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Harvard Asia Quarterly Fall 2003 1 HAQ CONTENTS HAQ Editorial Staff

Editor in Chief Jennifer Chien Harvard Law School

Executive Editor Melody Chu Harvard Law School

Managing Editor Focus: Current Topics in Health and Modernization in Asia Loretta Kim Graduate School of Arts and Sciences

Circulation Manager Eva Chan Harvard Law School 4 Understanding the Context of Emerging Pathogens in China Production Editors Gail E. Henderson Damon Clark Graduate School of Arts and Sciences Melody Chu The SARS crisis and China’s response to it highlighted both the modernization Harvard Law School of China’s health care system and the serious flaws that remain. Gail Henderson explores the rapid development of China’s public health system Area Editors Loretta Kim, Central Asia over the past few decades and explores the lessons to be learned. Graduate School of Arts and Sciences Yongwook Ryu, China Graduate School of Arts and Sciences Jein Do, Korea Graduate School of Arts and Sciences Danny Ooi, Japan 9 The Politics of China’s SARS Crisis Graduate School of Arts and Sciences Holly Gayley, South Asia Yanzhong Huang Graduate School of Arts and Sciences Richa Gulati, South Asia Huang presents a political analysis of the SARS epidemic crisis in China. He Harvard Law School argues that a problematic institutional structure prevented information flow Umej Bhatia, Southeast Asia Graduate School of Arts and Sciences within the state bureaucracy, resulting in the initial official denial of the disease, policy inaction, and exacerbation of the epidemic. However, the same Associate Editors authoritarian governmental structure enabled the authorities to deal with the Harvard Law School Eva Chan crisis in an expedient fashion. Ernest Lim Haifeng Huang Jimmy Gao Frank Jin Diya Kapur Lauren Kim 17 Gender, Medicine, and Modernity: Childbirth in Tibet Amy Lehr Rich Lin Today Adrian Lu Jennifer Chertow Matt Peckosh Sean Rosario Chertow explores the formation of an emergent modernity in Tibet regarding Karen Tseng Thomas Tso childbirth practices and reproductive choices. While arguing that China Tzung-bor Wei inscribes its nation-building policies onto women’s bodies, she details the David Welker myriad ways that Tibetan women actively negotiate their engagement with Kenneth Yap Sun Ying government health incentives and traditional medical practices. Jennifer Youn Graduate School of Arts and Sciences Megan Burnett Denise Ho Leighna Kim Hawon Lee Steve Lin John Ng Michelle Powers Jean Francois Rene Karen Teoh Graduate School of Design Michelle Lee

Harvard Asia Quarterly 2 Fall 2003 Volume VII, No. 4 Fall 2003

HARVARD ASIA QUARTERLY is a publication affiliated with the Harvard Asia Center. HAQ was established in 1997 by members of the Harvard Asia Law Society in conjunction with students from other graduate and professional programs at Harvard University as an inter- disciplinary journal of contemporary Asian affairs.

LETTERS HAQ welcomes readers’ letters and comments. HAQ reserves the right to edit corre- General Articles spondence for length or format, and the right to decline publication. Letters should be addressed to the editor and submitted to the address below, or sent to: [email protected]

SUBMISSIONS 29 India’s Foreign Policy Towards China: The NDA HAQ invites the submission of articles and Experience essays to be considered for publication. Sub- missions should address matters of contem- Raviprasad Narayanan porary concern in Asia. Submissions should be delivered in electronic form via email. All Narayanan analyzes the policy of the National Democratic Alliance (NDA) submitted materials become the property of government towards China since 1998. He details the perceptions and HAQ. HAQ reserves the right to reject submissions and to edit materials for length, for- issues dominating Sino-Indian relations, providing a window into the signifi- mat and content. To receive HAQ Editorial cance of Prime Minister Vajpayee’s recent visit to China. Guidelines, submissions schedules, or additional information, please contact HAQ at the address below, or visit our website at www.haqonline.org. Electronic submissions or inquiries should be sent to: [email protected] 35 Towards a Sustainable Rural Development Policy SUBSCRIPTIONS in Vietnam Annual subscriptions to HAQ are available at a rate of $28.00 (individual subscribers) and Khai Q. Nguyen $35.00 (institutional subscribers) for four issues delivered in the United States and $45.00 Vietnam’s rural sector remains underdeveloped despite the country’s overall for deliveries elsewhere. For more informa- significant growth. Nguyen warns that a widening income gap between rural tion, please contact HAQ or your academic periodical subscription service. Subscriptions and urban sectors may result in undesired social and political conse- are available online at our website: quences for Vietnam’s stability. The timely implementation of his proposed www.haqonline.org short-term and long-term remedies is urgent, especially in view of Vietnam’s WTO accession. Please address all correspondence to: Harvard Asia Quarterly c/o Harvard Asia Center 1737 Cambridge Street Cambridge, MA 02138 46 Unlocking South Asia’s Economic Potential: USA Considering an FTA between Sri Lanka and the US Fax: (617) 495-9976 William H. Avery www.haqonline.org email: [email protected] Avery discusses how Sri Lanka could potentially be a powerful catalyst in advancing South Asian economies, further opening up the region to wider international trade, and promoting peace and political stability. He argues Credits: that strong economic ties between Sri Lanka and the US are critical to Cover Photo: Rafael Wober helping the region emulate the economic success that East Asia has Photo credits: Andrew Thompson (p. 11), experienced in the last few decades. Rafael Wober (p. 12), Jennifer Chertow (p. 19, 22), Khai Q. Nguyen (pp. 37, 39, 42), Rafael Wober (pp. 47, 49).

No material appearing in this publication may be reproduced without the permission of the publisher. The opinions expressed in this publication are those of the contributors and are not necessarily shared by the editors or pub- lishers. All statements of fact and opinion represent the work of the author, who remains solely responsible for the content. All editorial rights reserved.

Harvard Asia Quarterly Fall 2003 3 UNDERSTANDING THE CONTEXT OF EMERGING PATHOGENS IN CHINA

BY GAIL E. HENDERSON n the early 20th century, America perceived China as the ‘sick man of Asia.’1 In 1948, a report by the UN Relief Organization stated, “China presents perhaps the greatest and most intractable public Gail E. Henderson, PhD is a medical sociolo- I health problem of any nation in the world.” Two decades later, the domi- gist, Professor of Social Medicine, and Adjunct Professor of Sociology at the University of nant image of Mao’s China was one of healthy, red-cheeked babies born North Carolina at Chapel Hill. Her teaching and to a nation that provided health care for all.2 There is an appealing simplic- research interests include health and inequality in using such images – no matter how incomplete – to characterize a ity, health and health care in China, and research regime. ethics. She is lead editor of Social Medicine Reader (Duke University Press, 1997). Her dis- More recently, the spread of HIV/AIDS in China in the 1990s and the sertation, a study of a teaching hospital in SARS epidemic of 2003 have created a new set of health-related images for Wuhan, was published as The Chinese Hospi- China, of a regime unequal to the challenges of potentially disastrous tal: A Socialist Work Unit (Yale University Press epidemics, with a dangerously inadequate health care system. Newspaper 1984). She has been involved in numerous health studies in China. She is the co-editor, reports about government cover-ups, poor quality hospitals and farmers with Barbara Entwisle, of Re-Drawing Bound- who could not pay for needed medical care proliferated. Unfortunately, aries: Work Households and Gender in China such reports often overshadow a more balanced assessment of the forces (University of California Press, 2000). She is that have shaped the health care system and its ability to prevent and also co-editor of a research ethics casebook, Beyond Regulations: Ethics in Human Subjects control infectious diseases. This assessment requires an excursion into Research (with Nancy King and Jane Stein, Uni- history to revisit China’s remarkable achievements in health care and ex- versity of North Carolina Press 1999). plore the complex and sometimes contradictory economic incentives that determine how the system is able to respond to current challenges. What does history tell us? First, Chinese government advocacy and investment in community infrastructure fostered a strong and effective public health system, which became a WHO model during the 1970s. Sec- ond, economic incentives in the post-Mao era that encouraged the development of hospital-based, high technology medical care have shaped China’s current curative health care system. In concert with the move away from collective welfare and central administration, inequalities in access to services have increased and the investment in public health infrastructure and services has declined, especially in remote rural regions. Lastly, while there may be some similarities between the Chinese HIV/AIDS epidemic and the recent experience with SARS, superficial media reports have focused too much attention on government neglect. HIV and SARS are very different pathogens, with different modes of transmission, degrees of infectiousness, and number and types of people affected, all of which limit the extent to which accurate comparisons can be drawn.

PUBLIC HEALTH UNDER MAO Public health – including disease surveillance, health education, environmental sanitation, nutrition and food hygiene, and maternal and child health, was probably Mao’s biggest triumph. Under his leadership, from 1949 to 1976, China experienced the most successful large-scale health transition in human history – a near doubling of life expectancy (from 35 to 68) and the eradication of many endemic and epidemic infectious diseases, including sexually transmitted diseases,3 that resulted in a gradual shift in the leading causes of death from infectious disease to chronic conditions.4 This transition was not accomplished through great gains in per capita income but rather by creating a closed socialist political economy that redistributed income and wealth, exercised control over industry, agriculture and migration, and had the ability to set national and local priorities in health care. By broadly distributing resources and relying on low-

Harvard Asia Quarterly 4 Fall 2003 tech public health measures and “patriotic public health cam- dence of local health institutions also undercut the ability of paigns” that mobilized the population against environmental the central government to mobilize public health activities.10 and behavioral risk factors, China achieved impressive im- The national-provincial conflict over response to the HIV provements in sanitation, maternal and child health, infec- epidemic is one example of this breakdown, especially in ar- tious disease surveillance and vaccination. Its three-tiered eas with HIV-infected commercial plasma donors. Decentrali- primary health care system became the WHO model for de- zation of authority and shifts in concentration of resources veloping countries.5 This system developed hospital-based from rural to urban areas, and from public health to curative services and public health departments at the county and medicine, had direct consequences for China’s capacity to township levels and united both curative and preventive ser- respond rapidly to the SARS epidemic, at least initially, by vices at the village level in the person of the “barefoot doc- making it more difficult to access information from affected tor.” Rural cooperative programs and urban workplace pro- provinces and to mobilize public health personnel in rural grams provided most citizens with medical insurance, al- areas. though the level of coverage, quality of services and overall On the other hand, it is dangerous to generalize; the health status indicators were never equivalent between rural quality of the public health system is far from uniform across and urban locations.6 rural China. Research in a Shandong county public health department in 199011 and surveys of rural health services in PUBLIC HEALTH IN THE POST-MAO REFORM ERA eight provinces during the 1990s12 document that collective After Mao’s death, the market-oriented economic reforms benefits and funding for public health varied with the wealth of the 1980s and 90s transformed the nation once again. In- of the region. In many regions, the medical and public health comes and productivity rose dramati- supervision continued to extend to clin- cally as agriculture and then industry ics in villages and county towns. In were de-collectivized and administra- Public health programs that did these areas, village doctors continued tive authority over lower level units not generate profits suffered to implement standard, low-cost pro- loosened. Living conditions, diet, under the transition to a tocols in response to outbreaks of in- health and nutrition all improved market-oriented system. fectious diseases. However, the public steadily.7 These developments were in health system was less capable of re- sharp contrast to Russia, where life ex- sponding to new or more complex chal- pectancy actually declined, from 70 in 1986 to 64 in 1994, and lenges such as identifying hypertension, which was not rou- continued to decline thereafter. Major investments were made tinely screened, or conditions requiring expensive new diag- in urban medical services, long stagnant under Mao, as China nostic technology. turned to the West to help modernize its hospitals, pharma- Thus, during the reform era, China experienced an in- ceuticals and medical research and training. These changes crease in both aggregate income levels and disparities in had a positive impact on health status as well.8 Better treat- income distribution (income inequality in China now equals ment for chronic conditions such as cancer and cardiovascu- that of the US).13 In any economic system, both trends are lar disease that require more hospital-intensive services was related – in complex and sometimes contradictory ways – to increasingly available. The incentives to develop new diag- health outcomes.14 On the positive side, increased income nostic and treatment services included not only the clear and wealth produce improved health outcomes. China’s im- medical needs of the population but also increased profit- pressive gains in per capita income in the post-Mao era, and ability. Under the financing system of the reform period, hos- especially in the last decade, are correlated with improve- pitals were established as relatively independent economic ments in many health status indicators: during the 1990s, units that received decreasing amounts of funding from gov- overall mortality rates declined in both urban and rural ar- ernment sources but were able to set prices for new technol- eas;15 between 1991 and 2000, infant mortality dropped, from ogy and medicines at much higher levels than other services. 17.3 to 11.8 per 1,000 live births per year in urban areas, and As World Bank and Chinese public health researchers have from 58.0 to 37.7 in rural areas; and maternal mortality rates clearly documented,9 these incentives promoted the use of declined as well between 1991 and 2000, in rural areas from new technologies at the expense of other, less profitable ser- 100.0 to 69.6 per 100,000 women per year, and in urban areas, vices. In some cases, the reforms forced inefficient and poor from 46.3 to 29.3.16 quality hospitals to offer better services; in others, espe- On the negative side, inequality in income distribution is cially for the lowest level township hospitals in poorer rural linked to unequal access to preventive and curative health areas, they produced failing hospitals with little to replace care and consequently to disparities in health status. In some them. cases, health status indicators declined, while in others health Public health programs that did not generate profits suf- status improved but disparities in aggregate health outcomes fered under the transition to a market-oriented system as increased. Urban-rural health disparities are evident in the well, with implications for health outcomes. For example, dur- mortality figures cited above, although the gap is declining ing the mid-1980s, funding for childhood immunizations in for infant mortality. However, highly aggregated health sta- rural areas declined, which resulted in an increase in child- tus measures often mask significant differences between geo- hood infectious diseases. With assistance from UNICEF, the graphic and sub-population income groups,17 and this is cer- government reversed this trend by providing more funds tainly true for China’s border and minority regions where and personnel for immunization programs. As many have mortality rates are much higher. In addition to income and observed, increased financial and administrative indepen- geographic location, the strongest predictor of access to health

Harvard Asia Quarterly Fall 2003 5 care is having medical insurance. In urban areas the percent HIV epidemic in commercial blood plasma donors during the with employment-based coverage declined between 1993 and 1990s, in a number of central provinces, as reported in the 1998, from 68.4% to 53.3%; but the rural insurance programs New York Times in late 2001. Failure to provide treatment and that depended on the collective economy for funding col- the negative consequences of obfuscation and delay should lapsed almost entirely in the 1980s and by 1998, only 8.8% of not be minimized. However, these media reports fail to ac- the rural population had coverage.18 Initially, because medi- knowledge the complexity of both the challenges posed by cal care charges had been kept below cost through price an epidemic that may include as many as one million people, controls, loss of insurance did not create widespread hard- and the very limited resources available to meet those chal- ships. However, as medical services improved and charges lenges.25 rose steeply during the 1990s, paying for medical care be- In fact, few governments, rich or poor, have success- came increasingly burdensome to the poorest citizens.19 Data fully stemmed the spread of AIDS. In the US, since the intro- from surveys during the 1990s document a decline in rural duction of antiretroviral drug therapy in the 1990s, the rate of inpatient admissions compared to urban,20 and anecdotal re- new cases has leveled off at around 40,000 new cases a year.26 ports suggest that many do not seek care due to the financial In sub-Saharan Africa, where there are about 2 million new burden. cases in young adults each year, only Uganda has demon- While the overall improvement in strated reduction in the prevalence of AIDS, achieved through health status indicators is impressive international assistance, government evidence of the positive effects of the advocacy and a strong condom pro- 27 economic reforms, especially in con- Inequalities in income motion program. Comparisons be- trast to the recent experience of Rus- distribution are relevant to the tween nations are complicated by the sia, it is the inequalities in income dis- challenges of recent infectious fact that in addition to social and eco- tribution that are more relevant to the disease outbreaks. nomic disadvantages and government challenges of recent infectious disease inaction, there are many biological fac- outbreaks. This is because most infec- tors that promote transmission (such tious diseases, such as HIV/AIDS, TB and malaria, tend to as the presence of other infections, especially other sexually be most prevalent among those individuals and communities transmitted infections, and greater susceptibility to different that are already economically and socially disadvantaged, strains of HIV virus). thus exacerbating the burden imposed by the illness itself. Poverty and the rise of a private market for blood plasma As Paul Farmer, a physician and anthropologist who has fueled the plasma donor epidemic in China. In 1995, the inter- written about AIDS in Haiti and the striking relationship be- national and Chinese medical literature reported that the epi- tween inequality and infections, observes, “inequality itself demic was spreading to plasma donors,28 and in 1996, pre- constitutes our modern plague.”21 sentations at the International AIDS meeting in Vancouver In response to the rising inequalities in health and ac- also described this trend.29 By the first international AIDS cess to health care, one of the most researched topics in conference in Beijing in 2001, detailed epidemiology was be- China during the 1990s was health insurance reform, resulting conducted and reported.30 During this same time period, ing in a number of pilot insurance programs in urban and a number of publications documented the daunting difficul- rural areas.22 As a result, in 2002, a program to rebuild rural ties involved in protecting China’s blood supply. These diffi- health infrastructure, based on multi-ministerial coordination, culties included cultural barriers to an all-volunteer blood established the following policies: 1) reconstitute rural coop- donation system, shortage of clinical transfusion specialists erative insurance to cover 900 million farmers through a joint and the high cost of technology required for accurate testing funding mechanism, with direct investment from central, pro- for transfusion-transmissible diseases such as hepatitis and vincial and local governments and from the farmers them- HIV.31 Efforts to improve the safety of the blood supply have selves; and 2) re-establish rural township public health hos- been ongoing and increasingly successful. In the fall of 2003, pitals to implement and oversee public health activities at the just prior to notification that funds totaling almost $100 mil- township and village levels that had become “unfunded man- lion were awarded by the UN Global Fund for AIDS, Malaria dates” during the reform era. If implemented, these initiatives and TB, the Chinese Ministry of Health began implementa- will have a positive impact on public health and disease pre- tion of a plan to include AIDS comprehensive prevention vention in the long term.23 The current dual challenges of and care programs for plasma donors and other risk groups dealing with HIV/AIDS and possible future outbreaks of in 100 counties identified as hardest hit by AIDS.32 These SARS add impetus to ensuring that these programs are actu- developments are extremely important and deserve media at- ally carried out. tention as well as international support. Funding from the US and other donors for biomedical LESSONS FROM THE AIDS EPIDEMIC IN CHINA? and scientific research collaborations is also having an im- In assessing the Chinese response to SARS, the media portant impact on HIV prevention and treatment. Awarding a has sought lessons from the recent experience with HIV/ $15 million NIH Comprehensive International Program of Re- AIDS, highlighting China’s weaknesses in dealing with the search on AIDS (CIPRA) grant to the China CDC in the sum- epidemic.24 They criticize the lack of medical treatment avail- mer of 2002 did not garner much media attention, but it pro- able to AIDS patients in remote rural areas, most of whom vided funds for vaccine development, research on risk fac- have acquired the infection through intravenous drug use, tors and behavioral interventions and treatment trials that and the government’s inaction in the face of an emerging are all moving forward. Other US and international organiza-

Harvard Asia Quarterly 6 Fall 2003 tions have contributed to research efforts as well. An addi- already underway. We must credit China’s efforts to contain tional consequence of these collaborations is increased at- the SARS epidemic in its hospitals, cities and borders, and its tention to and training for researchers and communities on openness to international collaboration and information shar- the ethics of protecting human subjects in clinical research.33 ing. These efforts were contributions to the global efforts to Equally important, clinical research also has the potential to control this deadly disease, and prevented an epidemic from focus attention on unmet treatment needs, as occurred after becoming a pandemic. the first International AIDS meeting held in Africa in 2000, when the magnitude of HIV among Africans became suddenly so salient that the world could no longer ignore the double standard of access to drugs only in developed countries. While many factors influenced China’s decision to establish AIDS prevention and treatment services in the 100 highest prevalence counties, the initiative was spearheaded ENDNOTES after a major Sino-US conference, in November 2002, on AIDS research and training in Beijing. 1 J Horn, Away with All Pests: An English Surgeon in the We should also remember that the Chinese public health People’s Republic of China (New York: Monthly Review system has proven that it can respond to potential threats Press, 1969); GE Henderson, “Public Health in China,” in WA with speed and decisiveness: in December 1997, fearing an Joseph (ed), China Briefing 1992 (Boulder: Westview Press, outbreak of a deadly strain of avian flu, in one day 1.2 million 1992). chickens from 160 farms and from more than 1,000 retailers 2 V Sidel, Serve the People: Observations on Medicine in and stalls were slaughtered.34 In fact, public health and secu- the People’s Republic of China (Boston: Beacon Press, 1974). rity personnel effectively halted the spread of the SARS epi- 3 MS Cohen, GE Henderson, P Aiello, Zheng HY, “Success- demic, working across sectors and geographic regions and ful Eradication of Sexually Transmitted Diseases in the applying classic public health strategies (masks, hand wash- People’s Republic of China: Implications for the 21st Cen- ing, and isolation).35 The widespread perceived vulnerability tury,” Journal of Infectious Disease 1996; 174 (Supplement to SARS, in contrast to the perceived low risk of HIV infec- 2): S223-230. tion held by many in China, generated enormous support 4 WC Hsiao, “Transformation of Health Care in China,” New throughout the country for improvements in the public health England Journal of Medicine 310:932-6, 1984; GE Henderson, system, and these improvements will ultimately also benefit “Issues in the Modernization of Medicine in China,” in D work to combat the HIV/AIDS epidemic. Simon and M Goldman (ed) Science and Technology in Post- Mao China (Cambridge: Harvard University Press, 1989); THE CHALLENGE OF EMERGING INFECTIOUS DISEASES IN CHINA see also World Bank reports on China’s health sector (1984 Statistics on disease and death rates are often used like and 1989). Rorschach tests to measure the legitimacy of a government. 5 RJ Blendon, “Can China’s Health Care Be Transplanted Infectious diseases, including emerging pathogens like HIV/ Without China’s Economic Policies?” New England Journal AIDS, are particularly potent foci for such critiques, in part of Medicine 300: 1453-58, 1979. because they tend to fall hardest on the most vulnerable and 6 GE Henderson et al., “Distribution of Medical Insurance in least well-served members of society. In contrast, in 2003, China,” Social Science and Medicine 41,8: 119-30. SARS had a different profile: with a high case fatality rate, its 7 Zhongguo Weisheng Nianjian, “China Health Yearbook route of transmission, and degree and duration of infectious- 2001” (Beijing: People’s Medical Publishing House, 2001) re- ness were not known. Furthermore, society’s most valued porting 2000 mortality rates and leading causes of death. See members – health care workers charged with controlling the BM Popkin et al., “Trends in diet, nutritional status and diet- epidemic – were initially the people at greatest risk of infec- related non-communicable diseases in China and India: The tion. In the face of such a threat to public health, China economic costs of the nutrition transition.” Nutrition Re- launched a campaign to eradicate SARS that few countries views 59: 379-90, 2001, demonstrating the decline in malnutri- could have accomplished. It is not clear whether SARS will tion across rural China during the 1990s and rise in non- reappear or how large the epidemic in China might ultimately communicable disease. be. What is clear is that the outbreak of 2003 alerted China 8 GE Henderson et al., “High Technology Medicine in China: and the world to the importance of maintaining a strong pub- The Case of Chronic Renal Failure and Hemodialysis,” New lic health system, and the special burden that may fall on England Journal of Medicine 318,15:1000-4, 1988. society’s most disadvantaged groups if we do not. 9 China 2020 series: Financing the Health Sector (Wash- The spread of these emerging pathogens in China and ington DC: World Bank, 1997) elsewhere is a direct, if unintended, consequence of eco- 10 e.g., China 2020 series; also, Liu Yuanli, WC Hsiao, and K nomic reform and integration of China into the global com- Eggleston, “Equity in Health and Health Care: The Chinese munity. These are reforms that the US has encouraged and in Experience,” Social Science and Medicine 49,10:1349-56, which the business and scientific communities have played 1999. key roles. Helping to enhance the strengths of China’s public 11 GE Henderson and TS Stroup, “Preventive Health Care in health system instead of focusing on the failures brought Zouping: Privatization and the Public Good,” In A Walder about by the increasingly market-oriented features of health (ed), Zouping in Transition: The Political Economy of Growth care will reinforce needed reforms that in some cases are in a North China County. (Cambridge: Harvard University,

Harvard Asia Quarterly Fall 2003 7 1998) 90. This was matched by a fall in teen pregnancies.” (UNAIDS 12 China Health and Nutrition Survey (funded by NIH, NSF, “Country Successes” Fact Sheet, July 2000) Foundation, UNC, and Chinese Academy of Preventive Medi- 28 Ji Y, Qu D, Jia G, et al. “Study of HIV Antibody Screening cine), conducted in 1989, 1991, 1993, 1997, and 2000. for Blood Donors by a Pooling Serum Method,” Vox Sang 13 The World Bank reports the inequality index (Gini coeffi- 1995, 9:255-6. Wu Zunyou et al., “HIV-1 infection in commer- cient) for both countries in 1997 at about 40. Gini measures cial plasma donors in China,” The Lancet 1995 Jul income distribution on a scale of 1-100. A rating of “1” would 1;346(8966):61-2. Lancet is the premier British Medical jour- mean that that income is perfectly equally distributed, with nal. This first report featured a mother and her two daughters all people receiving exactly the same income; “100” would who tested positive, in the absence of any other risk factors mean that one person receives all the income. European coun- except commercial blood donation, in rural Anhui Province, tries’ Gini coefficients ranged in the 20s and 30s; the highest between February and March 1995. The authors state, “Noti- were Brazil, South Africa, and Guatemala, at around 60. fication of HIV-1 infection to infected persons or their family 14 Moreover, extent of inequality itself seems to be related to members is not routinely done in China. Neither these in- poorer health care access and outcomes. fected women nor their family members were informed of the 15 Jun Gao et al., “Health Equity in Transition from Planned to infection because it was feared that they would commit sui- Market Economy in China,” Health Policy and Planning 17 cide if they discovered they were infected with HIV-1.” The (Suppl 1):20-29, 2002, p. 22. authors recommended screening plasma products and do- 16 Zhongguo Weisheng Nianjian (China Health Yearbook) nors, disclosing HIV status to infected individuals, and in- 2001. (Beijing: People’s Medical Publishing House, 2001) The troducing surveillance of plasma donors. Other articles about comparable US figures are not too dissimilar: in 1997, IMR for HIV in plasma donors include: Ji Y et al., “An Antibody Posi- whites was 6.0; for blacks it was 13.7, a greater than two-fold tive Plasma Donor Detected at the Early Stage of HIV Infec- difference (CDC NCHS website). tion in China,” Transfusion Medicine 6,3:291-2, 1996; VR 17 Liu YL WC Hsiao, and K Eggleston., 1999, p 1350. Nerurkar et al., “Complete Nef Gene Sequence of HIV Type 1 18 Jun Gao et al., 2002 p. 26. Subtype B’ from Professional Plasma Donors in the People’s 19 Liu Yuanli, WC Hsiao, and K Eggleston, “Equity in Health Republic of China,” AIDS Res Hum Retroviruses 14,5:461-4, and Health Care: The Chinese Experience,” Social Science 1998; and Zheng X et al. (China CDC), “The Epidemiological and Medicine 49,10:1349-56, 1999; GE Henderson et al., Study of HIV Infection Among Paid Blood Donors in One “Trends in Health Services Utilization in Eight Provinces of County of China,” Zhonghua Liu Xing Bing Xue Za Zhi (China China, 1989-1993,” Social Science and Medicine 47,12:1957- Journal of Epidemiology) 21,4:253-55, 2000. 71; Jun Gao et al., “Health Equity in Transition from Planned 29 Dr. Yiming Shao, a virologist from the Chinese CDC, pre- to Market Economy in China,” Health Policy and Planning sented data at this conference. 17 (Suppl 1):20-29, 2002 30 Before 2000, epidemiology was published in Chinese jour- 20 Jun Gao et al., 2002, p. 26. nals, e.g., Ye DQ, et al., “Serological epidemiology of blood 21 P Farmer, Infections and Inequalities: The Modern Plague. donors in Hefei, Anhui Province,” Chinese Journal of Pub- (Berkeley: UC Press, 1999). lic Health 17:367-8, 1998; and in 2001, in the West, e.g., Wu 22 GG Liu et al., “Equity in Health Care Access: Assessing ZY, Rou KM, and R Detels, “Prevalence of HIV Infection the Urban Health Insurance Reform in China,” Social Sci- Among Former Commercial Plasma Donors in Rural Eastern ence and Medicine 55,10:1779-94; G Bloom and Tang SL, China,” Health Policy and Planning 16,1:41-46, 2001 “Rural Health Prepayment Schemes in China: Towards a More 31 Hua Shan, Wang J, Ren F, et al., “Blood Banking in China,” Active Role for Government,” Social Science and Medicine The Lancet 360:1770-5, 2002. 48,7:951-60; G Carrin et al., “The Reform of the Rural Coop- 32 “AIDS Comprehensive Prevention and Treatment Demon- erative Medical System in the People’s Republic of China: stration Sites,” China MOPH, 2003. Interim Experience in 14 Pilot Counties,” Social Science and 33 Research ethics training programs have been carried out at Medicine 48,7:961-72. the China CDC AIDS Center during 2002 and 2003, spon- 23 Personal communication with Dr. Yiming Shao, Chinese sored by NIH Fogarty International Center AIDS Interna- Center for Disease Control and Prevention. tional Training in Research and Prevention Program, at both 24 LK Altman, “Lessons of AIDS, Applied to SARS,” New UCLA and UNC, and the NIH Office of AIDS Research. York Times May 6, 2003 D1 34 G Kolata, Flu: The Story of the Great Influenza Pandemic 25 Joan Kaufman and Jing Jun, “China and AIDS—the time of 1918 and the Search for the Virus that Caused It (NY: to act is now,” Science. 2002 Jun 28; 296(5577): 2339-40. Simon and Schuster, 1999) p. 239. In fact, it was suspicion 26 http://www.cdc.gov/hiv/pubs/facts.htm that SARS was actually avian flu that delayed response in 27 “Uganda, whose HIV rates peaked at a staggering 14% in some locations. the early 1990s, was the first country in sub-Saharan Africa 35 Martin Enserink, “China’s Missed Chance: SARS in China,” to reverse its own epidemic. Now, it has nearly halved its HIV Science 301:294-296, July 18, 2003. prevalence to around 8% by strong prevention measures. Even rural areas, which are frequently among the last to evidence signs of both the advent and the reversal of an HIV/ AIDS epidemic, have shown a reduction in HIV rates. In some areas of rural Uganda, for example, HIV infection rates among teenage girls dropped to 1.4% in 1996-97, from 4.4% in 1989-

Harvard Asia Quarterly 8 Fall 2003 THE POLITICS OF CHINA’S SARS CRISIS

BY YANZHONG HUANG n November 2002, a form of atypical pneumonia called Severe Acute Respiratory Syndrome (SARS) began spreading rapidly around the I world, prompting the World Health Organization (WHO) to declare Yanzhong Huang is an assistant professor at the ailment “a worldwide health threat.” One country that was particularly the John C. Whitehead School of Diplomacy hit by the disease was China, where the outbreak of SARS infected more and International Relations at Seton Hall Uni- 1 versity, where he is directing the School’s new than 5,300 people and killed 349 nationwide. History is full of ironies: the Center for Global Health Studies. His research epidemic caught China completely off-guard forty-five years after Mao focuses on Chinese politics, state capacities, Zedong bade “Farewell to the God of Plagues.” global health and security. In May, he appeared The SARS epidemic was not simply a public health problem. Indeed, before the Congressional-Executive Commis- sion on China to testify about the politics of it caused the most severe socio-political crisis for the Chinese leadership SARS in China. His recent publications include since the 1989 Tiananmen crackdown. Outbreak of the disease fueled a monograph “Mortal Peril: Public Health in fears among economists that China’s economy was headed for a serious China and Its Security Implications,” which was downturn. The information clampdown and a fatal period of hesitation published by the Chemical and Biological Arms Control Institute in August 2003. He graduated spawned anxiety, panic, and rumor-mongering across the country and with a Ph.D. degree in political science from undermined the government’s efforts to create a milder image of itself in the University of Chicago in 2000. the international arena. As Premier Wen Jiabao pointed out in a cabinet meeting on the epidemic, “the health and security of the people, overall state of reform, development, and stability, and China’s national interest and international image are at stake.”2 In the weeks that followed, the Chinese government launched a crusade against SARS, effectively bringing the disease under control in late June and eliminating all known cases by mid-August. The outbreak posed some crucial questions relating to Chinese state capacity in crisis management: what accounted for the initial government cover-up and inaction, and then the subsequent dramatic shift in government policy toward SARS? Why was the government able to contain the spread of SARS in a short period? What lessons has the government drawn from the crisis? A political analysis of the crisis not only demonstrates crucial linkages between China’s political system and its pattern of crisis management, but also sheds light on the government’s ability to handle the next disease outbreak. While problems in the formal institutional structure and bureaucratic capacity accounted for the initial official denial and inaction, the institutional forces unleashed from the terrain of state-society relations led to dramatic changes in the form and content of government policy toward SARS. Through mass mobilization, the government successfully put the disease under control. Despite some encouraging developments, China’s epidemic control program is still plagued by problems in agenda-setting, policy making and implementation, which in turn can be attributed to its political system. A healthier China therefore demands some fundamental changes in the political system.

THE INITIAL GOVERNMENT RESPONSE TO SARS 1. Cover-up Cover-up and inaction characterized the initial government response to SARS. The earliest case of SARS is thought to have occurred in Foshan, a city southwest of Guangzhou in Guangdong province, in mid-November 2002. Similar cases were later also found in Heyuan and Zhongshan in Guangdong. In late January, a team of health experts from the Ministry of Health and the province was dispatched to Zhongshan and completed an investigation report on the unknown disease. On January 27, the report was sent to the provincial health bureau and, presumably, also to the Ministry of Health in Beijing. Apparently intended to keep the general Harvard Asia Quarterly Fall 2003 9 public uninformed about the disease, the report was marked the outbreak for fear that doing so would lead to panic and “top secret.”3 chaos, which would negatively affect tourism and To be fair, any government that is suspecting or discov- investment.10 The government incentives for cover-up be- ering infectious diseases in its territory faces painful con- came even stronger as the outbreak occurred at a time when flicts between its moral obligation to mankind and the poten- a new leadership was poised to succeed the elder generation tial negative socioeconomic repercussions resulting from pub- of Jiang Zemin. In mid-November, when the first SARS cases licizing the presence of such disease.4 Yet few countries have were identified, the Party was holding the 16th Congress to been as loath as China to admit the presence of an epidemic select new leaders to the all-powerful Politburo Standing Com- in their territories. According to the Implementing Regula- mittee. After the meeting, the new ruling elites were busy tions on the State Secrets Law regarding the handling of preparing for the National People’s Congress in March, which public-health related information, any occurrence of infec- would mark the beginning of a new government. To publicly tious diseases should be classified as a state secret before acknowledge the outbreak at this crucial juncture would not being announced by the Ministry of Health or organs autho- only risk causing socio-economic instability, but also sully- rized by the Ministry.5 Not surprisingly, a virtual news black- ing the party’s image and legitimacy among the people. out about SARS continued until February 11, when With a blackout on reporting about the disease in the Guangdong health officials finally broke the silence by hold- government-controlled press, carriers of the disease traveled ing press conferences about the dis- without realizing that they were spread- ease – presumably with the consent of ing SARS across the country. Worse, the Center. From then on, journalists The provincial government the security designation for the top- were allowed to report about SARS chose not to publicize the secret document meant that more extensively. But the provincial outbreak in order to avoid panic Guangdong health authorities could propaganda bureau again halted report- and chaos, which would not discuss the situation with other ing of the disease on February 23, when negatively affect tourism and provincial health departments in China. some reports began to question the investment. Consequently, hospitals and medical government’s handling of the outbreak. personnel in most localities were com- Until early April, the government au- pletely unprepared for the outbreak. thorities were essentially in denial, sharing little information When the first SARS case in Northern China was admitted to with the World Health Organization and even barring WHO the PLA 301 Hospital in Beijing on March 2, doctors in charge experts from visiting Guangdong, the epicenter of the out- of the treatment had little information about the disease.11 break. Overwhelmed by the extraordinarily high flow of traffic In accounting for this penchant for cover-up, one has to through ERs in mid-April, major hospitals in Beijing took few start with the country’s authoritarian institutions, which are measures to reduce the chances of cross-infection. Official secretive by nature. The philosophical system of agricultural reports revealed that even some well-connected government authoritarianism was devised by Chinese thinkers more than officials had problems getting admitted because of the short- two thousand years ago. Sunzi, the famous military writer in age of hospital beds.12 It is not difficult to imagine what hap- ancient China, described secrecy as crucial to state pened elsewhere. Indeed, Inner Mongolia’s first SARS pa- survival.6 Added to this thick residue of traditional tient, who sought treatment in the Hohhot Hospital around authoritarianism is a Soviet political model imitated by the March 20, was not correctly diagnosed until early April.13 Chinese Communist Party, which made the protection of state secrets a top priority. 2. Inaction The inherently secretive nature of an authoritarian re- This information clampdown paralleled the absence of gime is further compounded by the regime’s performance- effective response to the original outbreak. While it is evi- based legitimacy. In view of the dying communist ideology dent that as late as January 20 the Ministry of Health was and the continuous resistance to democracy, the regime must aware that a dangerous new type of pneumonia existed in constantly demonstrate to the public its ability to perform. Guangdong, the Chinese Center for Disease Control and Pre- As a result, “government officials routinely inflate data that vention (CDC) did not issue a nationwide bulletin to hospi- reflect well on the regime’s performance, such as growth rates, tals on how to prevent the ailment from spreading until April while under reporting or suppressing bad news such as crime 3, and it was not until mid-April that the government formally rates, social unrest and plagues.”7 In this sense, the official listed SARS as a disease to be closely monitored and re- denial and deception in the crisis was not a deviation from a ported on a daily basis under the Law of Prevention and familiar and troubling pattern in the contemporary Chinese Treatment of Infectious Diseases. The Chinese government political system. thus waited more than three months before taking decisive The performance-based legitimacy is related to a signifi- action. cant shift in the national agenda, which makes economic Lack of interdepartmental cooperation ostensibly delayed growth the key to China’s solution of all problems and social any concerted efforts to address the initial outbreak. The stability the prerequisite to development.8 In the words of policy developments during the crisis are a reference point the late paramount leader Deng Xiaoping, “the overwhelm- for the “fragmented authoritarianism” model, which posits ingly important issue for China is stability, without which that authority below the very peak of the Chinese political nothing can be achieved.”9 It was reported that the system is fragmented and disjointed, leading to a bogged- Guangdong provincial government decided not to publicize down policy process characterized by extensive bargaining.14

Harvard Asia Quarterly 10 Fall 2003 While the model offers only a static description of how the used as an excuse to pass them over for promotion, govern- core state apparatus works,15 it correctly points out the coor- ment officials at all levels tend to distort the information they dination problems in China’s policy process. Medical per- pass up to their superiors in order to place themselves in a sonnel in the city of Guangzhou in Guangdong Province good light. While this is not unique to China, the problem is blamed poor communication between the province’s health alleviated in democracies through “decentralized oversight,” bureau and the city’s health authorities for the failure to con- which enables citizen interest groups to check up on admin- trol the spread of the disease.16 In addition to the tensions istrative actions. Since China still refuses to enfranchise the among different levels of health authorities, coordination prob- general public in overseeing the activities of government lems existed between functional departments and territorial agencies, lower-level officials can fool higher authorities more governments, and between civilian and easily than their counterparts in liberal military institutions. As one senior democracies. This exacerbates the infor- health official admitted, before anything mation asymmetry problems inherent in could be done, the Ministry of Health a hierarchical structure. Beijing munici- had to negotiate with other ministries pal authorities, for example, kept hiding and government departments.17 At one the actual SARS situation in the city from level, Beijing’s municipal government ap- the Party Center until April. Initial decep- parently believed that it could handle the tion by lower-level officials led the cen- situation by itself and thus refused as- tral leaders to misjudge the situation. On sistance from the Ministry of Health; at April 2, the State Council held its first another, the Ministry did not have con- meeting to discuss the SARS problem. trol over all available health facilities. Of Based on the briefing given by the Min- Beijing’s 175 hospitals, 16 are under the istry of Health, the meeting declared that control of the army, which maintains a SARS had “already been brought under relatively independent health system. effective control.” Having admitted a large number of SARS The growing dispersal of political patients, military hospitals in Beijing power at the top level in the post-Mao withheld SARS statistics from the Min- era further reduced the autonomy of the istry until mid-April. Organizational bar- top leaders in responding to the crisis in riers also delayed the process of correctly a timely manner. Instead of having a per- identifying the cause of the disease. The sonalistic leadership unconstrained by Chinese CDC obtained the sample in Minister of Health Zhang Wenkang was fired laws and procedures, the post-Mao re- February but refused to share it with during the SARS crisis. gime features collective leadership, with other research institutions. After an ex- the Party General Secretary acting as the amination of just two samples, its chief first among equals. Political power at the virologist rushed to announce Chlamydia as the cause of national level has been further diluted after the 16th Party SARS on February 18.18 Congress, which expanded the membership of the Politburo The presence of such a fragmented and disjointed bu- Standing Committee and allowed former president Jiang Zemin reaucracy in an authoritarian political structure means that (who is not a member of the CCP Central Committee) to retain policy immobility can only be overcome with the interven- the position of Chairman of the Central Military Commission tion of an upper-level government that has the authority to (CMC). While Jiang gave up the positions of state president aggregate conflicting interests. But this tends to encourage and party general secretary to Hu Jintao, he packed his lower-level governments to shift their policy overload to the protégés into the Politburo Standing Committee; these upper levels in order to avoid assuming responsibilities. In protégés were initially silent on the emerging SARS threat. consequence, a large number of agenda items compete for Because China’s decision-making emphasizes consensus, the the upper level government’s attention. In addition, the drive involvement of more actors with equal status in decision- toward economic growth in the post-Mao era has marginalized making only increases the time and effort needed for policy public health issues. In fact, prior to the SARS outbreak, coordination and compromise. Indeed, despite the increas- public health had become the least of the concerns of Chi- ingly urgent tone in official reports, the startling decision to nese leaders.19 Compared to an economic issue, a public health fire Minister of Health Zhang Wenkang (a Jiang protégé) and problem often needs an attention-focusing event (e.g., a large- Beijng mayor Meng Xuenong (a Hu protégé) appeared to scale outbreak of a contagious disease) to be finally recog- have come at the last minute as a compromise between Jiang nized, defined, and formally addressed. Not surprisingly, and Hu. In contrast to President Hu and Premier Wen’s inten- SARS did not raise the eyebrows of top decision makers until sive activities related to SARS, three Jiang allies in the Polit- it had developed into a nationwide epidemic. buro Standing Committee, Wu Bangguo, Jia Qinglin, and Li By early April, it was evident that SARS was already Changchun did not contribute to the SARS campaign until being taken very seriously at the top level. Yet the April 24. The same day, Zeng Qinghong, another Jiang ally, government’s ability to formulate a sound policy against went to the Central Party School to downplay the SARS threat, SARS was hampered because lower-level government offi- asking the school to “maintain normal teaching and studying cials intercepted and distorted the upward information flow. order and work order.”20 As Chairman of the CMC, Jiang did For fear that any mishap reported in their jurisdiction may be not mobilize military health personnel to support the nation-

Harvard Asia Quarterly Fall 2003 11 wide campaign until April 28. By then, the disease had al- edented challenge to the state’s monopoly on information. ready engulfed China. Furthermore, while party leaders are not formally accountable to their people, they may have to take mass reactions REVERSE COURSE into account when they make policies, otherwise risking lack 1. The failure of information clampdown of cooperation with their programs from below. As a result of As the virus continued to spread, China’s political lead- the strategic interaction between the state with increasing ership was under growing domestic and international pres- legitimacy concerns and social forces with more political and sures.21 Despite the prohibition against any public discus- economic resources, the state may have more incentives to sion of the epidemic, 40.9 percent of the urban residents had take seriously the people’s interests and demands.24 already heard about the disease through unofficial means.22 News of the disease reached residents in Guangzhou through text messages sent among mobile phones on Feb- ruary 8, forcing the provincial government to hold a news conference admitting to the outbreak. Starting February 11, the Western news media began to aggressively report on SARS in China and the government’s cover-up of the outbreak. On March 15, the WHO issued its first global warning about SARS. While China’s government-controlled media was prohibited from reporting on the warning, the news circulated via mobile phones, email, and the Internet. On March 25, three days after the arrival of a team of WHO experts, the government for the first time acknowledged the spread of SARS outside of Guangdong. The State Council held its first meeting Beijing residents in April 2003, lining up to buy disinfectant. to discuss the SARS problem, two days after the Wall Street Journal published an editorial calling for other countries to suspend To some extent, the unsettled state of the leadership all travel links with China until it implemented a transparent transition increased the incentives of top leaders to accom- public health campaign. The same day, the WHO issued the modate social demands. Since Jiang Zemin informally retains first travel advisory in its 55-year history advising people not ultimate authority, the two formal titles Hu holds – Party Gen- to visit Hong Kong and Guangdong, prompting Beijing to eral Secretary and State President – have failed to grant the hold a news conference in which the Health Minister prom- latter “core” status in the fourth-generation leadership. The ised that China was safe and SARS was under control. En- tenuousness of Hu’s position may have prompted him to raged by the Minister’s false account, Dr. Jiang Yanyong, a attempt to expand his own political space.25 His emphasis on retired surgeon at Beijing’s 301 military hospital, sent an e- the virtues of plain living and his visits with peasants in mail to two TV stations, accusing the Minister of lying. While Inner Mongolia in early January 2003 appeared to create a neither station followed up on the e-mail, Time magazine picked new image of an engaged and caring leader. In March, Hu up the story and posted it on its website on April 9, which made it clear in the National People’s Congress that he would triggered a political earthquake in Beijing. “exercise power for the people, feel as the people feel and The aforementioned events are revealing examples of work for their happiness.”26 Given the growing demand for a how evolving state-society relations can significantly influ- more effective government response, the crisis offered Hu a ence the trajectory of public policy development in post- great opportunity to strike this new theme. Indeed, his will- Mao China. Economic reform and globalization provide more ingness to visit Guangdong, the SARS Ground Zero, in mid- Chinese with the information, connections, resources and April without wearing a face mask appealed to the Chinese incentives to act on their own for their personal security and public and stood in sharp contrast with Jiang, who fled to the personal fulfillment. In the words of Thomas Friedman, these relatively safe Shanghai during the crisis. empowered, even super-powered individuals become more Last but not least, the exclusive nature of the Chinese demanding of the government, and will get angry when their body politic does not prevent outside forces, including for- leaders fail to meet their aspirations.23 The torrent of mes- eign media and international organizations, from intruding sages sent through cell phones or the Internet and Dr. Jiang into the post-Mao public policy process. This is especially Yanyong’s exposure of the cover-up thus posed an unprec- the case when a justification can be made that a failure to pay

Harvard Asia Quarterly 12 Fall 2003 heed to international pressures will hurt China’s economic With the intensive and direct involvement of the Party development and thus the regime’s legitimacy. Indeed, given Center, the potential for interagency and intergovernmental the endemic lying and misinformation in China’s bureaucracy, cooperation was maximized. On April 23, a task force known Hu and Wen (both Internet users) have incentives to obtain as the SARS Control and Prevention Headquarters of the uncensored information from alternative channels in policy State Council was established to coordinate national efforts making. In this respect, foreign media and international orga- to combat the disease. Vice Premier Wu Yi was appointed as nizations alike are instrumental in channeling social demands commander-in-chief of the task force. Similar arrangements into the state policymaking regime. were made at the provincial, city, and county levels. Direct involvement of the political leadership also in- 2. The government crusade against SARS creased program resources, helped ensure they were used The strong internal and external pressures prompted for program purposes, and mobilized resources from other Party leaders to intervene on society’s behalf and precipi- systems. On April 23, a national fund of two billion yuan tated them to fully mobilize resources for autonomous ac- ($242 million) was created for SARS prevention and control. tion. In hindsight, one of the strengths The fund was to be used to upgrade of party-state dualism in China is the county-level hospitals, to finance the Party’s ability to push the government treatment of farmers and poor urban by signaling its priorities loudly and The SARS debacle has actually residents infected with SARS, and to clearly. This helps explain why the April given central leaders a fund SARS-related medical facilities in 2 meeting held by the State Council did justification to reinforce control central and western China. The central not generate any serious response by increasing discipline over government funding was comple- from the lower level, whereas the sys- lower-level officials who mented by an additional seven billion tem was fully mobilized after April 17, disobey central policy yuan from local governments.30 Free when an urgent meeting held by the instructions. treatment has since been offered to Standing Committee of the CCP Polit- SARS sufferers anywhere in the coun- buro explicitly warned against covering up SARS cases and try. Within one week, a SARS hospital that had the capacity demanded accurate and timely reporting of the disease. After to accommodate 1,200 patients was constructed and began the April 17 meeting, government media began to publicize to operate from May 1. the number of SARS cases in each province, updating the These momentous measures appeared to have worked. numbers on a daily basis. The party and government leaders The epidemic started to lose its momentum in late May. On around the country were now held accountable for the over- June 24, the World Health Organization lifted its advisory all SARS situation in their jurisdictions. against travel to Beijing. On August 16, with the last two The perceived crisis also led the government to take SARS patients discharged from the Beijing Ditan Hospital, measures to strengthen fundamental authority links within China for the time being was free from SARS. the system. As indicated by the “fragmented authoritarianism” model, higher-level leaders, once commit- IS THE GOVERNMENT PREPARED FOR THE NEXT DISEASE OUT- ted to a particular policy area, can impose their will on lower BREAK? levels without serious institutional constraints.27 The SARS 1. The good news debacle has actually given central leaders a justification for The weaknesses and strengths demonstrated by the reinforcing control by increasing discipline for lower-level government during the crisis raised questions regarding its officials who do not obey central policy instructions. For capacity to respond to other disease outbreaks. The govern- example, on April 20, Health Minister Zhang Wenkang and ment appears to have drawn some important lessons from Beijing Mayor Meng Xuenong were ousted for their misman- the crisis. When asked what he learned from the SARS crisis, agement of the crisis. As part of a nationwide campaign to the Shanghai Mayor Han Zheng replied that “first of all, we mobilize the system, the State Council sent out inspection should realize that the number one concern of the rank-and- teams to the provinces to scour government records for un- file people is health and life security.”31 On various occa- reported cases and to fire officials for lax prevention efforts. sions since the crisis, central leaders have emphasized the According to the official media, by May 8 China had sacked importance of public health, especially rural health care.32 or penalized more than 120 officials for their “slack” response The government has also provided more funding to public to the SARS epidemic.28 These actions shook the compla- health. The government earmarked billions of dollars to SARS cency of local government officials, who then abandoned prevention and control. Recently, it invested 6.8 billion yuan their initial hesitation and jumped onto the anti-SARS band- for the construction of a three-tiered network of disease con- wagon. Driven by political zeal, they sealed off villages, apart- trol and prevention.33 While a nation-wide SARS training ment complexes and university campuses, quarantined tens program is underway, the government has initiated a disease of thousands of people and set up checkpoints to take tem- reporting system which allows local hospitals to directly re- peratures. By May 7, 18,000 people had been quarantined in port suspected SARS cases to the Chinese CDC and the Beijing. The Maoist “Patriotic Hygiene Campaign” was revi- Ministry of Health.34 talized. In Guangdong, 80 million people were mobilized to These measures reflected the increased efforts of the clean houses and streets.29 In the countryside, virtually ev- Party to cultivate a new image for its leadership. It wants ery village was on SARS alert, with roadside booths installed citizens to see the leaders as being in touch with the people to examine all those who entered or left. and committed to their best interests. More attention has

Harvard Asia Quarterly Fall 2003 13 thus been paid to the basic needs of China’s farmers and harass public health activists and devote few resources to workers. Recently, Premier Wen indicated that beginning 2003, educating people about infectious diseases. In addition, there a majority of the increased health funding will support rural has been no fundamental change in the government devel- public health. He also reiterated his commitment to a new opment agenda. The central government still equates devel- medical insurance scheme in the countryside.35 Provided that opment with economic growth and uses that as a yardstick in rural areas were viewed as the weakest link in containing the measuring local government performance. Earmarking finan- spread of SARS, such measures are expected to strengthen cial resources until now has been done on an ad hoc basis, the ability of the public health system to respond to a future and there has been no discussion of serious public finance disease outbreak. reform.39 All of these factors sow the seeds for a larger and Equally important, the government seems to have learned more catastrophic disease attack. Single-minded pursuit of that in an era of the Internet and cell phones, a complete economic development, for example, entails more rapid and information blackout is not only impos- intensified human activities against sible but also counterproductive. nature, increasing the risk of human There are signs suggesting that the exposure to potential disease organ- crisis is forcing the government to take The government seems to have isms. When a critical threshold is sur- steps to establish an image of a more learned that in an era of the passed, infection can suddenly develop open and transparent government. The Internet and cell phones, a into an epidemic. April 28 Politburo meeting obviously complete information blackout In addition, it is worth noting that made the decision to publicize a sub- is not only impossible but also the apparent policy transparency has marine accident in the same month that counterproductive. not been accompanied by significant cost 70 lives. News of the tragedy was state relaxation of media control. On reported by the official Xinhua news May 12, the very same day that Pre- agency on May 2. This marks a significant departure from the mier Wen Jiabao released the new regulations to promote traditional secretive approach taken to the nation’s military openness, the Beijing Morning News carried an article on disasters. If this new openness continues in the post-SARS how people who spread “rumors” about SARS could be jailed era, it will not only create conditions for a government that is for up to five years. While the newly promulgated Regula- more accountable to its people, but will also provide consid- tions on PHEs stipulate that government officials make timely erable incentives for sharing knowledge of an outbreak with and truthful reports about any public health emergencies, the international community as early as possible. they do not enshrine the public’s right to be informed in the Third, as evidenced in the government campaign against same manner. Indeed, a most recent speech by Vice Premier SARS, an infectious disease can potentially trigger the party- Wu Yi reiterated state control over the media in order to state to organize a political campaign to reach deep into the “strictly prohibit the spread of rumors and other harmful in- hinterlands and snap people into action. The government formation.”40 In other words, public health emergencies will capacity to mobilize against a disease outbreak is enhanced still be considered state secrets until they are formally an- by a more institutionalized crisis management system. The nounced by the government. Regulations on Public Health Emergencies (PHEs) issued by This will not only make a future government cover-up the State Council in mid-May, for example, requires setting highly likely, but will also sustain the problem of lying and up an emergency headquarters right after a public health misinformation in the Chinese bureaucracy. While feedback emergency is identified. It was reported that the government from the public may matter more for the government than planned to set up an Emergency Response Bureau, which before, government officials are ultimately not responsible to would draw on the example of the US Federal Emergency the public but rather to the higher authorities. Hence the Management Administration to tackle future health crises government will always be more sensitive to something that and natural disasters.36 comes down from the top, rather than from the bottom up. Ironically, the likelihood of deception has increased as a re- 2. The bad news sult of the spread of some government measures in fighting But will all this suffice to effectively contain future epi- SARS, such as the practice of holding bureaucratic officials demics? Before answering this question, we should keep in personally accountable for local SARS cases through a “re- mind that SARS is not the sole microbial threat China faces. sponsibility pledge” (junling zhuang) without giving due The country is facing challenges from other major infectious consideration of actual local conditions (e.g., the public health diseases such as the plague, cholera, HIV/AIDS, sexually infrastructure). If indeed an outbreak is imminent, a local gov- transmitted diseases, tuberculosis, viral hepatitis and endemic ernment official concerned about his post may well choose schistosomiasis.37 These multiple public health challenges to lie. Because of the regime’s performance-based legitimacy, require China to build on the anti-SARS momentum and inte- the tendency to cheat can be tolerated, sometimes even en- grate a comprehensive epidemic control plan into the na- couraged by the central party-state. Manipulation of SARS- tional socio-economic development agenda. While the health related data remained a serious problem even after April 17. sector now receives increasing attention from the high-level, Among other things, a pattern could be easily identified in the government so far has placed top priority on the preven- the government war against SARS: when upper-level leaders tion of the return of SARS only. Despite some encouraging demanded a reduction of SARS cases, their orders would be signs, the top leaders have been generally silent on other reflected in statistics afterwards.41 It is alleged that Shanghai, major infectious diseases.38 Local governments continue to the economic center of China, had only single-digit SARS

Harvard Asia Quarterly 14 Fall 2003 cases because the city authorities were allowed leeway to significantly reduced the incentives for any meaningful decide on what constitutes a SARS case. change in the political system. According to a recent survey To the extent that upward accountability and perfor- carried out in five major cities, more than 76.5 percent of the mance-based legitimacy causes problems in agenda-setting respondents expressed increased confidence in the govern- and policy making, the lack of effective civil society partici- ment as a result of the crisis, compared with only 1.7 percent pation reduces government effectiveness in policy enforce- who said the opposite.49 With this strong “loyalty,” to bor- ment. In initiating many anti-SARS projects during the crisis, row political economist Albert Hirschman’s term, the govern- the government did nothing to consult or inform the local ment does not need to worry too much about “exit” (i.e., people. Chinese non-governmental organizations (NGOs) people turning their back on the government), and the incen- were absent in the war against SARS.42 Instead, the govern- tives to expand the space for “voice” of people through po- ment relied on the extensive array of mobilization vehicles litical reform will be heavily discounted.50 Little wonder that installed in the Mao era – village party branches, street sub- after several months of permitting China’s intellectuals the district offices, former barefoot doctors – to take tempera- freedom to call for political reform, the Communist Party has tures, quarantine people, trace infections and round up lag- ordered a halt to such debate.51 gards. To be sure, party leaders undertaking the anti-SARS measures differed from their predecessors by emphasizing CONCLUSION “science” and “rule by law.” Yet the absence of genuinely The pattern of the government response to SARS was engaged civil society groups as a source of discipline and shaped by the institutional dynamics of China’s political sys- information, coupled with the increasing pressure from higher tem. A deeply ingrained authoritarian impulse to maintain authorities, easily created a results-oriented implementation secrecy, in conjunction with a performance-based legitimacy structure that made nonscientific, heavy-handed measures and an obsession with development and stability during po- more appealing to local government officials. They found it litical succession, contributed to China’s failure to publicize safer to be overzealous than to be seen as “soft,” and this the outbreak. Meanwhile, an upward accountability, a frag- opened doors for more human rights violations. Until June 2, mented bureaucracy, and an oligarchic political structure ham- for example, Shanghai was quarantining people from the re- pered any effective government response to the outbreak. In gions hard hit by SARS (such as Beijing) for ten days even if spite of these problems, interactions between the state and they had no symptoms.43 As a result, government policy society unleashed dynamics that prompted the central party- faced legitimacy problems in seeking society’s cooperation, state to intervene on society’s behalf. The direct involve- ultimately resulting in a series of protests and riots in Zhejiang ment of the Party strengthened authority links, increased and Tianjin.44 The mobilization model also suffers the prob- program resources, and maximized the potential for interde- lem of sustainability in the post-Mao era. While personal partmental and intergovernmental cooperation. In this man- rewards of private life (e.g., medals, higher pay, credits for ner, the party-state remains capable of implementing its will medical workers’ children attending the college entrance throughout the system without serious institutional con- exam) were provided for activism in the campaign, decades of straints. The government capacity in crisis management has reforms have eroded state control and increased the oppor- been further enhanced by a series of measures taken in the tunity cost of participation. The government has demon- post-SARS era. However, this does not mean the govern- strated the ability to spur people to action in even the most ment is ready for the next disease outbreak. In the absence of remote villages, but in a post-totalitarian context it is gener- fundamental changes in the political system and a compre- ally difficult to sustain a state of high alert across the country hensive epidemic control plan, not only is the same pattern for an extended period. of cover-up and inaction likely to be repeated, but the gov- Much to the chagrin of many China watchers, the SARS ernment will also find it increasingly difficult to control the crisis has not helped create more space for China’s nascent multiple public health challenges it is now facing. civil society. In early June, China detained 180 members of the banned Falun Gong spiritual movement in Hebei for spreading rumors and recruiting new followers during the SARS epidemic.45 Several days later, the Ministry of Civil Affairs outlawed 63 social organizations.46 Since mass mobilization is widely credited with helping stop the spread of SARS, it is very likely that local officials have learned the ENDNOTES wrong lesson: that forceful measures such as enforced quar- antines and travel bans are the silver bullet for all infectious 1 Ministry of Health, August 16, 2003, in http:// diseases.47 This will certainly bode ill for the prospect of www.moh.gov.cn/zhg1/yqfb/1200308160002.htm. democracy in China. 2 http://www.chinanews.com.cn/n/2003-04-13/26/293925.html The lack of change in fundamental political institutions 3 John Pomfret, “China’s slow reaction to fast-moving ill- underscores the unwillingness of the Chinese leadership to ness,” Washington Post, April 3, 2003, p. A18. let the SARS transparency campaign be used to push for a 4 For historical examples, see J. N. Hays, The Burden of Dis- more significant change. It sounds puzzling, but the triumph ease: Epidemics and Human Response in Western History of China’s war on SARS and the ensuing robust economic (New Brunswick, NJ: Rutgers University Press, 1998). growth48 appear to have rejuvenated the party and consoli- 5 Li Zhidong, et al., Zhonghua renmin gonghe guo baomifa dated the power base of the new leadership, which may have quanshu (Encyclopedia on the PRC State Secrets Law)

Harvard Asia Quarterly Fall 2003 15 (Changchun: Jilin renmin chubanshe, 1999), pp. 372-374. I 20030521/997636.html. thank Professor Richard Baum for bringing this to my atten- 31 http://news.sina.com.cn/c/2003-09-17/0742764996s.shtml. tion. 32 http://www.moh.gov.cn/jcwsyfybj/1200308080007.htm. 6 Robert E. Bedeski, “Approaches to Transparency in Arms Renmin ribao, overseas edition, August 26, 2003, September Control Verification – A Canadian View of Chinese Perspec- 3, 2003. tive,” Journal of Military and Strategic Studies, The Elec- 33 http://news.sina.com.cn/o/2003-09-25/1036816387s.shtml tronic Journal of the Centre for Military and Strategic Stud- 34 http://news.sina.com.cn/o/2003-09-23/0934803130s.shtml. ies, Winter 2000/Spring 2001, in http://www.jmss.org/2001/ 35 Renmin ribao, overseas edition, September 12, 2003. article1.html. 36 South China Morning Post, May 13, 2003. 7 Minxin Pei, “A Country that does not take care of its people,” 37 Renmin ribao, overseas edition, August 26, 2003. Financial Times, April 7, 2003. 38 Philip P. Pan, “China Meets AIDS Crisis with Force,” Wash- 8 “Development: Key to China’s Solutions of All Issues,” ington Post, August 18, 2003. People’s Daily online, March 6, 2000. 39 With regard to medical care and medical insurance, the 9 Renmin ribao (People’s daily), June 26, 2001, in http:// government uses 80 percent of its health spending on urban past.people.com.cn/GB/shizheng/252/5303/5304/20010626/ people, who account for only 20 percent of the population. Li 497648.html. Congguo, “Agriculture, Rural Area, and Peasant Issues: Think 10 Pomfret, “China’s slow reaction to fast-moving illness.” More about the Dangers,” Liaowang, August 3, 2003, no. 32, 11 http://www.people.com.cn/GB/shehui/47/20030606/ pp. 29-31. 1009738.html. 40 http://www.people.com.cn/GB/shizheng/1026/2126148.html 12 China Youth Daily, June 18, 2003. 41 As President Hu Jintao made his rallying call for a “double 13 “New Health Worry For China as SARS Hits the Hinter- victory” in combating SARS and maintaining robust eco- land,” New York Times, April 22, 2003. nomic growth on May 14, 2003, China reported its lowest 14 See David M. Lampton, Policy Implementation in Post- one-day increase in new SARS cases since the government Mao China (Berkeley and Los Angeles, CA: University of began reporting such figures a month earlier. South China California Press, 1987); Kenneth G. Lieberthal and David M. Morning Post, May 15, 2003. Similar pattern can be identified Lampton, Bureaucracy, Politics, and Decision Making in in localities like Guangdong. See Wong Kwok Wah, “SARS: Post-Mao China (California: University of California Press, What happened to April 20?” AsiaTimes online, May 24, 1992). 2003. 15 Michel Oksenberg, “China’s Political System: Challenges 42 21st Century Economic Herald, May 21, 2003. of the Twenty-First Century,” The China Journal, No. 45 43 John Pomfret , “China Feels Side Effects from SARS,” Wash- (January 2001), 28. ington Post, May 2, 2003. 16 Washington Post, April 3, 2003. 44 Eric Eckholm, “Thousands Riot in Rural Chinese Town 17 John Pomfret, “China’s Crisis Has a Political Edge,” Wash- over SARS,” New York Times, April 28, 2003; “China’s fight ington Post, April 27, 2003. against SARS spawns backlash,” Los Angeles Times, May 6, 18 See http://www.zaobao.com/speicial/newspapers/2003/05/ 2003. dayoo260503a.html. 45 Renmin ribao, overseas edition, June 6, 2003. 19 Ruan Ming, Deng Xiaoping: Chronicle of an Empire. Trans- 46 In China, there are some 2,000 national social organiza- lated and edited by Nancy Liu, Peter Rand, and Lawrence R. tions, including nearly 200 semi-official ones such as the All- Sullivan (Boulder, CO: Westview Press, 1992), p. 189. China Federation of Trade Unions, the Communist Youth 20 http://www.people.com.cn/GB/shizheng/16/20030427/ League of China and the All-China Women’s Federation. To 980379.html. set up a non-governmental organization, the organizer must 21 See John Pomfret, “Outbreak Gave China’s Hu an Open- produce a document of approval from the department over- ing,” Washington Post, May 13, 2003. seeing its operations. Such a department refers to govern- 22 Nanfang Zhoumu (Southern Weekly), June 12, 2003. ment organs or agencies at and above the county level or 23 Thomas L. Friedman, “A Russian Dinosaur,” New York those that have been delegated with the right of giving ap- Times, September 5, 2000. proval. In reality, the social organizations are placed under 24 For a game theoretical analysis of this state-society rela- the administration of such departments. See http:// tions, see Yanzhong Huang, “Bringing the Local State Back www.china.org.cn/english/features/state_structure/ In: The Political Economy of Public Health in Rural China,” 64418.htm. Journal of Contemporary China (forthcoming). 47 Leslie Chang, “China may apply lessons from SARS fight 25 Joseph Fewsmith, “China and the Politics of SARS,” Cur- to new AIDS programs,” Wall Street Journal, August 4, 2003. rent History, September 2003, pp. 250-255 48 Ben Doven, “In Asia, Signs of Revival after SARS,” Wall 26 People’s Daily, March 18, 2003. In http://english.people Street Journal, August 15, 2003, p. A6. daily.com.cn/200303/18/eng20030318_113472.shtml 49 Nanfang Zhoumu, June 12, 2003. 27 Lieberthal and Lampton, Bureaucracy, Politics, and Deci- 50 See Albert O. Hirschman, Exit, Voice, and Loyalty (Cam- sion Making in Post-Mao China. bridge, MA: Harvard University Press, 1970). 28 “Leaders get tough with local officials,” South China 51 John Pomfret, “China orders halt to debate on reforms,” Morning Post, May 9, 2003. Washington Post, August 27, 2003. 29 Renmin ribao, overseas edition, April 9, 2003. 30 See http://past.people.com.cn/GB/shizheng/252/17/1853/

Harvard Asia Quarterly 16 Fall 2003 GENDER, MEDICINE, AND MODERNITY: CHILDBIRTH IN TIBET TODAY

BY JENNIFER CHERTOW ince Deng Xiaopeng opened Tibet to mainland China and the international community in the early 1980s, the press toward Smodernization in Tibet has been rapid.1 Beijing has vigorously Jennifer Marie Chertow is a Ph.D. Candidate pursued a program of development and economic growth in its Western in the Department of Cultural and Social An- regions and tolerated an increasing number of international development thropology at Stanford University. Chertow recently completed two years of dissertation schemes in the Tibetan Autonomous Region (TAR). Subject to these fieldwork on childbirth practices in rural and various modes of modernization, Tibetans consume, practice, and urban Tibet, where she also researched state propagate both Chinese and Western forms of modernity.2 At the same and non-state HIV/STI prevention for Han and time, however, Tibetans are forging what might be called a distinct version Tibetan sex-worker populations in Lhasa. She 3 returns to Stanford this year to complete her of Tibetan modernity. dissertation. Moving between city life and rural landscapes; adopting new farming technologies while persisting in age-old methods of toiling the land; taking on Hong Kong-influenced styles of dress while continuing to wear sheepskin-lined woolen chubas; and utilizing IV drips in conjunction with rilbu or Tibetan medicinal pills; Tibetans creatively and strategically adopt new standards of living.4 In the TAR, formations of modernity reflect these uneven and fragmentary changes. Tibetans synthesize contradictory impulses to honor longstanding values and incorporate potentially advantageous innovations. Political, historical, and economic factors shape the contours of Tibet’s emergent modernity. For example, historical debates over the autonomy of Tibet influence Tibetans’ perception of Chinese resident populations as well as their relationship with the government of the People’s Republic of China (PRC). On an economic and political level, government health bureaucracies control the packaging, marketing, educational institutions, and treatment centers for Tibetan medicine. In addition, multimillion-dollar international development agencies introduce new medical technologies such as ultrasound and fetal heart monitors into women’s healthcare, while government-run population control measures influence Tibetan cultural-religious perceptions of reproduction and childbirth. In Tibetans’ eyes, incursions of top-down development projects, either governmental or non-governmental, often seem arbitrary, overwhelming, and beyond local villager’s or city-dweller’s control. Tibetans’ navigation of rapid and uneven changes serves as a marker of what might be called “Tibetan modernity.”5 This modernity is mediated through Tibetan conceptual categories, values, and beliefs, even as the categories themselves shift and change. Tibetan pragmatism, Buddhist values, “shamanistic” practices, and historical modes of legitimization of authority in Tibet strongly influence Tibetan understandings of their circumstances.6 At the same time, modernization projects stemming from Beijing and the international community frequently ignore these understandings. The resulting present-day condition is the co-existence of multiple systems of authority, dominant and sub-dominant ideologies, and a myriad of institutional and non-institutional structures.7 Here, I will focus on the impact of these forces on women’s health concerns, in particular those related to childbirth, and correspondingly ask what issues emerge for Tibetans in the context of childbirth today. As a primary domain of inquiry, childbirth practices offer a good way to map out a modernity that is neither Western nor Chinese, but distinctly Tibetan in its contours. Harvard Asia Quarterly Fall 2003 17 moxibustion. Outside of medical practices by amchis, Tibetan BETWEEN TOWN AND COUNTRY healing practices include herbal remedies, “folk” knowledge, and regional understandings of the sacred landscape. Within competing ideologies and practices, Tibetan Important and valued players in women’s childbirth women must strategically negotiate the terms of modernity in experiences, village healers can be barefoot doctors, spirit the uncertain terrain of government and non-government mediums, or lamas. At the village level, mothers and sisters initiatives. Government-sponsored construction projects also act as unofficial “midwives” for in-home birthing often begin and never finish; roads are paved, then dynamited practices. to accommodate new road projects; medical clinics are In the context of village medical practices, Tibetan established, minimally utilized, and fall into disrepair. women’s encounters with government hospitals and Furthermore, development projects often occur with little or international non-governmental health projects contribute no consultation among the populations they directly affect, to the making of a new Tibetan modernity. When women regardless of whether the PRC government officials are bleed onto concrete hospital floors that repel rather than ethnically Chinese or Tibetan. With relatively minimal absorb blood associated with drib, a Tibetan concept of consultation or forewarning about pollution, they already enter a different these projects, Tibetans must be modality for navigating old beliefs in creative and strategic about what they new contexts.12 In Tibetan choose to incorporate, how they Shaped by forces past and households, dirt floors absorb the protect beliefs and practices they wish present, women distrust certain blood from childbirth, though recently to maintain, and the manner in which government and non- plastic tarps are sometimes laid down. they interpret, resist, or adapt to new government initiatives while The mingling of earth with childbirth life circumstances. Tibetan women’s adopting others. blood create a powerful need to clear childbirth experiences reflect these that space of spiritual pollution. What concerns as women adjust to and reject different institutions, does it mean for a Tibetan woman to be able to wash away medicines, and epistemologies that comprise the shifting pollution rather than spiritually purify it? Shaped by forces landscape of modernity.8 past and present, women distrust certain government and Since the early 1990s, the door has opened for non-government initiatives while adopting others. Likewise, international non-governmental institutions (INGOs) to women discard traditional practices that no longer seem establish footholds in Tibet.9 From this time onward, relevant while maintaining those that appear beneficial. organizations have come and gone depending on government permission and local politics. Project agendas shift, personnel TRADITION MEETS MODERNITY leave, and local staff are employed, trained, and then disbanded depending on organizational resources. Moreover, Several issues emerge within the broad rubrics of health projects for women and children are often attempted, tradition and modernity in the domain of childbirth and not well conceived, perceived to be infeasible for monetary, women’s health within Tibet. On the one hand, Tibetans environmental, or political reasons, and abandoned to other persist in village-based practices around childbirth. These projects.10 An overall sense of the tenuousness of the include giving birth in the home with female relatives, taking situation fed by fear and paranoia depending on shifts in herbal or dietary-based remedies for excessive cramping, leadership in Beijing and the Tibetan Autonomous Region circumambulating temples and walking over bridges in order (TAR) all factor into creating an unstable atmosphere for to speed delivery. In addition, they engage in a variety of non-governmental agencies. The shifting and uneven other practices that might be marked as traditional including contours of various projects of modernity, both governmental the application of warm butter to the temples, fontanel, palms, and non-governmental, directly impact childbirth practices and feet of a woman in labor. On the other hand, Tibetan in Tibet. women routinely encounter practices of the state and science, Despite Beijing’s goals to develop its Western regions including reproductive counseling, contraceptive and to dissolve certain traditions tied to historical modes of interventions, c-sections, and tubal ligations in city hospitals. subsistence, village level medical practices are still central in They also accommodate the administration of pain childbirth today. Medicine, as historically understood in Tibet, medications via intravenous drips during labor in hospital consists of lay and non-literate, as well as institutional and settings. What makes this integration of old and new practices highly literate, medical practices. These practices stem from distinctly “Tibetan” are the ways Tibetan women position pervasive and longstanding use of healing methods themselves vis-à-vis these practices. Tibetan notions of embedded in Tibetan medical understandings of the body, pragmatism as well as Tibetans’ commitment to their own such as the body’s three humors and the proper balancing of ways of living – despite communist China’s best efforts to these humors within the body.11 Dating back to the eighth eradicate religion in previous decades and control its practice century, the literate Tibetan medical tradition includes today – give rise to a strategic admixture of “tradition” and practices such as pulse diagnosis, urine analysis, visual “modernity.” assessment, and palpation methods to determine the nature The story of Drolma, a farmer from a village in Shigatse, of disease. Practitioners trained in this tradition are referred represents one woman’s encounter with the shifting landscape to as amchis, and their methods of treatment include herbal, of modernity. Tilling the land two seasons of the year in dietary, behavioral, and topical treatments such as spring and fall, Drolma weaves wool and tends to domestic

Harvard Asia Quarterly 18 Fall 2003 animals during the winter and summer months. In addition, delivery, though sometimes to ill effect if complications arise she manages a household of twelve, who comprise her during these times. After a miscarriage or the death of an extended family.13 At the age of 36, Drolma has had two infant, women typically visit lamas and spirit mediums to miscarriages and five healthy children. Due to complications ease pain and to obtain astrological advice (tsi) to prevent with her fourth and fifth child, she decided to deliver these future miscarriages or deaths. Thus, village-level practices, children in the county hospital. While not her first choice, spiritual figures, and long-standing beliefs figure centrally Drolma chose to go to the county hospital to deliver her into how Tibetan women understand their birthing fourth child due to the prolonged duration of her labor and experiences and thus, how they encounter government the fact that she had been in pain for half a month prior to medicine. These beliefs influence women’s preference to delivery. Though Drolma indicated that the hospital failed to deliver their children at home. make her experience of childbirth faster or more comfortable, she nonetheless valued its benefits which she believes led to STRUCTURAL FACTORS SHAPING CHOICE the survival of her last two children. These benefits include Other factors affecting women’s preference for home birth may be termed “structural,” including occupation, wealth, village politics, and education. In terms of occupation, women from nomadic families cannot readily access clinics because they graze their animals in mountainous areas away from roads and administrative centers. During winter months, these families avoid travel due to cold weather and snow. For farmers, variable degrees of wealth decrease the likelihood that poorer families will use government facilities that require up-front cash. Likewise, local politics within a village might affect usage of clinics and hospitals. For example, unless the wife of the village leader has used such a facility, other village women might avoid using these facilities because doing so might create problems for them at the village level. Finally, educated villagers tend to know more about external institutions and the purposes they serve. As a result, they Mother and infant in a religious ceremony at Taklung Monastery. may be more or less inclined to use these government medical facilities depending on the quality of the medical system biomedical expertise, technology, and trained personnel, all outside of the village. of which Tibetans are taught to understand as advancements Proximity to government health outlets has a direct in healthcare. Drolma’s choice to give birth to her last two influence on Tibetan’s incorporation into Beijing’s project of children in the hospital was not easy. Indeed, her initial modernity. Villagers living closer to county seats tend to use decision to go to the hospital was made under duress, fearing clinics more frequently than villagers living in remote areas. the loss of her fourth child.14 In these administrative centers, there tend to be government Factors that might be glossed as “cultural” likely schools where Chinese language, Chinese history, math, influenced Drolma’s decision to remain at home for her first science, and politics are taught, thereby leading to quicker three births. Tibetans perceive birthing as a family affair rather integration of Tibetan youth into nationalization and than a medical condition. Due to disease and concern over modernization efforts. the disposal of bodily waste products, Tibetans perceive Often, impediments in infrastructure have a decisive hospitals themselves as polluted places. Because rules for impact on women’s choice to have a home birth. Yangkyi, a government-run hospitals do not permit religious activity on villager from a county just outside of Lhasa, described how the premises, including purification rituals performed by she had given birth to her first child at the county hospital lamas, these areas cannot be spiritually cleansed. In addition, and her second child in the home. After her first experience of women do not want to come in contact with strangers for fear childbirth, she explained that the return ride home from the that these strangers will bring harm or bad luck to the mother hospital on very bad roads in an exposed tractor bed was and child.15 Chance meetings with acquaintances lead to more painful and induced more bleeding than the birth itself. village gossip, which women consider a source of harm.16 In addition, the doctors in the hospital scolded her for moving Secrecy and privacy are important during pregnancy and during the delivery. For these reasons, she decided to give

Harvard Asia Quarterly Fall 2003 19 birth to her second child at her village home, even though lie beyond the reach of central governance. The government she had worried that her mother might not know what to do.17 can more readily monitor the overall population in villages Here we see that infrastructural impediments had a strong and regularly record maternal and child mortality rates, as influence on Yangkyi’s experience of hospital birth leading well as birth rates. These numbers inform policies pertaining her to deliver her second child at home. to population growth and directly affect government access In a 2001 Lhasa report by Save the Children, UK, Tibetan to women’s bodies, women’s livelihoods and their modes of women reported that they did not deliver in hospitals due to existence. Through the introduction of biomedicine, MCH paucity of transportation, bad road conditions, and lack of hospitals collaborate in attempts to control Tibetan women’s cash to cover the cost of giving birth in the hospital. All of bodies as the ground for state governance. International these structural issues affected women’s birthing choices. NGOs unwittingly participate in modes of surveillance through Families preferred to save their money for offerings to local practices of evaluation, documentation, and regulation under lamas and monasteries in the event that the mother or child the paradigm of international development and Western forms died during childbirth.18 They did not believe that they would of modernization. see the benefits of investment in an insurance plan and were reluctant to visit hospitals due to a COMBINING TIBETAN AND BIOMEDICAL general mistrust of biomedicine and PRACTICES strangers, including health personnel they did not know. Indeed, distances Tibetans take government Even in the midst of China’s from clinics, bad road conditions, lack surveillance seriously since their modernization efforts, the majority of of cash, and limited equipment and religious practices and births in Tibet occur in the home. On personnel in hospitals contributed to traditional modes of living have the whole, Tibetans consider birthing the external structuring of women’s historically been considered a primarily a family affair rather than a healthcare choices. form of treason against the medicalized condition. As mentioned In addition, government communist state. above, women prefer to give birth in surveillance is another structural the home and consider the presence concern directly affecting women’s of strangers a risk to the mother and birthing practices. Tibetans take government surveillance child. At the same time, village, township, and county level seriously since their religious practices and traditional modes doctors do make visits to homes in the event of an emergency. of living have historically been considered a form of treason Township doctors, in particular, may recommend a against the communist state.19 By registering in the county combination of biomedical treatments with traditional hospital women are by default made more visible to the methods of diagnosis and treatment. If a doctor is present watchful eyes of the government. In the hospital, a woman’s during home births, however, women often will not let the name is recorded in hospital records, her health status doctor perform the delivery unless the family already knows reviewed, and the number of children she has had entered and trusts him or her.24 Mothers, sisters, and even male family into health administrative logs – a concern for Tibetans who members assist the birth, rather than a doctor, who might have not strictly followed government reproductive control look on from a distance. policies.20 All of these issues affect women and the choices The medicalization of childbirth has yet to take a strong they make about their healthcare and childbirth.21 foothold in most parts of rural Tibet. Instead, biomedicine Through Mother and Child Health (MCH) initiatives, and birthing meet according to the needs of the pregnant the government is able to monitor pregnancy, childbirth, woman. A woman might visit a biomedical clinic in the pediatric care, and sexually transmitted infections across township for pre-natal checks and then deliver unassisted at China and into Tibet. The stated goal of MCH initiatives is to home, only later receiving antibiotics for an infection from a reduce maternal and infant mortality rates with a secondary village doctor. effect of introducing biomedical techniques and technologies Biomedicine has primarily made inroads into Tibetan into local birthing practices. Begun in the 1980s, MCH households in the form of intravenous (IV) drips and the rise government hospitals now reach many rural areas of Tibet. in demand for “injections.”25 The impact of this on birthing Satellite departments and clinics actively operate in county practices is found mainly in the prevention of infection with seats and township clinics. Along with the introduction of antibiotics before, during or after labor. IV drips are not biomedicine, the presence of MCH hospitals and clinics commonly used outside of hospitals for birthing and increases regulation, surveillance, documentation, postpartum periods, but at times they appear in village homes. enumeration, and governance over one of the most private Tibetans incorporate IV usage into the constellation of beliefs and inaccessible domains of Tibetan’s lives, childbirth.22 and practices associated with childbirth as an efficacious Government health policies encourage women to visit measure for preventing disease.26 MCH clinics. As a result, increased visits by village women This acceptance of and utilization of “modern” medicine to city hospitals has led to the creation of a census register of does not preclude lay healing practices. One such practice rural populations who are otherwise difficult to quantify. In includes the blessing and application of warm butter to the this way, the bodies of Tibetan women serve as the loci for delivering woman’s fontanel, temples, palms and feet to relieve the creation of new modes of governance into rural areas of pain. In villages, the mother or mother-in-law often apply Tibet.23 The registration of villagers in county hospitals leads warm butter to a woman during childbirth.27 This practice is to better mechanisms of control over regions that normally tied to traditional Tibetan medicine and the humoral element

Harvard Asia Quarterly 20 Fall 2003 referred to as lung, or wind, which is associated with high In government-disseminated information about “safe energy, nerves and stress. The practice calms the delivering practices” concerning childbirth, health practices associated woman, eases the pain of contractions, and evens out the with hygiene and childcare often differ from what Tibetans flow of energy in her body. do in their own lives. For example, rural Tibetans consider In the narratives of Tibetan women, numerous stories washing bodily surfaces before birth superfluous and even reflect women’s ease in moving between both “traditional” dangerous in cold winter months. Similarly, they believe and “modern” medical practices as they suit their needs. At placing a small amount of butter in a newborn’s mouth times, women’s needs during childbirth are related to the facilitates digestion and feeding a child barley flour (tsampa) mundane (bleeding, labor pain, labor complications) and at mixed with butter tea symbolically incorporates the child into times, the supra-mundane (ghosts, spirits, and demons). One the household lineage. From a biomedical perspective, these woman describes how she was late to deliver and did all of latter two practices are ostensibly unhealthy for newborns the prescribed village measures to speed delivery. She walked sensitive to oils causing diarrhea. the local bridge – a symbolic passage perhaps between this One villager from the Lhasa area, Chodron, reported that life and the next, or for the baby, the previous life and this one she had done all of the prescribed ritually-correct things for – and carried stones on her back in the her newborn, including giving it butter manner of carrying a child. When all of and feeding it tsampa with butter tea. these measures failed, she finally She herself also drank lots of butter decided to visit the doctor who The bodies of Tibetan women tea and ate fatty food, which was examined her and advised her to go to become the ground upon which transferred to the child in her breast the county hospital to deliver. Beijing’s modernization projects milk. Soon after delivery, her child Whether or not a woman decides take hold. began to have diarrhea and nearly died to deliver in the hospital, today Tibetan from dehydration. She brought the women use both biomedical and child to the township doctor, who told Tibetan medicine for childbirth. Villagers with lay experience her that excess fat in her breast milk was causing the diarrhea. in the domain of childbirth will use Tibetan massage and Chodron changed her eating habits accordingly, and her child medicines to induce labor, contract the uterus, or change the recuperated.28 Chodron’s tale reflects an ability by Tibetan position of the baby. However, Tibetan women might opt for women to incorporate new advice and behaviors. In the biomedical drugs to ameliorate these conditions if indigenous conflicting landscape of practices and beliefs around techniques and medicines do not work. In addition, educational childbirth, Tibetans are pragmatic in choosing those methods campaigns influence lay birthing practices with information that create the best outcomes for themselves and their about hygiene, maintaining body heat during delivery, children. breastfeeding techniques, and neonatal care. Tibetan women incorporate changes depending on the WOMEN’S BODIES AND THE STATE perceived benefit. They often consult a range of authorities in medical crises, including biomedical doctors, Tibetan Chinese modernity, understood in terms of nation-build- medical doctors, spirit mediums, and lamas without regarding ing projects and policies stemming from Beijing, shapes the these domains to be mutually exclusive. Within certain contours of women’s lives. In addition to MCH initiatives, an parameters, a woman traverses these domains depending on arena that directly impinges on the lives of Tibetan women is whether she has cash, transportation, road access to clinics, governmental concern about over-population. China’s popu- official identity passes, and/or political or family ties to lation control initiatives under the Chinese Communist Party “modern” medical institutions. These conditions create a (CCP) began in the 1950s, reached Tibet in the 1960s in a certain set of options for women’s actions and choices, which watered-down version, became codified across China as the factor into how Tibetan women strategically position “One-Child Policy” in the 1970s, and were re-invigorated in themselves vis-à-vis family and state. Tibet in 1983. Though not initially included, Tibetans and other national minorities of China were eventually compelled ENCOUNTERS WITH BIOMEDICINE to conform to a two-child policy for urban settlers and three- child policy for farmers and villagers. If Tibetans do not com- Tibetan women navigate a number of institutional and ply, fines can be levied, and limits on access to education and non-institutional medical resources, especially in the domain healthcare can be imposed. In addition, residency permits of childbirth. They face a myriad of constantly shifting health allowing for travel and habitation as well as citizenship are initiatives stemming from Beijing, such as new measures in not issued to any child born after the required limit. “safe motherhood,” immunization efforts, and incentives to Government concern with over-population has brought get pre- and post-natal checks. Women partake in new reproductive education campaigns and clinics to the most projects when new medicines or techniques appear beneficial rural parts of Tibet. Women figure centrally into the project rather than dangerous. Tibetan women, therefore, make for population control as a primary target for birth control pragmatic choices about their encounters with new health and reproductive education.29 Through these government institutions and policies. Tensions emerge, however, when policies, the bodies of Tibetan women become the ground what Tibetans perceive as beneficial differs from what upon which Beijing’s modernization projects take hold. How- government or non-government agencies perceive as useful ever, Tibetan women actively negotiate their relationship to or necessary. these policies, taking on certain aspects deemed beneficial to

Harvard Asia Quarterly Fall 2003 21 them while rejecting others whenever possible. of babies’ heads after birth. Here, the use of humor and satire Reproductive education campaigns teach Tibetan women stand in as devices for critique of modern contraceptive to understand that their lives and the lives of their children devices and assist Tibetan women’s processing of their will improve if they limit the number of children they have.30 encounters with the state. These campaigns inform women that with fewer children they The story of Jamyang provides one picture regarding can provide more for their families, especially if their farms the implications of state reproductive control practices for are small. In addition, women learn that their children will women. Jamyang described how she elected to have an IUD have more opportunities to go to school, make money, and put in after the birth of her second child. She and her husband possibly get outside work, even in a government office.31 wanted to provide a good education for their first two children. In Tibet, women who participate in population control In addition, their farm was small, and they could not afford to campaigns must compromise certain cultural-religious beliefs have a large family. Unfortunately, the IUD failed, and Jamyang related to childbirth. Most Tibetans consider it natural for a became pregnant again. At the time, the township doctor woman to have many children and believe that terminating a advised her to get an abortion in case there were complications pregnancy is sinful.32 In addition, most Tibetans place a with the IUD. She did so, but when she became pregnant yet certain social valuation on fertile again after the abortion, she decided women, and a stigma exists against to keep that child. barren women.33 In a chicken-and-egg Jamyang initially heeded the manner, these stigmas are less Women who participate in advice of government health workers accentuated than they once were since population control campaigns to limit her family size for economic the institution of pervasive must compromise certain reasons and to give better life reproductive control measures in cultural-religious beliefs related opportunities to her children. When her Tibet. Government campaigns put in to childbirth. contraceptive device failed, the place in order to dispel these ideas and township doctor offered further reduce the rate of population growth “medical advice” to have to have an have been largely successful. An overall shift in Tibetan abortion, advice which happened to also fall in line with official women’s attitude toward contra-ception and reproduction state policy regarding birth quotas for townships and can be noted in everyday conversations about childbirth, villages.36 After having an abortion once, Jamyang decided family planning, and life goals. Many Tibetans no longer to keep her third child and take the financial risks associated consider abortion to be a social stigma even in the context of with an increased family size. When recounting her tale, she a persistent belief that life begins from conception. spoke with an air of frustration at the health system that had While women’s attitudes toward contraception are complicated her childbearing situation. In a sense, her decision changing, deciding on a form of birth control remains a to keep the last child was a defiant one. At the same time, she challenge. Confronted with an astonishing array of indicated that she would probably have a tubal ligation in the contraceptive measures, many women find new reproductive future to prevent further pregnancies. control methods confusing and impracticable in their Jamyang’s story highlights the tension for many Tibetan everyday lives. Making monthly trips to township clinics to women who are willing to accommodate reproductive health receive injections or new pill supplies can be costly and changes introduced by the state but later regret their decisions difficult depending on distances to clinics and availability of due to the government’s failure to provide practicable and transportation. Likewise, women cannot easily accommodate safe technologies. These failures often compel women to health checks for IUD maintenance, infection, and other make decisions which directly conflict with local beliefs and concerns related to their health. practices, in Jamyang’s case involving abortion. Initially, Many women live far from clinics and do not prioritize Jamyang was inclined to accommodate her doctor’s advice, contraception in their lives especially since they maintain because she did not want a large family.37 Nonetheless, the beliefs that do not always accord with government health township doctor’s advice to abort her third child placed initiatives. Moreover, c-sections, surgical removal of uterine Jamyang in a difficult position. She would either have to be a masses, tubal ligations, and intra-uterine devices (IUDs) often “good patient” and get the abortion, or a “good woman” by leave women with scars. Women cannot easily incorporate carrying her pregnancy to term. these changes into previous patterns of managing their health Jamyang did not speak of an internal moral struggle. and their relationship to their bodies. Pragmatism regarding her health and the survival of her As a way to deal with invasive or unwanted changes, children outweighed Buddhist moral codes or social Tibetan women learn to narrate their experiences of stigmatization around abortion. Because the power of encounters with strange or foreign forms of medicine and township authorities supersedes village authorities, Jamyang technologies. Intra-uterine devices (IUDs) have become part likely felt pressured to get the abortion. However, she also of common parlance amongst Tibetans, and stories range resisted state authority by deciding to keep her third child, from the plaintive to the satirical.34 Described as devices which though she indicates that she later wanted her tubes tied. at times “float up” and become embedded in the uterine wall Jamyang’s case is not simple or straightforward. Initially, or contraptions that have been poorly-fitted leading to she was inclined to limit the number of children in her family, pregnancies and unwanted abortions, many women consider but later became frustrated that she was unable to do so IUDs to be the bane of their existence.35 Other women report without pain, invasive medical procedures, and difficulty to that their IUDs have simply fallen out or appeared on the top herself. Here, the problem appears to be one of adequate

Harvard Asia Quarterly 22 Fall 2003 services, technologies and advice. Jamyang was ready to embrace modernity, but modernity as presented to Tibetans IN-ROADS OF MODERNIZATION by the government failed to meet her expectations. The drive toward modernization links directly to nation- PITFALLS AND PROMISES OF INGOS building projects in the name of “One China.” Through their participation in government health initiatives, Tibetan women Not only do state forms of governance affect women’s figure as symbolic markers of and participants in China’s childbirth practices, INGOs introduce another set of practices nation-building project.40 Government policy defines Tibetan into local medicine through global capital and transnational women as central players in China’s goal to rapidly modern- forms of biomedicine. They offer, particularly to urban women, ize and industrialize its “backwaters,” including Tibet – a advanced technology such as baby heart monitors and sonic project the government refers to as “development of the West- wave machines in addition to ern regions.”41 More spe- new, integrative medical cifically, women hold a cen- methodologies. tral place in development Certain INGOs have projects that aim to modern- introduced therapies that ize the health care system. combine Tibetan medical State initiatives to control drugs to induce contractions the population and to re- with biomedical drugs like duce maternal and infant oxytocin and antibiotics.38 mortality during childbirth The Tibetan Medical target women. Hospital in Lhasa, for Reproductive plan- example, participates in ning programs and mater- integrative health measures nal and child health initia- by employing Tibetan tives are gender-specific medical treatments while also components of the PRC’s administering biomedical nation-building project. drugs. Other INGOs create Willingly or not, Tibetan integrative prenatal, delivery, women must participate in and postpartum childbirth these projects of modernity. regimens, which incorporate In this context, the stakes Nurses prepare medicines in Tibetan Medical Hospital, Lhasa. Tibetan medical and “folk” remain high for Tibetans methods of treatment and structured into this project assessment into biomedical methods. since they do not want to give up certain traditions associ- Unfortunately, most women in Tibet do not have access ated with Tibetan heritage and national identity in lieu of a to these new, integrative methods. Without adequate dominant Chinese identity. When women participate in top- infrastructure, technologies and epistemologies offered by down ideologies of Chinese modernity, they do so to the INGOs remain a distant and often daunting monolith. In degree that they perceive there are practical benefits to them.42 addition, as we have noted above, women’s willingness to Tibetan women accommodate those reproductive tech- utilize biomedicine also varies. Living at the edge of cash nologies that they see as beneficial. As with the case of economies, many women frequently live out their lives in Jamyang, who participated in reproductive control measures less than optimal health. As a result, they sometimes feel in order to limit her family size, many Tibetan women want to compelled to request free treatment for new forms of take more control over their reproductive lives. Ongoing gov- healthcare they are not entirely sure will be beneficial. ernmental campaigns teach Tibetan women that having less Despite efforts to include women,39 INGO investments children will increase the likelihood that their children will be in healthcare in Tibet frequently increase the influence of well-fed, educated and have greater life opportunities in the those who have power, namely government employees and cities as well as the countryside.43 In these ways, China’s institutions, and have little positive effect on those who do project of modernity inscribes itself on women’s bodies.44 At not have access to power, namely impoverished patients. A the same time, women interpret and forge modernity in local large percentage of international money goes toward terms according to their own needs and perspectives. increasing biomedical knowledge and techniques, which is Historically nomadic and living in fairly isolated and tran- mostly absorbed by government-run health institutions. On sient conditions, Tibetans had many children in order to in- the whole, international development projects for women’s crease the productivity of their farming and to improve the health tend to remain biomedical in focus, allowing for local chances of survival.45 Seeing the changes and opportunities populations to selectively incorporate their own healing available in the cities and the benefits of having extra cash to methods when they deem appropriate. As biomedicine purchase farm equipment, tractors, and trucks among other becomes more lucrative with the infusion of new money from things, many Tibetan women today voluntarily participate in INGOs, women must find ways to navigate new medical reproductive planning programs, particularly in farming com- resources while retaining ties to practices that give meaning munities.46 Tibetan women embrace these changes for the to their childbirth experiences. same reasons that women in South America and Africa will-

Harvard Asia Quarterly Fall 2003 23 ingly comply with contraceptive plans – to gain greater con- Endnotes trol over domestic finances, improve their children’s future, 1 For productive intellectual engagements and kindhearted enrich their own work lives and take control of their repro- guidance, I would like to thank my advisors Vincanne Adams ductive capacity. at UCSF, Akhil Gupta at Stanford, Matthew Kohrman at Hospital encounters reflect different negotiations with Stanford, and Sylvia Yanagisako at Stanford. My apprecia- the terms of modernity. In the accounts of Tibetan childbirth tion also goes to Jane and George Collier for visiting me in experiences given above, Chodron submitted to the clinical Tibet and providing critical input into grant proposals and and foreign aspects of hospital birth under duress in order to research plans. Many thanks to the Tibetan Academy of insure the survival of her fourth and fifth children. In the case Social Sciences and Tibet University in Lhasa for supporting of Yangkyi, a disappointing hospital experience and a diffi- my research while in Tibet. cult journey home prompted her to deliver her second child Materials were collected for this paper stem from a two-year at home. In both cases, as with many others, no single out- stay in Tibet, during summer 2001 to summer 2003. Thirty come toward or away from biomedicine arises. Women select household level interviews were conducted on childbirth in health avenues according to experience, need, access, and counties outside of Lhasa while volunteering as an ethnog- ideological frameworks. In addition, cultural and structural rapher for a midwife training project based in the US and factors influence women’s birthing choices even as these funded by the NIH. During the summer of 2003, due to the factors shift over time. SARS epidemic, I could not do village level research. Lhasa Health resources create daunting options and new based research in hospitals was conducted at this time while incentives that influence women’s decisions to participate in a researcher from the Tibetan Academy of Social Sciences state and non-state health initiatives. Women obtain medical conducted the 51 interviews with women of reproductive age advice from a number of sources, including fellow villagers, in Shigatse. Additional research includes 15 city level intergovernmental health workers, and INGO outreach workers. views with Lhasa health bureau officials and city health work- Furthermore, educational campaigns attempt to modernize ers. These interviews plus extensive participant-observation childbirth practices, change reproductive activities, and in work, leisure, home, hospital, and pilgrimage contexts com- influence women’s decisions about whether to abort prise the bulk of my independent research on childbirth. pregnancies. At the same time, both governmental and non- 2 The distinction between Western versus Chinese moder- governmental agencies present new and different options nity might broadly be encompassed in a Maoist vision of for improving women’s health. Education campaigns, health classes applied to the peasant populace versus a liberal eco- bureau officials, and INGO workers teach Tibetans at the nomic free market. Western modernity remains tied to capital- village and township level when, how, and where to tap into ist modes of production, globalization, democratization, and new health resources such as biomedical clinics and hospitals. neo-liberal forms of governance and economy. The underly- For better or worse, family relations provide the most salient ing question in Tibet is one of economy such that Tibetan avenue for receiving the benefits of biomedicine by creating modernity emerges as an incremental and shifting admixture ties to the wider community of health workers and institutions. of economic forms specific to Tibet (for example, nomadic Yet even with the assistance of family members, women find and farming communities, polyandrous marriage systems, and the institutional apparatuses of the modern health clinic to seasonal shifts in agriculture according to weather). Tibetan be cold, foreign, unfriendly, and intolerant of religious modernity is marked by changes introduced through com- practices associated with childbirth and illness. modities, technologies, movement between cites and shifts The modernity emerging in childbirth practices might occurring with the infusion of new forms of capital into the best be described in terms of women’s strategic navigation economy combined with state regulated industries like phar- of structural factors and religious-cultural concerns. Their maceuticals from the Tibetan Medical College, road construc- choices are guided by pragmatic considerations in order to tion, transportation, health care delivery, education, commu- achieve the best birthing and reproductive outcomes for them- nications, banking, insurance, armaments and certain modes selves and for their families. In search of the best outcomes, of agricultural production servicing the Red Army. Tibetan women move between hospitals and the home for 3 The concept of modernities in the plural derives its inspira- childbirth and between biomedicines and lay healing prac- tion from Lisa Rofel,Other Modernities: Gendered Yearn- tices for treatment, while they also acquire varying attitudes ings in China after Socialism, (Berkeley: Berkeley Univer- toward reproduction. Both tensions and collaborations be- sity Press, 1999). In Rofel’s formulation “modernity” is not a tween Tibetan and biomedical practices factor into women’s monolithic concept that starts from the West and travels out- choices. As women navigate these choices, they tap into ward to other lands, like a juggernaut propelled by the force local knowledge in order to create, resist, and signify the of its own weight. Rather, as Rofel points out through the current arc of motherhood and modernity in Tibet today. lives of women factory workers, multiple modernities exist for lived peoples on the ground, and can begin in the most distant reaches of the world away from metropolises, factories, industries, department stores, shopping complexes, high rises, consumer culture and straightforward cash economies. 4 For discussion of everyday practice as a modality of ethnographic inquiry and the analysis of embodied forms of social enculturation as a tool for social inquiry, see Pierre Bourdieu’s The Logic of Practice, translated by Richard Nice, (Stanford,

Harvard Asia Quarterly 24 Fall 2003 CA: Stanford University Press, 1990). Also see Arjun Cultural Identity,” Ph.D. Thesis, Dept. of Sociology and An- Appadurai’s discussion of local-global formations of moder- thropology, University of Newcastle. Other sources include: nity and cultural change in Modernity at Large: Cultural “Birth and Child Rearing in Zangskar,” Himalayan Buddhist Dimensions of Globalization, (Minneapolis, MN: University Villages: Environment, Resources, Society and Religious of Minnesota Press, 1996). Life in Zangskar, Ladakh, edited by J. Crook and H. Osmaston 5 Tibetan national formations outside of or in contrast to (Bristol: University of Bristol, 1994); S. Pinto, “Pregnancy Chinese or other national formations may be traceable and Childbirth in Tibetan Culture,” Buddhist Women Across through this mechanism of analysis I am calling Tibetan mo- Cultures, edited by K. L. Tsomo (Albany, NY: State Univer- dernity. However, the concept does not have bounded, re- sity of New York, 1999); Santi Rozario, “Indian Medicine, stricted limits and might be applied to contexts beyond terri- drib, and the Politics of Identity in a Tibetan Refugee Settle- torial Tibet as well as to non-Tibetan contexts. This paper ment in North India,” Presented at the International Work- does not address the question of Tibetan national forma- shop on Healing Powers and Modernity in Asia, held at tions since that question lies beyond the scope of this analy- Newcastle University. Revised Version at Australian Anthro- sis. pological Society Conference, October 1998. 6 Modes of legitimizing authority might broadly be said to be 9 For recent discussion of the negotiated relationship be- signified by the concept of nang (inside) versus chi (out- tween grantor and grantee as it relates to notions of sponsor- side). I am basing this understanding of how Tibetans legiti- ship, charity and development in Tibet, see Ethan Goldings, mize authority on the religious terminology used to describe “No (Heart) Strings Attached: Misunderstanding the Mean- a Buddhist practitioner in lay language, nang pa or nang ba, ings of Sponsorship, Charity and Development Practices in meaning insider versus the historical construction of the cat- Contemporary Tibet,” International Association of Tibetan egory for non-Buddhists or foreigners/outsiders, chi gyal gi Studies Conference Proceedings, 2003. mi (lit. foreign country people), during British colonial expe- 10 Multimillion dollar non-governmental initiatives incorpo- ditions to Tibet during the first decade of the 20th century. I rate new methodologies for reducing maternal mortality rates have not seen a discussion on this historical example in the (NIH/OneHEART, US) and improving prenatal and neonatal literature on Tibet; however, likely sources are Melvyn care (Save the Children, UK). Other non-governmental orga- Goldstein, A History of Modern Tibet: The Demise of the nizations address health concerns specific to women and Lamaist State: 1913-1951 (Berkeley: University of Califor- children (MSF, France; Swiss Red Cross, Kunde Foundation, nia Press, 1989), or David Snellgrove and Hugh Richardson, US). Still others assess the problems associated with deliv- A Cultural History of Tibet, (New York: F. A. Praeger, 1968). ery at high altitude (Lorna Moore, University of Colorodo, While Westerners today are referred as chi gyal inside Tibet, US) and research pediatric diseases like stunted growth and they are referred to as ingie (English), a marker of race, or big-bone disease (Terma Foundation, US). In addition, these alternatively kor che wa (tourists), a marker of social posi- international projects train health workers in integrative meth- tion, amongst exile communities in Nepal and India. Chinese odologies for pregnancy, midwifery, childbirth, and postna- living in Tibet are predominantly referred to as gya mi, or tal care (NIH/OneHEART, US; Save the Children, UK), and Chinese. These linguistic markers of difference serve as educate government officials in gender sensitive approaches mechanisms of inclusion or exclusion depending on when to health care and development (Save the Children, UK). In and how they are employed by Tibetans. light of these interventions, Tibetan women are subjected to 7 See Frederic Jameson, Postmodernism,or,The Logic of Late research agendas, educational trainings, medical technolo- Capitalism, (Durham: Duke University Press, 1991). Jameson gies and techniques, and new forms of medicine, which women attempts to outline a conceptual apparatus for mapping an at times absorb into everyday life and at times reject either ideological dominant against which the proletariat, interpo- tacitly or directly. Relevant citations include Lorna Moore, lated into innumerable projects of capital, might be able to “Tibetan protection from intrauterine growth restriction struggle. The descriptive passage above is meant to evoke a (IUGR) and reproductive loss at high altitude.” American landscape of systems, both economic and governing, that Journal of Human Biology 13:5 (2001): 635-44. Nancy Harris, are often contradictory and confusing and as such might be P.B Crawford, et al “Nutritional and Health Status of Tibetan suggestive of Jameson’s formulation of post-modernism. The Children Living at High Altitudes.” New England Journal of context of communist state rule in Tibet troubles this formu- Medicine, (Feb. 1, 2001):341-347. Also see upcoming co- lation. Vincanne Adams addresses similar phenomena in the authored article with Vincanne Adams on cultural sensitivity context of Tibet, although in a different manner, in her up- in midwife trainings in Tibet. coming book on women and modernity. See Vincanne Adams 11 The three humors in Tibetan medicine include lung or wind, and Stacy Leigh Pigg, eds, The Moral Object of Sex: Science, tri pa or bile and bei gan or phlegm. Wind energies are asso- Sexuality and Development in Global Perspective (Durham, ciated with motility, movement, rapidity, stress, depression, NC: Duke University Press, forthcoming). and other psychological disorders. Bile is associated with 8 See Santi Rozario and Geoffrey Samuel’s edited volume The stomach disorders, acidity, nausea, and distension. Phlegm Daughters of Hariti : Childbirth and Female Healers in is associated with viscosity, slowness, and infection. Tibetan South and Southeast Asia (London, New York: Routeledge, healing methods involve balancing these three humors and 2002). See also A.H. Maiden and E. Farwell, The Tibetan Art creating equilibrium with the five elements of earth, water, of Parenting: From Before Conception Through Early Child- fire, wind and ether, associated with different parts of the hood, (Boston: Wisdom Publications, 1997). See also K. S. body. Dietary and behavioral recommendations constitute Monro, “Tibetan Mothers in India: Medical Pluralism and main treatment methods while pulse diagnosis, urine analy-

Harvard Asia Quarterly Fall 2003 25 sis, touch, and visual assessment comprise diagnosis. For Social Sciences in summer 2003. I conducted first round in- detailed discussion, see Rechung Rinpoche, Tibetan Medi- terviews in summer 2002 in villages surrounding Lhasa while cine, Translated by the Ven. Rechung Rinpoche Jampal conducting ethnographic research for an NIH sponsored mid- Kunzang, (Berkeley: University of California Press, 1976, wife training. c1973). See also, Lobsang Rapgay, Tibetan Medicine, A Ho- 17 Ideas about authority figure centrally in this example. listic Approach to Better Health, (Dharamsala, H.P. India: Yangkyi’s grandmother advises Yangkyi to deliver in the hos- Lobsang Rapgay, 1985); Tsewang Drolkar Khangkar, Tibetan pital and values the government doctor’s knowledge over Medicine: The Buddhist Way of Healing, (New Delhi: Lustre Yangkyi’s mother’s knowledge for how to assist with birthing. Press, 1998). Yet infra-structural issues lead Yangkyi to voice a vehement 12 For recent research on concepts of pollution on Tibetan complaint against birthing in the hospital since the road and communities in Dalhousie, India, see Santi Rozario and transportation conditions were more harmful to her than an Geoffrey Samuel’s edited volume The Daughters of H¯arit¯i: otherwise “safe” hospital experience. Finally, Yangkyi’s un- Childbirth and Female Healers in South and Southeast Asia happiness with the doctors’ yelling and her negative experi- (London, New York: Routeledge, 2002). Also relevant are Mary ence of post-hospital delivery point to fears related to insti- Douglas’ discussion of the conceptual framework of pure tutional health practices, strangers, clinical settings, and larger and impure states for marking social inclusions and exclu- infrastructural issues not taken into account when govern- sions in socio-spatial contexts in Purity and Danger: An ments (and grandmothers) encourage women to give birth in Analysis of the Concepts of Pollution and Taboo (London: hospitals. Field research conducted in villages around Lhasa Routledge & Kegan Paul, 1966). See also Lila Abu Lugod’s summer of 2002. discussion of shame as a mechanism for surveilling women’s 18 Save the Children, UK mother and child health assessment sexuality in Veiled Sentiments: Honor and Poetry in a of four counties in Lhasa prefecture, February 2002. Bedouin Society, (Berkeley: University of California Press, 19 The PRC state rhetoric and political institutions including 1986). government health bureaus persist in this ideological con- 13 All names have been changed to protect the identity of struction of modern, forward thinking people versus tradi- interview participants. Drolma’s extended family includes her tional, backward thinking people. Tibetan cadre members use mother-in-law, her mother-in-law’s four sons to whom she is a particular term for the association of tradition with back- married, and her own five children. In Tibet, women will marry wardness: ley pa nak po, or black brain, alluding to conser- the brothers within one household in order to prevent the vative thinking or a brain that has gone black with decay and land from being divided through separate inheritance. Poly- degeneration. A milder, more common term which connotes androus marriage is a common form of marriage currently in the idea of conservative thinking amongst older generations practice today in Tibet. For detailed discussion of recent is the term ley pa jang ku, or green brain, ostensibly a less sociological research on polyandry, see Ben Jiao, Socio-Eco- degenerate form of this “cerebral malady” associated with nomic and Cultural Factors Underlying the Contemporary conservatism. Revival of Fraternal Polyandry in Tibet, Dissertation (Ohio: 20 See Goldstein et al, “Fertility and Family Planning in Rural Case Western Reserve University, 2001). Also see John Avery, Tibet,” The China Journal 47 (January 2002):19-39. The cur- “Polyandry in India and Thibet,” 4:1 (1881): 48-53. Ramesh rent reproductive control policy for minorities in China is one Chandra, “Report on the Project: Polyandry in a Himalayan child for government workers, two children for non-govern- Village,” Bulletin of the Anthropological Survey of India — ment workers, and in Tibet, three children for villagers. Town- Calcutta, 24:3-4, 1975, 54-138. Pant, Rekha, “The Changing ship health officials often visit villages and record these num- Scenario of Polyandry Culture: A Case Study in Central bers as well, which are kept by the village leader. Himalaya,” Man in India, 77:4 (1997): 345-353. 21 Critical medical anthropologist Paul Farmer discusses struc- 14 In the context of the interview conducted by a co-researcher tural economic and political factors affecting healthcare com- from the Tibetan Academy of Social Sciences in Lhasa, Drolma pliance for AIDS patients in Haiti, which bear a strong resem- incorporates her tale of birthing in the hospital on equal foot- blance to the scope of issues affecting women’s childbirth ing with her birthing experiences at home. However, she goes choices in Tibet. In the Haitian case, distances from clinics, to great lengths to describe the amount of pain she was in bad road conditions, lack of cash, and the fact that hospitals and how this pain compelled her to go to the hospital. would run out of costly treatments for patients in the middle 15 In one interview, a woman explained that an astrologer had of treatment plans all affected patient compliance, which had told her that her first child died because a dre mo, or female less to do with the individual and his or her health choices demon, residing in another woman attacked her baby when than with external factors structuring healthcare choices. See the two women came in contact. Shigatse, June 2003. Paul Farmer, AIDS and Accusation: Haiti and the Geogra- 16 Another instance where Tibetans dislike encountering ac- phy of Blame (Berkeley: University of California Press, 1992). quaintances is the case of sexually transmitted infection (STI) 22 The government did not create these epidemiological mea- clinics established by the Swiss Red Cross in Shigatse. Local sures on its own. In the early 1990s, the World Health Orga- women refuse to visit STI clinics because the Tibetan doc- nization did an evaluation of maternal and child healthcare tors come from local communities and patients fear that they delivery in Tibet. At that time, they introduced methods for will acquire a bad reputation if seen by local doctors, espe- creating statistics on maternal and infant mortality and mor- cially since the clinics comprise a morally charged sphere of bidity using measures that included the number of infant healthcare. Interviews collected from villages in the Shigatse deaths, maternal deaths, age of mother, age of child, number prefecture by a co-researcher from the Tibetan Academy of of women of reproductive age, and so on. These methods

Harvard Asia Quarterly 26 Fall 2003 were adopted by counties and prefectures surrounding Lhasa children saw her as a model for someone who had made a and possibly other areas in Tibet. good life for herself outside of the village. She herself had 23 For critical evaluation of institutionalized medicine, see been from a village in the same area and was staying with Michel Foucault’s The Birth of the Clinic: An Archaeology relatives where she conducted these interviews. of Medical Perception; translated from the French by A. M. 32 While abortion raises ethical questions within Tibetan Sheridan Smith, (New York: Vintage Books, 1994). cosmologies, women in Tibet historically have been able to 24 Some international agencies have found that women are terminate pregnancies or induce miscarriages using Tibetan willing to have a doctor assist with births if the doctor has medical and lay methods. Before the introduction of biomedi- acquired a good reputation based on trust. This assessment cal contraceptive technologies by the Chinese state and even points to the issue of legitimacy at the local level and who today, Tibetans used certain vegetable dyes that women Tibetans are willing to trust and why. Doctors from lineage would drink until they became sick. Tibetan medicines used based Tibetan medicine occurring within the framework of today to prevent hemorrhage and contract the uterus have teacher-student relationships are the most trusted medical also been used in the past to induce miscarriage. The name of practitioners. If these modes of legitimization are mirrored in the medicine is shey ju chu chig - Shey Ju #11. Sources in- biomedical domains, trust of doctors in patient’s eyes will clude Tibetan medical and pharmaceutical texts, or pey cha. likewise also increase. 33 These stigmas are signified through the exclusion of bar- 25 Since Deng Xiaoping’s liberalization of market economies ren women from weddings and purification rituals associated in the 1980s, the usage of IV drips has expanded. Needles with birth (pang sang). Field research in Shigatse, summer and intravenous drips have become a money making en- 2003. deavor for entrepreneurially minded Tibetan doctors, who 34 Medical anthropologist Michael Jackson describes how may or may not have formal training in biomedicine. life-worlds are inter-subjective exchanges between individu- 26 At the same time, an element of wonder is associated with als, their environment and their larger communities and so- intravenous drips, which is not transparent as a phenom- cial networks. These negotiated forms of inter-subjectivity enon. Cultural theorist Homi Bhabha describes how bibles shape how people understand their position in the world. introduced to local Indian communities during the British From this perspective, it is possible to see how Tibetan women colonial period would take on an almost fantastical, divine might find ways to incorporate marks of state authority on quality. Intravenous drips may have acquired something of their bodies into conceptual models of selfhood related to this mystical quality in medicinal terms for Tibetan patients. Buddhism, local beliefs, and village practices. See Michael See Homi Bhabha, “Signs Taken For Wonder,” The Location Jackson, Paths Toward a Clearing: Radical Empiricism and of Culture, (New York: Routeledge, 1994). Ethnographic Inquiry (Bloomington: University of Indiana 27 Reported in 51 interviews with Tibetan women from the Press, 1989): 1-18. same village in Shigatse, summer 2003. 35 Reported by women during village level interviews, sum- 28 Chodron told her story with the zeal of one who had learned mer 2002 and summer 2003. from her prior mistakes and had realized the benefits offered 36 See Goldstein, Ben Jiao et al., “Fertility and Family Plan- by township doctors, who are often trained in both biomedi- ning in Rural Tibet,” The China Journal 47 (January 2002):19- cine and Tibetan medicine. Tibetan medical prescriptions for 39. nausea and diarrhea are similarly linked to dietary and behav- 37 Similar trends have been noted in South America and Af- ioral measures. Most Tibetans are familiar with basic Tibetan rica where women accommodate non-governmental repro- medical methods of diagnosis and treatment. For this reason, ductive control interventions in order to better their life and it is likely that Chodron had little difficulty accommodating those of their children. Taking control over reproductive de- biomedical measures that did the same. cisions enables women to take control over the trajectory of 29 See Goldstein et al, “Fertility and Family Planning in Rural their lives. See This Bridge Called My Back: Writings by Tibet,” The China Journal 47 (January 2002):19-39. For a Radical Women of Color, edited by Cherríe L. Moraga and statistical overview of minority populations’ reproductive Gloria E. Anzaldúa; foreword by Toni Cade Bambara (Berke- rates, see Jiann Hsieh, “China’s Nationalities Policy: Its De- ley, CA: Third Woman Press, 2002). velopment and Problems,” Anthropos 81:1-3 (1986):1-20. For 38 This integrative method to delivery is being practiced at analysis of the impact population control policies have on the Tibetan Medical Hospital (Men Tsi Khang). An interna- national minorities, see Mundigo, Axel I. “Population and tional non-governmental organization currently operating in Abortion Policies in China: Their Impact on Minority Nation- Lhasa is experimentally incorporating this methodology into alities,” Human Evolution 14(3) (1999). See also, “The Moral trainings for health workers at the township level. Due to the Orgasm and Productive Sex: Tantrism Faces Fertility Control directors’ wish for anonymity, I have omitted the name of this in Lhasa, Tibet, China” in Vincanne Adams and Stacy Leigh INGO. Pigg, eds, The Moral Object of Sex: Science, Sexuality and 39 For example, INGO outreach bolsters an education cam- Development in Global Perspective (Durham, NC: Duke paign by the Women’s Federation. The Women’s Federation University Press, forthcoming). is the ruling communist party’s effort to include Tibetan 30 Field research, summer 2002 and 2003. women in its modernization efforts. It consists of a govern- 31 The Tibetan researcher who conducted these interviews ment work unit comprised of a collective of women from the was herself highly educated, and she worked in a research villages and townships. These women disseminate govern- office under the auspices of the government. It is likely that ment propaganda through education campaigns related to the village women who told her about their hopes for their women’s health topics, women’s work topics, and political

Harvard Asia Quarterly Fall 2003 27 re-education specifically geared toward women. According to the Swiss Red Cross 2002 handbook for maternal and child health, the Women’s Federation is considered a more effective mechanism for disseminating new health messages to village women. 40 Under PRC governance, Tibetan women must represent and enact a communist vision of dialectical historical change. For discussion of the feminization of the minorities in China, see Louisa Schein, Minority Rules: The Miao and the Femi- nine in China’s Cultural Politics (Durham: Duke University Press, 2000). See also Hjorleifur Jonsson, “Yao Minority Iden- tity and the Location of Difference in the South China Bor- derlands,” Ethnos 65:1 (2000): 56-82. Ildiko, Beller-Hann “Peas- ants and Officials in Southern Xinjiang: Subsistence, Super- vision and Subversion” Zeitschrift fur Ethnologie 124:1(1999): 1-32. 41 Jiang Zemin on the Three Represents (Beijing, China: For- eign Press, 2000). 42 For a discussion of governance through the State apparatus and disciplinarity at the level of the body, see respectively Louis Althusser, Lenin and Philosophy, trans. Ben Brewster (New York, NY: Monthly Review Press, 1971). Also see The Foucault Effect: Studies in Governmentality: With Two Lectures By and An Interview with Michel Foucault, edited by Graham Burchell, Colin Gordon, and Peter Miller (Chicago: University of Chicago Press, 1991). 43 See Goldstein et al, “Fertility and Family Planning in Rural Tibet,” The China Journal 47 (January 2002):19-39. 44 For a discussion of how the state disciplines women by way of reproduction while letting them stand in as iconic for the minority as sexual beings, see “Globalization and Immo- rality: Selling Shoes, Sexuality and the Sacred in Lhasa, Ti- bet” presented at the Global/Local conference, Department of Anthropology, Stanford University, May 1999, also Chap- ter 4 in Morality and Modernity: Saving Tibet in an Age of Desecration (book manuscript). 45 See David Snellgrove and Hugh Richardson, A Cultural History of Tibet (New York: F. A. Praeger, 1968). 46 Field research, summer 2002 and 2003.

Harvard Asia Quarterly 28 Fall 2003 INDIA’S FOREIGN POLICY TOWARDS CHINA: THE NDA EXPERIENCE

BY RAVIPRASAD NARAYANAN ino-Indian relations are characterized by the theory of the ‘unity of opposites.’ These opposites involve “estrangement” and “rapprochement” as the tectonic forces governing their relationship Raviprasad Narayanan earned his Ph.D in Inter- S have shifted over the past five decades. Despite the differences perceived national Relations from Jawaharlal Nehru Uni- versity, New Delhi, where he worked on and acknowledged by both countries, however, there is a desire to engage “China’s Economic Diplomacy.” In 2001-2002, more intensively in a relationship not dictated by the events of past. China he served as a Visiting Scholar at the Shang- and India visualize a process of understanding each other through the hai Academy of Social Sciences in 2001-2002. prism of being “civilizational states”1 prior to their emergence as nation Beginning in February 2004 he will be a Post- 2 Doctoral Fellow at the Center for Asian Stud- states in a Westphalian construct. It is perhaps this understanding that ies, Hong Kong University. informs their respective roles. Bearing in mind this construct of “civilizational states” evolving into “nation states” but with different political cultures and institutional arrangements, the Sino-Indian relationship is a study of both contrasts and commonalities. In interpreting the events that have determined the course and trajectory of Sino-Indian relations since 1998, realism, especially concerning security complex/dilemma and balance of threat, is a useful analytical framework with which to understand the post-Pokhran behaviour of India vis a vis China.3 Both Beijing and New Delhi are more concerned with achieving a minimum level of security than achieving a maximum level of power, but their behavior and policy affect each other’s threat perceptions and policy responses.4 The unity of opposites comes into play because China and India as security seekers rather than power seekers are highly conscious of relative gains. Hence, prospects for cooperation between the two exist even as areas for potential conflict remain.5

THE NDA PHASE

Led by the Bharatiya Janata Party, the National Democratic Alliance (NDA) that took office in March 1998 was perhaps the first Indian government that prior to assuming office had promised to deal more vigorously with what it claimed was India’s deteriorating security environment. (Ear- lier, public articulation of India’s security concerns was reflected only in bureaucratic reports.) By pursuing great power diplomacy to raise its own profile on the global stage, India’s desire to be recognized as a major power beyond South Asia posed a challenge to China’s interests in the region.6 For China, the pertinent characteristics of India’s growing role are the following: first, India’s consolidation of its dominance in South Asia; second, a comprehensive defense modernization drive, including a minimum and credible deterrent against China; third, an improving Indo-US relationship (and its effects); and finally, India’s attempts at reaching out to countries beyond its sphere of strategic influence, including Vietnam, Japan and the countries comprising the ASEAN.7 Shortly after the NDA alliance came to power, the defense minister, George Fernandes, called China “India’s threat number one.”8 This statement began yet another tumultuous phase in Sino-Indian relations. Fernandes’ remarks, much vilified in China, were characterized by the Chinese Ministry of Foreign Affairs (MFA) as “ridiculous and not worth refuting.” The MFA statement added that Fernandes’ remarks had “seriously destroyed the good atmosphere of improved relations between the two countries. The Chinese side has to express extreme regret and indig- nation over this.”9 Closely following Fernandes’ remarks, India decided to

Harvard Asia Quarterly Fall 2003 29 conduct three underground nuclear tests. Beijing’s response, between China and Pakistan…are an important part of the surprisingly, was subdued and the official statement released Sino-Pak comprehensive cooperative partnership.”19 Signifi- by Beijing merely labeled the tests “detrimental to peace and cantly, Premier Li Peng and Foreign Minister Tang Jiaxuan stability in the South Asian region.”10 In an interesting angle, called for both countries “to maintain peace and stability in Beijing Radio explained the tests in terms of India’s rejection South Asia” and to resolve the “Kashmir issue of Western pressures – a reference to the then prevalent politically…through negotiations and consultations.”20 debate on the Comprehensive Test Ban Treaty (CTBT). The It was at this time that Foreign Minister Jaswant Singh reluctance of China to criticize India by name, however, visited Beijing during June 15-17, 2003. Jaswant Singh’s visit changed following the next two tests conducted on May 13 revealed the willingness of both countries to discuss each and the publication of Vajpayee’s letter to US President other’s security concerns. Considered to be a success, the Clinton.11 To justify the tests, the letter dwelt more on China visit saw the initiation of a formal security dialogue with than Pakistan as a threat. In response to Vajpayee’s letter, China – a credit to the NDA government’s handling of its Chinese commentators made it clear that the “anti-China jus- China policy. Previous governments had discussed such is- tification of India’s nuclear tests was of greater concern to sues with China through routine diplomatic channels. The Beijing than the tests themselves.”12 issues under discussion, let alone disagreements, had not From Beijing’s perspective, New been made public. To maintain the mo- Delhi’s concern regarding China’s ties mentum of this process of engagement, to other South Asian countries was a President K.R. Narayanan visited China violation of the Five Principles of Chinese commentators made it in May-June 2000 to mark the 50th anni- Peaceful Co-existence,13 most notably clear that the “anti-China versary of the establishment of Sino- the idea of sovereign equality of all justification of India’s nuclear Indian relations. The rapprochement states, according to which states have tests was of greater concern to had completed a full circle from the the right to determine their own for- Beijing than the tests May 1998 statements of defense min- eign relations. The letter and its con- themselves.” ister George Fernandes’ speech in tents prompted calls at several levels which he labeled China a threat. in China to ‘untie the knot.’ At the international level, Chi- nese diplomats went to work to mobilize international pres- INTERPRETING VAJPAYEE’S VISIT sure on New Delhi from the standpoint of a non-proliferation agenda.14 In New Delhi, the Chinese ambassador, Zhou Gang, In a statement prior to Prime Minister Vajpayee’s visit to gave talks and interviews condemning “certain personages” China in June 2003, Hua Junduo, the Chinese Ambassador to for “jeopardizing the future of Sino-Indian relations.” Further India, outlined three peak periods in India-China relations. upping the ante, China expected an explanation to such “ver- ‘The first period,’ Hua Junduo wrote, ‘can be traced to two bal assaults” and also expected “practical actions” to move millenniums back when Buddhism bound China and India Sino-India relations back to a normal course of development.15 together’ in the earliest stage of the historic exchange be- With tempers near a boiling point, an about-turn by India in tween the two great ancient civilizations. The second period October 1998 began the process of normalization. The Princi- features mutual sympathy and support in the respective pal Secretary to the Indian Prime Minister in 1998 (now Na- struggles for national independence and liberation in mod- tional Security Adviser) Brajesh Mishra made a statement on ern times. As the third period, Ambassador Hua Junduo men- the government’s policy towards China, according to which tioned the ‘good-neighborly relationship’ in the 1950’s be- India did not see China as an “enemy” or desire an “arms tween the two independent Asian nations newly emerging in race” with China.16 the international arena and by the Five Principles of Peaceful Continuing along the lines of Brajesh Mishra’s state- Co-existence they jointly initiated after the Second World ment, President K.R. Narayanan in a January 1999 meeting War. 21 It is in this spirit of continuity that Atal Behari Vajpayee with Ambassador Zhou Gang and former Ambassador Cheng became the fourth Indian prime minister to visit China after Ruisheng called for “broad cooperation between India and Jawaharlal Nehru (October 1954), Rajiv Gandhi (December China” and declared that “China does not constitute a threat 1988) and P.V. Narasimha Rao (September 1993). As the Exter- to India.”17 On cue, the Chinese quietly restarted the stalled nal Affairs minister, Mr. Vajpayee had traveled to China in Joint Working Group meetings, suspended since the nuclear 1979 – a visit that began the recent round of high-level ex- tests by India. The process of normalization had begun with changes between the two countries. the highest constitutionally authorized representative from With a broad consensus across the political spectrum India, President K.R. Narayanan, stating that China was not a on handling relations with China, Vajpayee’s visit was pre- threat to India. ceded by an exercise of opinion building primarily in the In this step by step normalization process, the Kargil war media that created a positive atmosphere to further intensify provided China with further impetus to moderate its tone, relations with China and to seek innovative means to resolve given its wish to avoid a conflict on its southern flank involv- the Sino-Indian border dispute.22 In examining Vajpayee’s ing two de facto nuclear powers.18 It must be stated that at visit, it is imperative to answer the following three questions: the peak of the Kargil conflict, Pakistan’s army chief (and What was expected? What was attained? And, what lies now president) Pervez Musharraf began a week long visit to ahead? Beijing. Chinese sources asserted, however, that Musharraf’s visit was not related to the Kargil war and that “military ties WHAT WA S EXPECTED?

Harvard Asia Quarterly 30 Fall 2003 resolved, holds the possibility of enhanced trade and eco- With the debacle of 196223 retreating from the perception nomic cooperation between neighboring provinces of the of the decision-makers in the foreign policy establishment, two countries. Significantly, the Chinese Premier, Wen Jiabao, Vajpayee’s visit was heralded as a new beginning to resolve underlined a new principle of Sino-Indian equality as one of “outstanding issues” (diplomatic speak for the border issue) the terms for the final settlement of China’s boundary dis- and to secure recognition of Sikkim’s accession to India, which pute with India. The principle of “consultation on an equal has still not been officially acknowledged by China. Resolu- footing” was first propounded by China just recently. The tion of the stalemate over the border issue was sought by two sides further reaffirmed that pending an ultimate solu- including a “political touch” to the entire exercise of demar- tion, they will work to maintain peace and continue work on cation that would satisfy both sides. This was in line with delineation and clarification of the Line of Actual Control China’s “pragmatic preference for a negotiated settlement on (LAC). With a mechanism for resolving the border dispute, the basis of mutual understanding, mutual accommodation” India and China have clearly made a break from their past and most importantly “mutual adjustment.”24 One reason for history of mutual distrust which affected all levels of official optimism in the relations between the two countries, high- engagement. More importantly, economics is no longer hos- lighted by officials, was the growing confidence witnessed tage to political decision-making and has generated a tre- by the recent expansion of Sino-Indian mendous amount of optimism that Sino- trade. The emphasis on promoting trade Indian relations are headed for a more between the two countries was, in es- constructive engagement than ever sence, a continuation of former Premier With a mechanism for resolving before. Zhu Rongji’s call for Sino-Indian trade the border dispute, India and While the appointment of a spe- to reach the figure of 10 billion dollars China have clearly made a cial representative for resolving the by the year 2007 – a statement he had break from their past history of boundary issue marks a significant gain made when on an official visit to India mutual distrust which affected for India, for the Chinese the most wel- in early 2002. Since Sino-Indian trade all levels of official engagement. come development was the declaration had reached the five billion dollar mark on Tibet. To quote: “The Indian side in early 2003, the situation was ripe to pursue agreements recognizes that the Tibetan Autonomous Region is part of that would protect bilateral investments and resolve the prob- the territory of the People’s Republic of China and reiterates lems of double taxation and repatriation of profits.25 Prior to that it does not allow Tibetans to engage in anti-China politi- Vajpayee’s visit, the Chief Minister of Sikkim, Pawan Kumar cal activities.”26 The Chinese expressed “appreciation for the Chamling, had strongly advocated the promotion of border Indian position and reiterated that it is firmly opposed to any trade. The question of opening up Nathu La pass for trade attempt and action aimed at splitting China and bringing about and transit, it was hoped, would act as a powerful symbol of independence of Tibet.” In what must be an attempt to high- the growing relationship between the two countries in mat- light a positive outcome, the Chinese media lauded India’s ters pertaining to trade and commerce. Nathu La pass could acknowledgement that Tibet is an integral part of China. The also become the spiritual gateway for Tibetan Buddhists, phrase “Tibetan Autonomous Region” in the joint declara- thereby tremendously increasing the possibilities of spiritual tion contrasts subtly with the reference to Tibet in the joint tourism. communiqué issued on December 23, 1988, following the visit With regard to the wider international arena, some were to China by Rajiv Gandhi. This period is characterized by the of the opinion that Vajpayee’s visit should reiterate India’s statement: “[t]he Chinese side expressed concern over anti- opposition to the Sino-Pak axis in response to the transfer of China activities by some Tibetan elements in India. The In- missiles and fissile material from China to Pakistan. The Iraq dian side reiterated the longstanding and consistent policy war and its subsequent fallout were also expected to be on of the Government of India that Tibet is an autonomous re- the agenda. gion of China and that anti-China political activities by Ti- betan elements are not permitted on Indian soil.”27 With the WHAT WA S ATTAINED? Dalai Lama’s emissaries engaged in a parallel dialogue with China on issues of autonomy as opposed to independence, In what the China Daily described as “a handshake the Indian government offset any nascent opposition to its across the Himalayas,” Vajpayee’s visit saw the signing of a stance on Tibet by the Tibetan community settled in India. total of ten agreements and a Declaration on Principles for Economic incentives were also evident in some aspects Relations and Comprehensive Cooperation between India of the agreements signed during the summit. It could be ar- and China. Of primary importance in the joint declaration gued that India’s newfound confidence in promoting bilat- issued in Beijing was the decision for each side to appoint a eral relations with China stems from its improved economic Special Representative to explore the framework for a bound- performance. With exports showing a dramatic increase and ary settlement from the political perspective of the overall economic growth projected to be 5.7 percent for 2002, India bilateral relationship. The Indian National Security Adviser, has become China’s largest trading partner in South Asia. Brajesh Mishra, and the Chinese Senior Vice-Minister, Dai The two-way trade between the two reached $4.95 billion Bingguo, were appointed as Special Representatives charged dollars in 2002, up by 37 percent from the previous year. In with resolving the border issue. The appointment of the two the first five months of 2003, the two-way trade rose to $2.9 negotiators reflects a political will on the part of New Delhi to billion, reflecting a jump of 70 percent over the correspond- negotiate a final settlement of the boundary dispute that, if ing period the year before. China exported $1.22 billion and

Harvard Asia Quarterly Fall 2003 31 imported $1.68 billion worth of goods and services from Janu- regular exchange of high level visits and their decision to ary to May of 2003. promote trade as a vehicle for future cooperation. The real- In an important development prompted by the desire on ism is further evidenced by the acknowledgement that the both sides for increased commercial development, the two border issue is indeed a continuing issue that needs a politi- countries agreed to designate Changgu in Sikkim and cal will to achieve results in the near future. The appointment Renqinggang of the Tibetan Autonomous Region as the ven- of special representatives to resolve the boundary dispute ues for border trade. The two sides also agreed on using will infuse dynamism to the entire process of delineating the Nathu La as the pass for entry and exit for persons, means of LAC and establish the contours of a firm, permanent, mutu- transport and commodities engaged in border trade. The rec- ally acceptable boundary between the two countries. The ognition of Nathu La as the pass for entry and exit could be entire process, if successful, would have the effect of raising interpreted as a subtle gesture on the part of China in ac- Sino-Indian relations to unprecedented levels and bestow- knowledging India’s sovereignty over Sikkim, while not being a sense of maturity to their growing engagement. ing explicitly mentioned as much. While generating a lot of Vajpayee’s visit, for the first time, did not raise the bogeyman optimism, the lack of a clear statement on the status of Sikkim of Sino-Pak cooperation in military affairs. By downplaying from the Chinese side reflects in many ways the arduous this issue, India showed an awareness of how to construc- nature of the task ahead for the special tively further relations with China. De- representatives. Not one to wait for any spite China’s ‘all-weather’ relationship official recognition from China, the With mutual calls for with Pakistan, India displayed a confi- chief minister of Sikkim, Pawan synergizing their software and dence that results from highlighting bi- Chamling, said that it was time that hardware sectors, India and lateral spheres of cooperation and ex- there was a direct bus service from China are expanding their change. Gangtok to Lhasa along the lines of horizons in sourcing goods and India’s acknowledgement of the Lahore-Delhi and Kolkata-Dhaka services from each other. Chinese sovereignty over the Tibetan services currently in operation. Nathu Autonomous Region may have been La thus becomes the third pass across emphasized by the Chinese for the the Himalayas where border trade is conducted with China, purpose of selling the visit to its domestic audience as a the other two being Lipulekh Pass in Uttaranchal and Shipki “successful” endeavor. The opening of Nathu La pass and La in Himachal Pradesh. the setting up of two customs posts on either side With Prime Minister Vajpayee identifying economic co- (Renqinggang in Tibetan Autonomous Region of China and operation as the new focus of India-China ties, the visit saw Changgu in Sikkim, India) is a positive step forward. Sikkim the two countries agreeing to coordinate their strategies in will again be connected to the Tibetan plateau once trade supporting developing countries within the World Trade commences through the Nathu La pass. With it, a significant Organisation (WTO). A key aspect will be the search for chapter of the 1962 war will be closed. Linked to this is the special safeguard mechanisms on behalf of developing coun- new focus on trade as a mantra for closer interaction and tries in the field of agriculture. Other areas of possible Sino- coordination between India and China. In a fast globalizing Indian cooperation within the WTO framework pertain to world, multilateral institutions are the “platforms” shaping Trade Related Investment Protection Measures related to the global trends in commerce. The decision for India and public health issues (in the specific context of paragraph 6 of China to cooperate in providing safeguard mechanisms in the Doha Declaration), investment policy and dispute settle- the field of agriculture is another important step forward. It ment. The first of its kind, a five hundred million dollar fund recognizes the fact that for both countries, despite reforms for investments, mostly for the infrastructure sector in India, and their limited success, a majority of the workforce still was announced by China. earns its livelihood by cultivating the land as has been done With mutual calls for synergizing their software and hard- for several centuries. With large populations to support, ware sectors, India and China are expanding their horizons in introducing market forces too quickly in this crucial sector sourcing goods and services from each other. On the soft- would lead to the undoing of the relative gains accrued from ware front, India continues to enjoy a comparative advan- years of ‘fine-tuning’ the economy to face the challenges of tage in the delivery of information technology (IT) services. globalization. The recognition that economic interests are The software and IT services industries, India’s fastest grow- the driving force in bilateral ties is a welcome departure from ing sectors, grew to $6.2 billion in 2002. Trade between the the mutual distrust and pessimism that prevailed earlier. two countries, expected to reach Premier Zhu’s target of $10 Vajpayee’s visit must also be heralded as the culmina- billion sooner than was hoped, is thus emerging as a point of tion in the sensitive handling of relations with China since “mutual convergence” and “mutual benefit.” 1998. It should be recalled that following India’s nuclear tests, a letter written by Prime Minister Vajpayee had in no uncer- WHAT LIES AHEAD? tain terms singled out China as India’s prime security concern. A long road has been traveled since then and a longer Prime Minister Vajpayee’s visit to China and the Joint road needs to be journeyed in achieving results that per- Declaration issued by both the countries brings to the fore a haps, for the first time do not seem unrealistic. With time and sense of “realism” that permeates relations between the two caution the two countries might just get ther countries. This aspect of realism is most visible in the pragmatic approach adopted by both countries to commit to a

Harvard Asia Quarterly 32 Fall 2003 ENDNOTES

1 “Civilizational state” : The perception by a nation state that its influences, cultural and otherwise, transcend its frontiers and are a social feature spread over a vast domain. 2 The Treaty of Westphalia signed on October 24, 1648 between the Holy Roman Emperor and the King of France and their allies is considered the precursor to the emergence of the modern unitary state. 3 After India’s nuclear tests in May 1998 at Pokhran, Sino- Indian relations came under strain following the publication of a letter written by Prime Minister Vajpayee to President Clinton. The letter, while defending India’s nuclear tests, pointed an accusing finger at China and its support of Paki- stan as being an important factor in forcing India to go nuclear. New York Times, 13 May 1998, p. A12. 4 The ‘minimum security’ position was expressly spelt out in the Draft Indian Nuclear Doctrine (dIND), which envisages the creation of a deterrent that is minimal yet effective enough to provide for a ‘second strike capability.’ Interestingly, China also maintains a ‘minimum credible deterrent.’ 5 China and India share common interests in the following areas: opposing hegemonism and power politics, human rights, North-South relations, the establishment of a new international economic order and environmental protection. 6 Hans Morgenthau defines power diplomacy as follows: “The power of a nation depends not only upon the skill of its diplomacy and the might of its armed forces, but also upon the attractiveness of its political philosophy, political institutions and policies.” An illustration was the competing ideologies of the United States and the Soviet Union during the Cold War period. 7 Ma Jiali, “Yindu zhanlue diwei tuxian” [India’s elevating strategic position], Heping yu fazhan [Peace and Develop- ment], no.4 (2000), pp. 20-23. 8 “China is threat number one,” Times of India (New Delhi), 4 May 1998. 9 Foreign Ministry News Briefings, Beijing Review, May 25 – 31, 1998, p. 7. The vilification of George Fernandes in the Chinese media and official commentaries stems from his ar- ticulating causes that go against China’s interests, such as restoration of democracy in Myanmar and independence for Tibet. 10 Xinhua, 13 May 1998, in Foreign Broadcast Information Service, Daily Report, China (FBIS-CHI, No.98-133) http:// www.wnc.gov. 11 a) The Chinese Ministry of Foreign Affairs stated China’s grave concern over the tests which were detrimental to peace and stability in the South Asian region, as cited in Xinhua, 13 May, 1998, in Foreign Broadcast Information Service, Daily Report, China (FBIS-CHI). b) “India’s letter to Clinton on the Nuclear testing,” New York Times, 13 May 1998. p. A12. 12 Ye Zhengjia, “Wushi nianlai de Zhong Yin guanxi: jingyan he jiaoxun” (“Experience and lessons in 50 years of Sino- Indian relations”) Guoji wenti yanjiu (Beijing) (International Studies), no. 4 (1999), pp. 17-23. Also, Wang Hongwei, “Tancheng duihua shi yi zeng xin” (“Frank dialogue, dispel- ling doubts, increasing trust”) Nanya yanjiu (Beijing) (South Asia Research) No. 1 (1999) pp. 14-17.

Harvard Asia Quarterly Fall 2003 33 13 The Five Principles of Peaceful Co-existence between In- This limited conflict arose after Prime Minister Vajpayee’s dia and China or Panchsheel as they are known in India are: visit to Pakistan to meet the civilian government headed by 1) Mutual respect for each other’s territorial integrity and Nawaz Sharif. The Kargil conflict was seen in India as a be- sovereignty; 2) Mutual non-aggression; 3) Mutual non-in- trayal of faith by Pakistan even as India was initiating a pro- terference in each other’s internal affairs; 4) Equality and cess of rapprochement. mutual benefit, and 5) Peaceful co-existence. These principles 19 Xinhua, 25 May 1999, FBIS-CHI 1999-0526. formed the preamble to the ‘Agreement between the Repub- 20 Xinhua, 11 June 1999, FBIS-CHI 1999-0611. lic of India and the People’s Republic of China on Trade and 21 Hua Junduo, “Partners, not rivals” The Hindu (New Delhi), Intercourse between the Tibet Region of China and India’ 11 June 2003, p. 11. signed at Peking (Beijing) on 29 April 1954. 22 The Sino-Indian border is divided into three sectors: the 14 To India’s discomfiture, China played an active role in western sector, from the Karakoram Pass to Demchok on the joining the members of the Security Council to pass Resolu- Indus; the middle sector from Demchok to the Nepalese bound- tion 1172 condemning India and Pakistan’s nuclear tests. ary, and covering on the Indian side the states of Uttaranchal 15 Xinhua, 10 July 1998, FBIS_CHI, No. 98-193. and Himachal Pradesh; and the eastern sector from Bhutan 16 John W. Garver, “Sino-Indian rapprochement and the Sino- to Myanmar. Pakistan entente,” Political Science Quarterly (Washing- 23 In October and November 1962, China and India fought a ton), vol. 111, no. 2, 1996, pp. 323-347. war, in which Indian troops were convincingly defeated, over 17 President Narayanan, perhaps as a former Ambassador to the disputed boundary called the McMahon line. China at a crucial time when Sino-Indian relations were re- 24 P.S. Suryanarayana, “China identifies basis for ties with stored in 1976 following the 1962 war, initiated on his own a India,” The Hindu, 20 June 2003, p. 11. process of rapprochement, as there has been no evidence up 25 ‘Double taxation’ refers in this case to the imposition of to now that he acted so at the behest of the cabinet or at the taxes by authorities in two different countries on the same recommendation of the Prime Minister. The President in India income. ‘Repatriation of profits’ involves the return of prof- is the head of state and occupies a ceremonial post. The its from foreign investments to the nation of the investor, Prime Minister is the head of government and functions thereby leading to a gross outflow of capital. through the cabinet. While the Prime Minister is elected by 26 Text of the Declaration on Principles for Relations and the people, the President is elected by an electoral college Comprehensive Cooperation between the Republic of India composing the members of the Parliament and State Assem- and the People’s Republic of China.” blies. 27 Amit Baruah, “Taking a New Road,” Frontline (Chennai), 18 In the summer of 1999, India and Pakistan fought a brief July 5-18, 2003, vol. 20, no. 14, p. 6. but intense ‘mini’ war in the mountains of Kargil in Kashmir.

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Harvard Asia Quarterly 34 Fall 2003 TOWARDS A SUSTAINABLE RURAL DEVELOPMENT POLICY FOR VIETNAM

BY KHAI Q. NGUYEN uring the ten-year period beginning in 1986, Vietnam achieved substantial economic growth through a revolutionary reform program under the slogan Doi Moi (renovation). The economy Khai Q. Nguyen is professorial lecturer in the D doubled in size and the rate of poverty decreased from 70% to 35%. This Southeast Asia Studies Program at the Johns Hopkins University. Previously, he was senior progress started slowing down in 1997 as the Asian financial crisis began researcher in the Southeast Asian Civil Soci- affecting the Vietnamese economy, exposing its structural weaknesses ety Studies program at the Catholic University especially in the state-owned enterprise (SOE) and banking sectors. For- of America, and senior research analyst at the eign direct investment in Vietnam, one of the main engines of growth, World Bank. He participated in many World Bank economic missions to Middle East, North drastically decreased. It took the government four years to realize that a Africa, and Europe. His research interests in- deeper and more ambitious reform program was needed to revitalize the clude international trade, foreign investment, stagnant economy. The signing of the 2000 bilateral trade agreement with external debt, and agricultural economics. He the United States marked the beginning of the second and more difficult has authored many research papers in English and Vietnamese. The most recent ones are phase of economic transformation. included in the books entitled “The Vietnam- In contrast to the rapid pace of overall growth during the first phase ese Economy – Awakening the Dormant of economic reform, the rural economy has performed unsatisfactorily. Dragon,” “The Vietnamese Economy – Chal- The labor market unmistakably reflects this shortfall. Out of the estimated lenge of the Regional and Global Integration,” and “What Can Be Done For Rural Vietnam?” 1.4 million new job seekers who enter the labor market annually, only an estimated 300,000 people find jobs. Most of the others remain under- Author’s note: I am indebted to Buu Hoan and employed in rural areas. Although the rural growth rate is considerably Bao Nguyen for sharing with me their valuable lower than that of the industrial sector (4.9% and 10% per annum respec- insights and experience on Vietnam. tively), the rural economy appears just healthy enough to avoid triggering substantial labor migration to urban areas. According to the National Population Committee, about 250,000 people currently move from rural to urban areas annually.1 With three metropolitan centers, Vietnam will not suffer the unipolar growth phenomenon that Manila and Mexico City experienced.2 However, more efforts should be made to create non-farm employment in rural areas and around small urban centers within the next five years. Otherwise, more people will migrate from rural areas to urban areas. Rural unemployment and poverty will aggravate existing problems in urban areas and will create instability. Some of the goals of Vietnam in the first decade of the new millennium include: (a) eradicating hunger and extreme poverty; (b) reducing the malnutrition rate of children from 33% to 15-20%; (c) increasing life expectancy from 68 to 70-71 years; (d) increasing access to clean water in urban areas from 65% to 90%; (e) providing lower secondary education to all; and (f) restoring forest coverage from 28% to 43%.3 These ambitious goals can be reached if Vietnam takes strong economic reform measures, particularly in the rural and private sectors, with an emphasis on improving human capacity, infrastructure, the environment, and public governance. This paper discusses what conditions would best facilitate the achievement of these goals in relation to the following issues – the importance of the rural sector, the role of agriculture in the rural economy, land reform, agricultural development, non-farm employment, investment in rural areas, and management of natural resources. Reforms and improvements in the agriculture sector present the greatest promise in raising the standard of living of the rural poor. Farming is the primary income- generating activity in this sector. Others include small industries such as fine arts, handicrafts, wooden and rattan products, ceramics, labor-intensive agro-processing industries, and garments and textiles. These should be the focus of government efforts and support. In the concluding section of this paper, a number of short-term measures are proposed to help

Harvard Asia Quarterly Fall 2003 35 the rural sector develop itself. They include the removal of over 40 years, has better social services. The South has a government-imposed barriers that prevent the rural sector better infrastructure, more avenues for capital (especially for- from realizing its full growth potential. Most of these mea- eign exchange, thanks to remittances from Vietnamese living sures do not require any physical resources. It also recom- overseas), more experience with a market economy system, mends that a number of long-term measures regarding infra- more arable land, and larger farming area per household. Given structure, agricultural technology, non-farm employment, in- these variations, the Vietnamese government must custom- vestment and resource management be implemented to pro- ize and diversify its priorities and strategies for rural devel- mote growth and reduce poverty in the rural sector.4 opment.

I. IMPORTANCE OF THE RURAL SECTOR II. AGRICULTURE AND THE RURAL ECONOMY

The Sixth Congress of the Communist Party of Vietnam For an agrarian society afflicted with poverty, economic approved the Doi Moi (renovation) program in late 1986. Its development policy must address two fundamental issues implementation was delayed until 1988 after severe food short- simultaneously – economic growth and poverty reduction, ages in many parts of the country and the loss of Soviet bloc particularly in the rural sector. An economic development aid in 1988-1990.5 Through Doi Moi, the government took policy will not benefit the poor unless it promotes the pro- the first concrete steps to dismantle the collectivized agricul- ductive use of the poor’s most abundant asset – labor – and tural system.6 It also opened up the economy by adopting provides basic social services to them. The poor must be the 1987 Foreign Investment Law. Over the next few years, promoted to actively participate in the process of economic Vietnam gradually abandoned the old socialist command development. The most effective way to attain these objec- economy in favor of a free market economy characterized by tives is to raise rural and agricultural productivity.11 the recognition of private ownership, removal of price and Agriculture can play five important roles in economic interest rate controls, and promotion of foreign investment. development beyond the rural sector: it can supply food for As a result Vietnam was transformed from a food importer to domestic consumption, supply labor and other resources for a food exporter in just a few years. The average poverty level industrial employment and urban development, increase de- was also reduced. mand for industrial products, supply domestic savings, and In spite of the program’s success, not everyone ben- generate foreign exchange.12 The linkages between the agri- efited from Doi Moi. “Losers” of the “dismantled revolution” cultural sector and the industrial and service sectors poten- have been those with inadequate family support, single moth- tially facilitate mutual growth through market forces. How- ers, and those who lost their government support from the ever, for this mutual growth to transpire, the government old regime. “Winners” are those with more labor resources, needs to make substantial investment in agricultural technol- strong family support, and good health.7 With GDP per capita ogy and rural infrastructure including improving irrigation, of roughly US$420 in 2001, Vietnam remains one of the poor- offering price incentives to farmers, and promoting the de- est countries in the world. Hunger and malnutrition are still velopment of the private sector. common, especially in rural areas. Some 37% of the popula- Centrally planned economies that were cast from the tion lives in poverty. Currently, around 60% of the labor force Soviet model, such as Vietnam, failed to grow efficiently. They is unemployed or underemployed.8 were typically poor because they focused on industrializa- The rural areas account for approximately 75% of the tion, neglected agriculture, and suppressed the private sec- total Vietnamese population of 80 million. About 40% of the tor. Many countries broke away from this system in the late rural population – 24 million people – live in poverty. While 1960s and early 1970s. China and Vietnam adopted economic farming is the main source of income, the agricultural sector reforms in 1978 and 1988 respectively. In contrast to China, accounted for only 24.5% of the GDP in 2000, providing 24% however, the Vietnamese government adheres to a policy of of export revenue and 67.3% of total employment.9 The in- state-led industrial development, still maintaining an exces- come gap between rural and urban areas has been widening. sive, domineering role in the economy, with a large public According to Vietnam’s General Statistics Office (GSO), the sector consisting of about 5,200 SOEs concentrated in urban average per capita income of rural residents is 3.7 times lower areas while neglecting the private sector and the rural than that of city dwellers, far below the international mini- economy. mum poverty level of US$1 per day. A study by Nguyen Evidence shows that this policy caused increased un- Manh Hung reveals similar results.10 employment up to the late 1990s. An increase in unemploy- One problem hampering rural development has been ment is consistent with the argument that the creation of policy insensitivity to the obvious regional difference in socio- labor-intensive jobs in rural areas would be an efficient mea- economic conditions. Although rural-urban income dispari- sure to reduce poverty. By maintaining an overvalued do- ties are just as substantial in the South as in the North, and mestic currency, low prices for agricultural products and high urban centers are concentrated in the deltas and coastal ar- prices for manufactured goods, high taxes on land and agri- eas in the South as well as in the North, the climate and cultural exports, and export quotas, the government has suc- geographical conditions in different parts of Vietnam vary cessfully maintained low agricultural wages that in turn have significantly from the North to the South and from the low- generated low agricultural exports and low prices for imported lands to the highlands. In addition, the social and political industrial inputs. As a result, it has been easy for domestic conditions in the North differ from the South. The North, industries to make high profits, which are then used to fi- which was under the centrally planned economic system for nance state-owned enterprises. The success of development

Harvard Asia Quarterly 36 Fall 2003 is often measured in terms of the high level of output pro- Land Law, land cannot in practice be used as collateral. The duced by these SOEs.13 value of land, which can be used in principle as collateral, is Some market economies have also undervalued agricul- limited to the usually insignificant amount of land rent. Lend- ture in favor of the industrial sector in a manner similar to that ers are not allowed to exchange, transfer, or lease land-use described above, except that, in contrast to socialist econo- rights. Banks are often reluctant to accept land-use rights as mies, market prices and private businesses are allowed to collateral if the period of rights is due to expire. Foreign banks operate. But market economies, left alone, do not have a con- are not allowed to take land-use rights as collateral. Only scious objective to reduce pov- SOEs are allowed to use land- erty. The policy of poverty re- use rights as capital in joint duction must be actively pro- ventures with foreign inves- moted in open economies. In tors. However, such a joint Japan, South Korea, and Tai- venture must obtain permis- wan, the modernization of agri- sion from the government. culture and the rural economy Moreover, the Prime Minister have been the key ingredients must approve projects involv- of development strategy. The ing 5 ha. of land or more in ur- governments of these coun- ban areas or 50 ha. or more in tries are cognizant of the need rural areas. Permission of the to delicately balance growth Chairman of the Provincial with undue domination of the People’s Committee is required economy. The rapid economic in all other cases. growth of East and Southeast Due to these government- Asian countries might be asso- imposed restrictions, the 1993 ciated with rising total factor Land Law has failed to create productivity in these countries, Rice transplanting in the Red River Delta, North Vietnam. a market in agricultural land. while this economic indicator is Moreover, there is a lack of declining in Africa and Latin America.14 The experience of transparency in the application of rules and procedures con- Taiwan may prove to be the best model for Vietnam due to the cerning land rent/lease and settlement of disputes. Most land shared agricultural characteristics of the two countries. transactions are still arranged informally and may be of doubt- ful legality. The government should take measures to facili- III. LAND REFORM tate the implementation of the 1993 Land Law, the exercise of land-use rights, and the creation of a market for land, which Land is one of four essential elements of rural develop- in turn would help develop the credit market in rural areas. ment, along with credit, infrastructure, and social services. In The government should clarify and publicize land-use rights terms of agriculture, land is a key asset in reducing rural by issuing guidelines for implementing these rights. The pe- poverty.15 However, arable land in rural areas of Vietnam has riod of land-use rights and the ceiling on land holdings should become limited as the population has increased at the aver- be increased. Restrictions on land transfer, rent/lease, ex- age of 1.42% a year. Farm lots have become smaller and change, and conversion should be removed. Foreign and smaller.16 There are about 20 million farms in Vietnam with an domestic banks and investors should be treated equally re- average of only 0.38 hectares (ha.) each. The total cultivated garding land use. Biased treatments in favor of SOEs should area of Vietnam is 7.7 million ha., the equivalent of about 21% end. of the entire country. Yet 67.3% of the total workforce of 42 In summary, laws and outdated land use policies should million people is employed in rural areas. The average culti- be reformed to allow free market rules to determine land value vated land per rural worker is 0.27 ha., one of the smallest and uses. Land laws regarding farming should be changed to ratios in the world.17 In addition, most of the soil outside the allow fewer but larger operations. The government should Red and Mekong deltas, especially in the lowlands of central allow private ownership of land within the context of its so- Vietnam, is of medium to poor quality. Continuing erosion cialist policies. Private ownership of land will increase pro- due to deforestation and non-environmentally-friendly culti- ductivity and reduce poverty because it will create incen- vation methods on highland slopes by ethnic minorities ex- tives for private owners to invest in the land on a long-term acerbate the land shortage, which in turn can exacerbate rural basis. unemployment. The farming contract system, which will be discussed in IV. HIGHLAND DEVELOPMENT more detail in section V, increased agricultural output as well as the number of land disputes. As a result, the government About 30% of the population, including many different of Vietnam issued the first Land Law in 1988, stipulating that ethnic minorities and the poorest and most vulnerable house- land belongs to the public under the management of the state. holds, live in the highlands, which account for roughly 70% The second Land Law was passed in 1993. Although the new of total land in Vietnam. Much of the land in these areas is law does not allow private ownership of land, it gives legally extremely hilly and degraded: a small proportion of fertile authorized land users the rights to transfer, exchange, lease, land lies in the valleys, where many residents build their vil- inherit, or mortgage land.18 Under the operation of the 1993 lages. Highland development has been neglected, due to re-

Harvard Asia Quarterly Fall 2003 37 moteness, low productivity and lack of essential infrastruc- tem successfully increased agricultural production and low- ture and utilities. Many areas in the highlands lack good ered the threat of famine. Prior to this, local farmers and coop- education, basic health care, clean water, electricity, and fi- eratives had been secretly operating under this arrangement nancial services. Most of the provinces adjacent to the neigh- for some time. Second, in the same year, the government of boring countries of China, Laos, and Cambodia are located in Vietnam took another important step to promote deeper land the highlands. Thus, for national security reasons, these prov- reforms. Third, the promulgation of Resolution 10 in 1988 inces are of strategic importance to Vietnam and attract the abolished the collectivized agricultural system.20 It also re- special attention of national planners. distributed land to farming households in some regions of The government has failed to adequately serve the needs Vietnam.21 of the different ethnic minority communities that occupy the Technically, three main factors have contributed to agri- poorest regions in the Northern highlands bordering China cultural growth – increased rice productivity, diversification and the central highlands bordering Laos and Cambodia. into high-value crops, and expansion of cultivated land. In- Moreover, the forcible resettlement of indigenous peoples tensive paddy cropping also contributed to increased agri- from their ancestral lands to lands that have low potential cultural output. Rice still dominates the agricultural sector. It productivity and lack adequate water accounts for about 60% of all agricul- resources both decreased agricultural tural land in Vietnam and 45% of agri- output and disrupted the ethnic way of cultural output, of which 60% comes life and social organization of these It is necessary to develop the from the Mekong and Red River del- peoples. In view of the above situation highlands for agricultural tas.22 To raise the income of rural ar- and land shortage in the lowland areas, production and poverty eas, it is necessary to further diversify it is necessary to develop the highlands reduction purposes in support of production (da canh), and intensify the for agricultural production and poverty ethnic minorities. use of limited land (tham canh) in or- reduction purposes in support of eth- der to increase agricultural productiv- nic minorities. More will be discussed later in the section ity. The agriculture sector in Vietnam is traditionally anti- dealing with agricultural development. quated. Crop quality and productivity are still low, therefore In reality, the 1993 Land Law is not applicable in the there is great potential for further growth with the appropri- highlands since much of this area is common property man- ate application of modern techniques. Agricultural growth aged by ethnic minorities. The physical condition of the land will be the main source of increased rural income and reduced in these areas is also different from the lowlands. Many eth- poverty. nic minorities lack formal education and technical skills. There- fore, it is necessary to design a special development strategy 1. Diversification of Agricultural Production (ða canh) for the highlands. Agricultural research and extension services should focus on the condition of the environment in Crop diversification is often beneficial to individual farm- the highlands. Education and vocational training should rec- ers as well as to the whole country. First, this method helps ognize cultural differences. Large-scale agricultural produc- stabilize the market in case of price fluctuations, which are tion in the highlands should be avoided since it might be quite common for agricultural products. Second, it encour- totally alien to ethnic minorities’ way of life. The participa- ages farmers to grow non-traditional high-value crops. Third, tion of ethnic minorities throughout the economic develop- it prevents soil degradation. ment process must be promoted to balance agricultural pro- The government of Vietnam has set its focus on food ductivity with ethnic identity preservation. security and self-sufficiency, especially concerning rice sup- The primary necessity for minorities in the highlands is a ply. It has set limits on rice exports and discouraged farmers sustainable human habitat for self-sufficiency. Technical train- from switching from rice to other crops, although in principle ing and modern equipment are needed to help the hill people farmers are allowed to produce any crop. Since farmers un- replace low yield slash-and-burn farming practices with effi- derstand local markets and know where they can sell their cient and diverse food production methods. The reduction products to maximize their income, they should be allowed to of poverty in terms of money, property, and assets may mean decide what to produce. Farmers can grow many high-value very little to these ethnic minorities. crops in Vietnam, including but not limited to important industrial crops such as rubber, coffee, tea, black pepper, pea- V. A GRICULTURAL DEVELOPMENT nuts, soybeans, and sugarcane. Technically, wherever possible farmers should grow different crops in the same plots. The agricultural sector grew at an average annual rate of The chief benefit of this technique, known as rotation (luan 4.3% from 1980-90, and 4.9% from 1990-99. Although it lags canh), is to balance the chemical content of the soil. Diversi- behind industrial and service sectors, Vietnam’s agriculture fication is also a practical way to minimize the impact of bad has performed strongly compared to other developing coun- weather. One often-recommended set of crops for rotation is tries. This success can be attributed to three main policy legume/maize/rice. changes that offered more incentives to farmers. First, Direc- Rice and coffee have been the major sources of Vietnam’s tive 100, issued in 1981 and also known as the farming con- agricultural growth. However, given the instability of the world tract system, officially recognized the return of partial re- markets of these two main crops, it makes economic sense to sponsibility for agricultural production from farming coop- diversify away from rice and coffee. The Vietnam living stan- eratives to farming households.19 The farming contract sys- dard surveys of 1993 and 1998 show that increases in rev-

Harvard Asia Quarterly 38 Fall 2003 enues from rice production accounted for only 25% of the technological improvements. Statistics released by the gov- total increase in farming household revenues during 1993-98, ernment also indicate that employment in the agricultural sector while increase in revenues from livestock and aquaculture and value added per agricultural worker has remained un- accounted for 37% over the same period. changed over the last ten years.28 This suggests that agricul- Vietnam is the world’s largest exporter of black pepper, tural productivity has not improved. Vietnam has to make well ahead of Indonesia, India, Malaysia, and Brazil. Cash- strong efforts to invest more capital and high technology to ews are even more important, generating more foreign ex- maintain an annual growth rate of 4-5% for agricultural pro- change than black pepper in recent years. Vietnam has be- duction over the next decade. Relying on an increase in labor come the world’s second largest cashew producer behind is not feasible, since both unemployment and underemploy- India.23 Dalat, a popular tour- ment are prevalent in the rural ist city in central Vietnam, has and agricultural sectors. Con- gained the nickname “salad sidering that the prospects for bowl” of Asia. The area pro- expanding arable land are also duces iceberg lettuce for ex- very limited, the only viable port to various Asian coun- option available for Vietnam is tries, especially Singapore. to increase agricultural pro- Dalat is also a major producer ductivity with the application of other vegetables and flow- of more capital and technol- ers. ogy. Cultivation of mush- First, the government rooms and flowers can be should invest more in agricul- highly profitable, as there is a tural research and extension. great demand for these com- C. Peter Timmer emphasizes modities in Vietnam and on the the necessity for agricultural world market. The estimated research and application of annual domestic demand for new technologies.30 Public mushrooms is exceeding do- spending on research in Viet- mestic production.24 Vietnam Women cut and transport firewood to markets in North Vietnam. nam accounts for only 1.7% has become the world’s third of public agricultural expendi- largest exporter behind Japan ture as compared to 6% in and Hong Kong.25 As one of the world’s major rice producers China and 10% in Thailand and Malaysia.29 The government and second largest rice exporter, Vietnam produces 20-30 mil- allocates only US$30 million from the budget, and employs lion tons of rice straw a year. This by-product is an excellent approximately 2,800 extension workers whose responsibility bedding material for growing mushrooms. is to train 10 million farming households to use fertilizers and Many regions in the North are suitable for cost-effective pesticides, select the best crop varieties, use new farming cultivation of flowers for export markets. Farmers in these tools, and obtain farming services. They are also supposed areas have successfully grown high-quality flowers. MARD to help farmers obtain loans, sell agricultural products, and estimates that farmers can make up to 20 times more profits apply for land use permits. The most important issue here is from such flower crops than rice.26 Sub-tropical and temper- not the number of extension workers, but their technical com- ate fruit trees can grow successfully in the Northern region. petency, which lags behind other countries. Moreover, these Such projects would clearly be consistent with the government workers also compete against the very farmers government’s objective to eradicate poverty in the Northern they serve with their own farms and services-for-hire. This highlands and to improve living conditions in rural areas. conflict of interest needs to be resolved. Unfortunately, these opportunities have not yet been ex- Another way to increase agricultural productivity is to ploited. mechanize farming operations. The Mekong Delta is the best While flowers and straw mushrooms are suitable crops region to accelerate such a program. In 2000, there were about for urban and lowland areas, Vietnam also has a large com- 45,000 small tractors, 40,000 rice threshing machines, and parative advantage in the rubber industry in the central high- 360,000 water pumps in the region.31 Each tractor serves 1,300 lands and the Northeast region of South Vietnam, due to its farmers or 170 ha. of cultivated land on average. These fig- suitable climate, appropriate soil, available land, low cost of ures are quite high compared to those of other Southeast production, and extensive experience. Vietnamese rubber has Asian countries. It is necessary to ease restrictions on agri- earned a reputation for good quality. cultural land holdings to promote large private farms that are suitable for more efficient use of farming machines. Priorities 2. Intensification of Agricultural Production (tham canh) should be given to ploughing, transplanting, harvesting, and water pumping for irrigation, as well as using threshing ma- A study by the Asian Development Bank shows that chines to reduce post-harvest loss to below 7%. increases in labor and capital accounted for 87% of the in- In the absence of a comprehensive marketing strategy crease in agricultural output during 1996-98.27 Increases in for agricultural products, improved productivity only leads cultivated land area contributed to an additional 9% increase to market price collapse and puts more farmers in deeper in output. Only 4% of the increase could be explained by poverty. Vietnam needs to tackle three issues at the same

Harvard Asia Quarterly Fall 2003 39 time in order to compete successfully with foreign produc- tors for the failure of Vietnam’s sugar industry. If sugar mills ers: improving the quality of agricultural products, increas- that consistently operate at a loss are allowed to close down ing productivity, and reducing the cost of production. Viet- and other SOEs are equitized, they will have a much better nam was a well-known exporter of cheap but low-quality rice chance of achieving efficiency. Their products will compete in the early 1990s. Thanks to economic reforms, the quality of effectively with imported sugar. Ultimately, this will help six commercial rice has improved, at least in terms of rice with a other private sugar mills, five of which are foreign invested low broken percentage. Farmers in the Mekong Delta have joint ventures, to become more profitable.42 After an extended grown high-quality rice varieties.32 The volume of high-qual- period of inactivity, the government has finally taken steps ity rice exports with a low broken percentage has increased. to close down unprofitable plants. In contrast, over the same period, the volume of low-quality In addition to sugarcane and refined sugar, the govern- rice with a high broken percentage has decreased.33 The prices ment has also been involved in other agricultural processing of Vietnamese rice exports have been catching up with those businesses such as the production of salt, tea, fish sauce, of Thai rice of the same quality.34 As a result of improved cigarettes, paper and paper products, and sawn wood. Stud- quality, exports of commercial rice from ies by the World Bank and IMF show Vietnam have sharply increased dur- that SOEs in rural areas are weaker than ing the last decade.35 Exports of other SOEs in urban areas. Rural SOEs typi- agricultural products such as corn, A bold SOE reform program by cally operate at a loss despite various soybean, and peanut have not been the government could help means of financial support from the so successful since domestic prices are government, including free working 36 achieve a long-term solution to higher than world prices. A similar the problems plaguing the sugar capital, government guaranteed inter- situation exists for vegetable oil and industry. est free loans, reductions in value- fishmeal.37 added tax, and direct lending from com- At this stage of agricultural mercial banks.43 The World Bank esti- development, production is no longer a major concern; mates that the production costs of Vietnamese private pro- Vietnam needs to pay attention to production quality, post- ducers were 40% lower than that of SOEs.44 An IFPRI survey harvest processing, and marketing. As Bao Nguyen states, also reveals that marketing costs of SOEs are between 4 and “The problem with rural farming poverty is not that the farmers 16 times higher than those of private traders.45 A bold SOE cannot grow. It’s that whatever they have been growing (or reform program by the government could help achieve a long- know how to grow, or are familiar with growing) have little term solution to the problems plaguing the sugar industry as value or have no markets.”38 Shrimp, coffee, sugar cane, well as other rural SOEs. The effort to maintain the domi- catfish, and black pepper have been facing similar problems nance of the state enterprises has been costly to Vietnam. in recent years. According to its Ministry of Finance, the total debts owed Irrigation is a key factor for agricultural intensification. It by 5,175 SOEs in Vietnam amounted to US$6.9 billion at the is critical for reducing the risk of drought, raising yields, and end of 2002. These SOEs own about 80% of state assets but expanding cultivated areas. Irrigated land in Vietnam amounts contribute only 30% to the budget.46 The longer the govern- to about 2 million ha., accounting for only 26% of total culti- ment postpones taking action, the more capital resources will vated areas. Another one million ha. are partially irrigated be squandered at the expense of other rural development because the available irrigation infrastructure, located mostly projects. In contrast, China has strongly embraced SOE re- in the Mekong and Red River Deltas, is badly deteriorated. forms and promoted non-state enterprises to successfully There is an urgent need to rebuild the irrigation system. create non-farm employment and accelerating rural development. VI. REFORM OF RURAL SOES Since the Doi Moi program began in 1988, the industrial sector has grown more rapidly than the agricultural sector. The sugar industry is a striking example of the SOE prob- Foreign investment has played a key role in this process. As lem in Vietnam. Of 43 sugar mills in Vietnam, 37 are centrally or a result, however, industrialization has been confined mostly provincially owned SOEs. The SOEs are all unprofitable.39 to urban areas. The same policy that favors SOEs and the The sugar industry came to life as a result of the government’s urban sector over private enterprises and the rural sector decision in 1994 to achieve sugar self-sufficiency by the year should be blamed for the failure of the rural industrialization 2000. The shortage of sugar cane has pushed up its price, program in Vietnam. In contrast, Chinese rural industry has inducing farmers to grow sugar cane in inappropriate areas. flourished since reforms began in 1978. Given the fact that Consequently, the average yield has been low and the prices the agricultural sectors of both countries have performed of domestic sugar were 25% higher than those of imports.40 It well over the last decade, the slower growth of rural income is reported that the average price of domestic sugar was 1.65 in Vietnam as compared to China can be attributed largely to times and 1.88 times higher than sugar from India and Thai- under-performing rural industry and other non-farm activi- land, respectively. ties.47 With adequate flat land, good rainfall, reasonable tem- perature, and sufficient sunshine in the South, Vietnam is VII. NON-FARM EMPLOYMENT IN RURAL AREAS suitable for growing sugar cane.41 While bad weather conditions are partially to blame for the reduction of sugar cane Agriculture provides jobs for the rural poor and gener- supply, inefficiency and mismanagement are the major fac- ates export revenues, and therefore deserves government

Harvard Asia Quarterly 40 Fall 2003 attention in the short run. However, Vietnam should avoid Vietnam wants to realize the goal of achieving food secu- over-dependence on agriculture in the long run. A strategy rity.54 The improvement of rural infrastructure not only in- to provide non-farm employment in the rural area is crucial in creases agricultural productivity but also develops non-agri- this context. Since employment in the large-scale industrial cultural production and trade. Providing the private sector sector declined from 3.8 million in 1990 to 3.5 million in 1998,48 with investment opportunities in rural infrastructure and al- priority should be given to the development of infrastructure lowing local authorities to plan and carry out local infrastruc- and small industries in smaller centers, rather than the three ture projects could help achieve this. Many studies indicate largest cities – Hochiminh/Dongnai/Vungtau, Hanoi/ that investment in infrastructure offers high economic re- Haiphong/Quangninh, and Danang/Quangnam/Quangngai. turns, normally 25-30%. Building an adequate rural infrastruc- Examples of such small industries include fine arts and handi- ture, which includes rural transportation, electrification, safe craft, processing and preservation of agro-forestry and fish- drinking water, irrigation, and service centers and markets, is ery products, construction materials, wooden furniture, rat- critical to eradicating poverty in rural areas. tan products, ceramic and glassware, and garments and tex- In addition to the improved irrigation system as described tiles. With the expansion of industrial zones in Thai Binh above, Vietnam needs a more efficient warning and preven- province, the government appears to tion system for natural disasters such have initiated a new strategy to sup- as floods and typhoons. Typhoons port small industrial and commercial The labor/capital ratio of can be predicted three to five days in centers, helping them attract foreign private enterprises is ten times advance. Even though flood forecast- and domestic projects in handicraft, greater than that of SOEs, yet ing on small rivers is difficult, it is suf- mechanical engineering, electronics, private enterprises and rural ficiently easy on major rivers. Sizeable food processing, and textile and gar- households have little government investments are required ment industries. According to govern- opportunity to obtain loans. to take structural measures such as ment estimates, the industrial zones in building more dykes and repairing ex- Thai Binh could generate jobs for isting ones.55 15,000-30,000 workers by 2005. Services such as tourism, construction, and transporta- IX. FINANCIAL SERVICES IN RURAL AREAS tion can support rural production and create job opportunities. However, the most important prerequisite for promoting Besides improvements in infrastructure and the distri- non-farm employment is to increase rural income through an bution of land, an equally important governmental service to increase in agricultural productivity. This situation seems rural areas is making low-interest loans available to farmers. self-contradictory but is needed to break the cycle of pov- Financial services in rural areas are provided by the Vietnam erty. Such a first successful step will in turn effectively gen- Bank for Agriculture and Rural Development (VBARD), five erate demand for non-agricultural goods and services.49 State-Owned Commercial Banks (SOCBs), about twenty rural Studies by the World Bank50 and the Asian Develop- shareholding banks (RBs), 970 People’s Credit Funds (PCFs), ment Bank51 show that labor-intensive agro-processing in- and seventy Credit Cooperatives (CCs). In 1999, formal lend- dustries, food processing in particular, increase the value of ing to rural areas was about US$2.9 billion, serving about and demand for agricultural products. They also also mini- 50% of the rural population. VBARD provided 80% of these mize post-harvest loss, stabilize the supply/demand differ- loans, which is equivalent to US$2.3 billion.56 In many prov- ence, and create jobs for the rural sector. A study in the US inces, VBARD is the only formal source of financial services. shows that at the beginning of the 20th century, out of every The objective of these financial institutions is to provide US$100 spent on food, US$60 went to farmers, and US$40 to credit to farming families and micro and small rural enter- post-harvest operators. By the end of the century, this ratio prises (MSEs) in rural areas. had changed to US$22/US$78 with the larger share going to All rural financial institutions, except for SOCBs and processing, storage, transportation, packaging, and market- VBARD, are small. They have experienced problems of low ing activities.52 equity levels, large non-performing loans, low profitability, and an inability to handle loan losses. Management and staff VIII. RURAL PUBLIC INFRASTRUCTURE of financial institutions have inadequate knowledge of banking operations. They are often directed to favor SOEs at Less than 20% of rural households have electricity, and the expense of the private sector, even though SOEs in rural only about 30% have access to safe drinking water. The road areas are the weakest in terms of competativeness. The labor/ system in Vietnam is generally very weak with less than 10% capital ratio of private enterprises is ten times greater than in good condition. The situation of the road network in rural that of SOEs, yet private enterprises and rural households areas is worse. Many roads cannot be used in the rainy sea- have little opportunity to obtain loans. There is a large son. About 20% of remote villages cannot reach other parts shortage of medium-term credit for investment in perennial of the districts by car. Public investment in rural infrastruc- crops, livestock, aquaculture, machinery and vehicles for ture, including energy, water supply, health care, and educa- farming, processing, and marketing activities, all of which tion has been lacking for decades. Currently, most of the 70 require at least a year or longer to repay. In order to correct universities and 137 colleges, which together train about this situation, it is necessary to: (a) reform the banking system 807,000 students, are located in Hanoi or Hochiminh City.53 to serve rural areas; and (b) increase access to financial Massive investment in rural infrastructure is needed if services in the rural sector. In connection with these goals,

Harvard Asia Quarterly Fall 2003 41 the deregulation of interest rates and removal of government- plantation and processors, production of fertilizers, veteri- directed lending are the most important tasks. nary medicines, insecticides and farming machinery.60 These These objectives can be achieved with the following labor-intensive projects would help to increase employment reform programs: (a) improving the legal, regulatory and in the rural sector. supervisory framework; (b) restructuring SOCBs and Joint Since the reforms began in 1988, the government has Stock Banks (JSBs); (c) improving financial performance of approved 4,582 foreign-invested projects, with a total com- the banking system; (d) leveling the playing field for all banks; mitted capital of US$50.2 billion. However, only US$20 billion (e) improving transparency and financial information flow; has been actually disbursed. The operations of about 884 (f) expanding medium-term lending with external funding projects, worth US$10.5 billion, have been discontinued. Viet- support; (g) training management and staff in commercial nam has failed to attract more FDI for numerous reasons: (a) banking operations and in central bank supervision; and (h) high charges for the use of infrastructure;61 (b) unequal in- promoting savings to mobilize funds. come taxes between foreign and local businesses (higher than other Asian countries);62 (c) shortage of materials and X. GOVERNMENT AND FOREIGN INVESTMENT IN RURAL AREAS services; (d) corruption, red tape, and lack of legal transparency; and (f) the 1997 Asian financial crisis. From 1996-2000, 69.2% of total public investment was directed to the Red River Delta, the Southeast region, and the XI. MANAGEMENT OF NATURAL RESOURCES Mekong Delta, the three richest regions of Vietnam, which are also less rural than other areas in the country. The three Vietnam lost about 100,000 hectares of forest annually poorest regions, namely the during the past 50 years. The Northern Mountains Region, natural forest shrunk from the North Central, and the 43% of the land area in 1945 Central Highlands received to 26% in 1990. This was due only 21.3%.57 Public invest- to a combination of several ment in basic infrastructure key factors: rural poverty, should be reallocated to rural over-logging, illegal cutting, areas in order to promote rural insufficient arable land, inap- development through projects propriate resettlement, and such as rural transport, public wartime defoliation. Logging utilities, health centers, and by State Forestry Enterprises educational institutions. Such (SFEs) produced an average public works will encourage of 300,000-450,000 cubic additional private investment meters of timber annually and industrialization of the ru- from natural forests. Fires and ral sector. the construction of roads, Post-harvest losses have dams and high voltage power been discussed briefly in the The poorest of the poor in Vietnam, Lao Cai Province, Northern High- lines also contributed to this agricultural intensification lands. problem. Thanks to the refor- section above. As post-har- estation effort during the last vest technology is expensive to farmers, public investment decade, the forest expanded to 29% of the land area in 1999.63 can play a key role in the area in providing incentives to the Nonetheless, the consequences of deforestation - flash private sector to invest in post-harvest operations for re- floods and sedimentation - have taken a heavy toll on houses, ducing losses during food drying, storage and transport properties, and human lives in lowland areas. The operations. government’s stated goal of restoring forest coverage from With the integration of Vietnam into the regional and 28% to 43% seems overly ambitious. Corruption of forestry global economy, foreign investment was disbursed in the officials, rising domestic demand for timber products in light economy at an average of US$1.6 billion a year during 1994- of high import taxes, and slash-and burn practices in the 99. However, foreign investment in agriculture, forestry and highlands by minorities, make saving the remaining natural fishery accounted for only about 6% of foreign investment forests a large challenge for the government. It seems inevi- (FDI).58 As of December 2000, there were 340 FDI agricultural table that deforestation will continue in Vietnam. projects in Vietnam with a total capital of about US$2.3 bil- Although water is relatively abundant, its quality has lion, compared to five projects with a total capital of US$2.8 been on the decline due to pollution caused by rapidly ris- million in 1995.59 As rural infrastructure continues to be im- ing agricultural, industrial, and household uses. Much of proved, it is expected that foreign investment will expand the existing irrigation, drainage, and flood control infrastruc- gradually into production areas and the rural sector. In 2001, ture in rural areas has deteriorated. The demand for water in the government announced a policy to drive up FDI in agri- urban areas is expected to double in the next two decades culture by giving incentives to foreign investors who want yet there is no good drainage system. Vietnam has a total to invest in the following important areas: developing supe- wetland area of about 3.9 million ha. Protected areas account rior breeds of livestock, plant saplings, seeds, farm and for- for only 1.6% or 62,083 ha. The two most important wetland estry products for export, meat and diary industries, timber areas in Vietnam are located in the Mekong Delta, which

Harvard Asia Quarterly 42 Fall 2003 covers an area of about 3.9 million ha. and the Red River market; d) end subsidies to state-owned sugar refineries and Delta, which covers 866,000 ha. and is the most densely agricultural SOEs, which keep losing money, and allow com- populated area in the world.64 Although wetlands provide petition in domestic production; (e) promote the private sec- important habitats for people as well as wildlife and play an tor in rural areas by ending policies in favor of SOEs; (f) important role in regional and global ecology, Vietnam lacks remove restrictions on farmers’ rights to transfer, exchange, a comprehensive wetland management plan. rent/lease, inherit, and mortgage land; (g) extend the dura- Aquaculture is a highly profitable activity. However, it tion of land-use rights and raise maximum land holdings; and has created some pollution problems harmful to mangrove (h) provide credit to farmers through a reformed rural bank- forests, wetlands, and nearby areas. Over-fishing near the ing system. seashores has resulted in a decline in harvest volume. These Some recommended long-term measures include: (a) symptoms indicate that natural resources in rural areas have improve rural public infrastructure; (b) develop the high- been deteriorating. lands; (c) improve agricultural technology; (d) promote non- Land tenure, long-term conservation practices, and trans- farm employment; (e) better manage natural resources; (f) formation of unsustainable agricultural practices are impor- expand research and extension activities; (g) increase in- tant issues to be addressed. Fishing in offshore deeper wa- vestment in rural areas, and (h) improve rural data, which is ters is a measure encouraged by the government. Expansion critical to policy planning. of protected areas to conserve nature has also been considered by the government. In addition to these, forest restoration should be given priority. More imports of timber must be allowed in order to reduce the use of domestic products.

XII. CONCLUSION ENDNOTES The majority of Vietnam’s poor are located in the rural areas. A national economic development strategy will fall 1 VietCatholic News, “Vietnam – Industrialization Phenom- short of expectations if it cannot raise the rural standard of enon,” December 24, 2002. living. This is especially true for the ethnic minorities who 2 Sudipto Mundle and Brian Van Arkadie, “The Rural-Urban have been living in the highlands, their ancestral home; the Transition in Vietnam: Some Selected Issues,” Asian Devel- highlands account for 70% of Vietnam’s total land area. Fail- opment Bank, Occasion Paper No. 15, Manila: October 1997. ure to improve rural lives would result in the pronounced 3 Asian Development Bank, World Bank, and UNDP, “Viet- widening of the income gap between rural and urban areas, nam 2010 – Entering the 21st Century,” Washington DC: De- translating into a divergence of the quality of health, educa- cember 2000. tion, and other socio-economic indicators between them. This 4 Although human capital is also a key factor in determining phenomenon will in turn lead to an unwanted creation of rural poverty, this issue would be better discussed in the crowded megacities, transfer of rural poverty to the urban context of education and social services. Therefore, it is not sector due to migration, and lower overall productivity lead- covered in this paper. ing to economic stagnation. “All in all, the situation reflects 5 Adam Fforde and Stefan de Vylder, From Plan to Market – an ‘interlocking log-jam of disadvantage’ that afflicts, in a The Economic Transition in Vietnam, Westview Press, Boul- disproportionately large measure, the rural population – es- der, Colorado: 1996, 14-15. pecially the rural women, the landless, the smallholders, 6 Resolution 10 of the Communist Party of Vietnam’s Central pastoralists, and the indigenous minorities,” declares Nwanze Committee, June 1988. Okidegbe.65 7 Rita Liljestrom et al., “Profit and Poverty in Rural Vietnam: Except for a short period of peace from 1955-1960, the Winners and Losers of a Dismantled Revolution,” Curzon rural sector has suffered disproportionately in terms of prop- Press, United Kingdom: 1998, 1-14. erty damage, loss of human lives, and disrupted economy 8 World Bank, “Vietnam – Country Brief,” Washington, DC: during the warring periods of 1930-1975. In times of peace, it December 11, 2002. deserves more reconstruction and development efforts. Viet- 9 Ministry of Labor, Invalids, and Social Affairs and Govern- nam has undergone a profound transformation since the Doi ment Statistics Office, “Statistical Yearbook 2000,” Hanoi: Moi program started in 1988. Even though the role of the 2000. rural sector is critical to this growth strategy, the rural sector 10 Nguyen Manh Hung, “Regional and Rural-Urban Income has not been allowed to fully develop due to bias against the Disparities in the Vietnamese Economy,” in The Vietnamese rural and private sectors. Economy – Awakening the Dormant Dragon, Binh Tran- The government can take a number of immediate mea- Nam and Chi Do Pham, eds., RoutledgeCurzon: London, 2003, sures in the short run within its own authority and capacity 283-300. to help the rural sector develop itself: (a) allow farmers to 11 C. Peter Timmer, “Agriculture and Economic Growth in decide what they want to produce; (b) remove rice export Vietnam,” Research in Domestic and International restrictions – dismantle the rice export quota system by pro- Agribusiness Management, Volume 12, JAI Press: 1996, 161- gressively raising the export ceiling or replacing quotas with 203. export taxes, which should be completely removed in the 12 B.F. Johnston and J. W. Mellor, “The Role of Agriculture in long-term; (c) allow the private sector to enter the rice export Economic Development,” American Economic Review, No.

Harvard Asia Quarterly Fall 2003 43 51, 1961. 25 Xinhua News Agency, “Vietnam Becomes World’s 3rd Larg- 13 C. Peter Timmer, “Agriculture and Economic Growth in est Straw Mushroom Exporter,” Hanoi: November 20, 2002. Vietnam,” Research in Domestic and International 26 MARD, “Vietnamese Farmers Hope Quality Flowers Will Agribusiness Management, Volume 12, JAI Press: 1996, 161- Bloom in Export Markets,” November 2001. 203. 27 Asian Development bank, “Vietnam Agricultural Sector 14 World Bank, “World Development Report 1991,” Oxford Program Interim Report,” by ANZDEC Ltd with IFPRI and University Press, New York: 1991. Lincoln International, Hanoi: 2000, 46-47. 15 Nwanze Okidegbe, “Rural Poverty – Trends and Measure- 28 Asian Development Bank, World Bank, and UNDP, “Viet- ment,” Rural Development Strategy Background Paper #3, nam 2010 – Entering the 21st Century,” Washington DC: De- World Bank, Washington, DC: 2001, 47-49. cember 2000, 51-53. 16 General Statistical Office, “Statistical Yearbook 2000,” Hanoi: 29 Asian Development Bank, World Bank, and UNDP, “Viet- 2000. nam 2010 – Entering the 21st Century,” Washington DC: De- 17 According to the 2002 World Bank figures, there is an cember 2000, 41-47. average of 0.25 ha. per worker in the north and 0.5 ha. per 30 C. Peter Timmer, “Agriculture and Economic Growth in worker in the south (World Bank, “Socialist Republic of Viet- Vietnam,” in Research in Domestic and International nam – Agricultural Rehabilitation Project,” Project Perfor- Agribusiness Management, Volume 12, JAI Press Inc.: 1966, mance Assessment Report, Washington, DC: June 11, 2002). 161-203. 18 First, the government has not issued any decrees to ex- 31 Xinhua News Agency, “Agricultural Mechanization in plain how these rights can be utilized. Second, the law im- Mekong Delta to Be Stepped Up,” Hanoi: March 7, 2001. poses maximum agricultural land holdings of 3 ha. in the South 32 Such as IR64, VNÐ5-20, IR1490, and M8L250 for export and 2 ha. in the North for annual crops. In the case of peren- (BBC Worldwide Monitor, “Vietnam Ministry Reviews Agri- nial crops, the limits are 10 ha. for lowland and 30 ha. for cultural Production in 2000,” December 4, 2000). mountainous and midland. Third, the law sets a relatively 33 Nguyen Kim Vu, “Nâng Cao Chat Luong và Giá Tri Nông short duration of land use rights to annual cropland at 10 to San Hàng Hóa,” (Improving the quality and value of agricul- 15 years, with extended periods for tree crops. Fourth, the tural products), MARD, Hanoi: 2000. conversion of paddy land to other uses is practically prohib- 34 US$170/ton for Vietnamese rice vs. US$271/ton for Thai ited. In most cases, such a conversion requires the prime rice in 1990 (Francesco Goletti and Nicholas Minot, “Rice minister’s approval. Fifth, long-term land transfers are re- Markets, Agricultural Growth, and Policy Options in Viet- stricted to certain special circumstances (moving out of the nam,” IFPRI, Washington, DC: April 1997). area, inability to use the particular piece of land), and require 35 Saigon Times Daily, “Labor-Intensive Agro-Development permission from local authorities. Sixth, renting/leasing of Needed,” Ho Chi Minh City: June 12, 2001. land for annual crops or aquaculture for more than three years 36 For example, the world prices for corn and soybean were is not allowed, except with special government permission. US$75-US$80/ton and US$180/ton respectively in 2000, com- Lastly, sales and exchanges of land are subject to tax. The tax pared with the domestic prices of US$140/ton and US$300- rate is set at 50% of the land value if rice-growing land is US$400/ton respectively. transferred from one household to another household for 37 Lê Van Lai và Phi Van Ky, “Nhung Thách Thuc Ðoi Voi growing different crops. The transfer tax rate is 30% in cases Nông Nghiep Viet-Nam,” (Challenges Facing the Vietnamese of industrial construction. Agriculture), People’s Army Newspaper, Hanoi: 2000. 19 Decree 100 (Chi Thi 100) on the management of the coop- 38 Bao Nguyen, “Comments on document Towards A Sus- eratives was introduced in 1981. It defined eight kinds of tainable Rural Development Policy for Vietnam,” February work in rice production. Some works were contracted to indi- 27, 2003.” Prices of vegetables in Dalat in 2001 were so low vidual farmers. Others were carried out by cooperatives. that some one fourth of all vegetables were left to rot in place. These included (a) production of seeds; (b) preparation of Increased productivity to produce even more Dalat-grown land; (c) sowing and transplanting; (d) irrigation; (e) fertiliza- vegetables would not solve the problem – developed mar- tion; (f) tending; (g) pest control; and (h) harvesting. kets are urgently needed. 20 Resolution 10 (Nghi Quyet 10) was issued by the Politburo 39 Information, posted by Vietmedia on the Internet on De- of the Vietnamese Communist Party to transfer at least five cember 17, 2002, was obtained from the Ministry of Agricul- kinds of work to farming households. ture and Rural Development and published on the 21 Adam Fforde and Steve Sénèque, “The Economy and the government’s official newspaper Lao Dong (Labor). Countryside: The Relevance of Rural Development Policies,” 40 IMF, “Vietnam: Selected Issues,” Staff Country Report No. in Vietnam’s Rural Transformation, Benedict J. Tria Kervliet 99/55, Washington, DC: July 1999. and Doug J. Porter, eds., Westview Press, Boulder: 1995, 97- 41 Average rainfall is 1,400-2,000 mm a year. 138. 42 General Statistical Office, “Statistical Yearbook 2000,” Hanoi: 22 Asian Development Bank, World Bank, and UNDP, “Viet- 2001. nam 2010 – Entering the 21st Century,” Washington DC: De- 43 World Bank, “Vietnam Development Report 2002 – Imple- cember 2000. menting Reforms for Faster Growth and Poverty Reduction,” 23 Financial Times, “Agriculture: Cashew Output Rises by Washington, DC: 2002. 60,000 tons in 2002,” Global News Wire, February 10, 2003. 44 World Bank, “Project Appraisal Document on a Proposed 24 MARD figures reported by the VietCatholic News, Janu- Credit of SDR49.6 Million to the Socialist Republic of Viet- ary 13, 2003. nam for an Agricultural Diversification Project,” Washing-

Harvard Asia Quarterly 44 Fall 2003 ton, DC: June 1, 1998. cember 2000, 106-107. 45 Francesco Goletti, Nicholas Minot, and Philippe Berry, 65 Nwanze Okidegbe, “Rural Poverty – Trends and Measure- “Marketing Constraints on Rice Exports from Vietnam,” IFPRI, ment,” Rural Development Strategy Background Paper #3, Washington, DC: 1997. World Bank, Washington, DC: 2001, 47-49. 46 Reported by Financial Times in “SOEs Report Debts of US$6.85 billion,” January 16, 2003. 47 David O’Connor, “Rural Industrial Development in Viet- nam and China: A Study in Contrasts,” OECD Development Centre, Technical Paper No. 140, Paris: September 1998. 48 World Bank, “Vietnam: Advancing Rural Development from Vision to Action,” Washington, DC: December 1998. 49 Peter Wolff, “Vietnam – the Incomplete Transformation,” German Development Institute / Frank Cass, London: 1999, 106-109. 50 World Bank, “Vietnam: Advancing Rural Development from Vision to Action,” Washington, DC: December 1998. 51 Asian Development Bank, “Vietnam Agricultural Sector Program Interim Report,” by ANZDEC Ltd with IFPRI and Lincoln International, Hanoi: 2000. 52 Nguyen Kim Vu, “Công Nghe Sau Thu Hoach – Giai Pháp Ðau Ra Cho Nông San,” (Post-Harvest Industry – First Solu- tion for Agricultural Products), MARD, Hanoi: 2000. 53 Financial Times, “Ministry of Education and Training Plans More Universities, Colleges by 2005,” Ho Chi Minh City: December 23, 2002. 54 C. Peter Timmer, “Agriculture and Economic Growth in Vietnam,” in Research in Domestic and International Agribusiness Management, Volume 12, JAI Press Inc.: 1966, 161-203. 55 World Bank, “Vietnam – Agriculture for Sustainable Rural Development,” Sector Report No. 17278-VN, Washington, DC: January 12, 1997. 56 World Bank, “Socialist Republic of Vietnam - Second Rural Finance Project,” Report No: 23817-VN, Washington, DC: May 2, 2002. 57 Asian Development Bank, World Bank, and UNDP, “Viet- nam 2010 – Entering the 21st Century,” Washington DC: De- cember 2000. 58 Khai Q. Nguyen, “Foreign Direct Investment and Eco- nomic Development – The Vietnamese Experience,” in The Vietnamese Economy – Awakening the Dormant Dragon, Binh Tran-Nam and Chi Do Pham, eds., RoutledgeCurzon: London, 2003, 176-198. 59 Vietnam News Agency, “Ðau Tu Nuoc Ngoai Trong Nông Nghiep Viet-Nam,” (FDI in the Agricultural Sector of Viet- nam), Hanoi: December 15, 2002. 60 Asia Pulse Pte Limited, “Vietnam Sets Out Priorities for Foreign Investment in Agriculture,” Hanoi: April 10, 2001. 61 International telephone call charges in Vietnam are seven times higher than those in Singapore, three times higher than in China, and two times higher than in Thailand (Financial Times, May 22, 2002). 62 An income tax rate of 50% imposed on foreigners, compared to the maximum of 30% in Indonesia, 37% in Thailand, and 45% in China (Financial Times, May 22, 2002). 63 Asian Development Bank, World Bank, and UNDP, “Viet- nam 2010 – Entering the 21st Century,” Washington DC: De- cember 2000, 99-119. 64 Asian Development Bank, World Bank, and UNDP, “Viet- nam 2010 – Entering the 21st Century,” Washington DC: De-

Harvard Asia Quarterly Fall 2003 45 UNLOCKING SOUTH ASIA’S ECONOMIC POTENTIAL: CONSIDERING AN FTA BETWEEN SRI LANKA AND THE US

BY WILLIAM H. AVERY ccording to the United Nations, by 2035 India will have surpassed China as the world’s most populous nation.1 By that time the UN forecasts that India and its South Asian neighbors2 will have William H. Avery is an advisor on cross-border A together two billion of Asia’s five billion people. It is no surprise, then, mergers and acquisitions, currently based in Brussels. From 1996 until 2003 he served with that US businesses have seen India in particular and South Asia in gen- the U.S. State Department, most recently as eral as potentially lucrative markets for their goods and services. India’s Head of the Economic/Commercial Section at economic reforms of 1991 spurred a massive increase in foreign direct the U.S. Embassy in Colombo, Sri Lanka. He investment (FDI) into the country, with major multinationals such as Gen- received his B.A. in History summa cum laude from Princeton University and held a Fulbright eral Electric, Ford and DuPont setting up manufacturing operations to Scholarship to the University of Vienna, Aus- serve what was seen as a large and growing Indian middle class. tria. Twelve years after India’s first round of major reforms, the large domestic market multinational companies envisaged in India and the rest of Note: The views expressed in this piece are South Asia has not materialized. The fabled Indian middle class is large those of the author and not necessarily those of indeed – as many as 250 million people3 – but its demand for US products the Department of State or the United States and services is smaller than originally estimated. Several reasons explain Government. why India’s demand for US products and services has not met multinationals’ expectations. First, even after the economic reforms of 1991, India’s import duties remained high, making it hard for US exports to compete with locally-made products. In addition, indigenous firms proved themselves adept at meeting the demands of the Indian consumer. Meanwhile, Ameri- can firms did no better at penetrating markets in other South Asian nations than in India. This has led many US multinationals operating in South Asia to shrink their estimates of revenue that will flow from the subcontinent, even under the rosiest scenarios of political stability, economic liberalization, and rising income levels.4 Indeed, South Asia’s underperformance as a market for US companies is clear when the subcontinent is compared side-by-side with East Asia. Taken together, the countries of East Asia (China, Japan, Korea plus Southeast Asia) bought $169 billion in American exports in 2002, versus just $5 billion for the countries of South Asia. 5 On a per capita basis, that is $85 in US exports for every East Asian, but only $4 for every South Asian. There are many reasons for South Asia’s underperformance relative to East Asia and relative to the expectations of multinational companies: the slow pace of economic reforms, rampant political instability (including repeated skirmishes between India and Pakistan), and persistently high tariff barriers. By contrast, East Asia has liberalized faster, lowered tariff and non-tariff barriers faster, and attracted much more FDI than South Asia. The results are evident in annual GDP growth rates. According to the World Bank, the low- and middle-income economies of East Asia grew at 8% in the 1980s and 7.5% in the 1990s, while the economies of South Asia grew at 5.6% over both decades.6 The advantages that East Asia enjoys today over South Asia – higher average standard of living, better infrastructure, greater level of industrialization – are due to the rapid growth in East Asian economies over the past two decades. Growth in excess of five percent is not anemic by any standards, but forsaking the extra growth East Asia achieved had enormous opportunity costs for South Asia. Over two decades an economy growing at 5.6% can triple its size, whereas one growing at 8% can increase by nearly a factor of Harvard Asia Quarterly 46 Fall 2003 five. It is the difference between modest growth and transfor- 1990s, Sri Lanka achieved a substantial increase in income mational growth, between poverty alleviation and widespread levels, with annual per capita GDP growth of 4% in the 1980s poverty reduction. In the 1990s alone East Asia halved the and 5% in the 1990s.8 Today Sri Lanka, with a GDP per capita percentage of its population living in poverty (from 30% to of $870, is the most prosperous of the South Asian nations.9 15%), while South Asia achieved only a marginal reduction If things continue to go right for Sri Lanka, it can achieve its in poverty levels (from 45% to 37%).7 East Asia’s sprint ahead own economic miracle, and help its South Asian neighbors was aptly named the Asian economic miracle – a miracle that, in spite of a setback in the 1997 Asian financial crisis, still continues today. How can South Asia achieve its own economic miracle? South Asia, of course, needs a home-grown plan to achieve its own transformational growth; it will not be possible simply to import East Asia’s policies. Still, whatever South Asia’s own approach to growth turns out to be, a lowering of trade barriers will be necessary to achieve a South Asian economic miracle. Economists can debate whether growth is best achieved by re- moving trade barriers rapidly or gradually, but over time South Asia’s economies will have to open fully to trade if they are to reach East Asian levels of prosperity. There is no region or country in the world today that has achieved rapid and sustained growth in income levels without opening up to trade. Reducing trade barriers and restrictions on foreign investment in South Asia will not happen overnight. The process, which be- A central street in Jaffna, Sri Lanka. gan in earnest with India’s economic reforms of 1991, will take decades more and likely move in fits and starts. While no external force can compel South Asian economies to liberalize, US trade do the same. The US can play a helpful role in driving Sri policy can help nudge the subcontinent toward more open Lanka’s further liberalization and growth through a bilateral investment and trade policies. FTA. Sri Lanka’s growth would then have the potential to Given the high stakes involved, a primary objective of spur economic reforms throughout South Asia, much as US trade policy in South Asia should be to catalyze these growth in Hong Kong, Singapore and Taiwan did through- reforms. A South Asian economic miracle would lift hun- out East Asia. dreds of millions out of poverty in South Asia and would Sri Lanka opened its economy to capitalism in 1977, long increase the prospects for peace and stability in the region; it before its South Asian neighbors did – and long before capi- would also boost demand for US goods and services in the talism became fashionable. It was a bold move on the part of subcontinent, meaning more business for US companies and Sri Lanka’s then Prime Minister Junius Richard (“JR”) more jobs for American workers. The US can speed up South Jayawardene, who acted quickly to lower trade barriers and Asia’s development by intensifying its trade relationship with attract foreign investment to the island. These reforms were the subcontinent. As a first step, it should pursue a bilateral born of economic necessity. Sri Lanka, like India, had drifted Free Trade Agreement (FTA) with the war-torn island of Sri toward socialist economic policies in the years after gaining Lanka. This article will demonstrate how an FTA with Sri independence from Great Britain. By the time of Jayawardene’s Lanka (which would be America’s first with any South Asian election in 1977, nationalization of most industries had nation) can help transform South Asia into the next East brought the once prosperous island to the brink of economic Asia. ruin. Sri Lankans, coping with bread lines for the first time in their history, voted for a change. SRI LANKA: THE KEY TO UNLOCKING SOUTH ASIA’S ECONOMIC The opening of the economy brought a near instant POTENTIAL surge of growth to Sri Lanka. Growth rose from 3.8% in 1977 to over 6% in 1978 and 1979. However, the outbreak of ethnic Despite South Asia’s economic under-performance, there violence in 1983, marked by the insurgency of the Liberation is one prospect of hope: Sri Lanka. This island nation has Tigers of Tamil Eelam (LTTE), severely hampered Sri Lanka’s South Asia’s most open economy, and is in the process of ability to attract large-scale foreign investment. For the next further economic liberalization. In spite of being afflicted by 18 years civil war raged in the north and east of the country, nearly two decades of civil war in much of the 1980s and punctuated by terrorist attacks in the capital city, Colombo,

Harvard Asia Quarterly Fall 2003 47 and other parts of the south. In the late 1980s Sri Lanka suf- Lanka is at a historic crossroads – economically as well as fered a second uprising led by a left-wing paramilitary group politically – and the Bush administration has rightly made a in the deep south. Despite this internal strife, Sri Lanka’s policy decision to support the Sri Lankan government in its economy kept expanding, managing to grow at an average effort to set the nation on the right course. annual rate of 4.4% during 18 years of war. The country at- In July 2002 President Bush met with Prime Minister tracted modest levels of foreign investment, mostly from Japa- Wickremesinghe at the White House.11 The President offered nese and Korean firms opening small-scale manufacturing Wickremesinghe American support for Sri Lanka’s pursuit of facilities. The typical foreign investment in the 1980s and peace and economic development, promising to send several 1990s was less than $10 million, and large-scale foreign in- US government teams to Sri Lanka to assess areas for eco- vestment from blue-chip multinationals did not materialize to nomic cooperation. The support pledged by the President is any significant extent. Still, attracting any investment during taking a wide range of forms: continued direct assistance the ethnic conflict is a testament to the Sri Lankan from the US Agency for International Development, techni- government’s ability to persuade foreign firms that the con- cal assistance by the US Treasury Department on economic flict was confined to the north of the reforms, and plans for the return of the island and would not affect foreign en- Peace Corps as soon as conditions per- terprises in the south. mit. Most significantly, during In addition, successive Sri Lankan The US consumed nearly 40% Wickremesinghe’s visit to Washington governments in the 1980s and 1990s of Sri Lanka’s exports in 2002 the US government signed an agreement pushed through important economic re- and was by far its biggest with the government of Sri Lanka to forms aimed at attracting new foreign trading partner. strengthen commercial ties. This Trade investment, including privatization of and Investment Framework Agreement some state-run industries (notably plantations and air travel) (TIFA) aims, as the name implies, to increase trade and in- and the lifting of most exchange controls. The sum result was vestment between the two countries. The Sri Lankan govern- that Sri Lanka performed well for a country suffering an in- ment has since said publicly it hopes the TIFA will lead to a surgency, but still much below its potential. bilateral Free Trade Agreement with the US. In late 2001 an election took place that could well be There is no doubt a bilateral FTA with the US would be regarded in the future as a watershed in the history of Sri in Sri Lanka’s interest. The US consumed nearly 40% of Sri Lanka. The United National Party, campaigning on a platform Lanka’s exports in 2002 and was by far its biggest trading of peace and economic reform, came to power after seven partner. Apparel exports from Sri Lanka to the US alone years in opposition. Led by Prime Minister Ranil amount to some $1.4 billion annually and provide direct em- Wickremesinghe, the new government quickly began peace ployment for an estimated 210,000 people, or 3% of the talks with the LTTE, resuming a process of Norwegian gov- workforce.12 An FTA with the US, and the duty and advan- ernment facilitation initiated by Sri Lankan President Chandrika tages that it brings, would provide major benefits to Sri Lanka’s Bandaranaike Kumaratunga in the late 1990s.10 At the same exporters. Apparel is likely to be a sensitive area in any po- time, Wickremesinghe’s government embarked on a series of tential trade negotiations between the US and Sri Lanka, given economic reforms that together would constitute the second the quantity of Sri Lankan apparel exports and recent job major wave of liberalization since 1977. These reforms, still losses in the US apparel industry. But there is a way to turn underway as of late 2003, include removal of government Sri Lanka’s apparel industry into an export opportunity for subsidies, further privatization of state-run corporations (pe- both the US and Sri Lanka. The FTA could contain a rule of troleum, insurance, and telecom, among others), and relax- origin requiring Sri Lanka apparel to use US fabric inputs in ation of labor market restrictions. This new government is order to qualify for duty-free entry into the US. Such a provi- just getting started – its goal is to achieve long-term growth sion would create business for the US textile industry and of 8-10%. To do so, it has laid out a strategy to improve might win its support for a US-Sri Lankan FTA. economic productivity in a policy document entitled “The Outside of potential textile exports, the US interest in an Future: Regaining Sri Lanka.” This vision for Sri Lanka calls FTA with Sri Lanka is less immediately clear. US exports to Sri for nearly all industries to be in private ownership, for busi- Lanka were a modest $172 million in 2002. When American nesses to have greater freedom to shed workers, and for the companies look to South Asian markets, they tend to look government to stop the subsidies that direct capital and la- first to Sri Lanka’s much larger neighbors – India and, to a bor toward unproductive activities. Farther reaching than lesser extent, Pakistan. India, for instance, consumed over the incremental reforms of the 1980s and 1990s, this new 70% of US exports to South Asia during 2002, while just 3% wave of reforms, if fully enacted, will make Sri Lanka one of went to Sri Lanka.13 In a region of 1.3 billion people, it is a the most open economies in Asia. challenge for a country of 19 million like Sri Lanka to attract While the US has had a positive relationship with Sri the attention of multinationals. To overcome its modest size Lanka (and earlier, with Ceylon) in the years since the island’s Sri Lanka must position itself as a gateway to the larger South independence, Sri Lanka did not attract much attention from Asian market, as Hong Kong and Singapore have done in high-level foreign policy-makers in the US government dur- East Asia. ing the years of the ethnic conflict. Prior to 2001, for instance, Fortunately, even if US industry has been slow to notice no Sri Lankan leader had met a sitting US President since J.R. Sri Lanka, the US government has begun to realize Sri Lanka’s Jaywardene met with President Reagan in Washington in the potential as a trading partner. After the second round of US- early 1980s. Now the US government has recognized that Sri Sri Lankan TIFA discussions, held in Washington in March

Harvard Asia Quarterly 48 Fall 2003 2003, Deputy US Trade Representative Jon M. Huntsman The core of Sri Lanka’s hub strategy lies in developing said Sri Lanka was making progress in every area of the bilat- preferential trading agreements with its neighbors. In 2000, eral trade agenda. Huntsman added that though it was “pre- Sri Lanka signed an FTA with India. The Indo-Lankan FTA, mature” to talk about a US-Sri Lankan FTA, “our relationship while flawed by large “negative lists”17 on both sides, does is perfectly positioned to begin moving toward such a dis- serve the basic purpose of linking the Sri Lankan market with cussion.”14 Huntsman’s words – which he no doubt chose the much larger and more diverse Indian market. Specifically, carefully – indicate that a US-Sri Lankan FTA is a possibility the agreement allows foreign firms to avoid prohibitive In- in the near future. dian import duties by ship- Furthermore, the break- ping raw materials and/or down of World Trade Organi- component parts to Sri zation talks at the September Lanka, assembling them there 2003 Ministerial in Cancun will (provided there is at least push the US to rely more on bi- 35% local value addition), lateral FTAs to achieve trade and exporting them to India liberalization, and less on mul- under preferential duty rates. tilateral agreements in the After a slow start, the FTA WTO. The failure of the WTO has begun to stimulate bilat- at Cancun demonstrates how eral trade: two-way trade has difficult it is for a 146-member grown from $560 million in body to agree on a plan for re- 1999 to over $1 billion in 2002. moving trade barriers. Bilateral In 2002 Sri Lanka began agreements offer the US an al- negotiations on an FTA with ternative means to achieving Pakistan, which is expected trade liberalization in global to be finalized in late 2003 or markets. While a WTO-wide early 2004. It will likely con- agreement would remove trade tain duty breaks on value- barriers faster, bilateral agree- Despite internal security problems, trade has flourished. added exports, similar to (Kilinochchi, Sri Lanka) ments are easier for the US to those in the Indo-Lankan achieve and can serve as a agreement. Once in place, the wedge to pry open other markets. After the collapse of talks Pakistan FTA will link the island of Sri Lanka with the at Cancun, US Trade Representative Robert B. Zoellick wrote subcontinent’s second biggest nation, a market of 150 mil- that “the US will not wait [for trade liberalization through the lion people. The government of Sri Lanka has also announced WTO]: we will move towards free trade with can-do coun- an intention to enter into an FTA with Bangladesh. tries.”15 Two months later, in November 2003, President Bush As Sri Lanka assembles the trade apparatus to serve as thanked Prime Minister Wickremesinghe for the “positive an effective regional hub, the efforts of the South Asian As- role” Sri Lanka had played at Cancun.16 Within South Asia, sociation for Regional Cooperation (SAARC) to stimulate even if India is resistant to trade liberalization, Sri Lanka is intra-regional trade remain stalled. In particular, SAARC’s proving itself to be a “can-do country.” efforts to launch a South Asian Free Trade Agreement have The US government would do well to pursue an FTA been unsuccessful. Regional tensions are likely to impede with Sri Lanka. There are several compelling reasons for en- the development of a formal trading bloc in South Asia for hancing our trade relationship with this war-torn island. First, the foreseeable future. Sri Lanka could act as a gateway for US firms to the large, and Sri Lanka, however, is well positioned to serve as a neu- largely closed, South Asian market. Second, economic liber- tral hub for regional trade. Sri Lanka, alone among South alization in Sri Lanka could catalyze economic liberalization Asian nations, has strong relations with each of its neigh- in the rest of South Asia. Finally, an FTA with the US would bors. Sri Lanka’s own ethnic tensions, while considerable, bolster Sri Lanka’s own quest for peace, bringing humanitar- are distinct from regional tensions and uncolored by the Indo- ian and economic benefits to the country’s people. Pakistan dispute over Kashmir.18 Where SAARC’s multilateral approach to stimulating regional trade failed, Sri Lanka A SOUTH ASIAN TRADING HUB can succeed through a “hub and spoke” system of bilateral agreements. The Sri Lankan government has recognized that the country’s size alone will not attract large amounts of FDI. A COMPETITION IN LIBERALIZATION country of 19 million people approximately the size of West Virginia, Sri Lanka is not small by global standards. But it In addition to stimulating regional trade, Sri Lanka’s own appears tiny next to India, which is about 50 times larger in drive toward economic liberalization can serve as a powerful terms of both population and land mass. Recent Sri Lankan example to its neighbors of the benefits of an open economy. governments have therefore elected to promote Sri Lanka to South Asia remains a region of closed economies character- the international business community as a trading hub for ized by high tariff and non-tariff barriers. Pakistan and India the larger South Asian market. It is a wise approach that is have among the highest tariffs in the world, and non-tariff beginning to pay off in the form of increased trade with India.

Harvard Asia Quarterly Fall 2003 49 barriers in both economies are daunting to would-be traders. Meanwhile, the economy in the north and east has been Sri Lanka, by contrast, has a weighted average tariff rate of virtually destroyed by conflict. Between the Northern Prov- 5%, and the current government has publicly committed to ince and the Eastern Province, per capita GDP averages less working within the World Trade Organization (of which it is a than $500, just over half the national average.20 Economic founding member) to lower trade barriers further. activity in the north and east has picked up since the signing As Sri Lanka embarks on a second wave of economic of the formal cease-fire agreement in February 2002, thanks reforms, it has the potential to serve as a catalyst for reforms mostly to the government’s lifting of a trade embargo on throughout the subcontinent. Thus far Sri Lanka has not LTTE controlled areas and re-opening of a key highway to been a major economic threat to its neighbors; the lion’s the north. But the economic degradation of the north and share of FDI into South Asia has gone to India. If Sri Lanka east is proving difficult to reverse: infrastructure is poor, capital begins to attract large amounts of FDI and achieves GDP is scarce and the LTTE imposes heavy taxes on all forms of growth of 8-10% per annum, India and the other neighbors commerce. Just as during the conflict, remittances from Tamil will be forced to take notice. Most importantly, they will be communities abroad, sent in through an informal international forced to open their own economies, lest money transfer system, continue to prop they risk continuing to lose foreign in- up local standards of living.21 vestor capital to Sri Lanka. Thus a conflict that initially erupted East Asia in the 1970s and 1980s Without the prospect of a US- along ethnic lines has taken on an eco- demonstrated how small, open econo- Sri Lankan FTA, the process nomic dimension as well. Even if peace mies on the periphery of larger econo- of opening up the north and talks between the government and the mies can create competition in liberal- east to foreign trade will take LTTE produce a political settlement to ization, whereby economies vie with the conflict, lasting peace will depend each other to attract foreign capital. years if not decades. on bridging the economic gap between South Asia has suffered for not having southern Sri Lanka and the north and a Hong Kong, Singapore or Taiwan to set the standard for east of the country. A US-Sri Lankan FTA can narrow the gap competitiveness; Sri Lanka is well positioned to play that by linking all parts of the Sri Lankan economy to the world’s role. An FTA with the US can help it do so as quickly as largest market. For the north and east of Sri Lanka, the FTA possible, by requiring it to enact certain reforms as a part of would mean the end of international isolation and the oppor- FTA negotiations. The FTA would also send a strong signal tunity to attract capital in export-oriented industries. Of that US trade policy rewards liberalization, even among smaller course, it is only an opportunity: to take advantage of an nations. FTA, the LTTE leadership controlling much of the north and east would need to offer an investment climate – complete A PEACE DIVIDEND FOR SRI LANKA with legal protections for foreign investment – as attractive as that prevailing on the rest of the island. While an FTA with Talk of Sri Lanka becoming a regional hub and steering the US does not have the potential to effect peace on its own, its neighbors toward reform looks good in theory, but Sri the economic growth it brings would help underpin any po- Lanka will continue to fall short of its potential without a litical settlement that the Sri Lankan government and LTTE permanent peace in the country. Today Sri Lanka lives under might reach. a fragile cease-fire aimed at ending an ethnic conflict that has Without the prospect of a US-Sri Lankan FTA, the pro- claimed 65,000 lives and produced 1.5 million refugees and cess of opening up the north and east to foreign trade, and internally displaced persons. Along the way the conflict has thereby increasing living standards, will take years if not torn the fabric of Sri Lankan society, which now has one of decades. LTTE leaders have said publicly that the people of the highest suicide rates in the world. While Sri Lanka’s eco- the north and east need to see a peace dividend now. In a nomic performance during the 1980s and 1990s showed that letter to Prime Minister Wickremesinghe, LTTE Political Ad- peace is not a prerequisite for growth (even for robust growth), visor Anton Balasingham wrote that the Tamil people “need peace is a prerequisite for the kind of transformational growth immediate help to regain their dignity…. Reconstruction of that East Asia has achieved. If Sri Lanka does not achieve a infrastructure such as roads, hospitals, schools and houses lasting peace that satisfies the aspirations of all its communi- are essential for them to return to normal life.”22 The fastest ties, then the nation will never reach its true economic poten- way for the LTTE to develop the north and east is to supple- tial – no matter how many economic reforms it enacts and ment foreign aid flows with investment flows from abroad trade agreements it signs. and from the rest of Sri Lanka. A US-Sri Lankan FTA will After nearly two decades of war, Sri Lanka is a divided provide the LTTE with the incentive it needs to integrate the nation economically as well as politically. In the south, Co- economy of the north and east with the already open and lombo and its environs have become fully integrated into the largely transparent system existing in the rest of the nation. global economy, in large part due to booming apparel ex- This economic integration offers the best hope for overcom- ports. Sri Lanka’s Western Province, which comprises greater ing the deep ethnic, cultural and religious tensions that Colombo, has a GDP per capita of $1230, generating nearly spawned the ethnic conflict. half of the nation’s economic activity with just 30% of the population.19 GDP per capita figures for Colombo itself are A BRIGHTER FUTURE FOR SOUTH ASIA not available but would likely approach $2000. South Asia has one fifth of the world’s people, but ac-

Harvard Asia Quarterly 50 Fall 2003 counts for just 2% of the world’s economic output.23 With 8 World Bank Group, World Development Indicators 2003. robust and broad-based economic growth, the region could 9 The exception is the Republic of Maldives (population finally begin to live up to its potential as a major market for 287,000), the only nation in the region with a higher average US firms. At its best, South Asia could rival China as a market income than Sri Lanka. Its economy, heavily dependent on in terms of size and opportunity. tourism, produces a per capita GDP of over $2,000. Unlocking South Asia’s potential will not be easy. US 10 The Norwegian government works to bring about an end trade policy-makers have been pressing South Asian nations to Sri Lanka’s ethnic conflict by facilitating communication to open their economies for decades, and many more years of between the Sri Lankan government and the LTTE. This com- trade diplomacy lie ahead. Sri Lanka is a good place to start a munication has consisted of delivering messages from one renewed push to penetrate South Asian markets. Despite party to the other and, more recently, organizing formal talks decades of ethnic conflict, it is still the region’s most open between the two parties. economy. A growing network of trade agreements with neigh- 11 The two met again at the White House in November, 2003. bors will position Sri Lanka as a hub for US trade with the 12 Based on analysis of data from Central Bank of Sri Lanka subcontinent. A bilateral FTA with the US will in turn posi- Annual Report 2002, U.S. International Trade Commission tion US companies to take advantage of growing markets in Dataweb and “Nervous Sri Lanka garment workers eye loom- Sri Lanka and South Asia. Once Sri Lanka begins to capture ing China,” Forbes.com, August 19, 2003. the growth that large-scale foreign investment brings, the 13 U.S. International Trade Commission Dataweb. other South Asian nations will have no choice but to open 14 Washington Trade Daily, March 26, 2003. their own economies more, sparking a virtuous cycle of com- 15 “America will not wait for the won’t-do countries,” Finan- petition in liberalization. cial Times, September 22, 2003. Trade liberalization in South Asia has the potential to 16 Scott McClellan, White House Press Briefing, November 5, spark another virtuous cycle as well, whereby political stabil- 2003. ity increases as economies grow and poverty rates decline. 17 Items not covered by the FTA, or for which the agreement’s Greater political stability will, in turn, attract the high levels of provisions will be phased in over time. foreign investment needed to propel further economic growth. 18 The dominant religious tension within South Asia is the In time the economies of South Asia will begin to amass the tension between Hindus and Muslims. It has fueled commu- infrastructure needed to make their economies more efficient. nal violence in India and is at the heart of the Indo-Pakistan If East Asia can do it, so can South Asia. dispute over Kashmir. Sri Lanka’s tensions, by contrast, have Along the way, a US-Sri Lankan FTA can help reunite a their origins in a conflict between the majority Sinhalese (who divided economy and a divided nation. It is rare that a single are mostly Buddhist) and the minority Tamils (who are mostly bilateral trade agreement could have such far-reaching eco- Hindu). While there is a Muslim minority in Sri Lanka, reli- nomic, political and humanitarian consequences. If the US gious tensions – whether among Muslims, Hindus or Bud- chooses to pursue an FTA with Sri Lanka, its impact will be dhists – have not been a driving force in Sri Lanka’s civil felt for years to come – in Sri Lanka and throughout the conflict. Indian subcontinent. 19 Central Bank of Sri Lanka, Annual Report 2002, Chapter 2, “National Income and Expenditure.” 20 Central Bank of Sri Lanka, Annual Report 2002, Chapter 2, “National Income and Expenditure.” 21 In practice the LTTE runs a separate civil administration in the areas it controls, even though the Sri Lankan government and the international community still view these areas as part ENDNOTES of the sovereign territory of Sri Lanka. Even nearly two years into the current cease-fire, the people of the north and east 1 Population Division of the Department of Economic and remain largely isolated from the rest of Sri Lanka. The Sri Social Affairs of the United Nations Secretariat, World Popu- Lankan government and the LTTE are, however, in regular lation Prospects: The 2002 Revision and World Urbaniza- contact through the Norwegian government and have occa- tion Prospects: The 2001 Revision. sional direct contact as well. 2 For the purposes of this article, South Asia is defined as 22 “LTTE suspends negotiations with Sri Lanka pending imple- India, Pakistan, Bangladesh, Nepal and Sri Lanka; statistics mentation of agreements reached,” Tamilnet, April 21, 2003. from smaller nations such as the Maldives and Bhutan are 23 World Bank Group, 2003 World Development Indicators. not included. 3 “Indian Economy Challenges China,” Australian Financial Review, September 30, 2003. 4 India’s emergence as a center for offshore software development and “back office” services has helped some Ameri- can firms reduce their cost base, but has not had an impact on revenue. 5 U.S. International Trade Commission Dataweb. 6 World Bank Group, 2003 World Development Indicators. 7 World Bank Group, 2003 World Development Indicators.

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