose someone who can best perform as their representative. myanmar Sin Ko Ko Oo, 13, at the helm of his father’s long-tail boat on Shan state’s Inle Lake in central Myanmar. His father, tired after nearly a month of non-stop early morning work ferrying visitors © Richard Koh around the lake for the Phaung Daw Oo Pagoda Festival, is dozing in the bow of the boat. 66 Southeast Asia Donor Accountability and Local Governance Donor Accountability and Local Governance Southeast Asia 67

Donor Accountability and Local Governance Development Assistance to the Cambodian Land Sector

Mark Grimsditch

This article looks at World Bank and Ger- man land sector support and highlights the challenges these actors have faced in influence of donors has often proved to be able to conflicts and eviction. As a result, LMAP was implemented by Cambodia’s ensuring effective implementation of land limited in the face of weak local governance violations of land rights have become one Ministry of Land Management, Urban and lack of political will. of Cambodia’s most pressing human rights Planning and Construction (MLMUPC), sector reform. concerns. In 2012 a local rights organiza- financed by the World Bank, and received tion reported that it had recorded disputes technical support from bilateral donors in Following the collapse of the Khmer Rouge Setting the context: involving more than 400,000 people in the Germany, Finland, and Canada. in 1979, Cambodia was seen as a pariah Land in Cambodia 12 provinces where it has offices.4 The Project aimed to improve tenure state by much of the international com- Land conflicts have been a concern security and promote the development munity – through the 1980s itreceived aid The nature of land ownership in Cambodia since the 1990s, but pressure on land- of land markets by developing regulatory from just a handful of states. This changed has changed drastically over the last four owners has intensified as investment has frameworks, building the capacity of the in the early 1990s after Cambodia adopted decades. After the Khmer Rouge took power flowed into Cambodia and land values have Cambodian Ministry, and strengthening a multi-party system and held elections. in the early 1970s, all private ownership was increased. Large-scale evictions of urban dispute-resolution mechanisms. The main Donor money has since poured into Cam- abolished and land became state property. poor communities have occurred, often focus was to establish a land registration bodia and the country is now heavily Land remained state property after the fall to make way for real estate development. program to systematically issue land titles dependent on official development assis- of the Khmer Rouge and the establishment One local organization estimated that more across Cambodia.7 Up to August 2012, tance. According to one analysis, from 2002 of the People’s Republic of Kampuchea in than 150,000 people were evicted in Phnom almost two million land titles were issued to 2010, for every dollar spent from the 1979. Toward the end of the 1980s, private Penh between 1990 and 2011.5 In rural areas by LMAP and its successor program.8 How- national budget, Cambodia received an ownership of residential land was legalized, thousands of families have lost land to pri- ever, although the program enjoyed consid- average of $0.94 in aid.1 Cambodia’s donors, and in 1992 a new land law was passed that vate companies that have been granted erable success in titling rural areas, this was or «development partners,» provide sup- laid the foundations for the growth of the expansive land concessions for develop- not matched in urban areas. In 2009, fol- port across a broad range of sectors – from land market in Cambodia.2 ing agro-industry, often in breach of legal lowing a series of forced evictions in Phnom education and health to infrastructure This rapid transition from centralized requirements. While land is being consoli- Penh, local and international NGOs raised development and legal reform. Donors, Marxist-Leninist state to a capitalist free dated in the hands of the powerful, wealthy, concerns that legitimate landholders were which include the World Bank, the Asian market had significant impact on land and well-connected, landlessness has being denied access to the system because Development Bank, and bilaterals from holdings. According to one report, the land become a national problem. A 2008 study their land had been targeted for develop- Germany, Finland, and Canada, have con- reforms of the late 1980s and early 1990s found that 21 percent of households were ment. tributed significantly to the land sector. «set the stage for land grabbing and power landless, and a further 45 percent owned In 2009, residents living around Boe- With this support, Cambodia has made abuses» as land became a valuable com- less than 1 hectare of land.6 ung Kak Lake filed a request with the World notable progress in legal reform, institu- modity.3 As shortcomings in the 1992 Land Bank Inspection Panel for an inspection of tional strengthening, and the development Law became apparent, some donors made the Land Management and Administration of land administration and management future assistance conditional on the adop- The World Bank and Project. Located at the center of Phnom Mark Grimsditch is a researcher systems. However, land conflicts and tion of a new law. This was passed in 2001 Penh, Boeung Kak Lake was home to more from England, and is development-induced displacement con- and soon after, multi- and bilateral donors Cambodia – A troubled than 4,250 families. Many had lived there currently based in Beijing, China. Grimsditch previously lived tinue to plague the country. increased support to the land sector, seeing relationship for years and had potentially strong claims and worked in Cambodia for four Donors to the land sector have come an opportunity to support reform. as legal possessors under the Land Law. In years, where he worked with under increasing pressure from civil society Although the legal framework related Against this backdrop, donor-funded pro- March 2006 the lake was designated an several local and international organizations working on the to acknowledge these concerns and push to land is now relatively well-developed, grams have sought to improve tenure adjudication area of the land project. This land and housing rights. His for improved implementation by govern- implementation is often lacking. This is security by supporting Cambodia’s land should have been followed by an assess- current work focuses on social ment counterparts. Safeguard systems, complicated by the fact that most landown- administration and management systems, ment of all ownership claims within the area, and environmental safeguards in international development milestones, monitoring indicators, and var- ers lack definitive documentation for the and in 2002 the Land Management and which in turn would allow the issuance of finance and investment. ious other mechanisms are in place, but the land that they hold, leaving them vulner- Administration Project (LMAP) commenced. land titles. However, no assessment hap- 68 Southeast Asia Donor Accountability and Local Governance Donor Accountability and Local Governance Southeast Asia 69

pened, and when adjudication maps were 630 families received land titles. However, Germany’s milestones the system. The Cambodian government displayed in January 2007, all owners were 3,500 families had already left the area and was required by the German counterpart listed as «unknown.» Four days later, it was accepted the meager compensation offered, Prior to its cancellation, LMAP had already to develop a plan by July 2012 that would announced that the land had been leased by and several dozen families were denied begun to transition to the Land Admin- describe and define how to register areas the government to a private company.9 land titles, as their plots were outside the istration Sub-sector Programme (LASSP), that have been excluded from systematic Soon after, residents were pressured to 12.44 hectare area. under which land registration continued. registration and on how to avoid future vacate their homes in return for compensa- The Boeung Kak Lake case exposed the Germany and Finland continued to sup- exclusions.16 In May 2012, a draft document tion of $8,500 or a replacement apartment challenges that are presented by donor- port LASSP, whereas Canadian funding was circulated by the Ministry of Land Man- on the outskirts of the city. Many accepted, funded projects in the land sector. For a ended in mid-2013. Germany’s Ministry for agement, which outlined a very brief plan as they feared they would otherwise be number of years, LMAP was held up as a Economic Cooperation and Development for speeding up systematic land registra- evicted and receive nothing, but more than successful example of donor engagement, (BMZ) is responsible for bilateral official tion and solving the problems of exclusion.17 800 refused and resisted eviction. After with donors often referring to the large development cooperation, and currently However, this draft document was only one exhausting all available remedies without number of titles issued as evidence. How- commissions the Deutsche Gesellschaft für page, with just half of that page devoted to any result, Boeung Kak Lake residents went ever, the project was designed in a way that Internationale Zusammenarbeit (GIZ)13 to the issue of speeding up registration and to the World Bank Inspection Panel, claim- it avoided land that was in dispute or of implement Cambodian bilateral land sec- avoiding exclusions. Eventually, no further ing that poor implementation and inad- unclear status; in some cases, where pow- tor support. consultations were held with civil society. equate supervision of LMAP caused them erful interests were at play, LMAP failed to The LMAP Inspection Panel investiga- The Boeung Kak Lake case highlighted harm. The Inspection Panel’s investigation properly assess resident’s land claims, and tion and civil society advocacy also put Ger- the problem of exclusions from the titling found serious breaches of the World Bank’s thus left them exposed and vulnerable to man bilateral assistance under the spotlight. system, but civil society groups also iden- safeguard policies.10 eviction. After World Bank involvement in the land tified numerous other cases of exclusion Prior to the publication of the Panel’s Boeung Kak Lake residents lay in the sector ceased, attention turned to German across the country. The result of such exclu- report, the World Bank sought to negotiate path of a multi-million-dollar develop- bilateral assistance. A month after LMAP sions is that many thousands of people a resolution to the case with the Cambodian ment linked to a high-ranking official, and was cancelled by the Cambodian govern- have been left in limbo, with their land left government. However, the government was although safeguard mechanisms were ment, BMZ announced in October 2009 untitled, and thus exposed to future land not willing to negotiate and responded by activated and the World Bank eventually that future land sector support would be conflict or eviction. In 2012, BMZ commis- cancelling the project.11 The reasons for this attempted to push for a resolution to the contingent on strengthening human rights sioned a human rights assessment of the refusal to negotiate are open to speculation, dispute, the interests involved were too in the land sector. This took the form of German land sector assistance. Although but it is no doubt relevant that the company great. In this context of weak rule of law and five milestones that cover issues including the study found that the program con- that received the lease for the lake area is endemic corruption, the rights of ordinary indigenous land rights, implementation of tributes to the realization of the rights to owned by a well-connected and influential citizens often come second to the inter- a new framework for dealing with informal adequate food and housing, it also identi- ruling-party senator. ests of those with power and influence. In settlements in urban areas, and drafting of a fied numerous challenges and highlighted Finally, in August 2011, the World Bank this case, even the World Bank, which is a housing policy.14 Although these milestones a lack of accountability on the part of the announced a suspension of all future lend- major donor to the Cambodian govern- were not achieved in full, Germany contin- MLMUPC and development partners, and ing to Cambodia until this case was ade- ment, found its leverage to be limited. The ued to support the land sector and a new a lack of transparency in some areas of the quately resolved. Soon after, Cambodia’s collapse of LMAP and suspension of World program was approved.15 program, especially in the selection of adju- prime minister announced that 12.44 hec- Bank lending illustrates well the limitations This new Land Rights Program runs dication areas.18 tares of land would be cut from the devel- of donor influence when faced with a lack from 2012 to 2015 and is subject to a further Cambodia has achieved notoriety for opment area and granted to the remaining of political will on the part of the borrower. set of milestones that cover a number of its poor land rights record, and as a result, residents.12 This was a tremendous victory issues related to land registration, includ- BMZ has come under pressure from Ger- for those who held out and fought for the ing a commitment to speed up the process man parliamentarians and NGOs, as well recognition of their rights, and more than and to address the issue of exclusions from as local and international NGOs working in 70 Southeast Asia Donor Accountability and Local Governance Donor Accountability and Local Governance Southeast Asia 71

Cambodia, who asked for safeguards and is a development priority, the prevalence mechanisms that ensure the participation of widespread conflicts, displacement, and of concerned communities. Further, the landlessness indicates that a commitment United Nations Committee on Economic, is lacking. As Cambodia seeks to move away Social and Cultural Rights (ESCR) expressed from aid-dependency, the government has their concern regarding German engage- promoted investment, including in land ment in the Cambodian land sector in their and natural resources. However, in Cam- Concluding Observations to the Federal bodia’s current context of weak rule of law, Republic of Germany19 on May 20, 2011: where the elite are able to behave with rela- «The Committee is concerned that the State tive impunity, such investment comes with party’s development cooperation program considerable risk. One symptom of this has supported projects that have reportedly is that urban poor communities, such as resulted in the violation of economic, social those living at Boeung Kak Lake, are pushed and cultural rights, such as in the case of the from their homes to make way for high-end land-titling project in Cambodia (art. 2.1, 11, developments. 22 and 23).» In a 2011 meeting, a senior BMZ When confronted with broader con- official acknowledged this and expressed cerns about ongoing evictions and other concern that there was a risk that German land rights violations, donors have often development cooperation and the Ger- focused on the technical aspects of their man government could «appear as being support, avoiding sensitive issues that may involved in human rights violations occur- result in the deterioration of relationships ring in the Cambodian land sector,» making with government counterparts. Although it engagement in the sector a political risk for may be prudent for donors to focus on areas Germany.20 GIZ has been criticized for miss- where they have a realistic chance of making ing opportunities to engage civil society on progress, concentrating on isolated activi- their concerns around land registration ties and outputs fails to take into account and for not acting soon enough or taking the broader reality of what many see as the decisive action to address shortcomings in continuing deterioration of respect for land the implementation of land sector reforms. rights in Cambodia. This, in turn, will inevi- This was despite repeated attempts by civil tably lead to criticism that donors are com- society to bring these issues to the atten- plicit in the state’s failings. 1 S. Ear, International Donors and Human Rights in 13 Land sector support was previously implemented Cambodia, East Asia Forum, November 21, 2012. by the Deutsche Gesellschaft für Technische tion of donors through meetings, letters, It is important not to lose sight of the 2 M. Grimsditch, L. Kol and D. Sherchan, Access to Zusammenarbeit (GTZ), which changed to GIZ after and forums such as the Technical Working broader context of the challenges that Land Title in Cambodia: A Study of Systematic Land merging with two other German organizations. Group on Land. BMZ has since developed Cambodia currently faces with regard to Registration in Three Cambodian Provinces and the 14 Embassy of the Federal Republic of Germany, Phnom Capital (Phnom Penh: NGO Forum on Cambodia, Penh, Future German Contribution in the Land milestones that address some of the issues land and natural resources. Land conflict, 2012). Sector Workshop, press release, August 27, 2009. that have arisen in recent years, but, as displacement, and landlessness are ever- 3 UNDP (United Nations Development Programme), 15 FIAN (Food First Information and Action Network), mentioned above, these milestones have present threats to the livelihoods of many Land and Human Development in Cambodia (Phnom Germany’s Human Rights Obligations in Development Penh, 2012). Cooperation: Access to Land and Natural Resources not been met in full and the impact of this thousands of Cambodians, and with these 4 Cambodia has 23 provinces in total, plus Phnom and Germany’s Support of the Land Sector in process remains to be seen. come the risk of social unrest. Although Penh; LICADHO (Cambodian League for the Promo- Cambodia, May 2, 2011. 16 Cambodia’s failure to achieve these key there are no simple solutions to the complex tion and Defense of Human Rights), Five Shooting Royal Government of Cambodia and Government of Incidents at Land Dispute Protests in the Past Two the Federal Republic of Germany, Summary Record monitoring indicators has had little impact scenarios outlined here, it is clear that there Months Show Alarming Increase in Use of Lethal of the Negotiations on Development Cooperation on donor support, and aid commitments to needs to be a shift in the current paradigm. Force, press release, January 26, 2012. between the Government of the Federal Republic of 5 Cambodia have continued to increase year Sahmakum Teang Tnaut, Displaced Families: Germany and the Royal Government of Cambodia Phnom Penh 1990–2011 (Phnom Penh, 2011). held in Bonn on December 13 and 14, 2011. on year. This has led to criticism of donors 6 S. Chan, Impact of High Food Prices in Cambodia, 17 MLMUPC (Ministry of Land Management, in the press and from civil society, and has policy brief (Phnom Penh: CDRI, 2008). Urban Planning and Construction), Draft Strategy 7 highlighted the very significant challenges World Bank, Project Appraisal Document on a to Speed Up Land Registration in Cambodia, Land Proposed Credit in the Amount of SDR 19.3 Million Administration Sub-sector Program, 2012. of supporting reform in the face of limited (USD 24.3 Million Equivalent) to The Kingdom 18 M. Lüke, Human Rights Assessment of the commitment on the part of Cambodia’s of Cambodia for a Land Management and German-Cambodian Land Rights Program (LRP), Administration Project, 2002. (Berlin: German Institute for Human Rights, 2013). decision-makers. 8 LASSP (Land Administration Sub-sector 19 E / C.12 / DEU / CO / 5. Programme), Land Is Life, Land Administration 20 According to statement by a BMZ Deputy Sub-sector Programme newsletter, August 2012. Director General at a meeting between the German Donor influence and 9 World Bank Inspection Panel, Cambodia Land and Cambodian governments in Bonn, December 13 Management and Administration Project, and 14, 2011, online: http: / / www.cdc-crdb.gov. local governance investigation report, 2010. kh / cdc / Donor_Development_Cooperation_ 10 Ibid. Programs / Germany / Negotiation_on_Development_ 11 World Bank, World Bank Board of Executive Direc- Cooperation_2011 / annex4.pdf The experiences of the World Bank and BMZ tors Considers Inspection Panel Report on Cambodia (accessed October 2013). provide an illustration of the challenges Land Management and Administration Project, press related to donor-supported land sector release, Washington, DC, March 8, 2011. 12 Royal Government of Cambodia, Sub-decree No. 183 programs. Although the Cambodian gov- on Adjustment of the Size of the Boeung Kak Lake ernment has stated that land sector reform Development, 2011. Challenges for Poverty Reduction and Sustainable Development Southeast Asia 73

cambodia Siem Reap is one of Cambodia’s fastest-growing cities, filled with bustling hotels, shops, and markets. But along its Challenges for Poverty Reduction and outer edge, away from the tourist attractions and hectic commercial districts, lie natural, dry, unkempt grasslands, still untouched by development. Sustainable Development

Scrubland and lakes lie along the sides of Plov Lek 60 Road. At A View from Laos its end, the road abruptly turns into a field. Early each day, local people gather on the road to exercise. As dusk falls, traders set up stalls and impromptu restaurants along its pavement. Local people come out to picnic, date, or just enjoy the scenery.

Below: A young couple enjoy a picnic besides Plov Lek 60 Road © Miti Ruangkritya on the outskirts of Siem Reap.

The Lao People’s Democratic Republic is one of the poorest countries in the world. Three- quarters of the population is rural and lives from the land. Those living in the more remote parts of the country have limited access to education, jobs and healthcare. Malnutrition remains a problem. Over the last 10 years, Laos has experienced dynamic changes. The economy is growing at an average of 7.5 percent annually and there has been some suc- cess in combating poverty. The government has set a goal of getting Laos off the United Nations’ Least Developed Country list by 2020. But many observers are still concerned. The country’s progress depends on a rapid rise in direct foreign investment and the exploitation of natural resources. Unregulated investment in mining, agribusiness, and large-scale hydroelectric power plants to provide neighboring countries with electricity has at times led to forced migration and deprived rural communities of their livelihoods. The United Nations warns that most of the popu- lation is dependent on ecosystems that are being damaged beyond repair by the current development. In the run-up to the Asia-Europe Meeting and the non-governmental Asia-Europe People’s Forum (AEPF), which took place in the Laotian capital, Vientiane, in 2012, civil society and local communities organized a process for extensive discussions and consulta- tions aimed at formulating development goals for Laos. The process was led by agrarian and education expert Sombath Somphone, and more than 1000 men and women of all ages and of diverse backgrounds contributed their views and experiences. Somphone, a member of the AEPF organizing committee, presented the results during the AEPF con- ference, where he also gave the opening address. Two months later, Sombath Somphone was abducted in Vientiane and has not been heard from since. In this speech, he describes

the communal vision for fair and sustainable development in his home country. Sombath Somphone is an agra- rian expert from Laos. After Laos independence he worked on sustainable farming and food security. Later he introduced the Speech given by Sombath Somphone at the use of participatory rural appraisal techniques in Laos. 9th Asia-Europe People’s Forum (AEPF), In 1996 he established the Participatory Development October 16–19, 2012, Vientiane, Laos (excerpt) Training Center (PADETC) which aims to train young Lao people and local government officials in Excellency Dr. Thongloun Sisoulath, Deputy Prime Minister of the Lao PDR, respected community based development. friends and colleagues from Laos, Asia, and Europe, Ladies and Gentlemen, For his achievements he received the prestigious Magsay- What an honor and what a pleasure it is for me to be welcoming you all to our small say award, the Asian equivalent country, a land of gentle people with big hearts. I am especially honored to represent to the nobel prize. On 15th December 2012 he disappeared Laos at this Asia-Europe People’s Forum to address you today and to share with you when he was on his way home in some thoughts on how we can together work toward reducing poverty and building a more Vientiane. For more information see: sustainable future for ourselves and for our children. http: / / sombath.org / 74 Southeast Asia Challenges for Poverty Reduction and Sustainable Development Challenges for Poverty Reduction and Sustainable Development Southeast Asia 75

The human race has made enormous progress in science and technology in the past century. Thirdly, we need to give more space for the ordinary people and allow them to be the driv- We have built better and better infrastructures, better systems of communication, watered ers of change and transformation. Listening to the voices of the young is especially crucial. the deserts, sent men to the moon, advanced medical science, and also built enough weap- Their ideas and aspirations for sustainable development should be given due considera- ons of mass destruction to blow up our planet if we want to. In the process and without tion; after all, the future should be theirs to make. doubt, our lives have physically become more comfortable and more convenient. In fact, sometimes too convenient and too comfortable, especially for the majority living in the more developed parts of Europe, and for the more well-off even in the poorer parts of Asia. Hearing from the Lao people However, for the poor, the disenfranchised, the benefits of progress have yet to reach them. Our improved physical comfort has weakened our minds. We have become less caring, We in Laos have already taken the first step toward this direction. To foster solidarity less compassionate, and more self-centered. We let our emotions rule our heads instead against poverty and for sustainable development in Laos, civil society organizations in of relying on our intelligence and wisdom. We let our selfish desires and pursuit for im- Laos have teamed up with the government and mass organizations to conduct consulta- mediate gratification blind us to what is really important and essential for our personal tions in all provinces. The joint fieldwork has instilled a strong sense of trust among civil happiness and for the well-being of our families and societies. society organizations and mass organizations and broken the wall between civil society groups and government representatives. Lao people understand development in a more holistic way – poverty can be physical, How did we get there? social, and emotional. In Lao language there is one word that sums this up very well. It is called khuam tuk, which means «all forms of suffering.» Its opposite is called khuam I strongly feel that it is our poor education system and badly conceived development suk, which means «happiness» or «contentment.» The Lao often equate happiness or model that got us here. Our modern education system is modeled from the West, and is contentment with sustainable development or sustainable livelihoods, and sustainable quite divorced from reality. It is too compartmentalized and segregated, focusing on tech- development is a condition that arises only when there is balance between the four pillars nical content, and not [giving] adequate attention to critical thinking and analytical skills. of development – economy, nature, society, and governance. The development model is not balanced, not connected, and definitely not holistic. We focus too much on economic growth and ignore its negative impacts on the social, For each of the four pillars of development, the [Lao] people environmental, and spiritual dimensions. These unbalanced development models are the would like to stress the following: chief cause for inequality, injustice, financial meltdown, global warming, climate change, Economic pillar: Improvement of household or local economy by focusing on loss of bio-diversity, and even loss of our humanity and spirituality. We are blinded by the sustained income generation, employment creation, and strengthening of a self- power of money and let the corporations rule the world and even override the power of sufficient economy. Economic development should not lead to debt accumulation, the state. Ordinary people, and civil society, have very little say in all this. Their voices are which is the main cause of poverty. Economic development and promotion of not heard loud enough by the government and by the corporations. investment should also not undermine people’s land ownership, which is the foun- dation for food security and a sustainable household and local economy. Social pillar: Improving social security and development needs to focus on im- How to get out of this situation? proved access to good healthcare, better quality of education, and strengthen- ing social solidarity. More attention should be paid to combating negative social Certainly pointing fingers will not bring us together. Asking the industrialized nations that phenomena, such as erosion of family and moral values, which give rise to drugs are now already consuming up to three to five planets to care and share more will not abuse, gambling, and risks to HIV / AIDS infection, especially among young people. work. They have been addicted to a way and style of living for so long that they will not Environmental pillar: More focus needs to be given to the protection and conserva- easily want to change. Asking the developing nations that also aspire to have the kind tion of Laos’ natural resources and environment through reducing the degradation of lifestyle of the developed world will also not work. They do not want to be left out of of forests, safeguarding water resources, and preventing the release of toxic chemi- enjoying the material benefits and comforts that have been denied them for so long. Get- cals into land, water, and air by unregulated urban and industry development. ting out of this dangerous stalemate requires three major changes. Governance pillar: To strengthen governance and the rule of law, the focus should First and foremost, it is necessary to transform the present power structure. We be on improving people’s understanding of the law and their rights. This must go cannot afford to allow the big corporations to continue dictating to our governments hand in hand with strengthening the enforcement of the law to avoid abuse and the kinds of investment they should make. And we cannot continue to have governments non-implementation. We should also enhance the protection of peace and improve continue to listen to the power of money over the voices of the people and civil society. the transparency of governance by promoting participation in decision-making, These three parties – state, corporations, and civil society – should work together on a monitoring, and reporting of development activities by all stakeholders. more equal basis and with mutual respect and shift the course of development to a more balanced one. This should be done regardless of whether we live in Laos, Asia, Europe, We have heard the voices of the people, including young people, loud and clear. The ques- or any other continent. tion is: How do we now translate these clear voices into action? We hope what we have Secondly, we need to shift our thinking and adopt a different model of development. done in Laos will be some food for thought and stimulate discussions at the Forum. Over This new model should stress the balance and interconnectedness between the four dimen- the next few days, we will have the opportunity to exchange ideas and hear and learn from sions or pillars of development, namely: economy, nature, society, and governance. The the experiences from our colleagues and jointly work toward reducing poverty and build- development of one pillar should not have negative impact on any of the other pillars. If it ing a more sustainable world in solidarity. does, the losses on any other pillar should be factored in as additional capital loss. Thank you very much for your kind attention. 76

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debates concerning global challenges and specific developments in the Asian region are made available in English and German. Opinions expressed in the articles are those of their authors and not Heinrich-Böll-Stiftung. All articles in this publication are subject to Creative Commons License CC BY-NC-ND 3.0 The first issue, «Copper, Coal, and Conflicts,» deals with the local consequences of the worldwide competition for access to natural resources and analyzes the complex interrelations and conflicts of Photos All photos courtesy of the Global Institute For Tomorrow (GIFT), an independent Hong Kong based think tank interest that result from the exploitation of raw materials. providing content-rich and intellectually challenging executive education from an Asian world view. They are published in the unique photo-book The Other Hundred. It aims to act as a counterpoint to the Forbes 100 and other media rich lists by telling the stories of people around the world who are not rich but deserve to be celebrated. Featuring 100

In Rendite vereint 5 «Kein Preisschild für die Natur» 15 Von wegen alternativlos! 30 Thomas Fatheuer über die schwierige Pavan Sukhdev, Leiter der TEEB-Studie, Ein Plädoyer für die Commons photo-stories from 91 countries across 6 continents, The Other Hundred is the result of a worldwide collaboration between Beziehung zwischen Ökonomie und Natur im Interview mit Barbara Unmüßig von Silke Helfrich und Stefan Tuschen amateur and professional photographers who submitted more than 12,000 images from 156 countries. www.boell.de / asia