Asia Article

The China Connection

2007-06-18T00:56:00.000-07:00

By AUSTIN RAMZY
Jun. 7, 2007

GREEN MACHINE: Workers in Nanhai, Guangdong, assemble dolls for Jeffrey Lam's Hong Kong?based toy company. Its mainland staff has grown from 50 workers in 1979 to a seasonal high of 20,000 today

Photograph for TIME by Ariana Lindquist
Article ToolsPrintEmail Thirteen years before Chinese leader Deng Xiaoping made his famous Southern Tour, Jeffrey Lam made one of his own. Just five years out of college, Lam traveled to the city of Dongguan in Guangdong province to set up a small factory to produce parts for his family's Hong Kong toy company. The year was 1979, and China had just begun to open up its economy. Unlike Deng's 1992 trip, which revitalized a wavering reform program, Lam's voyage won't make it into the history books. But his efforts, and those of thousands of other Hong Kong businessmen like him, helped turn neighboring Guangdong—and hence China itself—into an economic giant. "If it hadn't been for Hong Kong," says Guan Zhisheng, an economist at Sun Yat-sen University in Guangzhou, "then there wouldn't have been any reform and opening up in Guangdong."

As Hong Kong marks the 10th anniversary of the end of British rule, there has been no shortage of debate over the question of China's influence over its reclaimed territory. What about the opposite? When Deng put the mainland on the path that led to the end of its self-imposed isolation, Hong Kong became the example China followed as it groped for a way forward in the transition from communism to capitalism. And Hong Kong quickly established itself as a conduit for foreign technology, culture, business know-how and investment. Now, as the mainland grows richer, what's striking is the degree to which the flow of ideas, influence and investment has started to reverse. "China has learned from Hong Kong," says Michael DeGolyer, a political-science professor at Hong Kong Baptist University. "China has learned how to compete. Now it's competing with Hong Kong and forcing Hong Kong to improve."

Three decades ago, it was Guangdong province that needed a jump-start. Although it was a backward region in a backward country, Guangdong did have several advantages. Its people were eager to work hard. Its politics were removed from the power centers of Beijing and Shanghai, so Deng considered it a safe place to begin reforms. In 1980 three of China's first four special economic zones (SEZs) were set up in the Guangdong cities of Shenzhen, Zhuhai and Shantou. These experiments in capitalism attracted foreign capital through liberalized regulations and tax exemptions.

As the SEZs' market-oriented policies spread across Guangdong, the possibilities became obvious to Hong Kong businessmen. After years of remarkable growth, the city's economy in the late 1970s was in danger of stalling. Land and labor prices were climbing, making light manufacturing increasingly unaffordable. Guangdong, meanwhile, had millions of able-bodied citizens who shared language, culture and often family ties. Hong Kong entrepreneurs "just thought about bringing factories here because the production costs were lower and they could be more competitive," says economist Guan. "They didn't know they would influence Guangdong. They didn't know they would influence China."

At its crudest, this influence took the form of cash, bucketloads of it. Since 1978, Hong Kong has contributed more than $273 billion in foreign direct investment to China, nearly as much as the total from all countries combined; southern China got the lion's share. The Pearl River Delta, the part of Guangdong province closest to Hong Kong, is now home to 57,500 factories established by or producing for Hong Kong enterprises. But investment did not just mean building factories. When Lam first visited Dongguan, the trip required two ferry rides and took up to four hours. Today his factory is a two-hour drive from Hong Kong. Travel time has been vastly reduced in part because of the infrastructure investments of Hong Kong companies. Hong Kong tycoon Sir Gordon Wu's Hopewell Group built the mainland's first expressway, the 120-km Guangzhou-Shenzhen Superhighway, and more than 160 km of other key roads in Guangdong. Hong Kong companies like Hutchison Port Holdings and Swire Pacific helped develop critical Guangdong ports.

Projects like these turned the region into a manufacturing force on a global scale. From 1980 to 2002 the Pearl River Delta was, according to the book Regional Powerhouse, "the fastest-growing portion of the fastest-growing province in the fastest-growing large economy in the world." Hong Kong didn't just bankroll this party. It also supplied management expertise and knowledge of foreign markets. In the mainland's planned economy, meeting customer expectations wasn't a priority. For Hong Kong's entrepreneurs it was a matter of survival. "These small businesses were exporters of course," says Joseph Cheng, a professor at City University of Hong Kong. "They all knew that Christmas delivery was a matter of life and death. They had to deliver for a particular ship, 14 weeks before Christmas. If they couldn't make it, it was bankruptcy." At Lam's first operation in Dongguan—25 sewing machines and some paint sprayers set up in a converted municipal building—lessons were sometimes as painful for the teachers as they were for the students. Once, when the shop ran short of black paint needed to complete a run of pieces for a toy mirror set, local employees bought an extra can at a market and finished the job. The only problem was the paint was toxic, and unsuitable for use in a toy. The unsafe parts had been mixed in with the safe, so Lam had to scrap thousands of pieces. "They had no clue in making anything," Lam says of his Dongguan employees.

But they learned. Just ask F.C. Lo, once known as China's "king of cans." The Hong Kong entrepreneur shipped the first aluminum cans to the mainland in the early 1980s from a plant in Hong Kong's New Territories. In 1985 he built his first factory on the mainland in Guangzhou, an $18 million investment. With the help of foreign stakeholders, his company expanded to 20 plants, and at one time controlled about 60% of China's can market. (Lo split the company's assets with its American investors in 2001 and now runs four plants on the mainland.) In the beginning, working with mainlanders was "one-way traffic," Lo says. "We would tell them what to do because we were so strong and they didn't know anything." Today Lo competes with homegrown manufacturers. "The local guys are so good," he says. Lam, the toy manufacturer, agrees: "They are teaching us. That's the way it should go. We should not be jealous of somebody who worked for us for $34 a month who is now making $34 million a year. If they are good, they deserve it."

Guangdong has become the workshop for the world, but that doesn't mean all it does is work. As commercial contacts with Hong Kong grew, the province also looked to its neighbor for hints on how to have fun. Nowhere is that more evident than in Shenzhen, the mainland city next to Hong Kong. The border crossing at Lowu is the world's busiest, with 252,000 trips daily. Hong Kongers cross to shop, sing karaoke in a nightclub or partake in other diversions that have become favorite pastimes for mainlanders, too. Shenzhen is home to Mission Hills, the world's largest golf complex, with a dozen 18-hole courses. When Hong Kong paper-and-packaging tycoon David Chu founded the club in 1994, 90% of its members were from Hong Kong. Today 60% of the members are from the mainland.

The SAR's cultural sway has extended far beyond Shenzhen and the fairways of Mission Hills. Hong Kong's music, movies and fashion dominated pop culture in Guangdong when China first opened up. "In the '80s and '90s, I definitely only listened to Hong Kong artists like Alan Tam, Jacky Cheung and Anita Mui," says Kent Li, 37, who hosts a pop-music show for state-owned Guangzhou Radio. Hong Kong also set the pace for fashion. Before a look is big in Guangzhou, Guangdong's capital, it is vetted in Hong Kong, says He Ying, a 28-year-old video editor and former owner of a clothing shop. "Hong Kong is like a filter," says He. "If people there don't embrace certain trends, then Guangzhou will never embrace them."

The trends are transmitted to the mainland through Hong Kong media, which is widely available in Guangdong despite the fact that most newspapers and TV channels are restricted. Hong Kong-style teahouses, found throughout southern China, always have copies of day-old Hong Kong newspapers; some are distributed legally while others are smuggled across the border. Likewise, hotels and residence compounds for foreigners have access to two dozen overseas satellite channels and eight from the SAR. A huge gray market in illegal satellite dishes means Hong Kong programs are widely available. Indeed, Hong Kong's media spurred the development of Guangdong's own press, which is known for testing the limits of mainland censors. Fledgling mainland journalists looked next door for instruction on everything from story development to production, says Chang Ping, deputy editor of the Guangzhou-based Southern Metropolis Weekly. "Hong Kong media helped establish the foundation for Guangdong's media," he says. but familiarity sometimes breeds discontent. Mainland Chinese nowadays no longer take all their cues from their cousins—and the spread of the Internet in China means they no longer have to, because the whole world is in reach. "Now, there's more of a global culture in Guangzhou," says Alex So of the youth-lifestyle magazine Coldtea. Relaxed travel restrictions mean mainlanders can easily visit the SAR. "Before, when it was harder to go to Hong Kong, I thought it was such a cool, mysterious place," says He. "It's not the same anymore."

Guangdong's industries, too, are more independent of Hong Kong than they once were. "In the 1980s, the shop was in front and the factory was in back," Yvonne Choi, Hong Kong's Secretary for Commerce, Industry and Technology, told a business forum in April. "This has changed and Hong Kong is no longer playing the leading role." Instead, the SAR is increasingly dependent upon China for its economic vitality. Last year, Hong Kong's stock market launched initial public offerings worth more than any other market except London—a bravura performance that was largely due to the $25 billion raised through the IPOs of Bank of China and the Industrial and Commercial Bank of China. In 2001, mainland China became Hong Kong's largest investor, and by the end of 2005, it had poured $162 billion into the territory. The capital influx is expected to expand since Beijing announced in May that it would begin to allow mainland institutions to invest in foreign stock markets, beginning with Hong Kong.

The hope is that the mainland's investors will provide the same economic boost that its tourists have. Beginning in 2003, when Hong Kong was suffering a severe economic slump due to the SARS outbreak, the central government began allowing greater numbers of mainlanders to visit the territory. They played a key role in reviving the economy, says Allan Zeman, a Hong Kong developer who operates Ocean Park, a marine-and-amusement park, and owns property, restaurants and bars in Lan Kwai Fong, a popular night spot. "China was the match that started the fire burning and got the economy going again," Zeman says. Of Hong Kong's 25 million visitors last year, 13.6 million came from the mainland, more than four times the 3.1 million who visited in 1999. Zeman says he has changed his businesses to meet the needs of mainland tourists. Fluent Mandarin speakers have been hired, menus have been altered and renminbi, the mainland currency, is now accepted. "Over the last several years there's been a tremendous impact on all business," he says. "I think everyone in Hong Kong is starting to cater ... to the mainland market."

That has created some unexpected opportunities for entrepreneurs like Apichar Sirichantakul, a Thai businessman who calls himself the "father of the ladyboys." The transvestite stage shows he runs in Bangkok are so popular among Chinese tour groups that he decided to bring them to Hong Kong. As many as 3,000 customers a day, most of them mainlanders, pay $20 each to see three dozen Thai transsexuals and transvestites give a 45-minute dance-and-lip-synch performance in an old movie theater on Hong Kong island. "Chinese travelers come here, go shopping in the day and see some sights, but at night there's nothing to do," Apichar says. "We give them something to see."

From lowbrow entertainment to high finance, it's certain Hong Kong will increasingly be catering to China in coming years. Lam, for one, reckons the partnership between the SAR and the rest of China is just as dynamic as it was when he ventured to Guangdong to set up a toy factory 28 years ago. "Hong Kong will continue to impact the mainland," he says. Just not as much as the mainland impacts Hong Kong.

from :www.time.com

Thaksin Ups the Ante for Thailand's Generals

2007-06-18T00:37:00.000-07:00

Thursday, Jun. 14, 2007
By HANNAH BEECH/BANGKOK

Enlarge Photo
SHOW OF FORCE: An anti-junta rally in Bangkok on June 11
Hoang Dinh Nam / AFP / Getty Images

Having dubbed itself the land of Smiles, Thailand tends to go out of its way to avoid confrontation. The capital's infamous traffic jams, for instance, rarely lead to the kind of road rage that strikes other cities. Yet this past week, the Southeast Asian kingdom showed the world a rather less peaceful visage. Protests against Thailand's ruling junta spilled onto Bangkok streets last weekend, with an estimated 13,000 demonstrators calling for the resignation of the generals who masterminded a bloodless coup against Prime Minister Thaksin Shinawatra last September. The marches, which sometimes erupted in clashes with the police, were the largest show of dissatisfaction to date against the military government led by the coup's architect, General Sonthi Boonyaratglin.

Thaksin, who has lived in exile since his ouster, quickly upped the confrontational ante. On June 11, a government-appointed investigative committee announced it had ordered the freezing of $1.6 billion in domestic bank deposits belonging to the former tycoon and his family, alleging corruption in several government projects overseen by Thaksin. The exiled leader, who has denied any wrongdoing, suggested the following day that he may return to Thailand to fight the charges—and perhaps re-enter politics. The prospective homecoming of Thaksin is likely to inflame tensions between civilian protestors and the military government, further damaging the country's international image and its hopes for stability. "[Thaksin's] return will raise the likelihood of violence," says Sunai Phasuk, the Thailand representative for New York-based Human Rights Watch. "We are heading for political upheaval."

Most of last weekend's demonstrators were from Thaksin's fan base, which draws largely from the rural poor. Many expressed anger at a tribunal, handpicked by the junta, which had dissolved Thaksin's Thai Rak Thai (TRT) party for committing electoral fraud in last year's polls. In their defense, the ruling generals have promised to hold elections by the end of this year, and they point out that their putsch was met with almost no public outcry. That's true: Thaksin's popularity had nosedived by the end of his tenure, in part because of his autocratic style, and street protests against him last year still dwarf the current rallies against the junta.

On Sunday, the junta blamed the TRT party leadership for the protests, later hinting that cash handouts had lured many poor citizens to the demonstrations. But the anti-junta rallies span a wider spectrum than just Thaksin's supporters. Democracy advocates took to the streets to decry the September coup. Anti-poverty campaigners who claim the junta has not adequately addressed the plight of Thailand's rural poor raised their voices, as did employees of community-radio stations banned from the airwaves by the interim government. Legal activists condemned what they believe is deteriorating judicial freedom under the military leadership. And Buddhists, who are upset their faith was not designated as the national religion in the draft of the postcoup constitution, also marched en masse. "The anti-junta coalition has gathered critical mass," says Thitinan Pongsudhirak, a political scientist at Chulalongkorn University in Bangkok. "This is a pent-up situation, and it's going to get worse."

The anti-junta coalition has vowed no letup in their dissent. On Monday, 5,000 Buddhists thronged in front of the Thai parliament, some participating in a hunger strike to draw attention to their call for a state faith. It's unlikely, however, that the generals will bend to such wishes—or relinquish their own power so easily. On Wednesday, General Sonthi struck a defiant note, predicting that Thaksin would not dare return to Thailand because he could be killed by one of the many groups of people who oppose him.

If Thaksin does return, the junta may have to redouble efforts to keep the peace between increasingly irate demonstrators and army troops. "To be fair to the military, they have been disciplined and patient so far, but for how long?" asks political scientist Thitinan. "They are trained to respond by force. If it turns more violent, it will be bad for Thailand economically—and for how it is viewed by the world."

with reporting by Robert Horn/Bangkok

from :www.time.com

The Philosophy of Sufficiency Economy

2007-06-16T03:14:00.001-07:00

Medhi Krongkaew

The economic crisis of 1997 affected everyone in Thailand, even His Majesty the King. Seeing many of his subjects suffering, he advised the Thai people to change their economic philosophy in order to cope with present economic adversity and withstand future economic insecurity. His Majesty’s words have become known as the Philosophy of Sufficiency Economy and have been used as the guiding principle in drafting the current 9th National Economic and Social Development Plan.

The philosophy can be summed up in one paragraph, as translated from the Thai:

“Sufficiency Economy is a philosophy that guides the livelihood and behavior of people at all levels, from the family to the community to the country, on matters concerning national development and administration. It calls for a ‘middle way’ to be observed, especially in pursuing economic development in keeping with the world of globalization. Sufficiency means moderation and reasonableness, including the need to build a reasonable immune system against shocks from the outside or from the inside. Intelligence, attentiveness, and extreme care should be used to ensure that all plans and every step of their implementation are based on knowledge. At the same time we must build up the spiritual foundation of all people in the nation, especially state officials, scholars, and business people at all levels, so they are conscious of moral integrity and honesty and they strive for the appropriate wisdom to live life with forbearance, diligence, self-awareness, intelligence, and attentiveness. In this way we can hope to maintain balance and be ready to cope with rapid physical, social, environmental, and cultural changes from the outside world.”

This philosophical statement has lent itself to interpretation by diverse groups of people. First, we can dismiss outright the extreme interpretation that the Sufficiency Economy means complete self-reliance or autarky. In an autarchic system, a country or unit thereof relies upon itself and its people to produce all its needs with no dependence on others. It may do this voluntarily (cutting off contacts with the outside world) or by necessity (because it is incapable of generating those contacts). But His Majesty the King explicitly rejected this interpretation: “This self-sufficiency does not mean that every family must grow food for themselves, to make clothes for themselves; that is too much. But in a village or sub-district there should be a reasonable amount of sufficiency. If they grow or produce something more than they need they can sell them. But they do not need to sell them very far; they can sell them in nearby places without having to pay high transport costs.”

Some people have attempted to link this economic philosophy with the so-called “Gandhian Economy.” Along the lines proposed by Mahatma Gandhi, this is an economy based on family-level or village-level small-scale enterprises and traditional methods. It may have been appropriate to India in the mid-twentieth century, when the people were poor and technology was limited. But in the present, it may be too restrictive to expect families to do everything by themselves using simple tools and machinery, such as traditional spinning wheels to make cloth. Perhaps the basic idea of Gandhian simplicity – a life less encumbered by modern needs and modern technology – could make people happier. But in the very open world of today, self-sufficiency a la Gandhi is too extreme.

We also hear people relating the Sufficiency Economy to the knowledge and applicability of Buddhism. In Buddhism, life, especially spiritual life, is enhanced by cutting out excessive wants and greed. True happiness may be attained when a person is fully satisfied with what he or she has and is at peace with the self. To strive to consume more leads to unhappiness if (or when) consumption is not satisfied or falls short of expectations. A sufficiency economy in this context would be an economy fundamentally conditioned by basic need, not greed, and restrained by a conscious effort to cut consumption. This is probably acceptable insofar as it does not reject gains in welfare and well-being due to greater consumption.

Looking back, it can be seen that His Majesty has talked about the sufficiency idea since 1974. In his customary birthday speech of that year, he wished everyone in Thailand “sufficient to live and to eat” (Por You Por Kin). This was indeed a precursor to the sufficiency economy. His Majesty also said: “The development of a country must be by steps. It must start with basic sufficiency in food and adequate living, using techniques and instruments which are economical but technically sound. When this foundation is secured, then higher economic status and progress can be established.” (See Apichai Puntasen, “The King’s Sufficiency Economy and Its Interpretation by Economists,” prepared for the 1999 Year-End Conference of the Thailand Development Research Institute (TDRI), Pattaya, 18-19 December 1999.)

This is very clear: it shows that His Majesty did not deny economic progress and globalization, as some people have interpreted. Indeed the word “globalization” (โลกาภิวัตน์ , lokapiwat) is used in the statement on Sufficiency Economy that His Majesty has endorsed. The notion that Sufficiency Economy is anti-globalization should be put to rest forever.

Still, there are attempts by various segments of the Thai population to dissociate this new economy from the realm of mainstream economics that stresses economic rationality and efficiency in resource allocation. It is obvious that His Majesty’s Sufficiency Economy is not the type found in a mainstream economics textbook, but it would be inaccurate to interpret it as the antithesis of mainstream economics in every respect. On the contrary, I think we can understand Sufficiency Economy within the framework of economic rationality and efficiency in allocative choices. The difference is not in type, but in degree or magnitude of economic behavior. His Majesty used the phrase “middle path” or “middle way” to describe the pattern of life every Thai should lead – a life dictated by moderation, reasonableness, and the ability to withstand shock. Can we find something in mainstream economics that captures the spirit of this philosophy?

I propose to use my own understanding of economic optimization. It is possible to see the Sufficiency Economy as consisting of two frameworks. One is the inevitability of facing the globalized world in which economic efficiency and competition are the rules of the game; the other is the need for economic security and the capacity to protect oneself from external shock and instability. Thinking within the first framework – the basic tenet of mainstream economics – we must realise the opportunity costs involved in every decision we make. We gain from specialization and division of labor because the opportunity costs of doing everything by ourselves is much higher. The laws of comparative advantage and gains from trade are at work in today’s world. But it would be foolish to pursue all-out specialization without basic security, especially in food, shelter, and clothing. This is where the framework of the new Sufficiency Economy comes in. This concerns the basic capacity of the people of a country to look after themselves. The optimization principle applies when we seek to answer the question: How much of our time and energy should be devoted to the first and second frameworks, respectively? In other words, how much resources should be allocated to producing for trade based on comparative advantage principle, and how much for basic security? The best mix between the two allocations would represent the optimal state of affairs, both in mainstream and Sufficiency Economics.

The author is professor of economics at the School of Development Economics, National Institute of Development Administration (NIDA).

from :Kyoto Review

The "Bombay 5-6": Last Resource Informal Financiers for Philippine Micro-Enterprises

2007-06-16T03:02:00.001-07:00

Mari Kondo

As a developing country, the Philippines has a large informal sector comprised of micro-enterprises. Many of these are severely resource-constrained small vendors operating in public markets, whose survival in business relies heavily on access to financing. This usually comes from the informal sector sector as well in the form of informal financiers called “5-6.” Two types of 5-6 financiers are found in Philippine public markets, each with a distinctive lending mechanism, Filipinos and Indians.

This paper considers the implications of having different financiers contribute to the development of micro-enterprises. I discuss Filipinos, but give central attention to Indian financiers for several reasons. First, regarded as last resource lenders, this group is crucial to the most marginalized micro-entrepreneurs. Second, a part of their lending money flows in from India through informal channels, quite an interesting phenomenon in this part of the world.

And third, despite their importance to Philippine micro-enterprises, little has been written about their financing practices. In the late 1980s and 1990s, extensive studies on micro-financing were conducted by the Philippine Institute of Development Studies, the Social Weather Stations, and other organizations (see Ghate 1992). Since their purpose was to grasp the concept of both formal and informal micro-financing institutions for the purpose of macro policy formulation, differences across institutions by ethnicity were not highlighted. As a result, although Indian financiers are widely known among Filipinos, studies regarding their business practices are virtually non-existent.

In addition to the usual review of literature, this study is based on economic anthropological field studies conducted in a public market in the town of Santa Rosa, Laguna province, and in Binondo (Chinatown), Manila. The public market in Santa Rosa depicts the workings of several micro-enterprises in a typical town in the Philippines. Binondo is considered the center of Chinese commerce through which “informal money” is coursed in and out of the Philippines. The field study was carried out with Ms. Marie Aquino, a researcher and a resident of the town of Santa Rosa with a background in anthropology, who conducted extensive interviews from 2000 to 2003.

The Role of Micro-Enterprises in the Philippines

The Philippines has lagged behind neighboring countries in economic growth; one major reason is that the country has been slow to develop a strong industrial sector (Yoshihara 1994). The contribution of manufacturing to employment has remained at about 10 percent for more than three decades (National Statistics Office 2003). Dramatic population increase and the deterioration of public education have created a pool of unskilled workers who now account for 29.3 percent of the total labor force (National Statistics Office 2003; World Bank Group 2001; Amante et al. 1999). Rural poverty, aggravated by population growth, has pushed rural folk to migrate to cities. But the failure of the stagnant industrial sector to absorb them has caused many workers to remain unemployed (defined as lacking a job or business and not looking for work because of a belief that no work is available, temporary illness/disability, bad weather, or pending job application/interview) or underemployed (working less than 40 hours during the reference period and wanting additional hours of work). Around 30 percent of the labor force in the Philippines has been consistently un- or underemployed (National Statistics Office 2003). Most of the underemployed are found in the informal sector within the service sector, running the micro-enterprises discussed below. The sound development of micro-enterprises is therefore a serious undertaking that needs to be addressed.

The Santa Rosa Public Market and Its Players

Although the business of micro-enterprises in the Philippines varies, this paper focuses on vendors and the informal financiers catering to them in the half-hectare public market in the center of Santa Rosa town. There are formal financing institutions on hand as well – cooperatives, lending investors, and rural banks – but these are not generally used by micro-entrepreneurs. There are also several pawnshops in the market whose usual customers are workers or residents of the town. For operational capital, though, the Santa Rosa vendors rely on funds raised through their own businesses and on informal financiers.

The Vendors. Of the 450 market vendors in the Santa Rosa public market, 75 percent are women. Ranging from poor to middle class, these vendors fall into four categories determined by size, location, and type of enterprise: ambulant vendors, rolling store vendors, stall vendors, and multiple stall vendors/private storeowners.

Ambulant vendors account for more than 50 percent of the total and include the poorest vendors in the Santa Rosa public market. Numbering about 230, some 90 percent have completed elementary education or less. Ambulant vendors sell smoked fish, vegetables, fish balls, and the like. Unable to buy or rent a stall, they market their goods along the sidewalks, in front of the larger stalls, or at the back of the market near the fish and meat vendors. Many are wives of fishermen living along the coast or of small farmers who sell their own harvest supplemented with fish bought from other, cheaper markets. The ambulant vendors are those most in need of informal financing. If they cannot sell enough one day, they need capital in order to buy goods to sell in the market the next day.

Rolling store vendors sell food, dresses, or shoes in customized vehicles, eliminating the need to rent a stall. They occupy spaces at the back of the public market together with other vendors. In August 2000, the number of rolling store vendors at the Santa Rosa public market reached forty, or 9 percent of the total. Most were residents of Santa Rosa or nearby towns, former salaried workers who had decided to start their own business. Their educational attainment was the highest among the four groups. They are also the most independent vendors because of their mobility, often moving from one public market to another in search of bigger profits. Some did not drive their own rolling store, but had assistants run their business in the field.

Stall vendors, totaling 150 in August 2000, made up 34 percent of the total. Their number has risen in past last two years since the Santa Rosa public market underwent expansion. Stall vendors are required to be residents of Santa Rosa and pay PHP 15,000 per stall annually. Although the regulations of the public market do not allow it, some stalls were sublet to non-residents and other vendors who had been unable to rent directly from the municipal hall. For this privilege, they paid PHP 20,000 annually to the stall owner and were responsible for keeping the area well-maintained.

The twenty-five multiple stall vendors and private storeowners comprised 6 percent of the population of public market vendors. They are residents of Santa Rosa and/or offspring of vendors in the old public market. Multiple stall vendors pay the local government PHP 19,100 annually for two stalls. They may rent a maximum of three stalls if their goods or line of business require a bigger area. The private storeowners – of drugstores, grocery stores, imported goods shops, and rice stores – are considered the “local rich” or old families of Santa Rosa. Unlike stall vendors, private storeowners paid only PHP 12,000 per annum because they completed the construction and furnishing of their stores.

Five-Six Moneylenders. So-called because of the manner in which they lend, five-six (5-6) moneylenders charge a nominal interest rate of 20 percent over an agreed period of time. A person who borrows 5 pesos from a 5-6 moneylender over a period of one week repays 6 pesos, including 1 peso interest. Neither Filipino nor Indian 5-6 moneylenders require collateral or documents from their borrowers. The success of a borrower’s business and loan repayment history provide a gauge of the borrower’s credibility.

At the Santa Rosa public market, 5-6 moneylenders undertake daily collection of payments in the morning, afternoon, or both. A client’s daily payment is determined by the sum of the principal borrowed plus its 20 percent nominal interest divided by the credit term. The loan arrangement is flexible; if the client fails to pay one day, it is understood that he or she will pay for the day missed the next time around.

Renewal of loans depends on the moneylender’s policy. Some 5-6 moneylenders will renew clients’ loans only after the previous loan is paid in full. More accommodating lenders will renew a client’s loan earlier, subtracting the outstanding balance of the old loan from the new loan and issuing the client the remainder.

Filipino and Indian 5-6 lenders play different roles among the vendors at the Santa Rosa market, although the essence of the 5-6 business is the same. The significant difference lays in the fact that Filipino 5-6s are resident “insiders” in the Santa Rosa community, while the Indians, as immigrants, are clearly identified as “outsiders.”

Filipino 5-6s: Community Insiders

Of the twenty to twenty-five Filipino 5-6 moneylenders operating in the Santa Rosa public market during the period of our survey, about 75 percent were women. Many are middle-class, long-time residents of Santa Rosa. The “big-time” lenders had other businesses, such as selling jewelry on installment. Many of the “small-timers” entered the 5-6 business to invest income generated by returning overseas contract workers (OCWs), either themselves or relatives.

Client Development and Location. The favored clients of informal moneylenders are proprietors of small businesses (such as vendors) and small service providers (owners of groceries, eateries, tailor shops, and hair salons). Since the lenders’ standard collection schedule is daily, businesses that generate cash on a daily basis are sought. Food-related businesses are ideal because of the perishable nature of food, their daily need for working capital in the form of cash, and their daily generation of profits.

A key success factor for 5-6 businesses is the development of a large, good-quality client base which continually borrows and repays without default. However, as micro-entrepreneurs of tiny businesses, the clients of 5-6 financiers are vulnerable to any shocks – external, such as economic downturn, and internal, such as family sickness. In short, regardless of their willingness, micro-entrepreneurs’ ability to repay tends to be unreliable. Therefore, an existing “good” customer for a 5-6 business can easily become a “bad” customer. Thus, simply to maintain the current size of a 5-6 business, the lender needs to look for new clients constantly.

For Filipino 5-6s, developing new clients is rather easy. First, people are more inclined to borrow from them as fellow Filipinos. They speak local languages freely, giving them a superior capacity to collect information – including rumors – about their borrowers’ credibility. Many Filipino 5-6s are women, and their preferred clients are also women, who aid in information collection and are easier to pressure for repayment. Because of their heavy reliance on information networks, Filipino 5-6s seek clients in wet markets and other sites where vendors congregate.

Credibility Check. Filipino 5-6s frequently use the mutual help scheme paluwagan to generate funds for their 5-6 business and at the same time check the credibility of their clients. The paluwagan is a kind of rotating savings and credit association: a group of people contribute the same amount of money toward a common fund and take turns collecting the total, often called the “salary,” over a fixed period (e.g., every seven days, every thirty days). The paluwagan is a common mechanism for saving money among Filipinos who do not enjoy access to banks.

A paluwagan scheme at the Santa Rosa public market typically involves five or ten stall vendors contributing over a period of months – five months if five members, ten months if ten members. Some paluwagan are much shorter – four members contributing for one month – so that the collected money is received weekly. The Filipino 5-6 moneylender usually serves as “manager” of the funds, collecting paluwagan contributions daily together with 5-6-loan payments. To compensate for the extra service involved in collecting the paluwagan money, managers “pocket” the payment of the last day of the month (1/30 or 3.3 percent of the amount collected). Members draw lots to decide who will receive the salary first, with earlier payment more advantageous. In some cases, the manager reserves the right to withdraw the salary first and uses the money to support her 5-6 business. In both cases, paluwagan members pay extra (or negative interest) to gain access to a savings mechanism provided by the Filipino 5-6 moneylender.

In the Santa Rosa market and more generally, members of the paluwagan are also lending clients of the manager. Vendors must have a good 5-6 payment history to be invited into a paluwagan because it will test one’s capacity to save money while repaying a 5-6 loan. The cost of joining a paluwagan could also be considered a premium payment for membership in an informal social “insurance” system, because in time of need, the Filipino 5-6s try to provide financing to paluwagan members first and on favorable terms.

As an informal savings system involving no legalities, the paluwagan is vulnerable to members running away with the money and to delayed or missed payments. The paluwagan system therefore operates among people who know each other – who work in the same office, live in the same neighborhood, or can otherwise keep a check on each other. The paluwagan organizer has to be particularly trusted by the members, making this a client development mechanism available to Filipino but not Indian 5-6 moneylenders.

Collection. Filipino 5-6s collect payments daily, talking to their clients and other vendors in a cheerful manner. This style is important as it allows updates on the creditworthiness of borrowers. A customer who does not want to pay may try to hide, but this tactic is not very helpful for clients of Filipino 5-6s, who, as residents of the town, can simply visit the borrower’s house. It is also dishonorable to default, so considerable community pressure will be felt to pay back the moneylender.

Still, in times of crisis, if a borrower asks a Filipino moneylender to wait for repayment, he or she will do so. As a good member of the community, the moneylender cannot refuse such requests. Filipino moneylenders are expected to show compassion to people experiencing difficulty. Eventually, however, this practice will increase the non-performing loans in their portfolio. This, along with community pressure to lend to non-creditworthy people, is a downside to being an insider.

Indian Financiers: The Unwelcome People

Indian financiers are called “Bombay 5-6s.” Mostly men, they number between fifteen and twenty in the Santa Rosa public market. Filipinos in general have a strongly unfavorable image of Indian 5-6 moneylenders.

“If you do not behave, I will give you away to a Bombay 5-6,” goes a warning issued by Catholic Filipino parents in an effort to discipline their children. History has it that the mother of Jose Rizal, the Philippine national hero, used this expression to discipline him in the 1860s. The warning remains in use today. (In 1999, all 80 Catholic Filipino students enrolled in the Asian Institute of Management, aged between 22 and 30, and coming from various parts of the Philippines, including the Visayas and Mindanao, recalled having heard this from their parents or nannies. Approximately thirty mothers working at the AIM also confirmed that they know and sometimes use the phrase.)

Who are these Indian 5-6 moneylenders who strike a certain amount of fear in Filipinos? The people called “Bombays” are overseas Indians and people of South Asian descent. Filipinos usually refer to people with South Asian features, regardless of actual nationality or origin, as “Bombay.” Because micro-credit financiers charge high interest rates, the term “5-6” can also invoke the image of a loan shark.

In the Philippines, there are two Indian communities – Sikh and Sindhi. In reality, many so-called “Bombay 5-6s” belong to the Sikh community. (It is said that Sikhs copied the money lending activities conducted by the Sindhis.) Not knowing the difference between the communities, Filipinos often believe that many Indians in the Philippines are in the 5-6 business, and the words “5-6” and “Bombay” are frequently used interchangeably to point out people of South Asian origin. Both words have negative implications.

Client Development. The preferred clients of Indian 5-6s are the same as those of their Filipino counterparts. However, Filipinos enjoy access to relatively bigger and more established businesses than Indians, who are generally seen as lenders of last resort. It is rare for a micro-entrepreneur in need of financing to approach an Indian; he or she instead seeks referral to a Filipino from an existing client. Filipinos say they are afraid of these foreigners who look “scary” and extend loans at usurious rates and that Indians are known to resort to violence if they have difficulty collecting payments. This renders it difficult for Indian 5-6 moneylenders to attract many “good clients,” and they have adopted certain techniques to meet this challenge.

Seeing a thriving business, an Indian 5-6 moneylender will often approach its owner. Almost all those interviewed acknowledged that Indian 5-6 moneylenders take the initiative. But lacking inside information, Indian lenders conduct careful observation in order to pre-screen the profitability of their prospects by the following criteria:

Size and location of the store – Bigger stores are deemed more creditworthy. Stores located inside the wet market have a lower chance of repayment default compared to ambulant vendors who can easily disappear.
Inventory – A large inventory indicates good credit standing with suppliers and a profitable business.
Volume of customers – The busier the store, the better the business.
Presence of other 5-6s – Some clients borrow from multiple moneylenders and this can indicate creditworthiness. One Indian 5-6 explained, “I know one of my clients borrows from six Indian moneylenders. Do I give loans to her? Most likely, yes. If many moneylenders have transactions with her, then her business must be good and she must be a good payer.” This can also be checked directly through other Indians who have had business with the client.

Indian moneylenders also prefer female customers and told us they seldom have male clients. If a store is run by a couple, Indians prefer the husband to be absent when they make their initial approach. They cited the following reasons:

Easier to begin a relationship – Women are responsible for purchasing small household items. One Indian 5-6 said, “Women are easier to convince because they tend to show off. They throw parties and celebrate even if they do not have enough money to spend. Then, after, they notice that their business capital is not enough, they start borrowing.”
Security concerns – Since the initial acceptance of business is rare, an Indian 5-6 moneylender needs to stay in the store to build rapport. Women are less violent than men and will not kick him out.
Confidentiality – Some women prefer to borrow without consulting their husbands and are afraid to go to Filipino 5-6s, since the information may leak out and reach their husband, other relatives, or friends. In this case, a stranger with little connection to the community is more likely to maintain confidentiality.
Prevalence of women in business – Unlike in South Asian countries, women traders, storeowners, and service providers are common in the Philippines.
Better chance of repayment – Though it was not explicitly stated by Indian moneylenders, a study on micro-credit shows that women borrowers have higher repayment rates than men.

Initial Approach and Credibility Check. Although many Filipinos speak English, for daily communication they use their local language, either Tagalog (Filipino) or a regional language in non-Tagalog regions. Indian 5-6 moneylenders can also speak some English, but many are more fluent in the local languages in which they conduct almost all their business.

The first transaction with a new client is considered by the Indian 5-6 to be an investment. Though his business is moneylending, he initially offers not money but goods to be paid back on installment, an arrangement called hulugan. (Earlier, some Indian moneylenders had engaged in door-to-door peddling and some eventually ran shops still known for their hulugan business.) The standard items offered in the initial transaction are umbrellas, towels, bedsheets, and small electrical appliances. There is nothing special about these goods except that they are needed by everyone. The moneylenders purchase them in Manila wholesale markets such as the Divisoria or in Chinatown, where they are sold at very low prices. The lender then goes to the store of a prospective client with these goods and simply asks her to purchase on an installment basis.

Selling goods on installment to prospective money-lending clients has various advantages. First, it provides tangible proof that the new client will obtain financing. Second, the mark-up is high: “We can sell goods in cash [not installment] if the price quoted by a client is 50 percent higher than our cost. However, the margin we can get is small compared to installment sales. We prefer to sell on installment, unless we feel that the collection from this client will be too difficult.”

A towel purchased for 200 pesos can be sold for 300 pesos cash (a 50 percent markup), but for 500 pesos on installment at 5 pesos per day for 100 days (a 150 percent markup). The difference in spread between the hulugan markup and the 5-6 nominal interest rate of 20 percent within a given time period can be considered a high-risk premium given to a client with no track record.

Today, most sales are on installment. Indian 5-6 moneylenders achieve “economies of scope” and use their collection time wisely by conducting their hulugan business simultaneously with their 5-6 business. In addition, proceeds from the hulugan business are an important component of funding for the 5-6 business.

A Humble But Persistent Approach. The Indian 5-6 moneylenders admit that it is difficult to convince potential customers to do business with them. The key to penetrating the market is to be humble but persistent. One described his approach – “Ma’am, would you like to buy something from me?” – while he started to show his goods. The usual reaction of Filipinos is to decline instantly, saying “No, I am not interested,” because they prefer not to associate with a strange “Bombay.” But the Indian is persistent. Another moneylender showed us his customer development techniques. Suddenly, he raised the pitch of his voice so that it became gentler. He also changed his posture, almost kneeling so the prospective client could physically look down at him, as though begging that she buy his goods.

Of course, potential clients do not quickly agree to purchase. However, this behavior can be understood by the Indian 5-6 as proof of a person’s prudence. Thinking the customer potentially a good payer, he does not give up, but woos the client once, twice, or even more times, showing his products one by one. He pleads, “Ma’am, please, please. You try it. This is good. You try,” or “Please, please, just try – even just one.” His persistent begging continues so that eventually, the initial fear and embarrassment of talking to the “Bombay” gradually dissipates and the Filipino woman feels some pity for him. She eventually says, “OK, OK, show me the items,” and then “I don’t like this, I don’t like this – but I like this towel.” She asks the lender the price of the towel, he quotes her the price and explains that he would collect payment daily. “It’s five pesos per day for 100 days.” He stresses how small the daily payment is – “It’s only five pesos” – and the customer considers the daily payment reasonable and agrees to the sale.

Client Location and Business Mix for Risk Diversification. The time required to effect daily collections constrains the number of clients a moneylender can have and therefore profits. In order to increase collection and monitoring efficiency, geographically concentrated clients are better. Thus, wet markets, where hundreds of small stalls operate, are preferred by anyone in the 5-6 business.

However, Indian 5-6 moneylenders avoid too much geographical concentration of clients. As foreigners, they fear bad treatment if their Filipino borrowers unite. For example, a group of clients in a market could complain to the police about the “Bombay” and have moneylender harassed. If, as a result, the moneylender cannot come to the market, the borrowers do not have to repay. If a lender’s clients are concentrated in just one market, this would mean the end of his business. (Theoretically, the same could happen to Filipinos, but as they are more likely to penetrate the social network of the borrowers, they can take counter-measures quickly.) Therefore, Indian 5-6s geographically disperse their clients at the expense of efficiency.

Indian 5-6s also try to develop a client base operating in varying businesses, preferring that their clients not know each other. One Indian “old-timer” explained: “If we lend to one meat vendor and do not lend to other meat vendors, the others would insist that we also lend them money. You see, Filipinos are fond of gossip. For example, if I lend to Mr. Juan, he will tell others in his business or in the market how much I lent him, the terms of payment, etc. If other vendors see that he was able to get a loan from me easily, they will want to get loans from me also. The trouble is, if Mr. Juan decided not to pay back to me for one reason or another, then the rest of the people in his business or in the market will do similarly. Who will suffer then? I will. So, we choose our clients and the location of their business. We prefer our clients who have the same business to be far apart. In that way, they will not know each other and will not gossip about us and the business terms we have with them.”

Terms of the Transaction. Perhaps as a reflection of the difference in risk involved, Indian 5-6s offer shorter credit terms than their Filipino counterparts. The renewal of credit before completion of repayment is also more difficult with Indian than Filipino moneylenders.

In 5-6 transactions, while legal documents are not signed, lenders get their customers’ signatures in notebooks, calendars, or even on a piece of paper. Some lenders maintain these books at home, some keep the book with the customer and make an entry every day, and some do both. They make entries in their own handwriting so the customer cannot tamper with the record. We encountered one case, however, where an Indian 5-6 used a signed promissory note for a big loan. The contract was not notarized, however, and was therefore not legally binding. It was simply an IOU to psychologically bind the borrower to the lender.

Collection from New Clients. The time spent on daily collection visits provides the lender an opportunity to assess the whether the client will pay daily without delay and in what manner. Upon receipt of goods, some clients insult, malign, or shout at the “Bombay” 5-6 when he comes to collect. When this happens, especially with a first-time client, the Indian lender is often quiet and tolerant. He tells the client that he will come back the next day.

A customer who does not want to pay the Indian 5-6 usually hides. She asks her storekeepers or neighbors to “Tell the ‘Bombay’ we are not here,” and when he comes back the next day, they say the same thing. Though the moneylender may be aware that the borrower is at the back of the store, he cannot do anything but return the next day. If the borrower’s store is located along his regular route, the lender tries to visit every day for one or two months. If the borrower still does not appear, the lender gives up. According to one: “We are becoming beggars. Before giving money, we are good to them. Once we lend the money, we are bad to them. We have to have patience in collecting.”

From the moneylender’s perspective, it is important for the first-timer to make full payment peacefully, since he or she is unfamiliar with the behavior and connections of a new client. The moneylender may discover that the client is connected to gangs in town, in which case he or she will stop dealing with the borrower as soon as the latter repays in full. Even if the customer seems interested in borrowing money or buying more goods, the transaction cost for the 5-6 in such cases is much too high. One informant’s way of declining further business was to say: “According to our company policy, my boss would not allow me to lend to you any more.”

Customers who pay the amount agreed upon on time without harassing the lender are considered good prospective clients. When payment is completed, the Indian 5-6 offers other goods and also capital for the customer’s business. Sometimes, although a customer may skip a payment, he or she finishes paying within the agreed period and is still deemed a good client. Since the 5-6 business requires rolling funds, Indian lenders prefer customers who pay as little as five pesos daily to customers whose payment patterns are not constant.

But the default rate of Indian 5-6 clients, especially new ones, is quite high. One Indian lender told us that only 20 percent of new customers are good enough for them to continue to cultivate. The other 80 percent are dropped from the customer list as soon as they finish repayment.

Daily Collections and the Motorbike. Daily collection of payments is key to the success of 5-6 businesses. If clients of Indian moneylenders are located in the wet market, collection is usually conducted in the morning while they are selling their commodities. The wet markets open as early as 4:00 a.m., and by 8:00 a.m. vendors will have accumulated the day’s profit. Many Indian 5-6 moneylenders start their collections around this time or earlier in the case of a difficult client who has not paid for some days so that he or she is the borrower’s first collector of the day. Wet market vendors are busy until around 10:00 a.m., so many moneylenders finish collecting there by 11:00 a.m. For those clients whose stores are not in the market, the 5-6 collects later in the morning or in the early afternoon.

Usually, the moneylender collects payments himself. If his business expands, family members or friends may help out. In very successful cases, non-family members, even Filipinos, are hired on a salary or commission basis to serve as collectors.

Unlike Filipino 5-6s, Indian lenders ride motorbikes when collecting payments. (In an exceptional case, we encountered one who uses a car, but he is an established lender with helper collectors.) Motorbikes are essential because they enable the 5-6 lenders to cover the wide areas in which their clients are dispersed. They are cheaper than cars, pass easily through the narrow streets where their clients do business, are seldom caught in traffic jams, are less likely to be “carnapped,” and facilitate quick escape if the lender is attacked.

Special Security Risks for the Indian 5-6

For various reasons, Indian 5-6 moneylenders are prime and easy targets of hold-ups while on their collection routes. First, they are easily identified because of their appearance, often including a turban and beard as proof of being Sikh, and they are always on a motorbike. Second, their chance of having cash are high. “We are like a walking cash dispenser,” said one. Third, their everyday route is fixed and reliable so that borrowers can have payments ready. This predictability makes it easy to plan a hold-up once a “Bombay” 5-6 is targeted.

Fourth, it is uncommon for Indian hold-up victims to report the incident to the police. Many are illegal immigrants without the required papers to conduct business in the country. Even if the hold-up is reported, the police may not be sympathetic to someone considered a violent foreign loan shark exploiting good Filipino citizens. Finally, the social penalty imposed by Filipino communities upon a person who robs an Indian 5-6 is likely to be less than if a Filipino 5-6 were held up.

The professional syndicates that kidnap wealthy Chinese businessmen leave the Indian 5-6 moneylenders alone, considering them too petty. It is the goons of the markets and neighborhood gangs who find the Indians attractive targets. They also target utility collectors for water, telephone, and electricity companies, but since utility payments have been shifting to banks and collection centers, the number of collectors walking around with cash has decreased markedly. To compensate for this opportunity loss, gangs have increasingly held up Indian moneylenders. When the MERALCO electric company put up collection centers and eliminated collectors, Indian 5-6 moneylenders reportedly experienced a substantial increase in hold-ups.

All Indian moneylenders interviewed had either experienced a hold-up himself or had a close friend or family member who had been robbed, and death was not an unlikely outcome. One lender in business two years told us he had been held up twice thus far. Another successful Indian 5-6 moneylender, in business for seventeen years, was shot five times during his stay in the Philippines. On one occasion, he was paralyzed and hospitalized for one year. A big-timer, he does not use a motorbike but owns one van and one car. He hires two Filipino drivers who also serve as his bodyguards. When he moves around to collect money or to develop new customers, he always carries a cellular phone for security reasons.

This big-time Indian 5-6 has a good relationship with the police. Once he was seen parking his car in front of the public market when no parking space was available. The traffic policeman merely stood by, giving him a smile instead of a ticket. We are sure that this big-time moneylender pays the policemen a certain amount, but how much is unknown. In one case, the policeman was also the moneylender’s client.

In another case, a policeman in the public market actually handled the 5-6 business among the vendors, with the big-time “Bombay” serving as his financier. This moneylender also enjoys good relations with the goons in the area. Every two to three weeks, he tells the small neighborhood general store owner, also a client, to provide a crate or two of beer to the goons, charged to him, saying, “You can tell them that it is my birthday today.” He told us he allocates around PHP 1,000 per month for relationship-building with the neighborhood gangsters. We do not know how much he actually pays.

In spite of the common belief that Indian 5-6 moneylenders resort to violence to collect from delinquent borrowers, because they are vulnerable to Filipino retaliation, it is actually difficult for them to be aggressive or violent toward people who default. And if an Indian lender does become violent, his bad reputation will spread rapidly and make it difficult for him to acquire new accounts. One lender recounted: “I had a fight with a client who was drunk. He refused to pay and threatened me with a knife. I could not do anything, so I left the place quietly.”

Funds from India

The availability of cheap and abundant funds is crucial for a financing business and shapes the ability of any moneylender to expand his business. The same holds true for 5-6 lenders. One distinctive characteristic of Indian moneylenders is their ability to source funds from India. Coming to the Philippines to break free of poverty, many Indians still have families and relatives at home who send money through the sale of land and other assets. This arrangement indicates that some marginalized Filipino businesses are financed by the Indian poor.

These funds are channeled through banks and through an informal mechanism called hawala, which is historically prevalent in India, the Middle East, and other parts of Asia. Through hawala, money is transferred from one part of the world to another outside formal banking channels. Brokers procure foreign exchange abroad and arrange payment in the destination country through associates or paid employees. Payment may be in US dollars or in local currency, using the exchange rate in effect when the money was procured abroad. A code or password is often conveyed from sender to recipient allowing money to be collected anywhere in the world. The sender need not reveal his name. Transactions carried out between countries may, over time, be adjusted for accounting purposes. As a result, the physical movement of cash is minimal. If a balance does build up, settlement can be made through the transfer of cash, gold, or trade invoices.

The Binondo district of Manila, historically the heart of Chinese-Filipino business, is said to be one of the centers for hawala transactions in the Philippines. In the 1970s, the black market there, referred to as “Binondo Central Bank,” dictated exchange rates in the Philippines by channeling money via hawala. Binondo is also known as a hub of drug trafficking, kidnapping, and arms smuggling, the proceeds of which are often transferred out of the country through hawala transactions free from bureaucratic inquiry or paper trail.

Hawala transactions similar to those in Binondo are employed by many Indian 5-6 moneylenders to channel funds to and from India. The system allows them to apply the preferred exchange rate in a transaction process that is simpler and quicker than that done through banks.

Impact of the Financial Crisis on Vendors and Moneylenders

The Asian financial crisis of 1997 devalued the peso by more than 100 percent, causing inflation and a high rate of unemployment and forcing many Filipinos to spend less on food. Instead of the preferred beef and pork, people shifted to fish and vegetables and made less frequent trips to the market. This adjustment had a differential effect on vendors. Ambulant vendors who sold fish and vegetables benefited from the financial crisis, and during this period their number increased by 15 percent and their average profits by 40 percent. Other market vendors suffered decreasing sales and profits.

Ambulant Vendors. Before the financial crisis, ambulant vendors’ preference for borrowing from Filipinos was evident at the Santa Rosa public market. Sixty percent of their funds came from Filipino lenders, while a mere 10 percent was borrowed from Indians. After the crisis, however, the Filipino proportion decreased to 40 percent while that of Indians increased to 20 percent. Ambulant vendors earned higher prices than before, but the price of the goods they sold also rose, increasing their need for credit. At the same time, the crisis affected the availability of funds of Filipino 5-6s so that they hesitated to lend to such clients, leaving the ambulant vendors with no choice but to increase their reliance on Indians.

Both Filipino and Indian moneylenders were forced to provide larger funding to their clients. Filipinos did this by nearly doubling the repayment period, leaving daily collections the same or less. Before the crisis, the typical loan was PHP 10,000 for 80 days, with a daily payment of 150 pesos. This changed to PHP 15,000 for 150 days with a daily payment of 120 pesos. The effective interest rate, or internal rate of return (IRR), was reduced since the money did not roll in as quickly as it used to. In this way, Filipino 5-6 moneylenders helped their good clients survive the crisis. The effective interest rates of Indian 5-6s also decreased, although the adjustment was usually made in the nominal interest rate, not by extending the term, probably because their clients tended to be the most marginal. Indian 5-6s gave reliable clients lower interest rates (12 percent) at the same term (80 days); vendors without good credit standing got a smaller discount (18 percent) and a shorter term (48 days).

Rolling Store Vendors. The sales of all rolling stores were hurt by the crisis as people stopped buying snacks and variety goods. Daily sales ranging from PHP 5,000 to 6,000 decreased to between PHP 4,000 and 5,000, although profit margins varied depending on the products sold (interview with 21 rolling store vendors, August 2000). Four out of the forty rolling stores were forced to close, but were soon replaced by newcomers, often relatives, because many retrenched employees received substantial separation compensation. As a result, the number of rolling stores remained the same.

Before the crisis, Filipino 5-6s were the rolling store vendors’ sole source of operational funds. The most highly educated group, these vendors were afraid of the supposedly violent Indian 5-6s. After the crisis, however, just as their lenders of choice experienced a lack of funds, rolling store vendors, the group hardest hit by the crisis, saw their credit-worthiness deteriorate. Filipino 5-6s thus reduced the average amount lent to rolling store vendors from PHP 20,000 to 15,000. For reliable clients, Filipino lenders doubled the repayment period, decreasing the effective interest rate. But rolling store vendors who were no longer extended favorable terms by Filipinos had to tap the Indian 5-6s who extended loans of up to PHP 20,000 on the same terms as for ambulant vendors.

Stall Vendors. Stall vendors were unevenly affected by the crisis, with beef and pork vendors hurt the most. Daily sales of beef vendors decreased from PHP 15,000-20,000 to PHP 13,000-16,000. Sales of pork vendors declined from PHP 10,000-15,000 to PHP 8,000-12,000 per day. Dry goods vendors saw a decline in sales from PHP 4,000-5,000 daily to PHP 3,000-4,000. The gainers were fish stall vendors, whose daily sales rose from PHP 3,000-4,000 to PHP 5,000.

This group of vendors enjoys significantly higher credibility than ambulant or rolling store vendors because they have a fixed place of business. The ability to pay the cost of a stall signifies a successful business; further, their fixed site means they can not easily hide from creditors. Before the crisis, stall vendors financed their businesses from various sources, the largest of which was personal funds (30 percent). Filipino 5-6s, Indian 5-6s, rural banks, and lending investors made up the difference. Their reliability made them favorite clients of the Indian lenders, who cultivated their business by selling goods on hulugan and financed 25 percent of their business needs. Although Filipino 5-6s were more favored by the stall vendors themselves, the fact that they required more funds than ambulant or rolling store vendors meant that Filipino lenders alone could not finance their business, supplying only 15 percent.

After the crisis, stall vendors’ personal funds available for business decreased from 30 to 15 percent of the amount needed. Indian and Filipino 5-6s increased their financing to 85 percent, with 50 percent coming from Indian and 35 percent from Filipino lenders. As in the case of ambulant vendors, 5-6 lenders increased the amount loaned and reduced the effective interest rate, Filipinos by increasing the credit period and Indians by decreasing the nominal interest rate.

Multiple Stall Vendors and Private Store Owners. Although multiple stall vendors and private storeowners occupy the best location in the market, they had to raise prices and saw sales decline by 18-22 percent. From PHP 20,000-25,000, the daily sales of drugstores and rice stores decreased to PHP 15,000-20,000. The daily sales of imported goods and grocery stores decreased from PHP 10,000-12,000 to PHP 8,000-10,000.

Before the crisis, multiple stall vendors were supported mainly by personal funds (45 percent) and rural bank loans (20 percent). Rural banks find multiple stall vendors more credit-worthy than single stall vendors; these children of old market vendors tend to have more solid collateral bases. Being established in Santa Rosa town, these vendors are also socially close to the Filipino 5-6s and turn to them before Indians. Filipino lenders prefer to lend to this financially prudent group as well.

After the crisis, the multiple stall vendors’ contribution of personal funds decreased to 30 percent. The contribution of rural banks did not change because multiple stall businesses require larger capital at lower interest rates. (It should be noted that a credit crunch did not occur in the Philippines after the Asian financial crisis. Commercial interest rates stayed level, or even decreased due to the sluggish economy. The rural banks in Sta. Rosa did not change their lending rates.) However, the share of financing from Filipino 5-6s increased from 15 to 30 percent. Again, the lending conditions of 5-6s changed in ways outlined above.

Private storeowners belong to the “rich families” of Santa Rosa town. They do not need to borrow much and sometimes even finance Filipino 5-6 businesses. Naturally, if they are short on cash when a supplier makes a delivery, they ask a Filipino 5-6 to finance the gap and are offered the easiest credit terms. They do not borrow from Indians. Before the crisis, private storeowners personally financed 80 percent of their businesses’ operating funds and borrowed 20 percent from Filipino lenders. After the crisis, personal funds decreased to 70 percent, and Filipino 5-6s increased their lending to make up the remaining 30 percent.

The Role of Indian 5-6 Moneylenders

In short, market vendors in all categories needed to borrow more money during the crisis. Filipino and Indian 5-6s both increased the amounts lent, but because of larger loans per client, slower repayment, and higher default rates, Filipino 5-6s could not serve all their clients. They prioritized based on client credibility and created a gap that was filled by Indian 5-6s.

Both Filipino and Indian lenders decreased effective interest rates to help their customers survive the crisis. Filipino 5-6s’ “insider” status helped them identify reliable vendors for whom they extended repayment periods and issued more funds while maintaining the level of daily payments. As “outsiders,” Indian lenders were not comfortable extending the duration of the repayment period. Their way of helping clients was to drastically reduce effective interest rates.

Small Filipino 5-6 moneylenders were badly affected by the high number of bad debts. Bigger lenders had other, stable sources of funds, such as the Filipinos’ paluwagan and the Indians’ hulugan, and were able to recover from the crisis, while small-time lenders, more dependent on daily collections, become indebted to their own financiers. Many went bankrupt and as they left the market, neophytes took their place.

The Indian 5-6 moneylenders remained confident about their business even when bad debts became prevalent. And although they suffered from defaults and delayed payments, none went out of business. These lenders were able to survive by tapping funds from India, where the Indian rupee was little affected by the Asian financial crisis. They in turn financed the most marginalized and least credit-worthy Filipino businesses during and after the crisis.

It is notable that Indian moneylenders are considered socially undesirable people in the Philippines. However, this study found that hosting Indian 5-6s with their different risk diversification strategies can be an asset for Filipino society, especially during economic downturns. The owners of micro-enterprises in a developing country are particularly vulnerable to the external shocks of globalization, and informal financing mechanisms with global funding sources, such as that of the Indian 5-6 lenders, may assist in alleviating such volatility.

Mari Kondo is associate professor at the Asian Institute of Management. She can be reached at mari@aim.edu.ph.

References

Agabin, M. H. 1988. A Review of Policies Impinging on the Informal Credit Markets in the Philippines. Makati City: Philippine Institute for Development Studies.

Amante, M.S.V. 1999. “Social Security and Labor Insecurities under Globalization.” In Social Security and Labor Insecurities under Globalization, ed. R.E. Ofreneo and M.R. Serrano. Quezon City: University of the Philippines.

Asian Development Bank. 2000. Key Indicators of Developing Asian and Pacific Countries. Hong Kong: Oxford University Press (China) Ltd.

Casuga, M.S., D.C.E. Erfe, and M.B. Lamberte. 1999. Credit Programs for the Poor: A Tale of Two Studies. Makati City: Philippine Institute for Development Studies.

Ching, F., L. Y. C. Lim, and B.M. Villegas. 1999. The Asian Economic Crisis: Policy Choices, Social Consequences, and the Philippine Case. New York: Asia Society.

Constantino, E.A. 1998. Current Topics in the Philippine Linguistics. Quezon City: University of the Philippines Press.

Ghate, P. 1992. Informal Finance: Some Findings from Asia. Manila: Asian Development Bank.

Guzman, G.G., R.G. Manasan, A.C. Orbeta, and C.M. Reyes. 1999. The Social Impact of the Financial Crisis in the Philippines. Manila: Asian Development Bank.

Jocano, F.L. 1998. Filipino Social Organization: Traditional Kinship and Family Organization. Quezon City: Punlad Research House.

Lamberte, M.B. 1999. A Second Look at the Credit Crunch: The Philippine Case. Manila: Asian Development Bank.

Lamberte, M.B. 1988. The Urban Informal Credit Markets: An Integrative Report. Manila: Asian Development Bank.

Mangahas, M. 2001. “Brief History of Poverty Monitoring.” Press Release. Quezon City: Social Weather Stations.

Mangahas, M. 2001. “The SWS Crime Victimization Statistics.” Press Release. Quezon City: Social Weather Stations.

Mitchell, M. 2001. “This Land Is Your Land: Land Rights in the Philippines.” Far Eastern Economic Review, March 29, 2001.

National Statistics Office. 2000. Annual Population Growth. Quezon City.

Paralkar, R. 2000. The World Bank’s Role in the Fight Against Poverty in the Philippines. Washington, D.C.: World Bank.

Scott, J.C. 1976. The Moral Economy of the Peasant: Rebellion and Subsistence in Southeast Asia. New Haven and London: Yale University Press.

World Bank. 2001. Education in the Philippines, Social Policy and Governance. Washington, D.C.: World Bank.

Yoshihara Kunio. 1994. The Nation and Economic Growth: The Philippines and Thailand. Kuala Lumpur: Oxford University Press.

from :Kyoto Review

Mapping the Terrain: Politics and Cultures of Islamization of Knowledge in Malaysia

2007-06-16T02:54:00.001-07:00

Alexander Horstmann

Georg Stauth
Politics and Cultures of Islamization in Southeast Asia: Indonesia and Malaysia in the Nineteen-nineties
Bielefeld / Transcript Verlag / 2002

Mona Abaza
Debates on Islam and Knowledge in Malaysia and Egypt: Shifting Worlds
London / Routledge Curzon / 2002

Syed Hussein Alatas
Ke Mana dengan Islam
Kuala Lumpur / Utusan Publications & Distributors / 2002

Farish A. Noor
Terrorising the Truth: The Shaping of Contemporary Images of Islam and Muslims in Media, Politics and Culture
Kuala Lumpur / JUST / 1995

Farish A. Noor
“The Localisation of Islamist Discourse in the Tafsir of Tuan Guru Nik Aziz Nik Mat, Murshid’ul Am of PAS”
In Malaysia: Islam, Society and Politics, ed. Virginia Hooker and Norani Othman
Singapore / ISEAS / 2003

Farish A. Noor
The Other Malaysia: Writings on Malaysia’s Subaltern History
Kuala Lumpur / Silverfishbooks / 2002

Chandra Muzaffar
Muslims, Dialogue, Terror
Kuala Lumpur / JUST / 2003

Islam in Southeast Asia has always had the complex of the “late-comer.” Yet Islam has been deeply felt in Malaysia and Indonesia since at least the sixteenth century, and there has been a steady transfer of ideas and networks between the Islamic heartland in the Middle East and Southeast Asia. Georg Stauth, in Politics and Cultures of Islamization, argues that scholars such as Clifford Geertz and Snouck Hurgronye have underplayed the deep influences of heartland Islam on local adat (custom) and have thus contributed to the dichotomization of adat and text-based, Shariah-orientated Islam. The author also criticizes the idea of a one-way distribution of ideas from the center to the periphery. Instead, he says, Islam has been appropriated and transformed in the local context. Far from simply absorbing Islamic concepts from the heartland, the peripheries of Islam are engaged in a process that uses and even instrumentalizes Islamic ideas for secular modernization. He notes that it is time to reconsider the universalistic cultural projects of Islamic fundamentalism or mysticism in relation to the diversity of local applications.

Stauth is concerned with the multiple and ambiguous effects of Islamization on institution building and on the rationalization and restructuring of Southeast Asian societies. He sets out to formulate a political sociology of Islam in Minangkabau, Java, Malaysia, and Singapore in comparative perspective. The association of Islam and the Asian Renaissance inspired him, as it has given new impetus to a non-western, non-European take-off to a successful modernity in Malaysia and in Singapore.

Yet tensions persist. One of them concerns the legitimating of Islam in an increasingly stratified and unequal society. Islam and the ulama stand for a just and good society, in which the Malay majority follows the precepts of Islam. The institutionalization of Islam in the nation-states of Malaysia and Indonesia has given rise to cultural projects of Islamic reconstruction. This tension and the accompanying cultural competition between centralizing nation-states and Muslim reformers escalated in the nineteen-nineties.

To understand this crucial process, Stauth analyses with brilliant clarity the manipulation of Islamization from above, the employment of intellectuals in the master plan, and the intellectual reconstruction of local Islamic traditions in the new Islamic think tanks. He also finds a fruitful solution to the Herculean task of tracing the making of Islamic localities by focusing on the ideas and agency of Muslim intellectuals who – according to Stauth – have mistakenly been termed “fundamentalists.” His long interviews with central Islamic actors are especially illuminating. The life histories and oeuvres of selected intellectuals show that Muslim intellectuals in Southeast Asia have found their own style and tradition.

Think Tanks and Platforms of State Islam

Prestigious institutions of Islamic education that form the core of the Islamization project were engineered by former prime minister Mahathir Mohamad to underline his ambition to make Malaysia a center of Islamic civilization, as well as to symbolize UMNO’s Islamic commitment. The think tank policy had the double effect of job creation and representation. Great figures of modernist Islamic thought were brought to Malaysia, forums were organized, and books published. Stauth notes that all these activities had formerly been organized on a smaller scale by ABIM (Angkatan Belia Islam Malaysia, or Malay Youth Movement), founded by Anwar Ibrahim. UMNO appropriated this representation from the grassroots movements, the final coup being the successful cooptation of Anwar into the project.

Mahathir also sponsored the reinforcement of clerical, orthodox traditions. The government needed support to outflank the opposition Islamist party PAS (Parti Islam Semalaysia) on the interpretation of the Shariah and the application of hudud (criminal) laws. The Pusat Islam (Islamic Center) therefore hosted ulama who proposed measures of responding to the Shariah. These state-sponsored ulama acted as government counselors in social and legal matters.

The government aimed to propagate its notion of an Islamic center with the help of the internationalization of Islamic discourse. The networking of ideas took shape in a highly staged support of Islamic intellectuals and Orientalists. Academic exchange with the Middle East proliferated via schemes with Cairo’s al-Azhar University. The 1970s and 1980s saw the overwhelming influence of the American scholar, Ismail Faruqui, and of the writings of Fazlur Rahman. Students of Rahman and Leonard Binder became prominent figures in Malaysian Islam.

In March 1982, Mahathir announced the decision to establish an International Islamic University (IIU). Later, the Organization of Islamic Conference agreed to sponsor the university. Stauth argues that ideological sectarianism and political influence could be felt when a group of young Muslim scholars from abroad joined the university (p. 235). Many of these appointees were from the Middle East and South Asia.

The exclusive Institute of Islamic Thought and Civilization (ISTAC) was founded in 1987 as a post-graduate institute by Syed Naguib al-Attas, the former Dean of the Arts Faculty at the University of Malaya. Anwar Ibrahim, a former student and long-standing friend of al-Attas, was behind its financing and remained its sponsor until 1998.

Among the leading Islamic intellectuals in Malaysia, Syed Naguib al-Attas began his career as an army officer fighting communists. He then studied at the University of Malaya and McGill University in Montreal, Canada, and earned a PhD from the School of Oriental and African Studies (SOAS), University of London, as a philologist and specialist in Malay literature. It is interesting that al-Attas’ teachers were eminent Orientalists such as Martin Lings, Hamilton Gibb, Fazlur Rahman, Tashihiko Isuzu, A. J. Arberry, Sir Mortimer Wheeler, and Sir Richard Winstedt. Stauth calls him a proponent of an anti-western revaluation of Islamic values in relation to the reconstruction of Malay spirituality. Mona Abaza, in Debates on Islam and Knowledge in Malaysia and Egypt, understands the project of ISTAC to be de-westernizing indigenous knowledge and countering traditional Orientalism (p. 90).[1]

Originally planned as part of the International Islamic University, ISTAC became a think tank on its own, strongly identified with its director (Stauth: 228, Abaza: 89-90). Al-Attas insists that he has nothing to do with the IIU and its Islamization of knowledge project. Nevertheless, the degrees awarded by ISTAC carry the seal of both the IIU and ISTAC. In 1996, the academic staff of ISTAC consisted of nineteen members, including Iranian and Turkish academics who had studied at McGill and Chicago University under the supervision of Fazlur Rahman (Abaza: 92) and Sudanese nationals who held PhDs from the universities of Wisconsin-Madison, Leicester, Istanbul, and Temple. The students numbered sixty; the Institute accepts only a limited number of students (it is for the khasah, the few).

The Reconstruction of Islam in Malaysian Discourse

The incorporation of Islamic symbols and legal divides is an essential element in the state project of modernization and bumiputra emancipation. In this state-led project, Islamic intellectuals were placed in strategic positions and provided generous resources in the framework of the state machine. Established university professors like S. N. al-Attas became influential in stimulating revivalist discourses and creating closed student circles.

The militant Islamization campaign began after the post-election race riots of 1969. Anwar Ibrahim was at that time a charismatic student leader at the University of Malaya and a loyal student of al-Attas. His cooptation into UMNO was crucial in bringing about the convergence of Islamization and the state and in controlling the Islamic grassroots movements, especially the dahwa (missionary) movements that were heavily influenced by dahwa in Egypt, Pakistan, and America.

Anwar was born in 1947 in Penang. On August 6, 1971, he established ABIM. In 1974, he was arrested (along with many others) under the Internal Security Act (ISA), following student demonstrations protesting rural poverty. In 1982, he was co-opted as junior Minister in the Prime Minister’s office and, under Mahathir’s protection, became president of the UMNO youth movement of Malaysia. He was warned not to go to Kuala Lumpur by his closest friends, especially ABIM core members and PAS ulamas. From 1986, he was Minister of Education and the confidential partner of Mahathir. Before being purged from office, he was deputy president of UMNO and president of the International Islamic University. Anwar’s rise ended in prison as his model of an Islamized state challenged the institutional power base of the elites.

Islamization between Malaysia and Europe

S. N. al-Attas was educated in England and was deeply influenced by European Orientalists. As Abaza notes, al-Attas’ works, with their strong philological inclination, reflect traditional Orientalism. He retains great respect for Bertold Spuler (1911-1990). Yet Al-Attas, who is a product of Orientalism, maintains an anti-western discourse. In Abaza’s words, he has become an anti-Orientalist Orientalist. Al-Attas has accused some Dutch scholars from the Leiden school of magnifying Buddhism and Hinduism at the expense of Islam.

A variety of Middle Eastern sources of local Islamic reconstruction have been recognized.[2] Yet the influences on local diversity from the West have received much less attention. Stauth argues that the western “Kulturkritik” and western critics of modernity like Nietzsche, Bergson, Heidegger, and Karl Jaspers have had great influence upon intellectuals of the non-western world. Stauth writes: “The anti-Westernness of the Islamic ‘inner-worldliness’ often takes its stand within the legacy of Western ‘Kulturkritik.’ Muhammad Iqbal, Mawlana Mawdudi, Sayid Qutb and Malik Bennabi might be named as most influential thinkers in this respect.” Kulturkritik is indeed very relevant to the stand of S. N. al-Attas, as well as to the Islamic reconstruction of ideas in Malaysia. Stauth continues: “Basically, then, local foundations of Islamic reconstruction engage in a cross-civilizational discourse with the West… It is this paradox which is most striking. Al-Attas’ Islamic Kulturkritik stands for the development of Western philosophy and thought from within an Islamic perspective.”

S. N. al-Attas’ writings about Sufism became very significant in ABIM Islamic circles. Abaza argues that his endeavor provided Malay Sufism with a modern reading and Malay students with a tool of self-assertiveness. Al-Attas, in contrast to al-Faruqui, emphasizes the importance of Sufism in explaining the Islamization of the archipelago. His is a modern and conservative reading of Sufism that could be harmonized with modernist interpretations of Islam.

S. N. al-Attas took a leadership role in the etatist project of reconstructing Islam in the Asian Renaissance. He was in the forefront of organizing student circles at his home and in stimulating them to read modernist literature. After re-asserting Malaysian Islam against the Dutch Orientalists, al-Attas has turned in his latest writing to processes of modernization and secularization, again contrasting Malaysia to the West. ISTAC is the product of an al-Attas-Anwar teacher-student relationship and enjoyed political protection from Anwar Ibrahim. His is a highly institutionalized, etat-ized project of reconstructing Islam.

Islam and Secularism

Al-Attas’ Islam and Secularism makes extensive use of the western Kulturkritik to criticize western development and to present his case against the secular.[3] Al-Attas draws on Christian philosophers who were alarmed by the crisis represented by the decline of Christianity and the Christian way of life in the western world. Secularization for Al-Attas is synonymous with de-Islamization and has to do with “the infusion of alien concepts into the minds of Muslims.”

He quotes Max Weber on the disenchantment of the world as well as Nietzsche’s Death of God. Van Nieuwenhuijze argues that al-Attas is in fact a follower of Nasr: “He envisages a revivified knowledge out of illumination. In so doing he assigns the rescuing role in the present quandary to what he calls existentialist mysticism rather than to the two hitherto dominant aspects of Islam, namely essentialist theology and philosophy.” Following Abaza, what is at stake is “a fight with the West over the sacred.” Nasr says: “Today modern man has lost the sense of wonder, which results from his loss of the sense of the sacred; to such a degree that he is hardly aware how miraculous is the mystery of intelligence, of human subjectivity as well as the power of objectivity and the possibility of knowing objectivity.”

Al-Attas’ reading of Malay mysticism revitalizes and rationalizes Islamic discourse. As Abaza notes, Al-Attas’ project of Islamizing Malay culture is certainly different from that of the founding father of the Islamization project, al-Faruqui, who was Shariah oriented, orthodox, dogmatic. Al-Attas is discoursing in a strictly Malaysian context, embedding his project in the de-westernizing of Malaysian politics. As Stauth argues, the project of S. N. Al-Attas lies in the historical reconstruction and reassertion of Islamization in the Malay peninsula.

In her important book, Debates on Islam and Knowledge in Malaysia and Egypt, Mona Abaza explores intellectual traditions and intellectual cultures in two key countries of the contemporary Islamic world – Malaysia and Egypt – and more particularly two centers and capitals of Islamic coffee-house culture – Kuala Lumpur and Cairo. Abaza places the Islamization of knowledge venture in the context of the post-colonial debate, the questioning of western domination of knowledge, and Ismail Faruqui’s call for Muslim scholars and ulama to take up the task of reconstructing the sciences in terms that are Islamic, culturally authentic, and relevant to the needs of Muslims the world over (pp. 9, 23-24).

Working on Foucauldian premises of deconstructing intellectual discourse, Debates on Islam and Knowledge reads – as reviewer Farish Noor notes – as an archaeology of a vast intellectual program which itself was an archeology of sorts. In the face of the painful realities of western domination and military hegemony, the politics and cultures of Islamization are rooted in the Muslim psyche of crisis and dependency that has also motivated former Third-Worldist movements, including subaltern studies in the Indian subcontinent.

Although sympathetic to the subversion of Eurocentric and Orientalist scholarship, Abaza realizes that the project of Islamizing knowledge had been hijacked by political leaders who see it as a convenient vehicle to serve their own interests and regain lost territory in Islamic legitimation. The Malaysian government’s patronage of Syed Naguib al-Atas and ISTAC was, in her view, a case of “the refeudalization and institutionalisation of an Islam of power” that served the interests of the ruling elite (pp. 92-95).

Abaza, according to Farish Noor, looks more to the structures of power, control, and domination – as well as mechanisms for the construction and production of knowledge – than to the contents of the discourse itself. This is a path-breaking study, as Abaza explores the genealogy of the ideology, the Islamic networks, and the counter-secular responses. Her study maps the difficult and ambiguous terrain of the program and shows how it unfolds along the South-South axis.

Both works are concerned with the positioning of Muslim intellectuals in the unfolding power of a discourse. This discourse is intimately tied to the West and the western critique of culture. Stauth as well as Abaza show that the most influential thinkers spent much of their education in the West and engaged themselves with western literature. This is no contradiction. Through the fascinating insights of Muslim intellectuals, visions of the re-organization of Muslim society against the West and against the secular become clear. The main protagonists use the West to reject it.

Islam and Politics

Against the background of modernization in Muslim societies, much of the discourse of the Islamists appears as utopian thinking. Three local scholars have contributed to a sustained critique of the political instrumentalization of Islam in contemporary Malaysia – Syed Hussein Alatas, the founder of Malaysian sociology; Farish A. Noor, the enfant terrible of Malaysia; and Chandra Muzaffar, the political activist.

S. N. Al-Attas’ older brother, Syed Hussein Alatas is a liberal academic known as a founder of sociological investigation in Southeast Asia. In his youth, H. Alatas was influenced by the ideology of the Egyptian Muslim Brothers and seems to have pursued a similar purpose of undermining the ideology of imperialism and Orientalism. He imagined an Islamic state as a philosophical base whose organization could be western, and used the journal Progressive Islam to develop Malaysian notions of the social sciences that would differ from the West. He distanced himself from the Weber thesis and developed his own concept of the development of capitalism in the Malay peninsula. Later, he criticized the Islamizers for Islamizing sociology in Malaysia and clashed with his brother and his brother’s connections with Anwar Ibrahim and government circles. This intervention cost him the vice chancellorship of the University of Malaya.

According to Abaza, Alatas’ early writing also reflected the concerns of young Indonesians who wanted to merge Islam with nationalism and who took Islam as a model of a just society that would provide welfare for the masses. Alatas told Abaza that he meant a form of Islamic philosophy would underlie a just government, rather than the political instrumentalization of the Islamic Shariah.

In The Myth of the Lazy Native, Alatas tackled the question of western biases in studying Asian societies before Edward Said’s Orientalism was published. In this landmark study, Alatas revealed how biased racial views equally affected Malay indigenous perceptions. Abaza notes that this work also challenged the views of Mahathir’s Social Darwinism, which obviously linked backwardness with race (p. 129). In his critique of the writings of UMNO (Revolusi Mental), Alatas reveals how the Malays reproduce in themselves stereotyped ideas about the backwardness of the Malays.[4]

In his new book, Ke Mana dengan Islam, Alatas argues forcefully that Islam has been taken hostage for political purposes. He criticizes the bureaucratization and rationalization of Islam in UMNO’s institutions. Alatas was also the mentor of Chandra Muzaffar, who developed his own perspective on Islamic civilization, Islamic ethics, and Islamic concepts of justice. Both Alatas and Muzaffar are very skeptical about the Islamization of knowledge project, believing that the Islamizers stand for a totalitarian regime that suppresses any form of political freedom.

Farish Noor argues that the government has opened the bottle, released the jin, and is now competing in an Islamization race with PAS. The pressure to introduce Shariah and police the everyday life and sexual relations of Malaysian Muslims is rising. The Islamization project as outlined by Stauth and Abaza thus provides a convenient tool for interpreting Malaysia and the promotion of Islamist ideologies.

In The Other Malaysia: Writings on Malaysia’s Subaltern History, Farish Noor opens the window to forgotten or suppressed Malaysian history that was rewritten to serve political interests. With Stauth, who argues that Syed Naguib Al-Attas reconstructs the early Islamization of Southeast Asia, and Abaza, who discusses Al-Attas’ role as a proponent of the Islamization project and his critical engagement with the secular West, Noor gives key importance to Al-Attas’ endeavor to manage a radical break with the past and his role as mentor to a generation of Islamic students and 1990s Malaysian elites.

The aim of ISTAC was to spearhead al-Attas’ own project of the Islamization of knowledge, which in turn is linked to his political project of creating a new class of Islamic leaders who conform to adab (ethics). Noor argues that al-Attas’ writings frame Islam in terms of a culturally specific, nostalgic past that is threatened by western secularization and the contamination of a pre-Islamic, Hindu-Buddhist past. In his second master narrative, Preliminary Statement on a General Theory of the Islamization of the Malay-Indonesian Archipelago,[5] al-Attas attempts to diminish the existence of a pre-Islamic history altogether. He sees the arrival of Islam as the final stage in the fulfillment of incomplete, imperfect Malay society and states that Hindu- and Buddhist-Malay culture “has not produced any philosopher of note.” Thus, Malay history only begins with the arrival of Islam.

According to S. N. al-Attas, western-directed secularization and the infiltration of Islamic culture by a pre-Islamic past has brought about a state of moral and epistemological confusion. For the agents of the Islamization project, Islam possesses a mission of salvation and is the sole religion with universalistic claims. As Noor notes, the ideas of al-Attas had enormous appeal for a whole generation of Malaysian students who were returning from their studies in the West disillusioned with the broken promises of Europe and uncomfortable in their own history.

The authors reviewed in this essay all map the terrain of the vast Islamization of knowledge project that has transformed Malaysian society and culture, the way history is conceived, and the relocation of Islam in that history. With Malaysians wondering if they will have to live in a full-blown Islamic state in the near future, the Islamization of knowledge project continues to shape the debate on Islam in Malaysia today.

Alexander Horstmann is Research Fellow in the Study Group 2003-2005: “Islam and Civilisation in Modern Society: The Positioning of Islam in the Perspective of Comparative Interaction,” directed by Georg Stauth, at the Institute of Advanced Studies in the Humanities (KWI), Essen. He had the honor of discussing questions of political Islam with S. H. Alatas, Farish A. Noor, and Chandra Muzaffar in the summer of 2003.

--------------------------------------------------------------------------------

[1] Al-Attas’ best known books are Some Aspects of Sufism as Understood and Practised among the Malays (Singapore: Malaysian Sociological Research Institute, 1963); The Oldest Known Malay Manuscript: A 16th Century Translation of the Aqai’d of al-Nasafi (Kuala Lumpur: University of Malaya Press, 1988); and The Mysticism of Hamzah al Fansuri, A Commentary on Hujjat al-Siddiq of Nur al-Din al-Raniri (Kuala Lumpur: University of Malaya Press, 1970). As Abaza states, al-Attas’ early philological works on Fansuri and Raniri became crucial landmarks for Malay Sufism and Islam.

[2] William R. Roff, The Origins of Malay Nationalism (Yale: 1970); Fred R. von der Mehden, Two Worlds of Islam: Interaction between Southeast Asia and the Middle East (University of Florida Press, 1993).

[3] Kuala Lumpur: ABIM Publishers, 1978.

[4] See The Myth of the Lazy Native (London: Cass, 1977), Chapter 10, “Mental Revolution and Indolence of the Malays.”

[5] Kuala Lumpur: Dewan Bahasa dan Pustaka, 1969.

from :Kyoto Review

Women, Islam, and the Law

2007-06-16T02:48:00.001-07:00

Patricio N. Abinales

Hjh. Nik Noriani Nik Badlishah, editor
Islamic Family Law and Justice for Muslim Women
Malaysia / Sisters in Islam / 2003

Gender, Muslim Laws and Reproductive Rights
Davao City / Pilipina Legal Resources Center, Inc. / 2001

The essays in these two volumes deal unevenly with the issues of sexuality, reproductive rights, and gender violence in Islamic societies. There is, however, one thread that binds them all – that to be a woman and a Muslim is probably one of the most difficult positions to be in these days.

Like all women, Muslim women have to negotiate their relationship with men regarding issues of sexuality, reproductive rights, and the raising of their families. But gender relations are also mediated by larger, interacting, and often conflicting regulatory perspectives – the patriarchal system, Islam and its various interpretations, and the laws of the modern state.

Patriarchy, the State, and Religion

These mediations are most apparent in the comparative overview offered Sisters in Islam’s Islamic Family Law and Justice for Muslim Women of Islamic family law in Indonesia, Malaysia, the Philippines, and Singapore. This slim volume is a series of country workshop reports on what editor Hjh. Nik Noriani Nik Badlishah refers to as “areas of discrimination against women in the substantive provisions as well as the implementation of Islamic Law legislation.” The workshop, which included participants from Egypt, Jordan, Iran, Morocco, and Pakistan, as well as “activists, Syariah (Islamic law) lawyers, and policy makers,” also “highlighted best practices and put forward strategies for reform.”

The countries where the patriarchal system is deeply embedded in the “tradition” and further validated by Islamic teachings that subordinate women to men and allow them little autonomous identity (much less rights) are those whose state structures are often heavily centralized but weak, corrupt, and inefficient. Of the four countries covered by this book, the status of Indonesian Muslim women appears the worst.

For decades, no law governed husband-wife relationships except those laid out by influential religious organizations like the Hanbali school of law and the Syi’ah Imamiyyah; these decree the wife to be completely subordinate to the husband and “absolutely not entitled either to shelter or to financial support” should the husband decide to leave her. Attempts by Indonesian nationalists to introduce progressive measures in the early days of the Republic (especially banning polygamy) were easily derailed by these religious groups. The same associations led opposition to the compulsory registration of marriage.

It was only in 1970, five years after the Suharto dictatorship came to power, that the state began to deal with these issues. The Marriage Act and a Kompilasi Hukum Islam were passed, but even then, according to Indonesian participant Ratna Batara Munti, the law “has no connection with the issue of [the] legitimacy of the marriage.” Women are thus open to abuse since men can still “evade their responsibilities towards their wives and children.” While the Act and the Kompilasi are more explicit regarding the conditions with which a husband must comply before taking a second wife, Ratna argues that these “do not reach the roots of the problem of the sexual oppression of women and the perception of women as sexual objects and sexual-service providers.”

Sexual relations that privilege the husband are thus confirmed by both state and religious laws: the woman’s prime duty is “to be devoted physically and mentally to the husband.” In the event he wants a divorce, a husband can simply charge his wife with nusyuz (disrupting the marriage), bring in his witnesses, and be absolved of his responsibilities. She cannot appeal to the Syariah court which grants the divorce because its decisions are often final; neither can she go to the civil court and invoke her rights, because the Marriage Act was not designed to go beyond the registration of their marriage. Custody of children twelve or younger goes to the mother, but without provision for paternal support.

It is no wonder that among the Islamic countries of Southeast Asia, Indonesia has the highest divorce rates; the state has virtually no power over Islam, particularly its conservative and anti-women streams.

Contrast this to Singapore where the state is authoritarian but efficient, and state actors are honest and dedicated to their profession. As far back as the 1950s, Singapore had already defined (and limited) the scope of Muslim laws to cover only marriage, family, and succession. This definition was legalized through the Muslims Ordinance of 1957 and a Syariah Court was established a year later. In 1966, the Muslim Ordinance was replaced by the Administration of Muslim Law Act (ADMLA), which came into effect in 1968. The ADMLA became the institutional and administrative framework for the “efficacious application of legislation.”

Unlike in Indonesia, the Singapore state recognizes the “overlapping of jurisdiction between the Civil Courts and the [Syariah court]” and gives Muslims the option to choose which court to use in cases of divorce, child custody, and the division of property. This tends to level the playing field and provides Singaporean Muslim women a better opportunity to assert their rights and defend themselves in case of spousal abuse. It also affords Muslim women one right that conservative clerics are strongly opposed to – the right to marry outside of Islam.

The “efficiency” of the Singaporean state is most evident in explicitly stating monetary and other financial provisions. The amount for spousal support after divorce (mut’ah) starts at S$ 3.00 per day recently (up from an original S$ 1.00 per day). While this is “generally inadequate,” giving an amount nevertheless indicates the extent to which Islamic law has become heavily regulated. A positive consequence of this regulation has been the appearance of cases where wives demand a share of the husband’s contribution to the Singaporean Central Provident Fund, with the courts ruling generally in women’s favor.

What Singapore presenter Halijah Mohammad calls the “interposition of Muslim personal law and civil laws” may encounter the problem of the refusal of the Syriah Court to recognize decisions made by its civil counterpart, but she notes that to date no such problem has occurred. This is partly because Singapore’s authoritarian regime takes governing and political stability very seriously. Chapter 7 of the book is a detailed elaboration by Halijah of the changes introduced in the Syariah courts to reduce case backlogs and, more importantly, establish better order and routine in the presentation, deliberation, and decision-making processes of these courts. She admits that as a small country, Singapore finds it “easy to control the population and enforce court orders.” Size and a huge population should therefore be taken into consideration when evaluating Indonesia’s more backward state.

The two other case studies – Malaysia and the Philippines – can more or less be located between these two “extreme” examples.

There was little attempt to codify, much less integrate, Islamic laws into the broader Philippine legal system until the Moro National Liberation Front’s rebellion shook the dictatorship of President Ferdinand Marcos and compelled it to pass a separate Code of Muslim Personal Laws. This “recognizes the legal system of the Muslims in the Philippines as part of the law of the land and seeks to make Islamic institutions more effective.” It also “codifies Muslim personal laws [and] provides for [their] effective administration and enforcement.”

A separate code for Muslims, however, does not make the position of women unproblematic. As Norma A. Maruhon noted in her report, Islamic schools and teachers in the southern Philippines have differing opinions about marriage and gender relations, depending on which “Traditions of the Prophet” are cited. For example, the Code leaves open the issue of dowry (mahr), which Maruhon suggests can create problems when couples divorce. Likewise, the Code’s regulations only apply when women want to file for divorce. Men can divorce their wives by merely declaring talaq, verbally repudiating the marriage and sending a notice of intention to the clerk of the Court. While the wife can seek arbitration by an Agama (religious) council, the failure to codify this process allows for vagueness that Maruhom warns can be disadvantageous to her.

While Maruhom and Carmen Abubakar (another Philippine presenter) cite the many pitfalls of the Code, the main problems facing Muslim women are two: the poverty of the Muslim provinces and the inability of a weak, corrupt, and inefficient Philippine state to promote development, bring about stability and better governance, overcome Muslim suspicions towards the Christian-dominated state, and involve Muslim Filipinos more meaningfully in its programs and policies. The Muslim provinces that are now part of the Autonomous Region for Muslim Mindanao (ARMM) belong to the fourteen poorest provinces of the Philippines. Worse still, the capacity of the state to deliver social welfare is appalling. In the provinces of Magindanao, Basilan, Sulu, and parts of Lanao del Sur, people’s main association with the state is with its war machine – the Armed Forces of the Philippines.

Poverty and war combine to set up obstacles to women’s progress. Suspicion of the state or its absence means that women wanting to expand their roles and rights must contend with the conservative streams of Islamic thought on their own. Unlike in Malaysia or Singapore, there is no modern state to support them or help create a political space where women can push for gender equality.

Weak state capacities also affect enforcement. Isabelita Solamo Antonio reveals that while the Code orders husbands to support wives, Syariah courts are filled with cases of “wives demanding support for themselves or for their children or both.” Not only are the courts crowded (here is Singapore’s advantage); they also lack the power to enforce compliance with their rulings.

Still, the codification of Muslim personal laws has led to specific clarifications of the rights and obligations of both husband and wife. The Code makes it difficult for men to marry again, for they have to show they “can deal with [both wives] with equal companionship.” Property distribution in the event of separation appears fair and the wife is allowed her own property. Finally, child custody favors the mother.

Malaysia inherited from the British colonial era “a dual system of courts.” Civil courts have jurisdiction over “the majority of laws including contracts, torts, property, and succession to property, crime and constitutional and administrative cases,” while Syariah courts cover “Islamic family law and have jurisdiction only when the parties are Muslims.” In the 1970s, the Malaysian government introduced legal changes that eventually shifted the jurisdiction of Islamic family law to the state level “except with respect to the Federal Territories.” The federal Islamic Family Act of 1984 further clarified this devolution of power but also – as in Singapore – institutionalized marriage and divorce procedures.

The devolution of Islamic family law to the local states, argues Nik Noriani Nik Badlishah, has been problematic: “there are [now] 14 separate jurisdictions (including the Federal Territories) on Islamic family law.” Conflicting regulations are inevitable, like the clash between Section 13 of the Islamic Family Act, which “requires the consent of both parties to the marriage or the consent of either the wali [guardian] or Syariah judge where the woman has no wali,” and Kelantan state’s 1993 Islamic Family Law, which undercuts the rights of the most vulnerable. This law says “the bride’s consent is wajib (obligatory) if she is not a virgin or if she is a virgin whose wali is not mujbir (her father or paternal grandfather).” The bride’s consent is simply recommended (sumat) “if she is a virgin whose wali is mujbir.”

Nik Noriani traces the origins of these provisions to “the traditional Shafi’i view of the doctrine of the ijbar (compulsion) and rights of wali mujbir to exercise compulsion subject to certain conditions.” This doctrine, Nik Noriani argues, has faded in importance in the Muslim ummah, and even Middle Eastern countries have banned compulsory marriage. In this light alone, the Kelantan law is “absurd and illogical” – all the more so in a community with no strong patriarchal system where women had traditionally been independent.

Devolution has also caused problems relating to polygamy. It has made it easier for men “to go to another State to contract a polygamous marriage and later apply for registration rather than…apply to the court for prior permission,” which is what the federal law requires. To prevent such abuse, the Islamic Family Law Act imposed conditions on husbands seeking to take another wife; these include the first wife’s “sterility, physical infirmity, physical unfitness for conjugal relations, willful avoidance of an order for restitution of conjugal rights or insanity.” The husband must also show that he “has the means to support all his wives and dependents,” can accord them equal treatment, and ensure that the new marriage “would not cause darar syarie (harm) to the existing wife.” The 1994 amendment to the Act requires that polygamous marriages be registered “even though they were contracted without [a] court’s permission.”

Here we notice the contradictions encountered when a state over-extends federalism in an attempt to incorporate Islamic laws. Federalism was the only way the Malaysian state could maintain control over its disparate territories, especially on its borders. But in trying to parallel administrative efforts to promote local autonomy, the central government may instead have created a chaos of conflicting interpretations that could affect the ability of women to push their agenda.

Already, when groups like Sisters in Islam try to initiate changes in the law for the betterment of women, they have been accused of being “pro-Western” or “anti-Islamic.” These criticisms have been mitigated so far by adroit coalitional politics amongst the women’s groups and with politicians and bureaucrats. But the danger exists of all these improvements going to waste, due to both the limits on democracy exercised by this one-party regime and the increasing shift towards Islamic conservatism by many Muslim groups.

Justifying Reform

All the country reports include suggestions about how to reform the existing codes. These are mostly concrete proposals, including one recommending pre-nuptial agreements. Amina Wadud’s essay (Chapter 9) provides the theoretical justification for pushing for reform in gender relationships inside Islam.

The core of her argument involves theorizing the concept of khilafah (woman’s full agency). Khilafah is “not a chapter, a verse, a hadith or specific operation,” argues Wadud. It is a theory, “a state of mind,” and a perspective. As a theory, it derives its foundations from the tawhid (“the harmony in and unity of all creatures under a single Creator”), but Wadud also recognizes that it exists and operates in a specific “social and political context.” She then proceeds to the crux of her reformist position by asking a direct question: “How are women treated by individual men and by Muslim patriarchy as a whole? If the answers to this question show grave inequalities, then the need for reform is justified.”

The next step is to figure out “the cause of this inequality” and why women are “in an inferior position in Muslim society.” Is it because of Islam? Wadud deploys hermeneutics and history to show how the non-involvement of women in the “formation of Islam’s paradigmatic foundations” led to a situation where “men and men’s experiences of the world – including their experiences with women – [have come to] determine how Islam is defined for themselves [and] for women. In other words, men have proposed what it meant to be Muslim on the very presumption that the male experience is normative, essential and universal.”

This, for Wadud, is what should be changed, arguing that the revelations of the Prophet Mohammad are also “affected by context, perspective and experiences” and thus subject to changing interpretations. Wadud closes her essay with a caution that any attempt to reform gender relations inside Islam must be done with a full understanding of the theoretical perspectives of the proposed reforms and the ideational foundations of the worldview(s) reformers wish to change. She warns: “Haphazard actions can only produce haphazard results.”

Ziba Mir-Hosseini complements Wadud’s essay by pointing out areas where reformers can make a stand. She argues that because “conceptions of gender rights in Islamic law are neither unified nor coherent, but competing and contradictory,” there are openings in the public sphere into which women can introduce reforms. Like Wadud, Mir-Hosseini opens her essay with a puzzle: “if justice and fairness are indisputable objectives of Syariah, should they not be reflected in laws regulating relations between, and the respective rights of, men and women? Can there be an equal construction of gender rights in Islamic law? If so, what are the strategies needed to achieve it?”

She makes a crucial distinction between the Syariah, which she refers to as “the totality of God’s law as revealed to the Prophet Mohammad,” and fiqh, which “is not part of wahy (divine revelation) [but] part of religious science whose aim is to discern and extract Syariah legal rules from the Qur’an and the Sunnah.” As a “legal science with its own distinct body of legal theories and methodology as developed by [Muslim jurists] over the course of centuries and in dialogue with other branches of religious and non-religious sciences,” the fiqh is open to changes in interpretation. It is in this area where women reformers have, as it were, a fighting chance.

Mir-Hosseini proceeds to an overview of the various Islamic “discourses” and how gender (in)equality figured in each of these. In the “classical fiqh” one finds the genesis of gender inequality; here it is taken for granted that women are not equal to men. Islam’s encounter with western colonial powers led to a shift in discourse as the “status of women” became a “contested issue” in the confrontation between traditionalism and modernity. The emergence of nation-states in the Islamic world transformed the fiqh again as “legal rules on family and gender rights were selectively reformed, codified and gradually grafted onto a unified legal system.”

The struggle for reform shifted from the larger religious community to the nation-state even as leaders of the new political order themselves struggled with the issue of religion and politics. Certain countries abandoned the fiqh as a sole basis of the law, moving it into the personal sphere and replacing it in the public sphere by western law. (Turkey is a prime example.) Others have preserved the fiqh and invoked western legal codes only insofar as they supplement and do not challenge the fiqh (the Gulf countries). Mir-Hosseini calls this a shift to neo-traditionalism, because this discourse effectively erases women’s right to actively participate in religious and political life. Even the “classical fiqh” had once allowed this. Neo-traditionalists now argue that gender has no place in Islam and that women must be totally subordinated to men. Mir-Hosseini traces the origins of the widespread belief that only men have the right to divorce to this neo-traditionalist school.

In the late twentieth century, however, a reformist discourse emerged. It “contends that the human understanding of Islam is flexible, that Islam’s tenets can be interpreted to encourage both pluralism and democracy, and that Islam allows change in the face of time, space and experience.” A vital articulator of this reformist discourse is a small but growing band of Islamic feminists “that takes Islam as the source of its legitimacy” but “challenge[s] the hegemony of orthodox interpretations and questions the legitimacy of the views of those who until now have spoken in the name of Islam.” The ability to push a revisionist view of Islam was ironically made possible by “appealing to the believer’s logic and reasoning, relying on arguments and sources outside religion, and imposing their vision of Islamic law through the machinery of the modern state.”

And perhaps herein lies a weakness of this still incipient reformist stream within Islam. For in many Islamic countries, the modernization of the state has entailed the further restriction of individual and group rights and the limitation of certain basic freedoms in the name of development. The successes of the countries in these studies have much to do with leaders (majority male) who modernize their societies through industrialization, regard governance as a top-down affair, and believe in the state having firm control over social forces. Even Turkey’s vibrant democracy is anchored on the unquestioned presence of the military.

Strategies for reform, therefore, are not only opposed by conservatives and neo-traditionalists. Reformers may also have to deal with state leaders’ suspicion of change emanating from below. It appears that the most successful reformers are those who can make accommodations with state leaders and push for gender reforms without transforming these into a call for broader political change. The case of Malaysia may be most illustrative here.

If reform efforts at the level of theory already face some difficulty, all the more so when it comes to the issue of reproductive rights and women’s control of their sexuality.

Sexuality

Gender, Muslim Laws and Reproductive Rights is a slim volume of workshop papers that covers issues of reproductive rights and female sexuality in Indonesia and the Philippines. There is unanimous agreement that women in these two countries have a long way to go before they attain a similar level of control over their bodies as that enjoyed by their western counterparts. Not only is there considerable opposition from male-dominated Islamic schools and institutions, but the nationalization of Islamic discourse, as Mir-Hosseini pointed out, has also become an unwitting barrier for Islamic women to organize a region-wide movement.

What is interesting in this group of papers, however, is that they confirm theoretical arguments made by feminists in the first book: that there is basis in Islamic thought for women to transform khilafah from a mere citation into a worldview. Early Islam, as Michael Tan notes, accorded women property rights and a say in marriage and divorce. Filipina Muslim Bagian Aleyasa Abdulkarim embodies the reformer that Wadud and Mir-Hosseini talk about – an Islamic feminist who adeptly combines the global discussion of women’s rights with various hadith that show how Islam values khilafah.

The discussion of sex is particularly overt in this volume. Abdulkarim and Indonesian activist Lily Zakiyah Munir quote the same hadith to show the value placed by the Prophet Mohammad and his early interpreters on a woman’s sexuality. Women, according to one hadith cited by Abdulkarim, not only have the right to enjoy sex, but can also refuse sex (p. 25). She cites the revered Islamic teacher Ibn Majah’s invocation that men must “pay complete attention to her needs [and] in the event that the man (husband) has fulfilled his desires (reached orgasm) before his wife, he should not leave her in haste but stay until she reaches her orgasm.” (Munir cites the same statement although her translation goes like this: “If one of you has an intercourse with his wife then he should pay attention to her needs seriously, so that whenever he comes to orgasm before she does, he should not withdraw… until she comes to orgasm.”)

But these daring statements are tempered by qualifications. After quoting Ibn Majah, Munir immediately cites the teaching of Sufi scholar Al-Ghazali, which describes marriage as “a form of enslavement.” She does not confront these reactionary ideas head-on but merely puts them alongside other hadith supportive of female sexuality. This even-handedness suggests that the forces she and others confront are still powerful. But by putting the two views alongside each other, she gives readers a glimpse of teachings and interpretations that dominant Islamic discourse tries to suppress and marginalize. A classic weapon-of-the-weak posture.

Others are not as bold. Carmen Abubakar argues that any discussion of “reproductive health or reproduction in general cannot take place outside the bonds of marriage.” Abortion is recognized, but only within the rubric of the “Islamic Rule of Necessity.” Abubakar cites the “fatwa of Ibn Taymiya,” banning only those contraceptives deemed harmful to a woman’s health, but reveals her conservatism when she qualifies that she and others “are finding out that many of these contraceptive methods are indeed harmful over a long period of use.” Well, so too are pain medicines or cancer treatment.

There is very little that the essays can be conclusive about. What is notable about this volume are the many times its authors hedge or steer clear of definitive arguments. Despite the admirable and daring arguments presented in both these collections in favor of expanding women’s rights in Islam, conservative forces have the upper hand in the politics of most Muslim societies today. If reformists and Islamic feminists do have a political presence, they are one of many voices or a minority bloc in a political arena dominated by conservatives.

Patricio N. Abinales is associate professor at the Center for Southeast Asian Studies, Kyoto University.

from :Kyoto Review

A Friendship, Some Mediated Imaginations, and Religiosity in Java/Elsewhere

2007-06-16T02:45:00.001-07:00

Steve Ferzacca

Jumpa Lagi

I’ve been coming to Indonesia for over twenty years, and for twelve of those years I’ve been involved in research as a cultural anthropologist on the island of Java, in the city of Yogyakarta (Yogya). In summer 2002 I was back for another visit, and an old friend that I’ve known both professionally and personally stopped by the house on the southside of Yogya where my family and I were staying. Mas Yarto, an office worker who manages the payroll for a research project associated with a local university, was a data cruncher for a similar project back when I met him twelve years earlier. I was a graduate student then and had come with my partner, also a graduate student, to conduct research in this mostly Javanese city for our PhD dissertations in cultural anthropology.

Upon his arrival, we greeted each other enthusiastically with handshakes and a sniff of each other’s cheeks. After slipping off his shoes he entered the small front room of our portion of the house that led into a larger room for guests, blessed with a ceiling fan and elaborately decorated with Javanese antiques, textiles, and Indonesian modern art. In a corner of this marble-floored room hung an exquisite painting of an equally exquisite man, at least in the eyes of many Indonesians. In short sleeves and familiar black hat was a pastel portrait of Indonesia’s first president, Sukarno. As the fan gyrated into a pleasant hum, among these relics of various moments of modernity, we lit up our cigarettes together, the sweet smoke bonding our friendship and comradery as men.

It didn’t take long for our conversation to turn to the events of September 11. From behind a plume of clove-ripened smoke Mas Yarto’s eyes seemed to pierce through this veil as he posed both a theory and question about those tragic events. Looking me in the eye he asked and proposed, “isn’t it true that thousands of Yahudi [Jews] who worked in the World Trade Center knew in advance to take the day off from work,” thus escaping death, mayhem, and injury. Knowing this, one could only conclude, as his rhetorical question proceeded, that “Jews were flying the planes.”

Just then the call for evening prayer began to echo through the city. Mas Yarto, in what seemed to me a strategic gesture designed to add an exclamation point to his position on the attacks, politely asked to excuse himself to wash his hands, feet, and face, and returned to pray in a corner of the room while I continued to smoke in silence. Like Marc Perlman in his 1997 return visit to Solo, the other court town to the east of Yogya, I was struck by this “increase in personal religiosity” (Perlman 1999, 11). In all of our years, the only time Mas Yarto had prayed in my presence was at the office with the other staff in the small room designated for daily prayers. I’ve been an overnight guest at his house on several occasions, and we spent many an afternoon after our office work tooling around town on his motorcycle, catching a movie now and then, and visiting sites, warung (food and drink stalls), and other places in and around Yogya he thought I should see.

Our talk in those days was mostly politics and culture, Javanese culture, and of course, my interest at the time in pengobatan tradisional (traditional medicine). Even though he lives in a small town to the south of Yogya where former rulers and their family members of the court towns of Solo and Yogya are buried – grave sites considered supernaturally potent (angker) and holy (keramat) – we rarely spoke of the varieties of Javanese religions, except perhaps the role of Javanese mysticism (kebathinan) in medicine. Islam, and certainly Christianity, in my recollection, had never been a source of discussion.

Back in those early days of our relationship, Mas Yarto struck me as a man of modernity. A Sukarnoist, suspicious of the Suharto New Order, engaged in science even as a minion of the office hired to bersih data (clean data), now befriending somebody from a place, at that time, representing everything thoroughly modern – from technology to free sex. One afternoon we and several others from the office went to see a movie, Oliver Stone’s JFK. As its star, Kevin Costner, began to outline the conspiracies he proposed had coalesced in the assassination of John F. Kennedy in a coup d’ tat, I could see that Mas Yarto was tearing up. After the movie ended, he and the others agreed that JFK and Sukarno shared many qualities and that what had happened to Kennedy – at least in the movie – had also happened to Sukarno. A common interest in conspiracy theories aside, it was the critique of the modern nation-state and its governmental intents that gave us common ground – a heady sense of modernity indeed.

Here we were in 2002 discussing conspiracy theories again. His punctuated argument in that room as the evening call for prayer sounded in the air drew upon a tradition of sensing conspirators and provocateurs behind every turn of history, every thrust towards change and capricious event. Since the political and economic crises that began in 1997 – continuing with the fall of Suharto, violent uprisings in different parts of the archipelago, student demonstrations and the reform movement (Reformasi), bank scandals, the killings of practitioners of black magic, the rapes of Chinese and Chinese-Indonesian women, cannibalism and neo-headhunting in some so-called outer islands, and of course, the petty and not-so petty politics of the Parliament – newspapers and magazines have confirmed and fueled local knowledge and rumor that someone or some ones were behind it all.

Because of our long-standing friendship and my own feelings about his entry into modernity, it was with some amount of resolve that I explained to Mas Yarto that such a proposition was preposterous. The evidence was clear, I said without hesitation (or thinking), that members of Osama bin Laden’s al-Qaeda organization were behind the plots and had perpetrated the attacks.

As the summer passed, I became increasingly aware that an emerging global pattern of affect had entered my relationship with Mas Yarto. Since my arrival he had been keenly interested in directing my scholarly attention towards the particular history and character of Javanese Islam. He took it upon himself to arrange several interviews with people whom he and others from his small town considered to be well read, scholars of Islam. One meeting with an autodidact of Islamic knowledge and practice, a man of some local renown, was to take place in Mas Yarto’s town half an hour south of the city. He had invited friends from Yogya to attend our “interview,” and since the conversation was scheduled in the evening, it seemed logical to have his friends pick me up and drive me there. Waiting for them to arrive, I suddenly envisioned the newspaper photographs of executed reporter Daniel Pearl, tied up, sitting on the floor, head bowed, hair grabbed by some off-stage captor, gun and knife to his head. Embarrassingly, I became more frightened as I waited, so much so that I walked back to the house to tell my partner that she might be concerned if I didn’t return. Mas Yarto – and our existence in a mediated politics of identity turned extremely violent, a “plurality of realisms” I brought together into a work of my own imagination – had frightened me to the point of astonishment.[1]

In all my years in Indonesia I had never felt frightened in this way. Moreover, these contemplations involved someone I called a friend and relative. We’ve worked together, eaten together, traveled together, played together, I supported his children through school, he has helped my partner with her work, we had as substantial a relationship as any I have had in Indonesia, perhaps beyond. This fear, this structure of feeling linked to global events that I experienced as I climbed into the mini-van, violated the long-standing, but always in-the-making emotional charge of our human relationship. I now wonder if I should have talked to Mas Yarto before I returned home about my fears that evening. Two years later (2004) we met again, once and briefly. We found we had little to say to one another, although he did bring me a gift that seems iconic of these times in Indonesia, in which, as Mote and Rutherford observe of Papua, “mass-mediated representations of violence [and other affairs] are a determining factor in the unfolding of events” (Mote and Rutherford 2001, 117). He brought me a book. And while it was not a representation of violence, it seemed to me to capture the multiple translations, (re)inscriptions, and virtual realities that charge imaginations in these times – it was an Indonesian translation of an English-speaking western scholar’s interpretations of Qur’anic suras.

Mediations

Since the political and economic crisis, the second Palestinian Intifada, the events of 9/11, and the wars in Afghanistan and Iraq, the hope of the international community for Indonesia, home to the world’s largest Muslim population, is that its people and its politics remain “moderate.” It is generally understood among observers of Indonesia, professional and otherwise, that a persistent history of tolerance and flexibility in social identity and social life among peoples in the region is the source of a moderate politics of identity. In fact, this tolerance and fluidity in orientation and experience has been cited as a cultural trait in island Southeast Asia, and in the Indonesian archipelago in particular. O.W. Wolters, in explicating a “cultural matrix” characteristic of the region, cites from a nineteenth-century Javanese text what he sees as a shared aspect of personhood across social and cultural boundaries, in which a civilized person (wong praja) is described as a flexible one (lemesena) (1999, 161).[2] Ben Anderson remarked that, especially for the Javanese, “almost anything is tolerated, provided it can be adapted to or explained in terms of the Javanese way of life” (1996, 16). More recently, however, in a retrospective on times passed, Anderson noted a lessening of “the tolerance of the Javanese” and the appearance of a figurative, and in many cases literal, social architecture of “high forbidding walls between different social groups” (2002, 3).

Events in Indonesia before and since 9/11 suggest that tolerance and the ability of Javanese to “change places” in this culturally plural nation are being challenged (Beatty 2002). In particular, the long-standing “flexible citizenship,” so to speak, between religious affiliation and personhood appears to be undergoing change towards an all too familiar rigidity.[3] As Anderson lamented some forty years ago and again recently, global forces and the rise of nationalism among the Javanese have “clearly threatened the older moral pluralism,” “undermining the older, structurally conditioned tolerance” (1996, 42). Based on observations and conversations up close and from afar, I want to explore here the manner in which identity in Indonesia, especially religious identity, has been newly charged. While local conflicts in Maluku, Kalimantan, and Sulawesi – variously described as ethnic, religious, political, economic, or some combination thereof – are perhaps cogent enough examples of the appearance of less tolerant, more rigid identity formations, in the following I will consider some conversations I had with my long-standing friend and others while conducting fieldwork in and around Yogyakarta in 2002.

Notably, and for the first time in this familiar local context, I encountered the “Jew,” or Yahudi. As I began to pay more attention, it became clear that this global sign had salience not only as a particular interpretive sign for understanding 9/11 and other events in and outside Indonesia. It was receiving other semiotic loads as well that reflect shifting social forms and practices and polarities of identity formation in Indonesia. Given the small number of Jewish communities in Indonesia, it is likely that little experience-informed knowledge of the Yahudi exists among Indonesians.[4] Further, the few Jews remaining in the small community in Surarbaya have neither been targeted nor experienced recent discrimination. Muslim neighbors greet them with the “cry of Shalom,” kosher is maintained with meat from a Muslim halal butcher, and for over a decade a Muslim family has served as caretakers of the small synagogue there (see Graham 2004). This suggests that the global sign of the Jew in Indonesia resonates with other events and anxieties in and among Indonesians.

After the parliamentary election of Indonesia’s fourth president, Abdurrahman Wahid, for example, Israeli and Palestinian violence began to be felt as a “mediated elsewhere” in the country.[5] It was at this time that the Yahudi as a political sign gained its present currency. Its visibility in the media is witnessed as reality, which gains deeper meaning within a visible context of other signs that profess equal insights into the really real of human events and affairs. Feldman (2000) describes this politicized visibility as a “scopic regime” in which a “plurality” of so-called “realisms” come to shape human understanding of events (see Feldman 2000). Siegel notes that the “word ‘Jew’ in Indonesia indicates a menace,” but a menace without form (2001, 302). In some instances, as Siegel suggests, Jewish religious identity “merges into that of the Christian” (ibid., 272). Hasan sees the same merging in the circulating “Zionist-cum-Christian conspiracy theory” (2002, 163). Clearly, this is what the Bali bombers had in mind. During his trial, Amrozi, one of the convicted bombers, explained that the bombings were spurred by moral decline throughout the world started by Jews, the United States, and US allies. The secular good life of this axis of evil was, in his mind, competing with religion to bring about moral decay. He was consequently “proud of the attacks that killed white people, but sad about the Indonesian losses.”

Siegel maintains that the anti-Semitism associated with the “mediatic Jew” enters into the everyday politics of religious diversity in Indonesia through Indonesian media accounts of violence between Muslim and “Chinese” communities. Siegel argues that the “Chinese give the Jewish threat . . . a body and thus a place in Indonesia” (2001, 303). Reid cites evidence that the linking of Jews and Chinese has a history in Southeast Asia, as Chinese came to be known as “Jews-in-the-East” (1997, 55). And, as Chirot notes, “the analogy with Jews is not welcomed among Chinese intellectuals in Southeast Asia” and only serves to “antagonize Muslims” (1997, 5). In effect, the global sign of the Jew, an already heavily loaded racialized sign, mediates the social identity of the Chinese that is already a “racial category” in Indonesian society, so that social theories about Chinese Indonesians as Chinese, Indonesian, or any other marked identity operate as fulfilling prophecies. This is how racism works, and why it seems useful to so many for understanding social life and difference.

The global sign of the “Jew” mediated through the Indonesian media also fuels fear among Indonesian Muslims that Islam is undergoing a process of adulteration, a fear often expressed in a discourse of “blood.” In October 2000, protests in Malaysia directed at the presence of the Israeli cricket team on Malaysian soil spurred demonstrations in Jakarta. Indonesian protestors drenched Israeli flags in blood and demanded, “We want Jewish blood.” On another occasion, Alwi Shihab, Wahid’s minister of foreign affairs, argued before the Parliament that Indonesia needed the support of the “Jewish lobby” in its effort to block the establishment of an international East Timor tribunal to hear cases of alleged human rights violations and war crimes by Indonesian military personnel in the final days the occupation. Why the “Jewish lobby”? Because the American congress is controlled by Jews and US Secretary of State Madeleine Albright had Jewish blood in her veins.

Reid laments that today in Indonesia and Malaysia, “the crudest racial formulations of the demonology of modernization are directed against a ‘Jewish’ minority known only as a theoretical construct” (1997, 63). In elaborating on the “demonology of modernization,” Reid notes the Indonesian fascination with and loathing of modernisasi, westernisasi, and globalisasi – historical processes and conditions Indonesians often conflate as one. Suharto’s New Order had encouraged such conflation, packaging pembangunan (development) together with indigenous democracy, hierarchical social relations, and the flow of goods and services as the basis of a just and prosperous society, as well as the foundation of the Indonesian state. Reformasi unveiled Suharto’s dream of pembangunan to be based on collusion, corruption, and nepotism (Kolusi, Korupsi, Nepotisme, KKN).[6] Further, it appeared in direct contradiction with the principles of a gotong-royong state of mutual aid, family values, and reciprocity and exchange that Indonesians see as essential to social life.[7]

But dreams can be hard to wake up from, and herein lies an irony. Another convicted Bali bomber, Ali Imron, stated that “the capabilities of our group as the sons of the Indonesian nation are worth being proud of.” This statement alludes to the 1928 Youth Oath heralding a nationalist “awakening” in Indonesia.[8] This awakening of national identity had as its aspiration entry into modernity of the nation-state kind. Under Sukarno’s Old Order and Guided Democracy, being a nation-state was semiotic of progress towards becoming a mature, advanced (maju) society. For Suharto’s New Order regime, however, simply being a nation-state was not enough; rather, the sign of modernity was the technocratically engineered, technologically developed condition of pembangunan. Thirty years of the pembangunan mentalité has had deep psychological, social, and cultural impacts on Indonesians, especially on the ways they see themselves, both among themselves and vis-a-vis the world of others.[9] Therefore, it was not surprising that Imron’s main source of pride was the technological capability of building and denoting bombs and the ability of poor village youth from a developing country to strike a blow against developed, modern powers like the US and Australia (see Fealy 2003). During a news conference in which he showed off the technology used in the 12 October 2002 bombing in Kuta Beach, Imron claimed he had learned to make bombs in Afghanistan and stated, “Our capabilities as Indonesians are something to be proud of, but they were used for a wrong purpose.” Linking the Indonesian nation with technological innovation has been a central urge of the ideology of developmentalism, pembangunan, of Suharto’s New Order regime.

The developmentalism that courses through the statements of the Bali bombers represents the economic and cultural consequences of New Order politics. During Suharto’s regime, globalization as Trouillot defines it – “changes in the composition and spatialization of capital” (2001, 128) – clearly took place in Indonesia, and was felt, I think it fair to say, at nearly all levels of society in some way or another. And while Trouillot notes that globalization is a fragmented process, he does identify the “planetary integration of the market for consumer goods,” linking peoples and places (like Indonesia) into a “web of consumption in which national ideals are becoming more similar even as the means to achieve them elude a growing majority” (ibid). The market and its mediatics – the media performances of the market in human life – embody and display the desire for the “good life” that the Bali bombers at once loathed and favored (ibid).[10] The conventional media of television, radio, and print remain dominantly influenced by others, namely the United States, Japan, Hong Kong, and India.[11] The mediations of a social imaginary of the good life achieved through the consumption of consumer goods is obvious both to newly arrived visitors and those of us who have spent some time in Indonesia.[12] Before the current anti-Americanism, this was the singular dominant image projected onto me by many Indonesians I met and came to know.

In some ways Mas Yarto’s position that early evening reflects similar sentiments. I sat before him, both object and subject within an emerging “scopic regime” in which multiple realities historically anchored in recent times invaded our lived histories as friends and co-workers. Gazing upon the contours of each other, we both, I believe, contemplated many “elsewheres” – the “mediated and mediatized elsewheres” Spyer characterizes as a “swirl of image, vocabularies, sound-bites, slogans, and vectors” that powerfully mediate the lived histories of local lives (2000, 28).[13] I can only suppose this was so for Mas Yarto, probably should have asked, but the effect on me, as indicated by my fear on one particular evening, was disturbing.

Religiosity

In similar ways, these “contemporary mediascapes” are also affecting the imagining of community, or more precisely, of communities in Indonesia today.[14] It is the convergence of so many events, images, activities, and associations that make these momentous times in Indonesia. Insiders and outsiders alike note the up and down side of Reformasi in the ability and freedoms Indonesians have to express their identities and thoughts in a multitude of ways. In terms of identity, Gerry van Klinken remarks that there is now “an exclusive discourse of ethnicity such as not been heard so publicly in Indonesia before” (2002, 68). Perhaps, but the desire for Jewish blood and the interpretation of blood as inherently fixed to religious affiliation is a disturbing sign of the times. While Siegel admits that the category “Chinese” is for some Indonesians a “racial category” (in the sense of “inheritance of physical traits”), he says that Indonesians harbor a different sense of racism (1998, 83, 85). He sees a distinction between “European racists” and “Indonesian racists” in terms of embodiment and assimilation – the other for European racists are “intolerable” for the elements they embody that pose threats, whereas the Chinese pose a threat if they don’t try to become “better Indonesians” (ibid, 85).

Recently, however, the notion of intolerable elements embodied by individuals has become noticeably entrenched in ethnic-religious conflict. In a conference version of this essay, my partner, Janice Newberry, an anthropologist conducting fieldwork in the same urban kampung (village), recounted a brief conversation with a son of the family we have lived with on and off over the years. As she remembered,

I was talking to the oldest son of the family, a quiet man, who had worked long and hard in a pharmacy alongside his father to help support the family. He had finally married and had moved in with his wife’s family, although he continued to spend significant time in his mother’s home. Not given to talking much, his words always seemed to carry more weight as a consequence. He talked about how things had changed. “You know, Mbak, now it’s as if a child won’t even take money from my hand. Now I’m kafir.” The use of the word kafir was very striking. I had never heard it used before. And now a Catholic was contemplating how even young children would no longer want to touch him. It was a very troubling moment (Newberry and Ferzacca 2003).

The increased religiosity that Perlman and I experienced among our friends has come to mean – for some Indonesians – religious purity of bodies, rather than differences in custom, ritual, views of God, modes of prayer. This is evident in direct and indirect ways. Many of these newly emerging “definitive religious worldviews” in Indonesia are fueled by mediations, particularly the Internet (see Bräuchler 2003). And while bodies on all sides of the recent sectarian conflicts can be purified through assimilation (conversion), they are nonetheless targeted for the blood that runs in their veins. Ja’far Umar Thalib, the now retired leader of Laskar Jihad, an Islamic militia, remarked during a high point in Muslim-Christian conflict that “Laskar Jihad sees Muslim blood as very expensive. In fact the blood of Muslims is more noble because it comes from the Ka’bah and it is more noble because it’s from Arafah.”[15] On trial for his role in terrorist activities in Indonesia, Abu Bakar Ba’asyir was quoted by the Prosecutor as saying in April 2001, “If their blood is halal (allowable under Islam), so are their belongings,” meaning the belongings of non-Muslims are available for the taking by Muslims.[16]

Further, the linking of blood to religious affiliation is not a recent development. These linkages took on a thoroughly modern appearance in the years just before the Japanese occupation. With war looming, Sukarno, under house arrest by the Dutch in Bengkulu, wrote several articles responding to decisions made by religious scholars (ulama) belonging to the umbrella organization later to become the Muslim political party Masyumi (then the Majlis Islam A’laa Indonesia, MIAI).[17] In an editorial that appeared on 18 July 1941 in the daily Pemandangan, Insinyur (engineer) Sukarno, man of modernity, attempted to convince Muslim scholars of the benefits of blood transfusion (1959a and 1959b). Some ulama had expressed concern about the use of Muslim blood to save the lives of the enemy (musuh) and the use of non-Muslim blood to save Muslim lives. Sukarno argued for the donation of blood (mendermakan darah) and blood transfusions (bloedtransfusie) using “data” gathered from the Qur’an and events in Islamic history.

Doesn’t the Qur’an argue that the polytheist (orang Musyrikin) is filthy (najis)? It’s true that it says that, but filthy with what? A filthy body? Filthy blood? No! What is said in the Qur’an about najis it that their understanding is filthy, a defiling conviction (itikad), a defiled thinking, a defiled religion. Polytheists can suddenly be seen as not defiling if they accept the belief in one God – from a belief in more than one god (syirik) to Islam. And their blood that flows through their body is not defiling, unholy (tidak suci), as long as that blood does not become dirty (kotoran). Don’t forget that a Muslim can become filthy from the blood of a Muslim that is “dirty.” Dirty blood (darah kotor) like that is filthy (Sukarno 1959a, 505).[18]

Sukarno makes a clear distinction between the notion of blood carrying identity because of links to religious affiliation (najis) and the biology of blood that can become pathologically dirty through biological processes (kotoran). In making this distinction, Sukarno not only hoped to draw upon the “tolerance” of the Javanese, but to show the fluidity between body and religious identity. By becoming Muslim, one’s blood becomes holy (yang tentu suci); therefore, biology is subject to history and not a fixed natural entity primordially tied to an equally fixed identity. This is the promise of modernity, after all, and the promise of Revolusi – that identity is made, engineered. Evoking the classic categories of Indonesian modernity, he called upon Muslims to enact an Islam that was not unrefined (mentah), primitive (primitief), uncivilized (biadad), and cruel (kejam), but a modern, wartime Islam (Oorlogsethiek Islam) filled with refined ideas (berisi budi yang halus) (ibid., 501), because the techniques and advancements of science made the blood received from donation not “dirty blood,” but “plasma that is clean and pure (murni)” (ibid., 506).

Errington points out that “in island Southeast Asia, . . . speculations about the reasons for differences between people (men and women, high and low, Javanese and non-Javanese) seldom put anatomy or physiology at the center” (1990, 57). In general this is true, but there are many examples in which the embodiment of identity has operated as a code of difference in and outside of Java. The shifting polarity in identity formations between fixity and tolerance is a constant in the history of social relations in this archipelago. Just as “being Indonesian was (and is) not something ‘natural’ or biological, but was (and is) something created by modern history” (Anderson 2002, 19), modern history has also had something to do with the association of Malay with Islam, Balinese with Hindu, Chinese with atheism, and so forth.[19]

In my conversations with the religious expert in Mas Yarto’s town, the linkage of body, ethnicity, and religion were featured as a true explanation of the Israeli-Palestinian problem. This autodidact produced such a narrative nightly, I was told, in a geography of syncretist Javanism – that peculiarly Javanese amalgam of Hindu-Buddhist-Islam mysticism that has fascinated insiders and outsiders alike for so long. In this kejawen (Javanism) stronghold south of Yogyakarta, our teacher identified the problem as a Jewish and Arab one, that is, a problem of ethnic identity that is biologically fixed, or at least genealogically continuous. He argued that the conflicts evidenced by recent events are not just religious conflicts writ large, and certainly not conflicts based in any Islamic ideology or theology. He cited events like 9/11 as having a genealogical history beginning with the original family feud between the descendents of Abraham that has since become entangled in the evolution of “modern” political organizations. He outlined a sequence that placed recent violence in a series of stages of social evolution, beginning with conflicts among families, followed by tribes, chiefdoms, and finally nation-states.

According to his proposal, it is within the context of the nation-state that the purity of the religious message has been captured and polluted by a modern politics of identity for the purpose of satisfying secular desires, neglecting the purity of the religious message that should stand outside the affairs of humans. Ja’far Umar Thalib agrees, and this was a common refrain I heard that summer and since.[20] It all begin as a blood feud, from his perspective, and continues as a problem of race (blood). In an eerily similar argument, when Bali bomber Amrozi received the death penalty while his younger brother Imron received a life sentence, Amrozi expressed contempt for Imron’s feelings of remorse: “Of course, we are different. I cannot recognize him. He dresses more and more like a lawyer. The eggs that we came from are different, aren't they?”

Further evidence of the fixing of religious and ethnic identity can be found in some draft legislation which Indonesian activists fear will bring the state into the most intimate affairs of daily life under the banner of establishing and maintaining religious harmony. The desire on the part of some Muslim groups for the inclusion of the syariat (Shariah) into national legal code – or even the replacement of the code with syariat – is disturbing to Indonesians who wish to see the separation of religion and state maintained, Pancasila without the Jakarta Charter, as it is referred to. For these Indonesians, the problem with the Holy Law of syariat is not its affiliation to religion, but its claim to provide the one and only guide for behavior. In Arabic, syariat means the clear, well-trodden path to water. The spirit of the proposed change is an act of purification.

If passed, two legislative drafts – a revision to the Criminal Code (revisi Kitab Undang-Undang Hukum Pidana, KUHP) and a Legislative Plan for a Harmonious Religious Community (Rancangan Undang Udang tentang Kerukunan Umat Beragama) – would bring the state and the law into all sorts of interactions among Indonesians. Combined, the revision and the draft would affect marriage and blood transfusions between people of different faiths, preparations and methods of burial, methods of performing sex, sexual orientation, cohabitation, witchcraft, and other aspects of interpersonal relationships, with some special attention to those taking place between Muslims and non-Muslims.[21] Essentially, the legislation is about exchanges that take place between and among bodies with the intent of limiting bodily exchanges in order to palliate religious arguments (argumentasasi agama) and forestall, if not reverse, national disintegration (disintegrasi Bangsa).

This is not the first time efforts have been made to implement syariat as the basis of Javanese legal code. This was a fundamental reason for Dipanagara’s Holy War (perang sabil), the Java War of 1825-1830. Remarkably similar conditions and discourse existed then, at least on the surface. Peter Carey, in his translation and commentary on a version of the Babad Dipanagara, argues that it was the “religious factor” of the rebellion that distinguished it from previous struggles and conflicts among the peoples of Java. He identifies attitudes of Christian Europeans towards Muslim Javanese, their harassment of religious teachers, and legal reforms introduced by Raffles (continued later by Dutch officials), in addition to increased contact with the “heartland of the Islamic World in Arabia,” as framing the rebellion by Dipanagara as a Holy War against the European kafir (1981, 46). Carey cites Dipanagara: “The European authority in Java was a great misfortune for the Javanese people, because they have been taken away from the Holy Law of the Prophet and had been subjected to European laws” (ibid., 73 n. 241).

Some 200 years later, the same arguments are being made in the bureaucracy of the modern nation-state. The Minister of Justice and Human Rights, Prof. Dr. Yusril Ihza Mahendra, stated that changes to the Criminal Code were necessary because the Code had not been revised since its inception during the Dutch colonial period and did not reflect the values and laws of Islam.[22] In a recent statement to Kompas, Mahendra stated that the revisions resulted from a process of transformation of the legal norms (kaidah-kaidah) of Islamic law, customary law (hukum adat), imported Dutch law (hukum eks Belanda), and international law already in place in society. After this transformation takes place, a positive set of legal norms can become Indonesian national law.[23] At the time of writing the post-election Parliament was to take up discussion of the revisions beginning in October 2004 (currently underway) (ibid).

Scapes of Feeling

The post-Suharto era is both an exciting and troubling time in terms of public religion and popular identity. Chinese and peranakan Chinese are now free to express and partake in images, activities, and associations that celebrate their ethnic identity. At the same time, the 1999 implementation of syariat in Aceh has led to “sweepings” and “Islamic dress inspections” in which the “physical symbols of Islam became the focus of various campaigns” resulting in a physicality of punition (Suraiya 2004). The demise of pela gandong, the peaceful co-existence among Christians and Muslims in Maluku, is just one horrific example of the recent convergence of internal forces – regional autonomy, flows of people through the archipelago for economic and political reasons, national economic and political instability, and transition from a long period of disciplined rule – with equally broad global forces coursing through technologies of violence, communication, and transportion, to name a few mediums. The consequences can be – perhaps don’t have to be – the kind of “hyper-hermeneutics” Spyer observes in Ambon where once closely-tied people try to discern “just under the contours of your regular Ambonese face... its ‘Christian’ or ‘Muslim’ contours” (2000: 35-36). As Dwyer points out in a thoughtful and sensitive study of Balinese women’s recollections of the violence of 1965-66, at times when social relations become highly charged power relations, a symbol of affiliation can become “an indexical sign pointing to the instability of knowledge itself” (2004). Such symbols also destabilize “scopic regimes”of social structure and relations, making it difficult but at the same time imperative to know who’s who and what’s what.

The conflation of so many currents and changes in Indonesia today is having both intended and unintended consequences in terms of security and identity. The proposed revisions to the Criminal Code appear on the surface to be an example of tolerant syncreticism. But in the context of legislated regional autonomy (otonomi),[24] primordial imaginations fixing people and place (the masyarakat adat movement and legislation), local politicos asserting “native son” (putra daerah) status in struggles for control of local resources, the “freeing” of political space, the consequences of migrations and resettlement programs, witch hunts, ethnic cleansing (pembersihan etnik), and terrorism projected in religious terms, the proposed changes can be read more ominously. They at least potentially signal “coded ways of talking [and acting] about other differences” (Lutz and Collins 2002, 92), here on a national level emphasizing “a trope of the ultimate, irreducible difference” (Gates, 1985, 5).[25]

My point is to illustrate in a small way – within an ongoing friendship some twelve years in the making – the significance that “globally traveling discourses of terror, war, economic rationality, or even human rights” can have at the very heart of human interpersonal relationships.[26] A challenge for anthropologists is to gain awareness of the confluence of history and identity formation within the ethnographic enclaves of the everyday – this goes without saying. Finessing an anthropology at a distance in both time and space with abrupt immersions into local knowledge and place is, at least for me, shaky business. Ethnographic work is always in medias res. But given the contingencies of my fieldwork practices since the early nineties, my periods of immersion are brief and limited at best – summertime ethnographic immersions further truncated by the necessary fulfillment of social proprieties. Given the ethnographic thinness of only one thickly lived relationship, based on punctuated encounters at that, I can only speculate how mediated imaginations play out as indexical signs when relationships are densely lived, when animosities and offenses as well as friendships and pleasures are allowed to build up.[27]

Ethnography is further confounded when those we work with and learn from are experiencing this confluence at times of crisis or as a chronic condition of unstable affairs. Long-term fieldwork in a particular place, with attention to historically charged local knowledge, is crucial for providing relevant testimony, even when we are compelled to follow along through “multi-sited” scapes and “deterritorialized” activities in order to “examine the circulation” of ideas, media, things, people, and so forth (Appadurai 1991; Marcus 1998). Caution is necessary when considering the contemporary circumstances surrounding identity formation that is fueled from outside events and discourses, as well as what some describe as the chaotic and perhaps dangerously free new ground of Indonesia’s national politics. Yet, it is no exaggeration to note that the raw materials for identity building in Indonesia have long included those emphasizing fixity, as well as those implying tolerance and fluidity. This polarity of identity has changed for Indonesia, due to forces within and without. The Jew as a global sign enters into the specifics of this place – Indonesia – as Yahudi, domesticated again to serve and satisfy the anxieties and desires of people engaged in particular conflicts wrapped in the desire for a globally familiar good life. The image and actuality of the globally constituted good life that infuses the public sphere provides the ever emerging technologies of communication (TV, handphones, and the Internet) and combat (guns and explosives) that for some Indonesians serve as mediums of expression for long-established ill-feelings between followers of different religions and ethnicities.

As religion, blood, and global desire circulate as political signs, we must not forget the scapes of emotions these signs are charged with and course through. The emerging salience of the Jew in Indonesia as a politically charged touchstone is one of those expected and unexpected turns in local sentiment and sensibility that says as much about global mass-mediated politics as it does about populist social relations in a country faced with an unstable present and uncertain future. For Indonesians like Mas Yarto, the desire to participate in a perceived and real global modernity embodied in the globalized sign of the good life often challenges the foundations of spiritual life in Indonesia. The persistence of these and other received categories among former colonized peoples require all of us to pay attention to our complicity in these serious issues at the root of current discord and violence. Until we do, stories like Mas Yarto’s and mine will only grow in proportion and scope.

Steve Ferzacca is associate professor of anthropology at University of Lethbridge in Alberta, Canada.

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Notes

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[1] I am referring here to Allen Feldman’s (2000, 49, 59) notion of “scopic regime,” which he defines as “an ensemble of practices and discourses that establish truth claims, typicality, and credibility of visual acts and objects and politically correct modes of seeing” in which a “plurality of realisms” come into play.

[2] The root lemes can mean non-rigid, flexible, but it also refers to a smooth and well-mannered, sociable comportment (luwes) and skillful (prigel) ability to work with and in a variety of situations and ways (bisa nyambut gawé warna-warna).

[3] Aihwa Ong’s (1999) notion of “flexible citizenship” refers to a fluid and opportunistic form of subjectivity that conforms to flexible capitalist accumulation, travel, and displacement. My use of flexible citizenship in this case highlights the fluid and opportunistic subject but extends this character feature beyond a cultural logic of capitalism alone.

[4] Historical sources that tell the story of the Jewish diaspora in Indonesia and Southeast Asia are few and far between. Much of what is offered here is pieced together from what I learned from Southeast Asianists who are Jewish and have looked into the Jewish community in Surabaya while traveling, studying, or working in Indonesia, as well as from stories and accounts taken from internet sources, listserves, and other electronic media. There have been communities of Jews in Indonesia, albeit extremely few. In the seventeenth century, Jews of Dutch, German, and Iraqi origin arrived in the Netherlands East Indies as merchants to take part in the trade in spices. By the 1920s, Jewish communities had established themselves in Surabaya and in the colonial capital of Batavia (now Jakarta). Before World War II, Jews fleeing the rise of Nazism joined these communities, which grew into settlements of several thousand. Japanese occupation brought an end to this growth and began the emigration of Jews, until all that remains is one small community of thirty Jews in the coastal city of Surabaya that has a synagogue but no rabbi or teacher. (There is also possibly a small community in Medan, a coastal city in Sumatra).

[5] For a discussion of the ways in which “mediated elsewheres” have affected sectarian violence in Ambon, see Spyer 2000.

[6] Actually, cracks in Suharto’s architecture of rule were beginning to appear long before Reformasi. In the early 1990s, I noted an exuberant concern in local and national discourses with the increasing prevalence of diseases of development brought about by Indonesians’ adoption of a western lifestyle (gaya hidup barat). I was unaware at the time that in the mediated, national arena this discourse was perhaps a precursor to religious concerns with secularization and westernization. I did note, however, that it was a concern of many Muslim doctors I came to know, and that their therapeutics for diseases of development included high doses of Islam. See Ferzacca 2001.

[7] Suzanne Brenner notes that the “Islamic revival” in Indonesia is partly due to what is perceived, especially by the middle class, as the “blatant opportunism of government functionaries and [to] resentment of the elite’s unabashed displays of wealth and power” (1996, 677).

[8] In appropriating the Sumpah Pemuda, however, Imron omits the “daughters” included in the original oath.

[9] See Heryanto’s fascinating study of pembangunan as metaphor, in which he outlines how it (along with several cohort semiotics) embodies “a new body of knowledge and epistemology, new values and world views, but more importantly a new awareness” (1995, 6).

[10] Robert Hefner also observes this irony in relation to religious rhetoric and experience, concluding, “Even as they profess their unique and unchanging truth, their actions confess they have tasted the forbidden fruit of a pervasive and porous pluralism” (1998, 100).

[11] Krishna Sen and David T. Hill write, “over half the television programs on Indonesia domestic channels are imported from the USA, Japan, Hong Kong, and India; half the music played on many radio stations is western music; books and magazines draw heavily on originals in other languages; and the traffic on the Internet defies any attempt to pin down a terrestrial location” (Sen and Hill 2000, 13).

[12] For an expansive consideration of economic developments and the growth of consumer markets during the New Order, see Hill and Mackie 1994. In particular, see Patrick Guiness’s essay in this volume, which examines consumerism among urban kampung (village) relations.

[13] In her article on the use of the jilbab (veil) among Javanese women, Suzanne Brenner illustrates the role a mediated global Islam has played in social practices and techniques of the self, reaching far into the intimacies of family life in Java (1996, 683).

[14] Kitely, commenting on the study of media, states, “in contemporary mediascapes we need to find a place in the thick of things and follow flows, people and media vectors” (Kitely 2002, 209).

[15] “Laskar Jihad ini memandang darahnya kaum muslimim demikian mahal. Bahkan darahnya kaum muslimim lebih mulia dari Ka’bah dan lebih mulia dari Arafah” (Ja’far Umar Thalib 2000, 19).

[16] “Ba’asyir ‘told followers to kill Westerners.’” The Jakarta Post.com, October 30, 2004. http://www.thejakartapost.com/detailheadlines.asp?fileid=20041029.@01&irec=0. Accessed October 30, 2004.

[17] MIAI was founded in 1937 by K. H. M. Hasyim Asy’ari, who had founded Nadhatul Ulama (NU) in 1926. MIAI operated as a federation of Muslim organizations that sought cooperation between NU, Persatuan Islam, Muhammadiyah, and other Islamic factions (see Hefner and Horvatich 1997).

[18] I have replaced the older Indonesian spellings with contemporary spellings.

[19] I detect in Anderson’s statement a sense of regret that this crucial understanding of the relationship between history and identity in Indonesia is endangered among some Indonesians.

[20] “Maka kalau darah kaum muslimim tertumpah hanya untuk politik tertentu, atau demi tokoh tertentu, itu suatu kezaliman yang luar biasa” (So if Muslim blood is caused to be overflowed only for some political reason, or by some political person, this is an extraordinary cruelty) (Ja’far Umar Thalib 2000, 19). These comments all find common ground around the theme of separation. Imron and the autodidact are concerned with disunity after sharing a womb, and Laskar Jihad’s stated reason for sending its militia to Ambon was not to war against Christians, but to stop a Christian separatist movement.

[21] See Ahmad Baso, “Argumen Fikih Mengoreksi RUU KUB,” Kompas, 23 October 2003: 1; and “Revisi KUHP Berpotensi Lecut Kontoversi Horisontal,” Kompas, 1 October 2003.

[22] See “Yusril Bantah Revisi KUHP Mengadopsi Syariat Islam,” Sinar Harapan, 1 October 2003; and A’an Suryana, “Code Revision Says ‘No’ to Casual Sex, Sorcery,” The Jakarta Post, 12 November 2003.

[23] “Pembahasan KUHP Terhambat Pergantian DPR,” Kompas, 21 August 2004.

[24] See Undang-Undang (UU) Nomor 22 Tahun 1999 tentang Otonomi Daerah.

[25] The current proliferation of horrific descriptions in word and image of Indonesian violence, discrimination, and destruction, from scholarly sources to the cultural productions of everyday folk in and outside Indonesia are signs in and of themselves of the ongoing tragedy of humanity in which the desire to enact and witness mayhem continues its theatrical engagement on stages all around the world.

[26] Nandini Sundar asserts that anthropologists should in these times be more urgent in “exploring cultures refracted in the common light of globally traveling discourses” (2004, 146).

[27] What “ersatz aura” these mediations project onto the interpersonal relations in unstable times is far from clear. Anderson, in a lecture on “Long-Distance Nationalism,” comments upon the effect new technologies of transportation and communication are having on political participation at a distance “with its ersatz aura of drama, sacrifice, violence, speed, secrecy, heroism and conspiracy” which he believes leads to a politics “without responsibility or accountability” (1992, 11). One could say that similar conditions exist within the national boundaries of Indonesia today.

from :Kyoto Review

Elections Are Like Water

2007-06-16T02:41:00.002-07:00

Manuel Quezon III

Elections are like water, missed only in its absence.

For the overwhelming majority of Filipinos who have no recollection of life before martial law, elections are like water – a requisite for political life, as essential for the body politic as water is for the human body. For the older generation, too, elections are like water – but as they view the arid desert that is our current political culture, they yearn for a time when the political landscape was lush, abloom with idealism, fragrant with the virtue of the leaders and the led, far, far removed from the horrifying sight of a nation tearing itself apart at the polls and beyond.

Elections are like water – a means of cleansing the body politic, a roaring torrent of votes channeled, like a river, to clean out the Augean stables every administration seems to become.

In 1935, when the country had its first national election, fully a third of the voters didn't bother to cast their ballots. We had a million and a half registered voters then, all male, all literate. We were looking forward to self-rule preparatory to full independence; it would seem logical that the voters would be interested in participating in the creation of the foundations of their future nation state. But a significant number were not, and the reason they were not should come as no surprise. The choices at the time were limited: three candidates for president, and of that limited number, one was the overwhelming favorite. The result was a foregone conclusion, and at a time when all seemed to be going well, a third of the electorate found no reason even to bother. Manuel L. Quezon won by a landslide, with 68 percent of the vote, against Emilio Aguinaldo and Gregorio Aglipay, neither of whom managed to get even 18 percent. In 1941, with women added to the roster of qualified voters, the turnout remained about the same, that is, a third continued to find it pointless to vote, even though the incumbent, Quezon, this time got 81 percent of the vote.

In the democracies we Filipinos like to envy, a turnout of 66 percent of registered voters would be phenomenal; the United States regularly involves a far smaller percentage of its population in elections that not only determine the direction of their country, but profoundly affect the rest of the world as well. The turnout of voters in the supposedly halcyon days of Philippine democracy before the war points to a defining characteristic of our democracy: that a sizeable majority of Filipinos have put, and continue to put, great stock in the voting process. The difference is that the predictable nature of our political and national development before the war was ended by a series of shocks and disappointments in the national trauma that was World War II.

Between 1941 and 1946, the Philippines went through six heads of government: Manuel L. Quezon, Jorge Vargas, Jose P. Laurel, Sergio Osmeña, and Manuel Roxas. Within that five-year period, two leaders contested the title of legitimate president of the Philippines (Laurel sponsored by the Japanese at home; Quezon, then Osmeña, sponsored by the Americans in exile). Taking sides was no longer a political business, it was a bloody business. There were collaborators and guerrillas, officials-in-exile and officials in the hills, officials in Manila who claimed to be secret guerrillas and officials who were overtly pro-Japanese.

The end of World War II and the first national elections held after the wartime trauma set the stage for elections as we know them today. The pretense of political virtue, so carefully nurtured prior to the war, was difficult to sustain in a nation for which voting had become a life-or-death matter. Before World War II, elections were like water – they had a sacramental aspect, the anointing of a leader by his people. After World War II, elections were like water – they were viewed not only as a means to cleanse away filth, but as a fundamental requirement for survival. Voters torn and divided, guerrillas, fake guerrillas, genuine collaborators and the unfairly accused, landlords who had fled their estates to seek refuge behind Japanese bayonets (and who now clung to America for dear life), disgruntled peasants – whatever their circumstances, survivors all – now had a desperate stake in the outcome of elections.

In the elections of 1946, genuine guerrillas, radicals, and leaders who had been ruthlessly defeated during the two decades of Quezon's ascendance in national life fought desperately for their time in the sun. Behind Roxas rallied the orphaned apparatus of Quezon's party machine, both guerrillas and collaborators, but most importantly those accused of collaboration for whom political survival offered their only prospect for rehabilitation and escape from disgrace. Both sides courted a destitute nation that viewed independence with mixed excitement and dread, conditioned to think of 1946 as the year in which the carefully-built-up development of the prewar years would find fruition, only to find that independence would be a flag waving over ruins emanating the stench of death and decay.

A nation literally parched, its infrastructure in ruins, its population decimated, its ideals proven woefully hollow by the war, viewed elections like water – and like the fight of parched people for water, the fight for the elections was desperate. 1946 saw no landslide, but a simple majority. It also saw vote buying, allegations of vote rigging, and election-related violence on a scale previously inconceivable. It would only get worse in 1949, when Elpidio Quirino won in an election that achieved shocking notoriety around the world for raising the dead and even drafting flora and fauna to cast votes. Yet in 1953, the much-anticipated deluge came, when the charasmatic Ramon Magsaysay beat Quezon's 1935 record with 68.9 percent of the vote.

But by 1957 Magsaysay was dead. His successor, Carlos P. Garcia, in a field of seven candidates, was elected with just 41.3 percent of the vote. With the election of the first president by plurality, the Philippine political system of today was born. A nation doesn't always have leaders with flair and charisma who, by hard work and ruthless plotting, like Quezon, or sheer flair and even greater charisma, like Magsaysay, dominate national life. The overwhelming majority of politicians are humdrum, devious, but not outstandingly cunning people, and it is impossible for someone always to shine.

Add to this the weaning of the electorate from an era in which politicians were expected to be reserved and to view appealing to the masses as a vulgarity not to be indulged. Furthermore, add the natural shift in tastes and expectations from those of the jaded and, in a sense, morally bankrupt generation of politicians active from before the war, to those of the young, brash generation that actually fought in the war or had grown up since. And add, further, the steady erosion of presidential power and institutional mechanisms, such as block voting, that Quezon had carefully put in place and that Magsaysay had wielded by sheer force of character. The following was the result:

Garcia was a president shorn of many of the basic levers of control that his predecessors had taken for granted. A president born and bred by the party machine, whose partymates had eliminated block voting, a bulwark of party-oriented voting. A president who inherited the steady removal of local government appointments from the perogative of the presidency, a process begun in response to the domineering nature but weak political gifts of Quirino. An old-style politician at a time after Magsaysay had eroded the ability of old-style politicians to achieve majorities by simply commanding their surrogates to issue instructions to voters. A man who spoke Spanish and who was inaugurated in an old fashioned cutaway, when the electorate far preferred the rustic, barong Tagalog-wearing style of the late Magsaysay. This was an electorate poised to raise to the Senate Rogelio de la Rosa, whose only qualification was as a matinee idol. Garcia was a president occupying an office that voters expected to be wielded with the aplomb and color of a Quezon or Magsaysay.

The problem was, Garcia was like neither of these men. What Garcia was, as he himself said, "was not stupid," and for a time he and his successors proved that they were clever enough to grasp the remaining levers of power to make it to the presidency.

The popular vision of the presidency – both among voters and among politicians aspiring to the position – thus suffered from the larger-than-life personas of past presidents at a time when contemporary presidents could not (though try, they did) wield the powers of the executive with the same overarching authority and effectiveness. The means, under the law and under the system, simply wasn't there. But expectations on the part of voters remained the same; the ambition afflicting politicians remained the same; and the intensity of popular interest in elections remained at the fever pitch it had been at since 1946, especially after the brief, meteoric rise of Magsaysay. Garcia was turned out by Diosdado Macapagal for much the same reasons Quirino had lost to Magsaysay, but Macapagal proved woefully ill-equipped to wield executive power. He was duly thrust aside in 1965 by Ferdinand E. Marcos, who eventually saw no other way to achieve the power he craved, and retain the position he had no intention of relinquishing, than by scrapping the system altogether.

In 1969 Marcos received 61 percent of the vote, giving him the fourth-highest percentage of votes in a national election and making him the only president to achieve a second full term. Just as Quezon had set out to change the system to make it more conducive to executive control, so did Marcos set the stage for something even more daring. This infrastructure-minded president would view elections as a dam – a means to channel political control, allowing him to irrigate the fields of his cronies, leave parched the lands of his opponents, and present to the people a pharaoh-like image of irresistible and indomitable will that could change the course of nature.

The water in the vast manmade lake of Marcos’s New Society proved muddy, shallow, polluted, and foul. In 1986 the dam was breached and a more natural course of water flow restored. Corazon Aquino lost the official count but won where it counted, a moral victory in the eyes of her people and the world. From the start, she shed the reluctance of a shy widow for the increasingly confident role of a revolutionary restorer, accomplishing what her husband had set out to do – restoring elections, bringing back water, so to speak, to a nation parched for elections.

Cory Aquino was brought to power by election, indeed, by referendum, and she used elections-as-plebiscites as her key to maintaining legitimacy.

But the stage of development – or underdevelopment – of the political system that had emerged with the election of Garcia came back with a vengeance under Fidel Ramos, who holds the unenviable record of winning the smallest plurality (28 percent) in our electoral history. His success had a baleful influence on the idea of elections as legitimation for presidential governance. What was important in the post-Edsa [ed: 1986 People Power revolution] scheme of things was neither popularity nor machinery (his opponents had both), but tactical supremacy: doing the most with less. After the strange rise to power of Ramos, rejected by an overwhelming number of his countrymen, but esconced in the presidency anyway because he proved less unpopular than his opponents, it was no surprise that Joseph Estrada's election six years later took on the characteristics of a landslide, although in fact, it wasn't even a plurality as healthy as Garcia's. Both Ramos and Estrada were minority presidents occupying an office burdened with expectations institutionally impossible to fulfill. At the same time, the electorate was increasingly polarized, desperate, and despairing; a change in popular tastes and mass communications made Joseph Estrada the heir of Rogelio de la Rosa.

Without Ramos's tactical cunning and long experience at handling subordinates, Estrada proved inept at maintaining himself in power. His vice president, Gloria Macapagal-Arroyo, on the other hand, had achieved a post-Edsa first: a near-majority [ed: Filipinos cast separate votes for president and vice-president]. This armed her with the ability to invoke a mandate of her own as putative successor to Estrada. When Estrada fled Malacañang Palace, Arroyo deftly moved in (to cut a long story short), but under circumstances so unique as to be denied the natural advantages a successor-president historically enjoyed as heir apparent, keeper of the flame, inheritor of legitimacy.

The 2004 presidential campaign was a quest for legitimacy – legitimacy lost by Estrada's anointed candidate, not yet earned by the incumbent. A quest for legitimacy by other candidates who were dependent on neither the discredited leader in jail nor the incumbent grievously wounded by allegations that she deserved to be in jail as well. Both candidates and the electoral contest itself were overshadowed by the maturing of a political culture born in the 1960s, made ruthless in the 1970s, and morally bankrupted in the 1990s – yet which both leaders and led view through the rose-tinted spectacles of the struggle to restore credible elections in the 1980s. We have elections, just as we have water – not as the result of a rational, well thought-out plan of national action, but because of fits and starts by leaders who view voting as they view water – as handouts to inculcate gratitude among a mendicant populace.

The day must come when fully one-third of the electorate can decide to sit home and not vote, because whatever the results of the elections, nothing fundamental is at stake. Since 1946, the stakes have always been fundamental, which is why graft and corruption have always been fundamental national issues in those elections. What is at stake, for so many people, is the very hope of a life in which water, quite literally, can be theirs to drink and to bathe in, a life that isn't measured in one faucet per barangay [neighborhood] and by garbage-infested canals.

Elections are like water – essential to the parched, a source of power to those who control it or even own it. Elections are like water – possessing different meanings for different people. Elections are like water – for us, at least, in a country where each upper-class swimming pool represents scorn for the many barangays that must line up hours for something murky and foul to drink.

Manuel L. Quezon III is a columnist and contributing editor at the Philippine Daily Inquirer and History Curator at the Ayala Museum.

from :Kyoto Review

Malaysian Chinese Business: Who Survived the Crisis?

2007-06-16T02:34:00.001-07:00

Lee Kam Hing and Lee Poh Ping

In the not so distant past, as economic growth was gathering pace in East Asia, Chinese enterprise was widely considered a significant factor in the process described as the Asian economic miracle (World Bank 1993; Anderson 1998). Ethnic Chinese in Indonesia, estimated at about 3 percent of the population, were said to own some 70 percent of firms listed on the Jakarta Stock Exchange. In the Philippines, 50 to 60 percent of the stock exchange’s market capitalization was reportedly held by Chinese, who form only 1.5 percent of the country’s population. In Malaysia, ethnic Chinese account for less than 30 percent of the population and were estimated to own more than 40 percent of corporate equity in 1997, while in Thailand it was said that 50 ethnic Chinese families controlled most of the country’s business sectors (Backman 1999). Highly publicized profiles of Chinese enterprise attracted great public interest and were used to illustrate the community’s strong economic presence in East Asia.

Yet even prior to the Asian financial crisis of`1997 and among those accepting the dynamic contribution of Southeast Asian Chinese to the regional economy, concerns were raised that the extent of their corporate dominance was misrepresented (Mackie 1995). Figures showing business ownership by Chinese were challenged, and it was argued that such figures should be revised downward. The general political weakness of the Chinese in Southeast Asia, it was also maintained, made their businesses constantly vulnerable to policies limiting their capacity for growth and/or their ability to move into new sectors (McVey 1992). In many cases, they were forced to rely on connections with powerful groups to generate growth (Gomez 1999). Consequently, the sustainability of Chinese businesses in certain countries remained uncertain, even where they appeared to be a dominant economic force.

And so when financial crisis on the scale of the 1997 debacle occurred, it was to be expected that Chinese enterprises in Southeast Asia would be the most affected. Indeed, this generally did happen. Significantly, however, Malaysian Chinese businesses appear to have suffered far less than their Thai and Indonesian counterparts. The number of Malaysian Chinese firms adversely affected by the crisis was nowhere near the number in Thailand, where it is said that of the more than 50 Sino-Thai families with dominant control of the economy, only 4 survived (The Straits Times, 29 January 2001). Nor were big Malaysian Chinese enterprises as affected in number or intensity as similarly-sized Indonesian Chinese firms. There, several prominent Chinese business groups, including the huge Salim Group conglomerate owned by Lim Swie Liong, have nearly collapsed. Further, the public impression in Malaysia is that Chinese companies were not as badly affected by the crisis as were firms owned by other ethnic groups.

Determining the impact of the crisis on Chinese business in Malaysia is no easy task. There is, first, the complexity of the event, at once a currency and a debt crisis, to which the government’s response had a variety of implications. Second, Chinese business is not homogeneous, but is comprised of large, medium, and small-scale enterprises. As Mackie (2000) pointed out in response to the common practice of identifying Chinese business primarily with big corporate players, there are very few studies that examine lower-level enterprises in detail. Until such studies are carried out, it is improper to generalize about Chinese enterprise in any particular country. Hence, this article makes no pretence of being exhaustive, but does attempt to show the complexity of analyzing Chinese capital in Malaysia. We then review the crisis’ direct impact on the Malaysian currency, stock market, and debt; its indirect impact on the general economy; and the general shape and significance of the government’s response. Finally, we relate these, in specific detail where possible, to the various sectors of Chinese business and, where data can be found, discuss the findings.

Key Concepts and Sources

The classification of Chinese big business is not simple despite the considerable literature on this group. The Malaysian Ministry of International Trade and Industry (MITI) defines any enterprise with sales of over RM25 million as a large-scale enterprise. But that definition does not adequately convey the broad picture of Chinese big businesses, some of which have assets and sales in the billions. The common approach adopted by analysts is to look at the stock market for highly capitalized enterprises – those within the top 50 or 100 firms – that are Chinese-controlled. To this are added relevant Chinese capitalists appearing on lists of the richest Asians and Malaysians compiled periodically by Forbes, Fortune, Malaysian Business, and other local business journals. This approach does omit many big businesses controlled by Chinese, however, particularly “old wealth” families who have not publicly listed their firms for fear of losing control of them (although the number of these are shrinking with time). Even capital listed on the stock exchange may not constitute the total volume of shareholder wealth as many individuals have considerable private assets that have not been injected into the listed enterprises. Furthermore, a major Chinese business figure or family may control more equity in a quoted company than is listed in its name.

Despite these limitations, the classification of big business used here does not depart from the common approach because of the difficulty of coming by reliable data. We have obtained names from the Kuala Lumpur Stock Exchange (KLSE); from figures published by the national asset management company, Pengurusan Danaharta Nasional, concerning companies whose debts it has taken over; from the list of companies filing for protection from creditors (as of mid-July 1998); and from other government publications. While these sources do not indicate the ethnicity of companies, it is not difficult to identify the better-known Chinese-owned or controlled companies. Relevant magazines and newspapers, especially local publications which often give more detail than non-Malaysian journals, have also been consulted. Finally, interviews with knowledgeable Malaysians supplement gaps in the published data.

There is also a problem defining SMEs, “small- and medium-scale enterprises,” a term often used interchangeably with SMIs, “small and medium industries.” Here, SMIs refer to enterprises primarily involved in manufacturing, while SMEs refer to the larger group that includes such non-manufacturing industries as retail. The problem is that the definition of SMEs/SMIs has varied greatly over time according to different agencies using different terms (Rogayah 2000). For example, the Credit Guarantee Corporation first defined an SMI as a registered business with net assets and shareholder funds of not more than RM250,000. In 1988, this definition was revised upward to not more than RM500, 000. MITI, on the other hand, considers a “small-scale industry” (SSI) as one with a paid-up capital of below RM500,000 employing less than 20 people, and a “medium-scale industry” (MSI) as one with a paid-up capital of between RM500,000 and RM2.5 million employing less than 75 full-time employees. Since then, a new definition of SMIs has been provided to include firms of not more than 150 workers with annual sales not exceeding RM25 million. In May 1996, following the establishment of the Small and Medium Industries Development Corporation, this definition of SMIs was refined. Small-scale companies are those which have employees not exceeding 50 and annual sales turnover not exceeding RM10 million. Medium-scale companies have 51 to 150 employees and annual sales turnover of between RM10 million and RM25 million. In this article, where data can be found on SMEs or SMIs, the definition that comes along with it will be accepted.

The last comprehensive survey of SMEs was carried out in 1994 (Chandraswami, Wong, and Ong 1999), and therefore reliable figures on the number of these enterprises are not easy to obtain. It is even more difficult to get statistics on specifically Chinese SMEs because registration, as for the larger companies, is done by business, not ethnicity. Estimates can be made, however, by checking the number of SME bank loan applications and by utilizing membership lists of trade and business associations that are obviously Chinese dominated. For instance, a press statement issued by the President of the Selangor Chinese Chamber of Commerce and Industry placed the number of its SME members at 2000. The Plastic Manufacturers Association in Malaysia estimated its membership at 1600. The Malaysian furniture industry includes about 3000 manufacturers ranging from small cottage industries to large, integrated producers with their own raw material and wood-processing facilities (Malaysian Business, 1 January 2001). By compiling such information, we can estimate the number of SMEs at around 200,000. Of these, 22,000 are SMIs involved in manufacturing and industry. More than 80 percent of these SMIs are Chinese-owned.

Finally, although the various definitions of SMEs and SMIs have no lower limits, there is actually a third level of business that is much smaller. These are the sundry shops, coffee houses, photography studios, and other such businesses that exist in large number, many owned by Chinese. Because of the extreme difficulty of obtaining data on these very small businesses, however, they cannot be considered here. Our main focus in the “small and medium” category will be on the SMIs.

Financial Crisis: Impact on Malaysia and Government Response

The direct impact of the financial crisis was seen in the precipitate drop of equity prices of firms listed on the KLSE. In February 1997, the KLSE composite index peaked at 1,271 points, and on 1 September 1998 it reached an historic low of 262. This sharp decline in the value of quoted equity was triggered by foreign investors pulling out funds and a simultaneous speculative attack on the Malaysian currency. The government would argue that many of those involved in currency speculation were also fleeing the stock market and that this contributed to the severity of the fall of both the ringgit and corporate equity.

The stock market and ringgit’s drop was devastating to highly-geared enterprises. Companies that had taken loans from abroad found that the sudden depreciation of the ringgit increased the size of their loans and interest payments appreciably. Those businessmen whose loans from domestic banks were pledged against shares experienced margin calls when the value of their shares fell. Reports that some banks were disposing of pledged shares further depressed prices on the stock exchange. The sharp decline of the KLSE and the specter of companies unable even to service interest on loans then created pressure on bank liquidity. By June 1997, the exposure of banks to property and stocks had grown to 40 percent, and the fall in property and equity prices left them suddenly quite vulnerable (Malaysian Business, 16 October 2000). This liquidity crunch led to a general loss of confidence in the economy, a situation that further deteriorated in early 1998 with a spate of large withdrawals of deposits. There were signs of runs on one or two financial institutions, some depositors began moving money to branches of foreign banks in Malaysia, and others transferred funds out of the country altogether. Local banks responded by raising interest rates, which in turn worsened the debt situation for private enterprises.

This sequence of events precipitated a massive contraction of the Malaysian economy. During the first six months of 1998, the Gross Domestic Product (GDP) shrank by 8.4 percent. The third and final quarters of 1998 saw negative growth of 10 percent. After more than a decade of steady economic expansion, Malaysia was in recession. The contraction was seen in all sectors, but most sharply in construction, which shrank by 22 percent, followed by manufacturing (10.2 percent), agriculture (9.2 percent), and services (1.7 percent). In the period 1996-1998, private investment registered negative growth of 19.7 percent while foreign direct investments (FDI) also declined. It was only toward the end of the first quarter of 1999 that positive growth returned, reaching 4.1 percent in the second quarter of that year.

As more and more companies became heavily burdened with debt, the government adopted measures to shield the country from further financial instability. The most common option available to debt-burdened companies was a restructuring process under Section 176 of the Malaysian Companies Act 1965, under which 30 publicly-listed companies were granted protection from creditors in September 1998. Creditors complained, however, that companies abused Section 176 by incurring further liabilities or by hiving off assets to their directors or substantial shareholders. To supplement the existing, inadequate mechanisms, Bank Negara, the central bank, set up the Corporate Debt Restructuring Committee (CDRC) on 17 August 1998. Through the CDRC, still viable companies owing at least RM50 million and having more than one creditor could work out a corporate restructuring in a more amiable atmosphere. Without resort to legal procedures, restructuring was planned jointly by companies and creditors. A total of RM45.9 billion worth of debts have been referred to the CDRC. Of those debts, 38 cases involving RM25.7 billion had been restructured and another 20 cases accounting for RM16.3 billion remained to be re-worked as of late 2000 (Malaysian Business, 16 October 2000).

The government took several other steps to assist companies’ recovery from the financial crisis. First, the Prime Minister established the National Economic Action Council (NEAC) to advise on the country’s economic recovery. The NEAC was placed under the control of former Finance Minister Daim Zainuddin, who had been credited with pulling the country out of recession in the mid-1980s. Second, the government introduced capital controls. Effective 1 September 1998, the ringgit was no longer tradable outside Malaysia and payments by residents to non-residents of RM10,000 and higher required the approval of Bank Negara. The exchange rate was fixed at USD1 to RM3.80, in contrast to the free exchange rate of RM2.50. This measure was significant in two respects. By stemming the outflow of capital, it reputedly saved the economy, and hence some Chinese businesses, from ruin. It also made Malaysian exports more competitive and benefited Chinese SMIs that exported goods.

Third, in April 1998, the government established Pengurusan Danaharta Nasional to relieve the banking system of its non-performing loans (NPLs) and assets and to allow banks to resume normal business and strategic planning. There was an accompanying easing of monetary policies, wherein the statutory reserve requirement for banks was lowered from 13.5 to 6 percent and the base-lending rate of major commercial banks was reduced to 11 percent. The extent of the loan problem facing the country was evident in the value of NPLs. As of mid-2000, total NPLs in the system amounted to RM86.84 billion, of which Danaharta Nasional had acquired RM37 billion. The balance remained with financial institutions.

Fourth, to help banks recapitalize as quickly as possible, a National Capital Fund, Danamodal, was established on 10 August 1998. At the same time, a concerted move was made by the government to consolidate the financial sector, the implications of which will be discussed below.

Finally, the government relaxed some limits on foreign equity participation. Where previously foreign ownership in a Malaysian venture was limited to 30 percent, the government now allows foreigners to hold majority control in the telecommunications industry and, if new investments are made, in the manufacturing sector. In stockbroking and insurance enterprises, foreigners can own up to 49 percent equity.

General Impact on Chinese Business

Three years after the crisis, the Singapore-based Oversea-Chinese Banking Corporation (OCBC) studied the financial standing of large enterprises operating in the region and suggested that the big Chinese businesses remained strong. In Malaysia, the OCBC analysis argued that Robert Kuok, timber magnate Tiong Hiew King, Genting Group’s Lim Goh Tong, Sarawak-based Yaw Teck Seng, banker Teh Hong Piow, Hong Leong Group’s Quek Leng Chan, and power and property tycoon Yeoh Tiong Lay had emerged relatively unscathed from the crisis (The Straits Times, 29 January 2001). In Thailand, some Sino-Chinese family businesses were beginning to recover. Meanwhile, in Indonesia, a number of analysts argued that the return of the country’s Chinese would be necessary to drive the country’s economy to full recovery.

The government in Malaysia seemed to take a similar view of the economic resilience of the Chinese. In February 1998, the NEAC considered allowing non-Bumiputeras (Bumiputra refers to Malays and other indigeneous people in both Peninsular and East Malaysia) and foreigners to own a larger volume of shares of local companies (The Star, 21 February 1998). In July 1998, the NEAC reported that the market value of equity held by Bumiputera companies had dropped by 54 percent in the year since the crisis and that Bumiputera ownership of publicly-listed stock at market value had similarly declined from 29 percent in June 1997 to 27 percent in February 1998 (The Straits Times, 24 July 1998). The NEAC recommendation was seen by some as an effort by the government to allow cash-rich Malaysian Chinese and foreigners to take over or inject cash into Bumiputera companies that were struggling with debt problems. It was only in the strategic industries of banking, automobiles, aerospace, and shipping that the 30 per cent ceiling on foreign ownership would remain in force. The suggestion that non-Bumiputeras be allowed to take up a larger stake to help recapitalize Bumiputera firms was not widely implemented. Instead, prominent Bumiputera-owned companies received government assistance in resolving their debt problems. Clearly, the government was unwilling to alter the equity balance among the ethnic groups despite the financial crisis.

In the financial sector, new moves by the government to stabilize the sector gave rise to concern among large Chinese firms. To consolidate and strengthen banks in the wake of the financial crisis and in preparation for World Trade Organization (WTO) liberalization, the Malaysian government directed that all fifty-four finance companies be merged into only six anchor institutions. Unease arose from the fact that of the six proposed anchor banks, only Public Bank and Southern Bank were controlled by Chinese. The other Chinese banks would be absorbed into largely Malay-controlled or state-controlled institutions. Several of these, such as Ban Hin Lee Bank and Hong Leong Bank, had performed far better than the institutions they were to be absorbed into. The fear was that even Public Bank, Malaysia’s largest Chinese-controlled bank, would eventually no longer be in Chinese hands once its major shareholder, Teh Hong Piow, passed from the scene.

Following much protest and lobbying from the banking community, the number of anchor banks was raised from six to ten, mainly because two Malay banking groups not on the original list – one headed by Rashid Hussein, the other by Azman Hashim – lobbied successfully to retain control of their enterprises. Only one other Chinese-controlled bank, Quek Leng Chan’s Hong Leong Bank, was granted anchor bank status. The bank merger exercise was widely viewed as a setback for Chinese business.

More generally, the effect of the crisis on individual Chinese firms can be indirectly gauged by examining its impact on the different sectors of the economy. Table 1 shows participation in the various economic sectors by ethnicity. In the construction sector, which suffered the most severe contraction, 54.9 percent of firms were Chinese-owned. In manufacturing, the Chinese held 52.6 percent of companies, while in agriculture, which fell by 9.2 percent in 1998, the Chinese business share was 57.9 percent.

Table 1. Economic Sector Participation by Ethnicity, 1998

* Foreign, joint companies of Malays and non-Malays, and others.

Sources: Compiled from figures from the Economic Planning Unit (EPU), Malaysia.

Impact on Big Chinese Business

The Chinese companies that proved vulnerable during the crisis were those that had diversified beyond their core businesses or had entered into speculative ventures. Acquiring quoted equity and developing property were popular forms of asset building in the years preceding the crisis – both were relatively accessible to the Chinese and easily liquidated. Further, property and stock prices had been rising steadily, in part due to the large inflow of overseas funds. The crisis had a two-fold impact on these firms. Those that had relied on heavy borrowing to diversify their operations were already experiencing problems, and when the currency depreciated, loan repayment became a struggle. How well these companies coped depended on whether they were able to service interest charges, meet loan repayment schedules, and make up the shortfall in the margin call of pledged shares that had fallen greatly in value.

The sharp and immediate drop in property values also had severe consequences for companies that had recently shifted into property development and construction. According to the National Property Information Centre, about 16 million square feet of office space remained vacant in the Klang Valley alone in June 2000. At an absorption rate of 2-2.5 million square feet per year in a growing economy, it would take five to seven years for this vacant space to be occupied (Malaysian Business, 1 January 2001).

The individual large Chinese firms affected by the crisis fall into four categories:

those unlikely to recover;
those with heavy losses and loans in the process of restructuring;
those with the reserves to ride out the period of low turnover and profits; and
those which performed well during the economic slowdown.

The Casualties: Many of the first category can be found among companies that filed for protection under Section 176 of the Companies Act by mid-July 1998. Most notable was Time Engineering, a subsidiary of Renong, the largest Malay-owned conglomerate in Malaysia. The Chinese-owned or controlled companies that filed for protection include shipbuilder Westmont Industries, financial services firm MBf, appliance maker Kuala Lumpur Industries, property developer Wembley Industries, and stockbroker Uniphoenix. Other firms had their debts taken over by Danaharta Nasional. As of December 2000, 32 out of 76 companies placed under Danaharta special administrators were identifiably Chinese-owned. Several of these had been high profile in the pre-crisis period: Malaysia Electric Corporation, Jupiter Securities, Sin Heng Chan (Malaya), Instantgreen Corporation, Seng Hup Corporation, Timbermaster Industries, Woo Hing Brothers (Malaya), Bescorp Industries, Sri Hartamas, Rahman Hydraulic, and Kuala Lumpur Industries Holdings.

Most of the companies or individuals who fell into immediate and serious trouble were those with heavy debt. In the pre-crisis period, a number of businessmen had taken huge loans to acquire properties or listed companies. Pledging shares of their own firms, some of which had price-earnings (PE) ratios of 18, to acquire companies with PE ratios of 6, seemed an intelligent way to expand and diversify. In a period when loans were easy to obtain, some investors then used the acquired shares to make further acquisitions. These corporate raiders bought up sizeable numbers of shares of targeted companies with the aim of driving up share prices before disposing of them at a huge profit.

Two businessmen known for ambitious acquisitions and takeovers who later came to grief are Soh Chee Wen and Joseph Chong Chek Ah. Soh began with the takeover of a company called Autoways Holdings. He subsequently acquired, among others, the stockbrokerage firms Uniphoenix and Halim Securities and the manufacturer Perstima (involved in the production and sale of electrolytic tin plate for the canning industry), which he later sold off. But Soh became heavily indebted and his companies were eventually placed under Danaharta Nasional’s special administrator.

Like the businesses acquired by Soh Chee Wen, some of those bought by Joseph Chong were considered healthy, such as the publicly-listed Wing Tiek Holdings and Westmont Industries. Other of Chong’s companies included Westmont Land, later re-named Techno Asia Holdings, and Prima Mould Manufacturing. Chong took over Sabah Shipyard and proceeded to acquire the National Steel Corporation of the Philippines. But in mid-1997, talk began of major financial problems at Westmont Industries. According to a report in The Edge (16 November 1998), an investigative audit revised Westmont’s accounts to indicate a huge loss instead of profits for the 1996 financial year. The crisis greatly aggravated Chong’s problems. As of December 1997, Westmont’s losses amounted to RM651.4 million and liabilities totaled RM883.7 million, including short-term and other debt of more than RM400 million. Westmont became the first of 30 publicly-listed companies to file for protection under Section 176. Chong’s Wing Tiek Holdings, which had accumulated losses of RM200 million, was also forced to restructure. Chong is no longer associated with the two companies.

Perhaps the most spectacular corporate fall due in part to overexpansion and the crisis was that of Lim Thian Kiat (better known as T.K. Lim) of Multi-Purpose Holdings. Multi-Purpose Holdings was once linked to the Malaysian Chinese Association (MCA), a senior member of the ruling Barisan Nasional (BN) coalition. Lim’s family had used its own company, Kamunting, to gain control of MPH during the 1986 recession, however, after the firm went on a massive acquisition binge and subsequently suffered heavy losses. Lim belonged to the new generation of young and ambitious corporate players, and under his control Multi-Purpose Holdings expanded further. Lim also had political connections and was reportedly close to Anwar Ibrahim, Malaysia’s Deputy Prime Minister between 1993 and 1998. The heavily-diversified Multi-Purpose Holdings group included Multi-Purpose Bank, Malayan Plantations, property developer Bandar Raya Developments, and the gaming firm Magnum Corporation. By 1997, Multi-Purpose Holdings had incurred debts amounting to RM2.2 billion, and Lim’s Hong Kong investments were also said to have suffered heavily from falling property values.

The Restructuring: The second group of Chinese enterprises are struggling to restructure company debts. Among these is the Lion Group, controlled by William Cheng, which has substantial interests in nine publicly-listed companies as well as investments in China. Following the depreciation of the Malaysian currency, the group began to have problems servicing its roughly RM10.4 billion in debt, about half of which was secured in US dollars. The loans were taken for Lion Group’s investments in China and for the construction of a RM2.5 billion steel plant in Banting, Pahang, by Cheng’s private firm, Megasteel. Cheng’s stock broking business – with brokerages in Malaysia, Indonesia, Singapore, and the Philippines – suffered huge losses following the stock market fall, further weakening the group’s financial position. The crisis caused demand to fall for its steel products and its motor vehicles produced under the brand name Suzuki. Most of the group’s other companies lost money, including Lion Land. Only two of Cheng’s companies remained profitable: the timber operations of Sabah Forest Industries and the insurance firm Malaysia British Assurance. Cheng had eventually to go to the CDRC, through which he hoped to reach agreement with his more than 100 creditors. He has since been forced to sell his stakes in Malaysian British Assurance as well as his corporate headquarters in Kuala Lumpur (Malaysian Business 1 January 2001).

Equally hard hit was the Sungei Way Group headed by Jeffrey Cheah. The group is involved in property development and construction, the two industries greatly affected by the economic downturn. Cheah’s other losses came from his listed firm, Gopeng, and the provisioning for the US$110 million Eurobond due in 2001. Cheah sold off some of the Group’s companies, but still owns assets such as Sunway Pyramid and Sunway College, which are not part of the listed Sunway Group.

The Resourceful: The third group of Chinese firms are steadily recovering from the crisis without crippling debt or the need to restructure. Some were badly affected, like Tan Chong Motors and Oriental Holdings, both in the motor industry which experienced a sharp fall in demand. Kuala Lumpur Kepong, a plantation company built by the late Lee Loy Seng but now run by his son, is another well-managed firm that was affected by the cyclical fluctuation of commodity prices. We also count within this group Chinese businessmen whose public and private wealth remains fairly intact despite financial crisis and economic slowdown: Quek Leng Cheng of the Hong Leong Group, Lim Goh Tong of the Genting Group, and Teh Hong Piow of Public Bank.

The Winners: A small group of Chinese businessmen came out of the crisis stronger financially. Francis Yeoh of the YTL Group stands out among these. The YTL Group was started by his father, Yeoh Tiong Lay, as a construction company and has since diversified into power generation. The group has several listed companies, including Taiping Consolidated, and assets estimated to be worth RM8.70 billion at current values. The Group owns prime property in Kuala Lumpur’s city center, including the JW Marriot Hotel and the shopping complex Lot 10. According to a report in early 2001, the Group has RM5 billion cash that may be used for further acquisitions, particularly power plants being sold off by the privatized but still government-controlled power supplier, Tenaga Nasional (The Edge, 5-12 February 2001).

Profiles of Top Chinese Businessmen

In February 2001, Malaysian Business released its list of the 20 richest Malaysians. Sixteen of the 20 and 9 of the top 10 were ethnic Chinese. A number of other wealthy Chinese outside the top 20 also control well-managed corporations (Malaysian Business, 1-16 February 2001).

Table 2. Twenty Richest Businessmen in Malaysia, 2001

Source: Malaysian Business (1-16 February 2001)

The wealthiest Malaysian businessman is Robert Kuok, whose estimated worth is RM15 billion. Starting off in the sugar trade, Kuok diversified into a wide range of business interests, but the bulk of his investments are outside Malaysia, including in Hong Kong and China. Lim Goh Tong (#3), the second richest Chinese businessman, built his wealth largely from the casino business at Genting Highland and has controlling stakes in the publicly-listed Genting, Resorts World, and Asiatic Developments. Despite problems with the Hong Kong-listed Star Cruises Plc, in which he holds a 20 percent stake, Lim is said to have RM2.4 billion surplus cash.

Quek Leng Chan (#4) of the Hong Leong Group remains financially strong. His business empire stretches from Hong Kong to New Zealand, Europe, and the United States, and he controls at least 11 companies listed on the Malaysian stock exchange. Quek’s most important asset is probably Hong Leong Bank, which now has anchor bank status in the on-going banking consolidation. Most of Quek’s manufacturing companies, such as OYL Industries and Malaysian Pacific Industries (MPI), are performing well, though two, Hong Leong Industries and Hume Industries, have a debt burden of RM2 billion. In the restructuring exercise, it is expected that one of these two companies will be sold off to ease the Group’s debt situation.

Teh Hong Piow (#7) has long been respected for his prudent management of Public Bank. The Public Bank Group’s pre-tax profit was RM150.1 million in 1998, a decline from RM472.7 million for the corresponding period in the preceding year. In 1999, however, the Group’s profits rose sharply to RM600 million, a performance surpassing that of other banks. Public Bank’s prudence in lending is reflected in its low proportion of non-performing loans (NPLs). When the default period for loans was three months – it was subsequently increased to six months – Public Bank’s net NPL was only 2.4 per cent compared to the whole banking system’s 9.3 percent. It was the stockbroking arm of the Public Bank Group that suffered losses at the height of the crisis in 1998, but this firm has since returned to profitability. Its commercial bank and finance company in Hong Kong are expected to become the major income earners in the group in the future (Malaysian Business, 16 February 2000).

Chinese businessmen not listed in Table 2 are also major corporate players in Malaysian business. One is Robert Tan Hua Choon, whose companies include telecommunications cable supplier FCW Holdings, industrial equipment supplier Jasa Kita, developer Keladi Maju, and wood-based manufacturer Malaysia Aica (Maica). Tan also has a controlling stake in the watch and calculator distributor Marco Corporation, which deals with Casio products. Marco Corporation is to be used for a reverse takeover of the ailing Khong Guan, listed on the KLSE.

Chinese Business Resilience

How do the resilient Chinese listed in Table 2 differ from those still mired in financial problems? How have they kept their wealth relatively intact during the financial crisis? Previous studies have argued that Chinese businessmen in Malaysia have been able to adapt to new challenges. This was demonstrated during the colonial period and again after independence when the government introduced the New Economic Policy (NEP) in 1970. The 20-year NEP established affirmative action programs to assist Bumiputeras in business (among other areas) and to redistribute wealth to achieve economic parity among the major ethnic communities. As Table 3 indicates, implementation of the NEP did achieve significant redistribution of corporate wealth in Malaysia.

Table 3. Equity Ownership (at par value) of Limited Companies, 1970-1998

* Discrepancy in figures is due to differing definitions of the categories. Both sets of figures, however, show the achievement of Bumiputra wealth.

** Dominant ethnic group uncertain.

Sources: Compiled from figures from the Economic Planning Unit (EPU), Malaysia.

When the NEP was introduced, the Chinese viewed its initiatives as limiting their economic opportunities and over the years developed strategies to contend with it. One of these strategies was to establish business and political connections with powerful Bumiputeras by allocating shares, partnerships, and board positions to influential Malays. These connections helped Chinese-controlled companies gain access to government contracts and trading licenses. Many of the resiliant Chinese individuals listed above are linked to powerful Malays in one way or another. But the financial crisis showed that such ties were not enough to maintain a firm position in corporate Malaysia and that other qualities were essential to the business performance of successful Chinese enterprises.

First, the resiliant Chinese are all engaged in “real” business – investments are made in producing goods and services (even if some started off as speculative ventures). For example, Quek Leng Chan and Robert Tan own companies involved in manufacturing. In spite of the economic slowdown, these companies continue to generate encouraging rates of return. Second, they are involved in economic sectors less vulnerable to the financial crisis. Palm oil, for instance, a mainstay activity of companies like Lee Oi Hian’s (#9) KLK, enjoyed high prices in the 1997-98 period, though most commodity prices have since come down.

Third, most of these businessmen have concentrated on their core business. Even those in vulnerable sectors, such as the motor industry and property development, have survived through prudent management. Teh Hong Piow focuses on managing Public Bank, an institution he founded in the 1960s, and his diversification has been into related financial sectors. He has significant stakes in the insurance companies London and Pacific Insurance Co Bhd, in which he owns 53.46 percent, and John Hancock Life Insurance (M) Bhd, of which the Public Bank Group’s KL Mutual Fund holds 21 per cent. In the on-going merger exercise of insurance companies, Teh is expected to be a major player in the consolidated sector.

In contrast, many of those who encountered difficulties had diversified beyond their core competence or business interests. In addition to those with ambitious strategies mentioned earlier, there were companies like Woo Hing, well known for its watch business, which went into property development and suffered from the downturn in that sector. John Masters Holding, a garment company listed on the Main Board of the KLSE, is another example.

Fourth, this group of resilient Chinese businessmen has largely avoided the burden of crippling debt. While it is common practice for companies to take bank loans to expand or diversify, well-managed firms always have sufficient asset backing and income flow to service interest charges and loan repayment. These firms retained their profits as reserves, which proved crucial to see them through the difficult business period. Most firms that fared badly were burdened with loans secured from abroad, including William Cheng’s Amsteel, controlled through his Lion Group (see Table 4).

Table 4. Debts of Major Companies (in RM billions)

Source: Malaysian Business 1 October 2000

Finally, a number of successful business groups had diversified their interests abroad. The bulk of Robert Kuok’s business interests and assets – in China, Hong Kong, Europe, and elsewhere – were shielded from the financial crisis and currency devaluation. Quek Leng Chan owns companies in Hong Kong and Europe. Khoo Kay Peng (#13), Tiong Hiew King (#6), Teh Hong Piow, and Tan Chin Nam (#18) also have significant investments abroad. Yet overseas investments were not always helpful. T.K. Lim’s Multi-Purpose Holdings lost money in Hong Kong through its Magnum International Holdings Ltd, which was listed on the Hong Kong stock exchange. Others who ventured into Vietnam and Cambodia did not recover their investments. The Lion Group’s investments of some US$80 million in China did not help William Cheng deal with the financial crisis (Malaysian Business, 16 September 1999).

Impact on Small Chinese Business

The most immediate and direct impact of the crisis on Chinese SMIs was the sharp reduction of credit facilities available to them. Before July 1997, borrowing from domestic banks and other financial institutions made up of 38 percent of short-term and 43 percent of long-term credit. These percentages were greatly reduced when banks, facing liquidity problems, cut credit to the SMIs and raised interest rates on new loans. As the crisis deepened, domestic demand for SMI output declined while production costs increased for those using imported materials, machinery, and parts.

The manufacturing sector as a whole contracted by 10.2 percent in 1998, due not only to local conditions, but to declining demand in the East Asian market, which had accounted for one-third of Malaysia’s manufactured exports. The industries most affected were transport equipment and machinery manufacturers and those producing goods for construction – iron and steel, wood and wood products, and cement. More resilient were the chemical and chemical products manufacturers, including those dealing with plastic products in the resource-based industries. The leading performers in manufacturing continued to be makers of electrical and electronic products.

To help affected SMIs, the government created a Fund for Small and Medium-Scale Industries (FSMI) in January 1998. An initial RM1 billion and (in May 1998) an additional half billion ringgit was set aside to assure this sector of continued financing during the economic slowdown. Conditions were also relaxed to increase access to credit: the minimum amount loaned was reduced from RM250,000 to RM50,000; the maximum was raised from RM2 million to RM5 million; and the 20 percent limit on working capital was abolished. In November 1998, a Rehabilitation Fund for Small and Medium-Scale Industries (RFSMI) was established with RM750 million to assist viable SMIs with temporary cash flow problems to service existing loans. As of 30 June 1999, the value of loans approved by the RFSMI was RM1.831 billion. The RFSMI had also by that time approved RM152 million in assistance. Given the high demand for loans from the RFSMI, RM250 million was transferred in August 1999 from the RSFMI to the FSMI.

In February 1998, the political party MCA and the Associated Chinese Chamber of Commerce and Industries of Malaysia (ACCCIM) jointly organized a seminar to discuss the impact of the Asian financial crisis on the SMIs. Anwar Ibrahim, then Deputy Prime Minister and Finance Minister, was invited to open the seminar and to participate in a dialogue session. The purpose of the seminar was to bring to the government’s attention the difficulties Chinese SMIs were facing, especially in obtaining loans from the RM1.5 billion RFSMI. Following the seminar, the government announced that half of RFSMI resources would be loaned to non-Malay SMIs. The majority of SMIs are in fact Chinese-owned (see Table 5), and according to ACCCIM officials, a major proportion of the RFSMI eventually went to them. Malay SMIs continued to receive assistance from other loan schemes.

Table 5: Rough Breakdown of SME Ownership by Ethnicity

* Foreign, joint companies of Malays and non-Malays, and others.

Sources: Compiled from Economic Planning Unit, Malaysia (EPU) figures.

Despite the financial crisis, many Chinese SMEs have survived reasonably well. A report by a private research group (Chandraswami et al.) suggested that the SMIs, Chinese in particular, were spared the worst of the crisis because they were less exposed to borrowing. It is estimated that retained earnings were used to finance the assets and working capital of about half the Malaysian SMIs. External fund sources were: 77 percent from domestic banks; 3-5 percent from foreign banks, bonds, and equity; and the balance from friends, family members, and private moneylenders. In other words, Chinese SMIs were spared the debt problem because they had found it difficult to secure bank loans.

Certain SMIs have actually benefited from two factors arising from the financial crisis. First, the pegging of the Malaysian ringgit to the US dollar at 3.80 effectively undervalued the currency. This has aided the competitiveness of Malaysian products in the international market, where some 30 percent of SMI production is destined. The second factor is continued political and economic uncertainty in Indonesia. When the collapse of Indonesian banks resulted in credit being cut off to Indonesian SMIs, many were reportedly unable to fill orders placed earlier by US companies. Some of these companies have since shifted operations to Malaysia, particularly in textiles and plastics manufacturing.

While Chinese SMIs did relatively well during the crisis and in the following two years, they began to feel the effects of the slowdown by 2000. The pegging of the ringgit increased the price of raw materials and component parts, a growing concern as inventories ran down. In addition to falling foreign demand, the growth of domestic private consumption expenditure dropped from 14.4 percent to 13.9 percent from the first to the second quarter of 2000. At the same time competition from imports increased. In preparation for the WTO and the Asean Free Trade Area (AFTA), import duties on 305 products that had long been protected were reduced in the year 2000 budget. SMIs producing shoes, furniture, and textiles for domestic and export markets felt these effects (see ACCCIM 2000).

The Importance of Chinese SMIs

Manufacturing remains the most important sector in the Malaysian economy. Despite the financial crisis, manufacturing contributed 34.4 percent of GDP, 82.9 percent of total exports, and 27 percent of total employment in 1998. Exports were worth RM 237.68 billion. Large multinationals and big local corporations are responsible for the bulk of production, but local SMIs also produce a considerable share for the domestic and export market. The real significance of Chinese SMIs, however, lies in their production linkages with large-scale industry, including local Chinese companies. These SMIs manufacture components and parts for major domestic companies like DRB-Hicom Holdings and for multinationals such as Intel, Matsushita, and Sony. Just as important are the Original Equipment Manufacturers (OEM) that produce goods for foreign companies.

Through these industrial linkages, some SMIs have evolved into large-scale enterprises, including several listed on the KLSE. Hing Yiap and Padini Holdings, quoted on the Consumer section of the KLSE Second Board, are just two of many companies that started as small family businesses. Both are in the textile and garment industry. Hing Yiap commenced business 29 years ago producing garments for the domestic market. It presently has both its own brand name and is a licensee of an American company. Despite the economic slowdown, Hing Yiap posted an after-tax profit of RM6.3 million on a turnover of RM96.6 million for the financial year ending June 2000 (The Star, 12 February 2001). Padini began business in 1971 as Hyayo Garments Manufacturers Company. It ventured into ladies’ fashion wear and later into children’s wear, producing under the “Miki-Kids” brand name. After a bonus and rights issue exercise, Padini’s paid-up capital was raised to RM27 million. It was listed in March 1998 on the Second Board with a public issue of 3 million shares and an offer of 1.5 million shares for sale (Malaysian Business, 1 September 1999).

A number of small enterprises have moved from the Second Board to the Main Board of the KLSE, such as John Master and EOX Group. EOX began as Eastern Oxygen, a component of the gas operations industry. In January 2001, it acquired Wonder Link for RM140 million, a Malaysian-owned fleet of 122 ships ranging from 4,134 to 18,155 deadweight tons (DWT) operating from East to West Asia and to Australia (New Straits Times, 10 February 2001). EOX’s listing was transferred from the Second Board to the Main Board in early 2001. At least ten other Main Board companies started out on the Second Board. Four in the technology section – AIC Corporation, Eng Teknologi, Globetronics Technology, and Lityan Holdings – are Chinese-owned enterprises.

The Second Board of the KLSE has been important in opening up opportunities for SMEs, especially those owned by Chinese, by allowing them an avenue for expansion. But most Chinese SMIs have chosen to remain small. One deterrent to growth is the Industrial Coordination Act (ICA), under which SMIs with a paid-up capital of RM2.5 million must restructure to allow greater Bumiputera participation. In the early 1980s, though, when the paid-up capital requirement to secure public listing was relatively low, quotation on the KLSE was seen by many firms as an opportunity to expand, diversify, and move into corporate reaches which had easier access to the capital market. Some Chinese businessmen also saw public listing as a chance to cash out or sell part of their holdings and still retain control. During this “corporatization” of the SMIs, smaller firms were often prepared to be taken over and injected as assets into larger firms. Presently, young Chinese in the technology and private education sectors see opportunities for business expansion through such corporate exercises again.

Conclusion

It is clear that major corporate figures in Malaysia were unevenly hit by the 1997 financial crisis, some surviving with their businesses intact and others unable to survive. At the SMI level, too, there were exporters that benefited from the weakening of the ringgit and others that suffered from reliance on imports of materials, machinery, and parts. Some SMIs also felt the credit crunch. A number of conclusions can be made from the variety of experiences recorded by firms following the crisis.

First, among the big businesses, a distinction should be made between “entrepreneurs,” or productive businessmen, and “speculators.” Entrepreneurs can be defined here as businessmen who build “productive” economic enterprises, be they in manufacturing, banking, property, trade, or services, and who invest borrowed money in such enterprises. For example, Lim Goh Tong is an entrepreneur who used his own and borrowed money to create a vast resort empire from scratch. Money was not used to speculate on the stock market or as leverage for yet more borrowing for purposes of speculation or acquisition. Genting operates a major resort-cum-casino, employs tens of thousands of people, and pays significant taxes to the government. Major businessmen Teh Hong Piow and Robert Kuok concentrate on managing their banks and hotels well. And when Robert Kuok and the Teo family (of the See Hoy Chan group) were involved earlier in the sugar and rice trades, respectively, they took the entrepreneurial risks associated with these fields, anticipating demand, ensuring adequate supplies, and consolidating their markets. A speculator, on the other hand, essentially uses money, borrowed or otherwise, not to build a real enterprise but to speculate on the stock market or acquire other properties or firms. The equity gained is then used to leverage additional loans to acquire yet more companies, even if these acquisitions are of dubious economic value. Speculators’ ability to acquire companies in this manner depends greatly on connections with influential people, often politicians in power. The only risk they take is the possiblity of being unable to honor their loans.

It could be argued that the distinction between “entrepreneur” and “speculator” is not sharp. Many entrepreneurs started off as speculators, later concentrated on managing their acquisitions, and became productive businessmen. Others start off as entrepreneurs – building productive enterprises and listing them on the stock exchange – but seeing that wealth can be made more easily through acquisition or corporate raiding, turn their energy to speculative activities.

Further, entrepreneurs often need political connections to develop their enterprises. The foundation of Lim Goh Tong’s Genting was not his construction business, where he first developed a strong reputation, but his casino operation, the licence for which, it could be argued, he obtained through his close relationship with then-Prime Minister Tunku Abdul Rahman. Similarly, Robert Kuok is well known as a skillful cultivator of influential politicians. The need for patronage from powerful political figures is a fact of life for most Chinese big businesses in Southeast Asia. The difference is that entrepreneurs use these licence and business opportunities to build enterprises that produce goods and services, and theirs are the businesses that have generally weathered the crisis.

Second, the area of business involvement was a key factor in determining how well a firm managed. Entrepreneurs in export businesses – from large rubber and palm oil dealers like the KL-Kepong group to many SMIs – fared rather well. Their costs were incurred in ringgit, and they were paid in foreign currency at a time when commodity prices were high. Businessmen involved in property, on the other hand, such as Jeffrey Cheah of the Sunway group, suffered from the property downturn. Even well-managed firms were badly affected.

Time is the third factor. Export-oriented SMIs that benefited from the government’s capital control measures may find this is only a temporary lift and not a long-run advantage. If these and other SMIs do not upgrade their operations to meet the impact of globalization, trade liberalization, and competition from similar products produced more cheaply in China and perhaps India and Vietnam, their enterprises may eventually suffer. Indeed, even now the SMIs that export to the US face the problem of the slowdown in the American economy.

Finally, the Asian crisis should serve as a reminder that attention to the strength of Chinese business in Malaysia (Lee and Chow 1997) and the rest of Southeast Asia (Limlingan 1986, Redding 1990, Mackie 1995) should not preclude analysis of its failures. For every Chinese business success, hundreds of firms cease trading for a variety of reasons. Many failures are due to mismanagement, poor quality products, low technology, lack of product and production innovation, over-borrowing, and moving from core businesses into speculative ventures. The recent financial crisis revealed the variety of business forms utilized by Chinese to develop their enterprises and showed that the strengths and weaknesses of Chinese business in Southeast Asia are mainly structural in nature.

Lee Kam Hing was professor of history at the University of Malaya and is now research editor of Star Publications and a director of the Asian Centre for Media Studies. He has written on the Chinese in Malaysia.

Lee Poh Ping is professor and senior fellow in the Institute of Malaysian and International Studies, the National University of Malaysia. He has written on the socioeconomic history of the Chinese in Malaysia and Singapore and on Japanese relations with Southeast Asia.

References

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from :Kyoto Review

Ecotourism in Vietnam: Potential and Reality

2007-06-16T02:13:00.000-07:00

Phan Nguyen Hong, Quan Thi Quynh Dao, Le Kim Thoa

With 13,000 floral species and over 15,000 faunal species, three newly discovered big animal species, and a ratio of country/world species of 6.3%, Vietnam has enormous tourism—particularly ecotourism—potential. In fact, since 1986, when Doi Moi (renovation reforms) began the shift from a centrally planned to a socialist-oriented market, or multi-sectoral, economy, tourism has been an sector of primary concern to the government. In May 1995, the prime minister of Vietnam approved a master plan of tourism development for the period 1995-2010. In February 1999, the state decree on tourism was part of the socio-economic development strategy for the period 2001-2010 approved at the IX National Congress of the Party: “Tourism development has become a spearhead economic industry indeed. It is necessary to improve the quality and effectiveness of tourism activities, bringing into full play the natural conditions, and cultural and historical tradition to meet the domestic and international demand for tourism and to catch up with tourism development in the region” (Document of the IX National Congress 2001).

Tourism has so far brought great benefits to the economy, but it has also contributed to environmental degradation, especially biodiversity deterioration. Thus, the concept of “sustainable development”—development which meets the needs of the present without compromising the ability of future generations to meet their own needs—must be factored into tourism development. This consideration is reflected in the term “ecotourism,” which is referred to variously as ecological or environmental tourism, nature or green tourism, sustainable or responsible tourism.

Ecotourism involves travel to relatively undisturbed natural areas with the specific object of studying, admiring, and enjoying scenery, plants, and animals, as well as any cultural features found in these areas. It is distinguished from mass or resort tourism by its lower impact on the environment, lower infrastructure requirements, and its role in educating tourists about natural environments and cultural values.

Fully aware of its significance, the government of Vietnam has prioritized ecotourism in its strategy for tourism development to ensure both sustainability and economic benefits. Though ecotourism in Vietnam is at a beginning stage of development, it is expected to grow strongly through support from government and international organizations.

Natural resources potential

Vietnam is both a “cradle” of native species and a transitional area of organisms from the biota of the north (Himalaya-south China), the south (Malaysia-Indonesia) and the west (India-Myanmar) (Khanh 1999). Moreover, due to its diversity of topography and climatic conditions, Vietnam is rich in floral and faunal species, of which 10 percent and 11 percent, respectively, are endemic. The three big animal species that have been recently discovered in Vietnam are “Sao la” (Pseudoryx nghetinhensis) in 1992, “Mang lon” (Megamuntiacus vuquangensis) in 1993, and “Mang Truong Son” (Muntiacus truongsonensis) in 1996. Indeed, Vietnam is considered one of sixteen countries with the highest biodiversity in a wide range of ecosystems (WCMC 1962)—a very favorable condition for ecotourism development.

Coastal ecosystems: Vietnam’s 3260 km of coastline hosts a variety of coastal ecosystems. The number of seagrass species in Vietnam ranks second only to the Philippines within ASEAN. Seagrass beds are increasingly abundant from north to south and are home to 125 benthic species and 158 seaweed species (Tien 2000). Sea cow (Dugong dugong or manatee)—an animal species in danger of extinction—can be found in the Con Dao seagrass bed.

Coral reef ecosystems are already attractive to ecotourists, with resorts established at Cat Ba Island, Co To, Bach Long Vi, Con Co, Hon Son Tra-Hai Van, Con Dao, Phu Quoc, and islands in Khanh Hoa province. Divers can observe colorful coral reefs with a wide range of flora and fauna. Coral reef samples are exploited for tourist souvenirs in the provinces of Quang Ninh, Nha Trang, and Con Dao (Tien 2000). Species composition is rich: about 95 species of 35 genera in Northern coastal areas and 255 species of 69 genera in Southern coastal areas. These include 180 phytoplankton, 97 zooplankton, 70 seaweed, 78 polychaeta, 208 mollusk, 76 crustacean, and 157 fish species (Yet 1998, cited in Tuan 2000).

The National Environment Agency of the Ministry of Science, Technology and Environment (2000) lists 79 wetland areas of national importance (Hughes et al. (eds.) 2001). Among them are lagoon ecosystems, found only in Central Vietnam (Tam Giang-Cau Hai, Tra O, Truong Giang, O Loan, Thuy Trieu, Thi Nai, and Nuoc Ngot). Lagoons are very high in biodiversity with a high level of nutrition. As one of the biggest lagoons in the world, Tam Giang-Cau Hai Lagoon (21,000 ha) has as many as 55 species of seaweed. Fish, shrimp, and crabs of economic value include Mugil cephalus, Siganus guttatus, Penaeus monodon, Scylla serrata, and Portunus pelagicus. Hundreds of tons of mollusks are harvested annually (Hoi et al. 1995, 1996). Lagoons in Vietnam also contain mineral resources of high value, help regulate the local climate, and can become ideal tourist destinations.

Wetland areas of obvious tourist interest are coastal sandy ecosystems. The total area of sandy beaches in Vietnam is 170 km2. According to Mai Sy Tuan (2000), flora found here are not rich in species composition, mainly shrubs and succulent grass such as Pandanus tectorius, Agave americana, Euphorbia antiquorum, Opuntia sp., Sesuvium porlulacastrum, and Casuarina equisetifolia. There is a globe-shaped grass species, Spinifex littoreus, with infruitescence resembling a porcupine, which, when ripe, roll along sandy beaches to the delight of children. On hot sunny days, you can lie on hammocks under the Casuarina equisetifolia forest listening to the wind singing or eat seafood such as squid, blue crabs, mud crabs, and banana shrimps. Other marine species commonly found are uca, mollusks, amphibians, reptiles, and birds. Most notably, this ecosystem provides a breeding ground for some turtle species in danger of extinction. Among the many beautiful sandy beaches in Vietnam are Cat Ba Island, Tra Co, Bai Chay (Quang Ninh Province), Do Son (Hai Phong City), Dong Chau (Thai Binh), Hai Thinh (Nam Dinh Province), Sam Son (Thanh Hoa Province), Cua Lo (Nghe An Province), Thien Cam (Ha Tinh Province), Lang Co (Thua Thien Hue Province), Ngu Hanh Son (Da Nang City), Nha Trang (Khanh Hoa), Phan Thiet (Ninh Thuan), and Vung Tau.

Vietnam’s diversified mangrove forests suffered greatly during the two Indochina wars. In recent years, mangrove reforestation efforts have been made by many groups, ranging from central and local governments to NGOs and other international organizations. A typical example is Can Gio Mangroves (described in the case study below), designated by UNESCO as the first Biosphere Reserve in Vietnam on 21 January 2000 and included in the world network of Biosphere Reserves.

Ca Mau mangrove forest in the extreme south features houses of built in traditional Tay Nguyen style and seven other simple Nypa palm (a mangrove species) thatched huts and a small pathway leading to the mangroves. Though infrastructure is still poor, the area attracts 3,000 tourists per month (People’s Newspaper, 11 September 2002). The Xuan Thuy Ramsar Convention Nature Reserve supports a great variety of faunal and floral species, including nine threatened and near-threatened bird species. Most notably, 26 percent of the world’s black-faced spoonbill and 2 percent of the Larus saudersi can be seen here (Birdlife 2001).

Limestone ecosystems: Limestone mountains are distributed mostly from the north to Quang Binh. These mountains of evergreen forests have vivid fauna and flora species. They are also home to the distinctive cultures represented by some of Vietnam’s ethnic minorities. Vo Tri Chung (2002) stated that limestone mountains contain many historical vestiges of human civilization, social development, and protection of the country. Visitors can hike in limestone mountains in the Cat Ba, Ba Be, and Cuc Phuong National Parks and the Phong Nha-Ke Bang and Paco-Hangkia Nature Reserves.

Special use forest system: According to the Tourism Development Research Institute, the special use forest system includes eleven national parks of 259,797 ha; sixty-one nature reserves of 1,692,351 ha; and thirty-four environmental, historical, and cultural forests of 147,886 ha. The total area of special use forests in Vietnam is 3,100,034 ha, accounting for 28.4 percent of total forest land (10,915,592 ha).

Some national parks are located in remote areas, such as the Pu Mat and the Ben En national parks; others lie along national roads or near big cities with convenient transportation suitable for ecotourism development. They are Ba Vi national park (Ha Tay province), Cuc Phuong national park (Ninh Binh province), Cat Ba national park (Hai Phong province), Tam Dao national park (Vinh Phuc province), Bach Ma national park (Thua Thien Hue province), and Nam Cat Yien national park (Dong Nai Province).

In recent years, the government of Vietnam has invested in improving infrastructure and investigating the floral, faunal, geological, and geomorphological characteristics of national parks. These areas have become research sites for the maintenance of biodiversity samples. Therefore many universities and research institutions have organized visits for students, cadres, and foreigners. We hope the open door policy of sustainable tourism development will continue to channel appropriate investment to national parks in order to welcome nature reseachers to Vietnam.

Since 1987, the establishment of special use forests increased thanks to interest from the central to local levels, the cooperation of scientists and researchers, and the coordination and assistance of international organizations and NGOs. It is in these forests that ecotourism should continue to be developed for both their natural and their cultural value.

Fruit gardens: Lying in the tropical region, Vietnam has many varieties of fruit trees, especially in the Mekong river delta, where warm weather favors year-round tree growth. After hard-working days in noisy urban areas, visitors can walk in gardens of diversified fruits of many colors and sample the simple, peaceful life closely associated with the river. One newly emerged ecotourist village is My Khanh village, about 10 km from Can Tho City in the southwest. It is a fruit garden located on 40,000 m2 with many canals and creeks, floating markets, traditional (“rong”) style guesthouses, and stocked lakes for fishing and boating. It is a good place for visitors interested in culinary culture, local fruit specialties, traditional production of noodles, wine, young sticky rice, mat weaving, and rice grinding (Sai Gon Economics Time 2002).

Cultural integrity potential

Vietnam is rich in culture identity, with fifty-four peoples whose indigenous knowledge should also be accessible to visitors. One of the principles of ecotourism is to preserve cultural integrity because human value cannot be separated from natural value. As most potential ecotourist sites are inhabited by ethnic minorities, the principle of “encouraging community participation in ecotourism activities” should both create income and help maintain cultural identity. These communities have a deep understanding of traditional festivals, cultivation and land use customs, culinary culture, traditional lifestyle and handicrafts, and historical places. A trip to the limestone mountain of Cao Bang-Bac Kan, for example, is valuable not only for the natural Ba Be Lake, but for the opportunity to learn about cultivation customs, dying practices using endemic plants to produce brocading (Cham weaving), and traditional handmade boats of precious timber collected in the forest.

Cultural value is also represented in Vietnam’s approximately 100 traditional festivals. The Nghinh Ong Festival—to worship “Whale”—is the biggest festival of coastal fishermen in Vietnam (Canh 2002). Other distinctive celebrations are the “Spring” festival of Thai and Muong ethnic minorities and elephant racing and buffalo festivals in Tay Nguyen.

The reality of ecotourism in Vietnam today

According to Nguyen Van De (2002), there was a 7.1-fold increase in international tourist visits from 300,000 in 1991 to 2.14 million in 2000; domestic tourism experienced a 7.5 fold rise, from 1.5 million to 11.3 million visits. This is a high rate of increase compared to other countries in the region, bringing international tourism in Vietnam to a near equal level with the Philippines and to about one quarter of that of Malaysia, Singapore, and Thailand.

Those referred to as ecotourists account for over 30% of international and nearly 50% of domestic tourists (Luong 1999). Tam Dao National Park receives 120,000-150,000 visitors every year (Tien 2002). Tourism in Nam Cat Tien is restricted, but still some thousands of mostly young people visit this area. Meanwhile, ecotourists to Ha Long Bay number 400,000. Ecotourism has been increasing in recent years, with domestic visitors rising more rapidly than international ones, accounting for up to 9.5 million people in 1998 (Luong 2000). Most ecotourists are adventurous young people and researchers who focus on national parks and nature reserves.

Source: Luong 2000

Because ecotourism is important for environmental education, maintenance of indigenous culture, and local economic development, both investment and government encouragement are required. Fillion et al. (1992, cited in Ceballos-Lascurain 1996, cited in Le Van Lanh 1999) estimated that international ecotourism generated USD 93-233 billion in 1988, and in fact, most nature reserves in the world are dependent on ecotourism revenues. But ecotourism also needs investment in human resources (especially tourist guides), management, and fundamental research and planning focused on the natural environment of proposed ecotourism sites. Investors at home and abroad have preferred to focus on infrastructure like hotels and restaurants. What investment does exist goes mainly to national parks and nature reserves and comes from the state budget through the Ministry of Agriculture and Rural Development and from international organizations like WWF and the governments of the Netherlands, Hong Kong, and Singapore. Total capital investment in national parks and nature reserves from 1994 to 1999 was VND 71.1 billion (USD 1.1 million today). According to the Institute of Tourism Research and Development’s 1999 investigation, visitor entrance fees generated VND 386.2 (USD 25,150) million for reinvestment in infrastructure, conservation, and forestry development (Luong 2000).

Poor and uncoordinated management and organization of ecotourism have limited the development of this sector. Most resorts—beaches and other popular sites—are under the management of provincial tourism departments. In nature reserves and national parks, there is coordination between management boards and tourism corporations, which make investments in infrastructure and enjoy partial profits collected from fees. But there are often too many overlapping jurisdictions. For example, special use forests are managed by the forestry sector. The management boards of National Parks are under the Ministry of Agriculture and Rural Development; those of Nature Reserves and Cultural, Historical and Environmental Forests are under Provincial and City People’s Committees. In Con Dao National Park, the local units involved in tourism are the district government, Con Dao National Park, tourism managers, military units, and local fishermen. According to new regulations governing the management of special use forests promulgated according to Decision No. 08/2001/QD-TTg by the prime minister (November 11, 2001), the Ministry of Culture and Information in coordination with the Ministry of Agriculture and Rural Development is responsible for establishing and managing Cultural, Historical and Environmental Forests.

This tangled web of oversight has yielded no national strategy for ecotourism in Vietnam. And although tourist routes have been set up, no zoning plans have clearly delineated areas for ecotourism activites in national parks and nature reserves.

Is it really ecotourism?

Vietnam’s natural and cultural potential for ecotourism is well established. However, based on the following principles of ecotourism (Luong 1999), the economic activity occurring in Vietnam is only a type of nature-based tourism.

Principle 1: “Educating tourists on the natural environment to raise their awareness and get them involved in conservation work.” Who is responsible for environmental education? The tourist guides, managers, and other ecotourism staff. But in fact, most of these people do not have sufficient environmental training or indigenous knowledge to engage in education work. Research by Pham Trung Luong (2000) shows that 90 percent of ecotourist guides lack environmental knowledge (80 percent about flora and fauna species, 80 percent about natural resources typical in their area), and 88 percent would benefit from ecotourism guidebooks written especially for them. An illustration of wasted potential caused by this lack of training is Ha Long Bay, a world heritage site with immense environmental value—coral reefs, limestone mountains, thousands of flora and fauna species of high biodiversity—and rich cultural identity. But tourists in Ha Long Bay are presently visiting only the Bay and some caves, not accessing environmental information or local cultural activities. In general, the full potential of ecotourism has not yet been reached.

Principle 2: “Protecting the environment and maintaining vulnerable ecosystems.” Ecotourism should be associated with sustainable development, human love for nature, and protection of the environment. Nevertheless, much tourism is still spontaneous and lacking in management and visitor regulations. Some tourists are not fully aware of environmental protection and reluctant to pay conservation fees. If they throw rubbish or cut tree branches, they are not fined. As a result, some tourist areas have suffered serious environmental degradation, such as Huong Pagoda (Ha Tay province). And since there have been few Environmental Impact Assessments, the consequences of ecotourist activities are not clearly understood.

Principles 3 and 4: “Maintaining and promoting cultural identity and involving local communities in ecotourism.” International vistors to Vietnam often like to visit ethnic minority villages to observe the culture, meet local people, and participate in traditional activities. The ethnic minorities who live in or near nature reserves maintain distinctive lifestyles, cultural identities, and traditional customs. These features are part of the real value of ecotourism. However, local people are not much involved in ecotourism, and most tourist guides have poor knowledge of the indigenous culture. Therefore, ecotourists get no exposure to Vietnam’s diverse cultural identities. This is a limitation that must be overcome.

In addition, local people still live in poverty, their life closely associated with natural resources. The economic benefits of ecotourism need to be shared with them, but this will not happen without community participation. China provides a positive example: a questionnaire survey by Dr. Li Wenjun (2002) showed that most residents in Jiuzhaigou Biosphere Reserve, China, have been involved in the tourist business and its relevant jobs. Participation includes operating a family hotel, restaurant, or gift shop; renting yaks, sheep, and traditional ethnic dress to visitors for photographs; working for hotels, restaurants, or tour companies; and collecting garbage in tourist areas. The family hotel business is the main income source for residents.

Case Study: Can Gio Mangrove Biosphere Reserve

Can Gio Mangrove Biosphere Reserve (CGMBR) is a rehabilitated mangrove area located within Can Gio district in the Southeast. It covers 73,000 ha including nearly 40,000 ha of mangroves. This area was largely destroyed during the war, particularly in the period 1962-1970. Restoration was begun in 1978 by the government of Ho Chi Minh City with labor provided by local people and city organizations. It became a biosphere reserve recognized by MAB/UNESCO in 2000.

Located only 40 km from downtown Ho Chi Minh City, with the great diversity of fauna and flora typical of tropical mangrove ecosystems, and with great historical and cultural traditions, Can Gio is becoming a favorite recreation/tourism destination for residents of the Ho Chi Minh City area.

Natural and social background: Can Gio is uniquely valuable for its diversity—72 mangrove plant species, including 30 true and 42 associate mangrove species belonging to 10 main plant communities occupying newly formed mudflats along rivers, firm mudflats flooded by spring tides, highland sandy clay, abandoned salt pans, and brackish water areas. Some of the mangrove are rare species listed in the Vietnam Red Book, such as Lumnizera littorea and Aegiceras florida (Tuan et al. 2002). The 440 fauna species (Hong et al. 1996; Nhuong 2000, cited in Tri et al. 2000:14-15) include 118 invertebrate macro benthic, 134 fish, 9 amphibian, 30 reptile, 130 bird, and 19 mammal species (Hong et al. 2000). All of these are located in a complex and beautiful network of natural rivers and canals.

Can Gio also has a remarkable history. Archaeological evidence indicates that a relatively developed socio-economic life existed in this area in the first millennium BCE related to offshore shipping and trade with other regions. During the war years (1968-1975), this area was well known as a resistance base; the Special Water Task Force was responsible for famous victories costing the enemy great losses in war equipment and soldiers on Long Tau river. The fishing community in Can Gio also has a yearly festival to welcome the “king-fish,” a day of reunion for all local people.

Tourism in Can Gio: Recreational visits to Can Gio started spontaneously in the mid-1990s as students from the city came to visit the beach and see monkeys on the weekends. There were neither entrance fees nor services. In 2000, a new bridge was completed across the Dan Xay river, facilitating transport from Ho Chi Minh City to Can Gio town, and the Forest Park was handed over to Sai Gon tourist company. Since then, tourism in the area has been highly promoted to city residents.

There are three main tourist features in Can Gio. The Forest Park is home to a mischievous 600-member natural monkey troupe, a semi-natural crocodile pool, a historical museum, and a newly restored model of a Vietnamese army base. Visitors enjoy walking under the cool mangrove canopy and playing with the monkeys or sitting in the former army base recalling battles against enemies. Food and drink are available in the park-owned restaurant.

The Vam Sat site includes a bat sanctuary in the flooded Rhizophora area and a bird sanctuary containing over 10 species listed in the Red Book. Here visitors and scientists can find a diverse three-level fauna system: birds at the top, mammals in the middle, and aquatic organisms, including sea and brackish water species, at the lower level. A 58m observation tower helps visitors enjoy the whole scene.

The April 30th Beach is located in the transition zone near Can Gio town. Although the long beach is not of high quality, it is near the city and features cheap local seafood, which can be enjoyed under the canopy of a nice stretch of casuarina trees. In the town itself, people can visit the mausoleum/tomb of General-Fish, a respectable traditional character of the Can Gio fishing community.

Tourism in Can Gio is in the process of transformation from a spontaneous to a professional format. Visitors are mainly residents of Ho Chi Minh City seeking relaxation, fresh air, and a natural environment as a respite from work in the busy city. Most go to the Forest Park and the beach, the numbers rising quickly from 27,213 in 1997 (Sinh 1999) to almost 230,000 in 2001. It is estimated that around 80 percent come from Ho Chi Minh City, 5 percent from the local area, 1 percent from abroad, and the remainder from other nearby provinces.

As at many other nature-tourist sites in Vietnam, educational activities are limited. Vam Sat provides visitors with basic knowledge of the ecosystem of mangrove fauna and flora, and has therefore attracted a good number of scientists and true eco-tourists. But this site has not attracted a lot of casual visitors because its lack of large car parks and long travel time by boat makes its travel cost relatively higher than the other Can Gio sites.

Can Gio district, together with city’s Department of Tourism, is planning to increase tourist sites in Can Gio in both quantity and area to make tourism the leading economic sector of the district and a strong point of the city. Tentative additions include ecological training tours, a picnic site for the city’s young people, the Sac Forest naval site, orchards, and historical sites (Department of Tourism 2002).

Management of tourism in Can Gio: The management of tourism in Can Gio is rather complex, involving both public and private parties. Two big tourist companies based in Ho Chi Minh City operate in the area—the Sai Gon Tourist Cooperation (SGT) and Phu Tho Tourist. The district’s trading company and some private enterprises operate restaurants, guest houses, and private car parks. At least 100 local families operate seafood shops, souvenir shops, drinks stands, and chair rentals. Businesses related to transportation along the main road from Ho Chi Minh City—motorcycles, buses, the ferry, and shops—also benefit from tourism development.

The management board for Can Gio protected mangrove forests, some forestry plantations, and the district’s organisations in Can Gio are planning tourist businesses of various types. And the newly established management board for April 30th Beach (under the district People’s Committee) controls the operation of shops and security there.

The impact of tourism: At the moment and in general, the impact of tourism on the local economy and society is positive. Some local community members have seen their income increase and their living standards improve through employment in beach services, in businesses along the main road, or in the big tourist companies. The most visible and general benefit to the local community is improvement in the local infrastructure. The new bridge, good roads, and electricity which support tourism also improve the life of local people.

But eco-tourism in Can Gio is also having some negative impact on the environment and the community. With the number of visitors increasingly rapidly, beach pollution is becoming a problem. Waste is collected each morning; for the rest of the day, refuse from food and drink shops are thrown into the beach creating unhygienic conditions. The operation of shops and services by local people who lack knowledge of tourism and business practices has led to unfair competition among the food sellers and chair renters and to social evils such as fighting.

To make this sector socially healthy and sustainable, local people involved in tourism and tourist company employees should be reorganized and given training in sustainable eco-tourism. A good management board should also be established to control the activities of all stakeholders and ensure their activities do not go beyond the permitted level.

Recommendations

There are four main areas that deserve priority in improving eco-tourism in Vietnam:

1. Concerned bodies from the local to the central levels should coordinate planning, ecotourism policy-making, the compilation of guidebooks, and the conservation of vulnerable ecosystems, wild life, and cultural integrity.

2. Baseline studies of the natural environment of potential ecotourism areas should be carried out. These include Environmental Impact Assessments of ecotourism activities and research into carrying capacity to avoid overconcentration of tourists, too many hotels, and a level of noise and transportation that would seriously affect local life and natural environments.

3. Ecotourist guides should undergo compulsory training at colleges or universities. Staff, especially managers, should be equipped with professional skills and basic knowledge of ecotourist practices at home and abroad.

4. Local communities should be engaged in ecotourism—not only in generating greater income, but also in conservation work. This may require the development of special schemes.

Phan Nguyen Hong, Quan Thi Quynh Dao and Le Kim Thoa work at the Mangrove Ecosystem Research Division, Centre for Natural Resources and Environmental Studies, Vietnam National University, Hanoi. The case study presented in this paper is an initial finding from the project funded by the MAB/UNESCO within the Young MAB Scientist Award Programme 2002, and was undertaken with Le Kim Thoa. The author would like to express great gratitude to MAB/UNESCO for this support.

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from :Kyoto Review

Thailand

2007-06-16T01:58:00.001-07:00

Thailand

Thank you very much, Acharn Giles. The title of my talk, “A Country is a Company, a PM is a CEO,” is based on a statement Prime Minister Thaksin Shinawatra made in November 1977 when he declared: “A company is a country. A country is a company. They’re the same. The management is the same.”

Thaksin’s election victory in January 2001 should be seen not just as the “rise of Thaksin,” but as the triumph of big business in Thai politics. Thaksin is not the only big businessman in or well connected to the Cabinet. Ukrist Pathmanand, others, and I elsewhere have described the circles of interest around this government, so I don’t need to go into detail. It’s enough to note that the Cabinet and the core of the Thai Rak Thai Party contain a significant selection of the big business families which managed to survive the crisis in reasonable shape.

Big business has captured the state. That in itself is interesting, and I will talk a little about how this came about. But what big business wants to do with the state is more interesting, and I’ll spend rather more time on that.

First, then, how did this capture of the state come about? To begin with, we have to understand that this is not totally new. In the era of military dictatorship, big business was very well connected politically. As parliamentary democracy developed, several big businessmen played a prominent role in the early stages, and later moved more into the background.

For most of the past two decades, they have not seen much need to take a direct political role. I think this was for two reasons. First, before 1997 globalization seemed to be a great thing. Big business profited more than any other social or economic segment by getting access to technology, ideas, education, markets, finance. Big business did not need the state to manage globalization. Second, the state did a pretty good job of looking after business’s interests inside the country without the need for direct management. It built infrastructure, controlled labor, kept the macro economy stable, and did not interfere much with big business itself.

All that changed over the 1990s, and especially in the 1997 crisis, in three main ways. First, the existing political system showed itself catastrophically incapable of protecting big business interests – in fact the government sleepwalked into a crisis which wrecked many of the largest companies. Second, globalization ceased to be a friend but became a threat – in the shape of the IMF and predatory transnational capital. And third, society became more demanding. The 1990s was a decade of protest, new political organizations, and arguments for structural change. (I will come back to this issue below).

These three changes provided the motivation for big business to take a larger political role. Two other things made this much easier. First, parts of the 1997 constitution had an urban, centrist bias which provided the openings for big business. Second, the widespread social havoc of the crisis created an equally widespread demand for political change which could be exploited by electoral promises and party imagery.

Now let me move to the second part, how big business wants to use the state. I divide this into two areas, which are broadly economic and sociopolitical respectively.

First, economic. This government wants to shift towards a form of the “developmentalist” state found in other parts of Asia over the past generation. By “developmentalist” I mean that the state takes a more active part in protecting and promoting domestic capital in order to achieve catch-up economic growth.

This is not a new ambition on the part of Thai domestic capital. Back in 1980, the banker and finance minister Boonchu Rojanasatian campaigned for “Thailand Inc.” and said: “We should run the country like a business firm.” That effort was blocked by the generals, who worried that capitalism rampant would stimulate communism rampant too.

Thaksin has echoed Boonchu almost exactly, talking of “Thailand Company Limited” and saying, “A country is a company. A company is a country. They’re the same.”

Economic growth is the Thaksin government’s primary focus. At first, it was simply recovery from the crisis. Once this was on the way, the goal became attaining OECD status and transiting into the first world. This is the primary goal that shapes all of the secondary ones.

For earlier developmentalist states (Japan, Korea, Taiwan), the aim was to force-feed domestic capitalism through three main kinds of policies: directed credit; industrial policy, meaning packages of protective and promotional measures for selected sectors or firms; and control of labor.

Thailand’s new developmentalism differs in some important ways because of the change in era and the special character of Thailand’s economy. Most importantly, Thailand has pursued trade liberalization and later financial liberalization for many years, so the economy is highly open and externally oriented. Changing this orientation would be highly costly. Since the boom and bust, most major industry – and especially export industry – is under transnational firms. The Thaksin government’s policy is not to withdraw from this transnational dominance. It accepts that this is the age of transnational production networks. Rather the government tries to promote Thailand as a site for export location, tourism, and investment, and at the same time to upgrade Thailand’s position within transnational production chains.

In parallel, the government wants to promote and protect domestic capital in sectors oriented to domestic consumption, especially service industries. These sectors are somewhat protected from foreign competition, not by trade protection but by other legal barriers, such as the ban on foreign ownership of land and restrictions on foreign investment in media, telecommunications, and certain kinds of services on the grounds of special or security reasons. These sectors are also the ones in which most of the family businesses connected to the government are involved.

The government has moved towards what used to be called “industrial policy,” though here it is formulated in terms of business school economics and labeled “enhancing competitiveness” and promotion of small and medium enterprises (SMEs). Five strategic industries have been openly identified for promotion, including: fashion; agriprocessing; automobiles; ICT, especially graphics; and services, including tourism, restaurants, medicine, and logistics. Others are clearly being promoted in parallel through cronyist ties. Note that the majority of strategic industries are in services or service-related.

The government is also involved in channeling credit on a scale never previously seen in Thailand. The 1997 crisis pole-axed the commercial banks and finance companies. Those that survived are still reluctant to lend. At the same time, the crisis transferred many banking assets to government control. The government’s Krung Thai Bank was transformed from a sleepy dinosaur into the country’s largest lender. In addition, the government has mobilized other semi-dormant state banks and state specialized financial institutions (e.g., Government Saving Bank, EXIM Bank, SME Bank), expanded their roles, and urged them to lend. It has also experimented with ways to steal dormant deposits away from the remaining commercial banks; launched schemes of subsidized credit (for real estate and SMEs); begun using the stock market to corporatize and refinance state enterprises; and set up a state Asset Management Corporation which is able to restore the creditworthiness of formally bankrupt companies. The government has become the major factor in the allocation of credit.

The government is also stimulating consumption in order to create the market for domestically-oriented enterprise. This began with Keynesian stimulus under the previous government. Thaksin expanded this by encouraging a large increase in consumer debt.

Finally, the Thaksin government is intent on broadening and deepening the extent of the domestic capitalist economy. The thinking is simple: many people still live in a semi-subsistence economy. Incorporating them more firmly into capitalism will increase growth (as well as reduce poverty). The Thaksin government’s so-called “populist” schemes are easily misunderstood as similar to Latin American welfare populism. With the exception of the cheap health scheme, this is not the case. The Thaksin schemes are mostly about stimulating entrepreneurship by increasing the access to capital. Thaksin has said: “Capitalism needs capital, without which there is no capitalism. We need to push capital into the rural areas.” Thaksin’s adviser, Pansak Vinyaratn, claimed: “For the first time in the history of Thailand, we have moved capital closer to the people.” The same logic is being applied to some parts of the illegal or underground economy. The government wants to legalize them and bring them within the scope of the legitimate economy.

Now let me come to the socio-political part. Here my argument in summary is as follows. While big business has seized the state to manage external threats, it has also seized it to manage internal threats. This second mission is just as important, and much less understood.

After the end of the Cold War and the collapse of Thailand’s military rule, there was a big expansion of political space – protests, civil society, NGOs, public intellectuals, people politics, new organizations, etc. More people were looking for new ways to challenge the distribution of power and wealth. This upsurge threatens the interests of big business in many ways. Most directly, it threatens its ability to command the use of natural resources for land development, power generation, waste disposal, and many other things. By the end of the 1990s, almost every large-scale project was challenged and blocked by protest.

More subtly, this new civil society embraced ideologies which aim to severely reduce the power of the central state. These ideologies arose in reaction to the centralized, top-down, dictatorial state of the era of military rule, which was willed almost intact to the new parliamentary politicians. These protest ideologies range from classic liberalism, which simply wants to qualify state power through greater transparency, rule of law, checks and balances, etc., through to more anarchistic ideas such as the community culture movement, which wants to disassemble the central state and return power to local communities. These liberal and anarchistic strains were logically opposed to one another, but in many of the campaigns of the 1990s they could cooperate in opposition to the central leviathan. Moreover, these agendas started to have real influence within the state. Some of the key policy documents of the late 1990s were written from this perspective, namely, many parts of the 1997 constitution, the eighth development plan, the decentralization law, education reform proposals, and so on.

Just when big business wanted to seize the state and use it to force-feed capitalism, civil society movements wanted to disassemble or restructure the state to be more responsive to other interests. And these agendas began to have influence over the state.

Moreover, the protest movements disrupting the big projects were intertwined with the ideological campaigns against the strong state. The ideologues rode on the backs of the protesters to press their agenda; the protesters contracted the ideologues to articulate their demands in a wider political context. Moreover, this axis began to benefit from globalization, whose benefits had earlier seemed to fall mostly to big business and the middle class. Similar protest movements and ideological currents began to link together on a transnational scale, leading to such events as the World Social Forum and the siege of Seattle.

Since 2001, the Thaksin government has closed down much of the political space opened up over the prior quarter-century. This has been dramatic. The government has pursued five main approaches.

First, the government has tried in part to quell protest through a new “social contract” offering some more welfare, village funds, and various “care” schemes. Second, where this approach is ineffective, the government reverts to repression. The Pak Mun dam issue nicely fits this pattern. Thaksin himself went directly to the protesters and offered them money. When they refused, he settled the issue summarily without even completing the government-financed research and had the protest camps forcibly dismantled. To aid in countering protests, the government has added several repressive laws and has partially rehabilitated the military to serve as an ally and resource. It has aggressively targeted the NGO movement.

Third, the government has tamed the media through a mixture of law, regulation, intimidation, and money. The media is possibly tamer now than at any time in Thailand’s modern history, except the immediate aftermath of the 1976 massacre.

Fourth, the government has launched campaigns of social discipline. Some of these are peripheral – little more than state aid for panicked middle-class parents who cannot control their children and particularly their children’s sex lives. But behind these campaigns is an idea of the state’s duty and ability to discipline what Habermas would call the life-world. This is summed up in the phrase “social order,” which in its Thai version, rabiap sangkhom, has a much greater tone of conformity and orderliness than the English. For example, the Ministry of Culture has been running a TV ad for several months about a bad youth who would not bend his back in the traditional stoop of deference. The “final war on drugs” in 2003 had many objectives, but one of its outcomes was to intimidate all forms of social deviance.

Fifth, the government is promoting nationalism. This is not the political nationalism of the colonial and cold-war eras, but an economic nationalism. The thinking is explained in Liah Greenfeld’s book, The Spirit of Capitalism, which Thaksin and his advisors have publicly quoted on several occasions. The main message of the book is that societies which put priority on achieving economic growth to make their nation great can achieve growth very rapidly. Greenfeld wrote: “Where nationalism embraces economic competitiveness, the ‘take-off into sustained growth’ can be expected to take place within a generation…. Nationalism was like the magic wand that changed Cinderella’s pumpkin and mice into a gilded coach-and-four.” Greenfeld’s second message is that societies which start on this path but get distracted by other goals such as democracy or rights or the quality of life or equity are likely to fall by the wayside.

At the end of last year, Thaksin said: “Democracy is a good and beautiful thing, but it’s not the ultimate goal as far as administering the country is concerned…. Democracy is just a tool, not our goal. The goal is to give people a good lifestyle, happiness, and national progress.”

In sum, I see Thaksin as the leader of a big business project to seize the state in order to protect big business against both external and internal threats, and in order to achieve a “great leap forward” into advanced capitalism. Thaksin and his allies want to manage the economy more actively by using state tools to mobilize resources and deepen capitalism. They want to manage the society to suppress alternative agendas which might obstruct this great leap forward, particularly agendas which prioritize rights, democracy, or equity above growth. Thailand is obviously adopting a form of developmentalism along the line of the Asian NICs in the 1970s, but with differences because of the way the world has changed over recent decades.

When a country becomes a company, and government becomes management, then people are not so much citizens with rights, liberties, and aspirations, but rather consumers and factors of production. Thank you.

Giles Ji Ungpakorn: Thank you very much, Prof. Pasuk. Our next speaker is Associate Professor Paul Hutchcroft, who is currently based in the University of Wisconsin in the United States, where he specializes on comparative politics on Southeast Asia, especially the Philippines.

from :Kyoto Review

The Pondok and the Madrasah in Patani

2007-06-16T01:50:00.001-07:00

Hasan Madmarn
Bangi / Universiti Kebangsaan Malaysia Press / 1999

by Naimah Talib
The study of traditional Islamic institutions in Southern Thailand has not received much systematic and scholarly attention. Institutions such as the pondok (private Islamic boarding schools) are historically important to the Malay-Muslim community in Thailand. They perform a key role in providing religious instruction and also in deepening the community’s understanding of Islam. Moreover, they are closely associated with Malay-Muslim identity and often act as a pivot for Malay social life. Hasan Madmarn’s study of the pondok and madrasah in Patani is a valuable contribution to the literature on traditional Islamic institutions. In particular, he offers fascinating insight into the workings of the traditional pondok and its influential role in Patani society.

From about 1782, the Siamese monarchy began gradually to extend its influence over the Kingdom of Patani. Patani was then divided into seven administrative areas, each under the control of a Siamese-appointed chief. In the 1890s, King Chulalongkorn’s reforms creating a centralized administration undermined the power and influence of the Muslim rulers further, leading by the early twentieth century to direct control by the Siamese authority. However, Siamese officials spoke little if any Malay and governed from the towns, while the Malays generally stayed in the countryside and found security and sanctuary in their religion and culture. Today, Malay-Muslims form the majority in the four southern Thai provinces of Pattani, Narathiwat, Satun, and Yala, but make up a small minority in the country as a whole.

In the 1930s and 1940s, attempts by the Phibun government to assimilate ethnic minorities into national life had a direct impact on the Muslim community in the South. Malay-Muslims protested at the assimilation measures and there emerged growing dissatisfaction, especially among the young. This resulted in a determined attempt to revive Malay identity and raise the level of Islamic consciousness. Religious institutions such as the pondok were used to disseminate ideas of Pan-Malay nationalism and Islamic revivalism.

Hasan Madmarn’s monograph highlights some of these issues. He draws attention to the historical importance of Greater Patani as a center of Islamic learning and to the various responses of the pondok to government policies intended to modernize them. He also discusses the adjustments made by providers of religious education in Pattani province in the last few decades.

Hasan begins his study with the role of Patani as an independent Malay-Muslim kingdom in the seventeenth and eighteenth centuries. The Patani religious scholars, the ulama, offered Islamic classical education to keen students through the pondok, providing both basic and advanced courses in Malay and Arabic. Hasan gives a detailed and excellent evaluation of Patani’s religious scholars in the nineteenth and early twentieth centuries, highlighting their contribution to the writing of important religious commentaries and to translation from Arabic into Malay, written in the Jawi script. Many of the ulama, such as Shaykh Dawud al-Fatani and Shaykh Ahmad al-Fatani, distinguished themselves in the religious centers of the Middle East in the nineteenth century and were connected to networks of religious scholars within the Malay and wider Muslim world. The Holy Mosque at Mecca (Masjid al-Haram) became a much sought-after destination for graduates of the Patani pondok. Hasan also stresses the importance of the Malay language in religious instruction, maintaining that much of the literature used for religious instruction was in Malay, the students’ own language.

In his study of the pondok, Hasan examines the role of Chana, a town in Songkhla province, from the 1930s to the 1950s. Chana had four major and highly regarded pondok whose reputation enabled them to attract students from all over Thailand and British Malaya. The ulama of these pondok belonged to the Kaum Tua, or traditional school, which favored “all that was traditional, unchanging and secure” (p.18). The traditional pondok system of learning is narrowly based and “medieval” at best (p.21). There is no system of assessment and students learn by rote and by taking down commentaries and explanations given by their religious teachers. As in other parts of the peninsula, the Kaum Tua came into conflict with the proponents of modernist reform, called the Kaum Muda. Hasan mentions Tok Guru Ghani, a leading member of the Kaum Muda group, who introduced the modern madrasah into the traditional system of religious instruction represented by the pondok.

In contrast to the pondok’s exclusive focus on religion, the madrasah curriculum is broadly based, emphasizes knowledge application, and has a relatively vigorous system of assessment. The madrasah is often modeled on similar schools found in the Middle East. Here it would have been useful for Hasan to discuss the relative popularity of madrasah and pondok schools before the 1960s, but he does not provide information on enrolment for these two types of institutions. More attention is given to the ulama of Patani, the mainstay of the pondok system, than to the proponents of the madrasah system.

Neither does he cover in much detail the impact of Thai government policies to upgrade and introduce secular subjects into the pondok schools in the early 1960s. This program entailed the registration of all pondok with the Ministry of Education and was aimed at transforming them into private schools subject to government regulation. This inevitably resulted in a new conception of the pondok as an educational rather than a religious institution. By 1971, 400 pondok had been registered and have survived as “private schools.” Hasan mentions the concern of religious teachers when Islam came “under government control” (p.74), but offers little evidence of resistance against the registration policy that made it compulsory for the pondok to use Thai as one of the languages of instruction.

The fears of religious teachers were confirmed by the 1987 policy extending compulsory education from six to nine years. Religious teachers at this time publicly opposed the policy because it would limit the time Muslim children could spend in religious schools. Another response to government reform was the attempt to transform pondok into madrasah. This would allow religious teachers to modernize their curriculum and include the objectives of the Thai educational system while preserving the tradition of Islamic learning associated with the pondok.

The Thai government, meanwhile, provided incentives to Muslim children to remain in public education by encouraging the teaching of Islam in elementary schools, a move that was received positively. (There was also an attempt to upgrade the standard of teaching and the curriculum of Islamic private schools, the post-registration pondok schools.) In time, Islamic subjects were introduced at the secondary level of public schools, and eventually, the Education Ministry established the College of Islamic Studies at the Prince of Songkhla University. This allowed students to pursue Islamic studies in Thailand at the tertiary level for the first time.

While Hasan has done a commendable study on the institution of the pondok, giving adequate attention to the curriculum and the learning process, and highlighting the contributions of religious scholars, he has not addressed the role of religious institutions within the broader context of political change in the Southern provinces. For example, there is no discussion of allegations that the separatist movement in Southern Thailand has used pondok as recruitment centers. Without exaggerating the importance of separatist demands, it may be worthwhile to underline the terms by which the Muslim community has tried to negotiate its integration into mainstream Thai political and social life. Education continues to serve as an important key to integration and development, as most pondok have been transformed into private Islamic schools under the government’s jurisdiction.

The competition for students between traditional, private Islamic schools and government-run public secular schools that include Islamic subject matter is also a pertinent issue not carefully examined here. At question is whether the pondok can adapt to conform to the Thai national educational curriculum and continue to exist alongside secular schools. Certainly, the pondok is under increasing pressure to redefine its role in Thai Muslim society.

Naimah Talib teaches at University of Canterbury in Christchurch, New Zealand.

from :Kyoto Review

Overseas Filipino Workers, Labor Circulation in Southeast Asia, and the (Mis)management of Overseas Migration Programs

2007-06-16T01:45:00.001-07:00

Odine de Guzman

In recent years overseas contract work has become the Philippines’ prime export commodity. In the year following the 1997 Asian financial crisis, overseas Filipino worker (OFW) remittances amounted to US$7 billion. (DER-BSP, Table 11. OFW Remittances By Country and By Type of Worker.) OFW remittance is such a vital source of revenue that since the mid-1980s the government has lauded these workers as the country’s “new economic heroes” or mga bagong bayani. This essay highlights the growth of women’s participation in the ongoing Filipino labor diaspora and underscores the government’s active promotion of overseas labor migration. It discusses Filipino international migration within the context of labor circulation in Southeast Asia, comparing the experience of overseas domestic work of Filipinos and Indonesians. Finally, this essay examines two forms of involvement by the international community in current women’s migration issues – the promotion of international protections and research on different aspects of women’s migration – and includes a current reference list on the issue.

The bagong bayani are a diverse group. They include emigrants and contract workers, both of whom may be documented or undocumented. (NGO statistics categorize these two groups as overseas Filipinos and overseas Filipino workers.) As of 2001, overseas Filipinos numbered 2.74 million and OFWs 4.67 million, of whom 3.05 million are documented and 1.62 million undocumented (Kanlungan Center, citing the Commission on Filipinos Overseas, Department of Foreign Affairs). OFWs are further statistically classified as sea-based workers, who are largely male, and land-based workers, who are the focus of this essay.

Initially, the workers were called OCWs, or overseas contract workers, a term which is descriptive of a temporary and contractual employment status – usually fixed terms of six months to two years. Moreover, the term bespeaks the workers’ lack of physical and social mobility in the receiving country, which is restricted by the terms of their contract. Because of the growing prominence of overseas work and of the sense of being neither here nor there implied by “OCW,” the term has fallen out of favor in both government and media parlance. “OFW” – with the insertion of “Filipino” adding a national projection as befits new heroes – has become the preferred version.

Being heroes, however, does not mean the government can guarantee OFW welfare, despite remittances that annually amount to billions of dollars. News reports abound of victims of abuse and of the death of overseas contract workers since the early 1990s.[1] These include Singapore’s much talked-about 1995 execution of Flor Contemplacion, who was convicted of killing a Filipina domestic worker and her Singaporean ward; the unresolved case of Mary Jane Ramos;[2] the case of Sarah Jane Dematera, on death row for 11 years (Kanlungan Center); and numerous others that remain unreported.

The Feminization of Philippine Overseas Labor Migration

These news reports sketch the current face of Philippine overseas labor migration. It is increasingly female and services-oriented. In 1992, of the total deployed, land-based, newly hired OFWs, 50 percent were female. This increased to 58 percent in 1995, 64 percent in 1999, and 72 percent in 2001.

The Philippine Overseas Employment Administration (POEA) lists eight skill categories. In the period 1992 to 2001, the skill category “service workers” comprised an average 35 percent of the total number of deployed newly hired, land-based workers (POEA InfoCenter; NSCB). In that ten-year period, “service workers” was consistently one of the top two in terms of newly hired workers deployed. It alternated with the category “production workers,” which was the top occupation of overseas land-based migrants in the 1970s and which was the top occupation of deployed workers in the years 1994, 1996, and 1998-2000. The third highest category in the same period was “professional and technical workers,” which overtook “production workers” in 2001 (POEA InfoCenter).

The stereotypical gender division of labor is replicated in these skill categories. Production workers are predominantly male at 71 percent of the newly deployed in 2002, while service workers and professional and technical workers, largely nurses and overseas performing artists, are mostly female. (Dancers and musicians made up 72 percent of this skill category in 2000; 99.5 percent of all deployed entertainers went to Japan [POEA Annual Report 2000]. In 2002, 85 percent of deployed newly hired “professional and technical workers” were female.)

Fifty-two percent of the women deployed in 1992 were service workers; 59 percent in 1995; and 47 percent in 2000 (POEA 2002). From 1992 to 2001, women comprised an average 89 percent of deployed newly hired service workers. They comprised 92 percent of deployed newly hired service workers in 2000, 91 percent in 2001, and 90 percent in 2002.

The feminization of Philippine overseas labor migration, which had been male-dominated until the 1980s, belies the failure of women’s empowerment in society. The increasing out-migration of women indicates a decline, or continuing limitation, in the share of work available to women in the production process; employment opportunities remain restricted and income insufficient. The majority of female OFWs are still in “traditional” reproductive work such as domestic work and cultural entertainment, health care and nursing, where the pay is low and the nature of the work involves a higher exposure to physical, sexual and other abuse. This in turn underscores the international division of labor, in which the Third World, or the South, does the labor-intensive and lower-paid work. It also demonstrates a persistent gendered division of labor at the global level, with the South taking on the menial aspects of reproductive work, which are thereby “feminized,” secondary, subservient, and inferior to the “masculine,” dominant North.

The State and Overseas Labor Migration[3]

Migration is not wholly a personal decision motivated by desire for capitalist accumulation, but also reflects the lack of development policies on the part of the government and the lack of satisfactory living and employment opportunities within the home country. Feminist activist Wilhelmina S. Orozco asserted , as early as 1985, that the government had deliberately promoted labor migration as a solution to unemployment and growing national accounts deficits. Subsequently, sociologists Graziano Battistella and Anthony Paganoni (1992, 1996), Maruja M.B. Asis (1992), Joaquin Gonzalez III (1996, 1998), and urban planner Benjamin Cariño (1995) have examined the policies and directives of government administrations since Marcos, demonstrating how the government actively promotes labor migration with provision for the welfare of the migrants often an afterthought.

The administration of Ferdinand E. Marcos was blatant in its desire to use labor migration as a solution to the nation’s economic problems. The government was assertive in promoting and maintaining its warm body export. The Labor Code of 1974 formalized the Philippine labor migration program and had as its main goal the promotion of overseas contract work in order for government to reap the economic benefits of lower unemployment and workers’ remittances. In 1982, the Central Bank, Ministry of Foreign Affairs, and Ministry of Labor and Employment made the remittance of 50 to 70 percent of workers’ salaries mandatory through Executive Order 857. Sanctions such as the non-renewal of passports or disapproval of new contracts were imposed on those who did not comply. Executive Order 857 was so unpopular with contract workers that government abandoned it for more relaxed measures, like incentives to remitting migrants, the Suwerte sa Bangko program, the Balikbayan program, and the Overseas Workers Welfare Administration (OWWA) remittance assistance program (Gonzalez III, 1996).

Government policies and regulations on labor migration up to this period were but slight refinements of the Commonwealth government’s laws from 1915 to 1933, all of which focused on the economic benefits the United States government could gain from this enterprise. The Labor Code of 1974 only made the provisions in the previous laws more organized and economically viable.

In the late 1980s, the abuse of women migrant workers started to be widely publicized. Following a temporary moratorium on the deployment of Filipino entertainers to Japan, the administration of Corazon C. Aquino temporarily banned the deployment of domestic workers on January 20, 1988. The ban was meant to protect Filipino women migrants from being abused and exploited in the foreign countries where they worked.[4] But as NGO activists contended, no matter how well intentioned, the ban was wrong policy: because of it, many more women would leave the country illegally and would “no longer be entitled to government protection, thus putting [them] completely at the mercy of [their] employers” (Ocampo 1988, 5). Another issue was the ban’s infringement of the constitutional rights of workers to travel and find gainful employment. It was meant as leverage for negotiating better terms and conditions for the workers, but as migrant activists also pointed out, it was not binding on receiving states, who could simply turn to other developing countries for cheap labor.

NGOs proposed more concrete measures to address the abuse of overseas workers. They demended that government “put more teeth in the country’s labor laws to guarantee [the] protection of overseas domestic [workers],” compel labor attaches to do their jobs, and “enforce government-to-government negotiations for a fair deal for Filipino domestic [workers]” (C.D. Nagot, Gabriela spokesperson, quoted in Delos Santos 1988, 1; M.L. Alcid 1988; I.L. Laguindam 1988). In a press statement, Filipina domestic helpers in Hong Kong proposed the following (The United Filipinos Against the Ban, 1988):

Forge bilateral agreements with receiving countries. Proposals for HK:
(A) Repeal of the new conditions of stay for foreign domestic helpers.
(B) Strict implementation and monitoring of the employment agency regulations. Exorbitant fees and replacement guarantees to employers must be stopped.
(C) Meting out of appropriate penalties against abusive employers and agencies, from blacklisting to imprisonment.
(D) Standardization of working hours to a maximun of 12 hours of daily work.

Provide on-site protection to overseas Filipinos. Use the Welfare Fund to provide legal assistance, counseling, emergency loans, educational activities.

Educate certain officials and staff of Philippine Consulates on the rights and welfare of migrants. Remove anti-migrant officials.

Reorient overseas employment programs and agencies concerned to cater to interests and protection of rights of workers.

Abide by ILO instruments pertinent to migration and migrant workers, esp. Convention nos. 97 and 143, Recommendation nos. 86, 100, 151, 169.

Institutionalize the representation of overseas Filipinos in national and local (receiving countries) policy-making bodies.

Uphold people’s right to gainful employment. Develop viable local employment programs as an alternative to cheap labor export.

Subsequently, the Aquino administration lifted the ban for selected countries, Middle Eastern countries being the last. Maruja M.B. Asis (1992) noted that although the issue of remittances was important to the government, a gradual shift toward welfare and protection was noticeable among the executive orders and legislation passed during Aquino’s term. Among the most publicized of Aquino’s presidential actions was Proclamation No. 276, signed on June 21, 1988, which declared December “The Month of Overseas Filipinos.” In recognition of their contribution to the national economy, President Aquino called overseas contract workers the new heroes of the country or the new economic heroes. (Another version is “modern-day heroes,” which gained currency in the latter part of the 1990s, which Hong Kong activists counter with “modern-day slaves.”)

The epithet could not protect the migrant workers from being abused overseas. After a couple of highly publicized deaths of Filipina domestic workers abroad, the succeeding administration of Fidel V. Ramos tried to put a hold on the “new hero” syndrome. In 1996, RA 8042, the Migrant Workers and Overseas Filipinos Act of 1995, was implemented to show government support for the new Philippine heroes following national outrage at the execution of Flor Contemplacion. At the same time, government publicists floated the idea that Filipinos need not go abroad to get good employment.

Ramos promised economic prosperity through his Philippines 2000 program, which aimed to achieve NIC-hood (newly industrialized country status) by the year 2000. Nevertheless, remittances from overseas Filipino workers were still one of the bigger sources of government revenue.

At the end of 2000, Joseph Estrada, the thirteenth President of the Republic, called upon OFWs to be patient and continue supporting his beleaguered administration. Estrada said “the OFWs should continually remit their hard-earned dollars here to help prop up the heavily battered economy and to help in praying for his critics and political opponents” (Manila Bulletin, December 10, 2000). Later, President Gloria Macapagal-Arroyo, in her state visit to Singapore in 2001, was quoted as saying: “The Philippine economy will be, for the foreseeable future, heavily dependent still on overseas workers’ remittances” (Agence France Presse, 2001). In a keynote speech to welcoming Filipinos in Kuala Lumpur during her state visit to Malaysia in the same month, the President proffered a new name for the economic heroes: OFI, or overseas Filipino investors. In this telling, overseas Filipino workers “invested” their talents and energy in the receiving country.[5]

One aggressive “investment” strategy the government reportedly adopted was to deploy “at least one million people” abroad annually, or 2740 persons per day (Kanlungan Center 2001). The NGO further quotes the President as saying: “Jobs here are difficult to find and we are depending on people outside the country. If you can find work there and send money to your relatives here, then perhaps you should stay there” (Philippine Daily Inquirer, July 28, 2001). In keeping with the spirit of the free market espoused by Macapagal-Arroyo, the implementation period of the controversial sections of RA 8042, which provide for the deregulation of overseas employment and the gradual phase-out of the POEA, fell during this administration.

Part VII of RA 8042 reads:

SEC. 29. COMPREHENSIVE DEREGULATION PLAN ON RECRUITMENT ACTIVITIES.
Pursuant to a progressive policy of deregulation whereby the migration of workers becomes strictly a matter between the worker and his foreign employer, the DOLE within one (1) year from the effectivity of this Act, is hereby mandated to formulate a five-year comprehensive deregulation plan on recruitment activities taking into account labor market trends, economic conditions of the country and emergency circumstances which may affect the welfare of migrant workers.

SEC. 30. GRADUAL PHASE-OUT OF REGULATORY FUNCTIONS.
Within a period of five (5) years from the effectivity of this Act, the DOLE shall phase out the regulatory functions of the POEA pursuant to the objectives of deregulation.

Like her predecessors, Macapagal-Arroyo could only enjoin OFWs to “stay put abroad and continue to send their dollar remittances until the Philippine economy stabilizes” (Del Callar, 2001). Yet at the same, the government officially maintained that overseas employment was not a policy: “In an August 2001 meeting with a delegation of overseas Filipinos advocating for their right to vote, Labor Secretary Patricia Santo Tomas objected to any reference to ‘export of labor,’ saying that people go abroad on their own volition” (Kanlungan Center 2001; underscoring mine).

The new heroes of the country, ang mga bagong bayani, continue to hold a special place in government rhetoric.

Migration in the Region

Filipinos are not the only border-crossing labor migrants in contemporary Southeast Asia, though they are probably the most “encouraged” by their government and have the most organized way of dealing with the move (Azizah Kassim 1998; Jones 2000). One major receiving country is Malaysia, with about 743,641 legal foreign workers from ten countries, including the Philippines, Thailand, and Indonesia, and an estimated one million undocumented foreign workers. Alien labor accounted for about 20 percent of Malaysia’s workforce of about 8 million and about 10 percent of its population of about 20 million in 1995 (Azizah Kassim 1998). Sidney Jones asserts that “Malaysia was the largest employer of foreign labor in Asia in 1999” (Jones 2000, 3). But Malaysia also sends labor to neighboring countries such as Singapore – where 200,000 Malaysians reportedly work (Jones 2000), some of them illegally – Brunei, Taiwan, and Japan. Azizah Kassim (1998) explains that Malaysian workers in these countries are found in domestic services, manufacturing, construction, and services, the sectors occupied by foreign migrant workers in Malaysia. That is, semi-skilled Malaysian workers take up jobs abroad that they refuse in their home country because of relatively higher pay, while some professionals opt to stay in Brunei for the tax breaks the Sultanate offers.

Thailand also sends workers abroad, while receiving a number of illegal workers, in this case from Myanmar and Southern China. They too work in the sectors occupied by Thais in foreign countries (Azizah Kassim 1998); because of their irregular status wages are often determined by what employers can afford and sometimes by the generosity of employers. Estimates of migrants in 1998 put the number at one million, with two-thirds likely to be irregular (Jones 2000).

Thailand has exported labor to countries in the Middle East (mostly Saudi Arabia), Europe, the Asia-Pacific region, and the United States since the 1980s. Political instability in the Middle East, however, shifted Thai labor movement toward Japan, Hong Kong, and Singapore. By the 1990s, Thai overseas labor was predominantly located in the Asia-Pacific region. In 1993, 85 percent of total overseas Thai labor was in the region, with 32 percent based in Singapore, Brunei, and Malaysia. The major destinations of 191,735 deployed Thai labor migrants in 1998 were Taiwan, Singapore, Brunei, Japan, Israel, Malaysia, and Hong Kong (Battistella 2000, 13).

As of 2000, Singapore was home to approximately 530,000 foreign workers. Officially, the workers could be recruited from Malaysia, Hong Kong, Taiwan, Macao, South Korea, Thailand, India, Bangladesh, and the Philippines. The largest group of foreign workers in the country was Malaysian, while the second largest was Filipino; there were also reports of the presence of a considerable number of Indonesians and mainland Chinese. Foreign workers occupied the following sectors: domestic services, which registered approximately 100,000 workers; construction (200,000); shipyards; services; and hotels. Of the 530,000, around 80,000 were highly skilled and worked in finance, business, commerce, and manufacturing (Battistella 2000, 12).

Brunei had been importing labor since the mid-1980s; the foreign workers based in Brunei were from Singapore, Malaysia, Thailand, Indonesia, and the Philippines as well as from India and Bangladesh. In 1988, the largest foreign worker group was Malaysian with 18,418 workers, followed by Thai at 9,941 workers (Azizah Kassim 1998). Currently, Brunei’s private citizens are “dependent on migrant workers for 74% of [their] manpower” [needs] (Jayasankaran 2003).

Like its Philippine counterpart, the Indonesian government under the New Order started “sending migrant workers overseas as one of strategic ways to overcome unemployment and to increase foreign exchange” (Eko Susi Rosdianasari 2000, 93). From the late 1960s to the early 1990s, Indonesia processed over 700,000 overseas workers’ papers, the majority of which (like Thais and Filipinos in the 1970s and 80s) were for the Middle East. Twenty-four percent went to Malaysia and Singapore; however, this number did not include the over half a million believed to be in Malaysia undocumented (Azizah Kassim 1998). By in 1997, as noted by Graeme Hugo, the Malaysian Immigration Department was impelled to raise estimates of Indonesian workers residing in the country to 1.9 million after nearly 1.4 million resident Indonesians voted in the 1997 Indonesian elections. (The year before, about 300,000 undocumented workers had been legalized.) This estimate was far greater than most others – for example, those based on a 1993 amnesty in Peninsular Malaysia when half a million Indonesians came forward (Hugo 2002). Overall figures as of 1999 indicated an estimated three million workers without “any formal document” – most from East and Central Java, East and West Nusa Tenggara, and South Sulawesi – while statistics from 1994 to 1999 showed 1,461,236 labor migrants leaving Indonesia each year.

A projected 36 million Indonesians were expected to be affected by underemployment toward the end of 2000 when a 2 percent (per annum) economic growth rate was expected.[6] Eko Susi Rosdianasari (2000) asserted that the Workers Department therefore aimed to deploy 2.8 million workers between 1999 and 2004, even as laws and government policies continued to lack measures to protect migrant workers. The government expected a return of up to US$12 billion in remittances from this enterprise.[7]

Indonesians’ top countries of destination are Saudi Arabia and Malaysia, followed by Singapore, Taiwan, Japan, Hong Kong, Brunei, and Korea. Indonesian labor migrants are mostly found in domestic work and in factories, industries, hotels, hospitals, and plantations, while a hefty 70 percent of all overseas Indonesian migrant workers are women.

Filipino and Indonesian Women in Foreign Households

While the majority of Filipino and Indonesian women labor migrants end up in domestic work, it is considered to be risky and sending governments do not have strong bilateral agreements with receiving states on the protection of these women. As noted earlier, numerous Filipino women have met misfortune in varying degrees in their quest for economic upliftment as overseas domestic workers. Media reports in Indonesia have likewise exposed the abuses experienced by women migrant workers, many of whom are domestic workers. The abuse begins in the home country, at the hands of a tekong (middleman/illegal recruiter) and calo (small company or individual recruiter), and continues in the employer’s home in the form of non-payment of wages, long working hours, subjection to cultural taboos, or physical and sexual abuse. The protection of domestic workers is made difficult because of the location of the work in the employer’s private residence, where the lines between the employee’s work and private time/space are blurred.

It is made even more difficult in Indonesia when “maids are not [considered] workers” and “continue to be regarded as the private property of households” (Ati Nurbati 2000, 91, 90). Because of the general assumption that domestic workers have low education and that “they sleep and eat for free,” their salaries are low and are not governed by minimum wage laws. In fact, “[a]s ‘part of the family,’ a maid’s wage is not public business” (ibid., 91). The notion that a domestic worker’s welfare, including salary, lies beyond the scope of public business partly originates from the capitalist division of labor into the productive and reproductive spheres, where the notion of work is a “production process that contributes to capitalist accumulation and exchange” (Eviota 1992, cited in Cheng 1996, 110). In contrast, domestic work falls within the “process of reproduction, essential to the survival of the family and society, [but] does not directly lead to the process of accumulation and exchange;” thus, it is not customarily considered work, thereby, it converts the status of domestic workers into non-workers (ibid). To a certain extent, women domestic workers fall within the ambit of the private on account of gender relations in society. Patriarchal societies deem women’s proper place to be the home, while men rightly belong in the public arena.

A review of most government policies and legislation on the protection of migrant workers shows that domestic workers’ specific labor problems are not factored in at all (Palma-Beltran and Javate-de Dios 1992; Heyzer 1994, also cited in Jones 2000; Goldberg 1996). Even so, many women leave because domestic workers at home earn only 15-20% of what they can earn abroad. In real terms, however, the enormous recruitment fees and other travel expenses increase their family’s living expenses, sometimes exponentially.

Indonesian domestic workers in Malaysia are offered between US$90 and US$150 per month with recruitment fees to be deducted from the first three months. But there are numerous reports of more deductions than agreed upon and failure to receive full or any salary at all (Jones 2000; Ati Nurbaiti 2000; Eko Susi Rosdianasari 2000). Yet for US$100 a month, many a rural woman would take the risk of illegal detention, torture, and even death, strengthened by the hope that one’s own fate will be different. (The bulk of reported abuse of Indonesian domestic workers is in Saudi Arabia, with many physically and sexually abused.)

Aside from the often-marginalized position of migrant workers in receiving countries, workers also fall into hierarchical categories within migrant groups, which can be imposed upon them by local society. In the hierarchy of overseas domestic workers in Malaysia, for example, Filipinos are on the top rung. Indonesians fall into a lower salary range because they usually have a lower level of education, are not yet knowledgeable about the use of “modern” household equipment, and are not proficient in the English language.

But regardless of foreign language proficiency, overseas domestic workers are almost always unjustly considered “potential prostitutes” by local officials and laypeople who tend to prejudge foreign workers (Jones 2000, 65); in fact, even in their home country, unmarried Indonesian women leaving to work as domestic workers are imagined as “social misfits who could not get husbands or who had personal problems at home that prompted them to leave” (64-65), despite the financial support they send back. Of course, recruited domestic workers every now and then unwittingly do end up in prostitution. The multi-million dollar business of trafficking in women thrives upon deceiving, or convincing, unsuspecting women and families about the rewards of overseas work. Once the migration process has started, where a worker actually ends up is determined by the recruiters and their allies. Sydney Jones asserts that in the case of Indonesian women, the high demand for overseas domestic workers in Malaysia facilitates the recruitment of women legal and illegal recruiters conscripting women for housework or for the brothel (65).

International Protections for Migrant Women

The incessant circulation of labor within the region attests to the interconnectedness of economies and unevenness of economic development among the neighboring countries, but it also intimates contiguous human relationships, harsh or otherwise. At the international level, the term “migrant” covers a broad spectrum of people on the move. It is commonly used to refer to people who journey to another country in search of work. The International Labour Organization (ILO) defines migrants “as those who migrate from one country to another for the purpose of being employed there,” which assumes that they are legally permitted to stay and work in the receiving country and implies that their movement is voluntary. However, migrants and migrant workers do not always migrate by choice. As the experience of many Asian women shows, a large number of migrant workers are forced by socio-economic circumstance or by recruiters or deceived into believing that they will be legally employed, but end up without legal status in receiving countries. The Beijing Platform for Action recognizes the following categories of migrant women: refugees, the internally displaced, migrant workers, immigrants, and victims of trafficking.

International Covenants seek to address the various injustices experienced by people in general. Typically, they are non-binding yet important in that states are encouraged, sometimes pressured, to act in accordance with international standards and the terms of the conventions. Among the United Nations documents that have significant language for the protection of migrant women are the following:

The Vienna Declaration and Program of Action, 1993, the first international document to “raise women’s rights as human rights and treat them as warranting equal recognition and treatment as those rights more traditionally defined” (Goldberg 1996, 176). The Vienna Declaration asserts women’s rights as “an inalienable, integral and indivisible part of universal human rights.” Part I, par. 24 of the document recognizes migrant workers as “being among ‘those persons belonging to groups which have been rendered vulnerable’ and demands that ‘great importance must be given to the promotion and protection of [their] human rights’” (177).

The Copenhagen Declaration and Program of Action, 1995. Pamela Goldberg (1996) asserts that while the Copenhagen Declaration is replete with language addressing women’s issues, it does not particularly address the needs of migrant workers and has “nothing concerning migrant women specifically” (ibid). The document does refer throughout to “vulnerable and disadvantaged groups,” among which women migrants and women migrant workers have been “consistently identified in other documents,” which makes the phrase “vulnerable and disadvantaged groups” applicable to migrant women. The brief attention given to migrant workers “stresses the need for intensified international cooperation and national attention to the situation of migrant workers and their families (par. 63) and calls for the equitable treatment and integration of documented migrants, particularly, migrant workers and their families (par. 78)” (ibid).

The Cairo Declaration, which resulted from the International Conference on Population and Development in 1994, strongly promotes the protection of women and migrant women. Principle 12 states: “Countries should guarantee to all migrants basic human rights as included in the Universal Declaration of Human Rights”; chapter 10 deals entirely with the issue of international migration. Additionally, the document promotes issues of gender equality, equity, and empowerment of women, including the directive for states “to pay special attention to protection of the rights and safety of those who suffer from [degrading practices, such as trafficking in women, adolescents and children and exploitation through prostitution], crimes and those in potentially exploitable situations, such as migrant women… (par. 4.9).” Parts of chapter 10 attend to the particular issues of refugees and undocumented migrants, who were first distinguished from documented or regular migrants in the Copenhagen Declaration. The Cairo Declaration urges states to “cooperate in… safeguarding the basic human rights of undocumented migrants” (par. 10.17). Moreover, it advocates that governments

“adopt effective sanctions against those who organize undocumented migration, exploit undocumented migrants or engage in trafficking in undocumented migrants, especially those who engage in any form of international traffic in women, youth and children. Governments of countries in origin, where the activities of agents or other intermediaries in the migration process are legal, should regulate such activities in order to prevent abuses, especially exploitation, prostitution and coercive adoption (par. 10.18).”

The Beijing Declaration and Platform for Action, from the United Nations Fourth World Conference on Women, held in Beijing in September 1995, is by far the most cognizant among UN conference documents of the issues of concern to women migrants (ibid). In addition to ensuring the rights of women and the girl child, the Beijing Declaration articulates a commitment to “address the structural causes of poverty through changes in economic structures, ensuring equal access for all women, including those in rural areas, as vital development agents, to productive resources, opportunities and public services” (par. 26). Goldberg cites the articles in the Declaration that commit to safeguarding the rights of women migrant workers thus:

“In its section on Violence Against Women (par. 112-130), the Platform for Action recognizes ‘[s]ome groups of women, such as… women migrants, including women migrant workers’ as being ‘particularly vulnerable to violence’ (par. 116). It calls for states to ‘[p]rovide women who are subjected to violence with access to the mechanism of justice, and, as provided for by the national legislation, to just and effective remedies for the harms they have suffered and inform women of their rights in seeking redress through such mechanisms’ (par. 124 (h)); and urges states to ‘[t]ake special measures to eliminate violence against women, particularly those in vulnerable situations… including enforcing any existing legislation and developing, as appropriate, new legislation for women migrant workers in both sending and receiving countries’ (par.126 (d)).”

Moreover, the Platform for Action recognizes the contributions of migrant workers, including domestic workers, as it strongly recommends the enactment or reformation of national policies to guarantee the protection of migrants’ human rights, including protection from abuse and exploitation by their guarantor (par. 148 (h); ibid).

The International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families, one of the few legally binding documents pertaining to international labor migration. The Convention required more than a decade of lobbying before it was ratified as an instrument of international law. Adopted by the UN General Assembly in December 1990, it only came into force on July 1, 2003, with the ratification of the Convention by Guatemala, the twentieth ratifying state. The slow ratification of the Convention illustrated the rather ambiguous position of many states regarding the protection of migrants. Although governments acknowledged the need to protect migrants, binding themselves to such protection was a different matter. It was a combination of non-government organizations and civil society groups worldwide, along with the UN agencies, which tirelessly lobbied their governments to ratify the document. Nonetheless, the Convention demonstrates the international community’s recognition of and respect for the human rights of migrants and their families; more important, it declares the international community’s commitment to the comprehensive protection of the rights of these people in the economic, social, political, and cultural dimensions of relocation and reintegration.

Lori Brunio, chairperson of the Coalition for Migrants' Rights (CMR) in Hong Kong, has this to say about the ratification of the Convention: “For foreign domestic workers like us, having an international treaty like the MWC that clearly recognizes and protects our rights affirms our dignity and gives us more courage to fight against abuses, violence and discrimination. Even if the place where we work (Hong Kong) has not ratified, the MWC gives us indisputable basis for saying that we should be respected and treated fairly as human beings” (Asian Migrant Center 2003).

Other international documents that can be cited to ensure the protection of the human rights of women and migrant workers are: the Universal Declaration of Human Rights; the International Covenant on Economic, Social and Cultural Rights; the International Covenant on Civil and Political Rights; the Convention on the Elimination of All Forms of Discrimination Against Women; the Convention on the Elimination of All Forms of Racial Discrimination; and the Convention on the Rights of the Child (The People’s Movement for Human Rights Education 2003).

The International Labour Organization, which works “on the principle that all human beings irrespective of race, creed, or sex, have the right to pursue both their material well-being and their spiritual development in conditions of freedom, dignity, economic security, and equal opportunity,” (quoted in Goldberg 1996, 175) has since 1949 approved conventions that address issues related to women workers and migrant workers. Among them are: the Migration for Employment Convention (Revised), 1949 (No. 97); the Migrant Workers (Supplementary Provisions) Conventions, 1975 (No. 143); the Forced Labour Convention (No. 29); the Freedom of Association and Protection of the Right to Organize Convention (No. 87); the Equal Remuneration Convention (No. 100); the Discrimination (Employment and Occupation) Convention (No. 111); the Minimum Age Convention (No.38); and the Resolution concerning the Conditions of Employment of Domestic Workers, 1965 (Goldberg 1996; The People’s Movement for Human Rights Education 2003).

Although these international covenants are not always legally binding and are not solutions in themselves to the issues of migrants and labor migration, they are important nonetheless in compelling both sending and receiving states to ensure the protection of migrants and to adhere to a set of laws that are accepted to the international community.

Research on Filipina Migrant Workers and Academic Debate in the West

Western academic interest in the phenomenon of female labor migration from the Philippines may be seen in various essays published in different academic journals based in North America. One fine example is the volume edited by Filomeno V. Aguilar, Jr., and published in the Philippines by the Philippine Social Science Council. Filipinos in Global Migrations: At Home in the World? (2002) is a collection of essays previously published in international journals which are not readily available in the Philippines. Aguilar’s introduction, “Beyond Stereotypes: Human Subjectivity in the Structuring of Global Migrations,” contextualizes the recent phenomenon of labor migration within the history of “formal and informal structures and networks of migration” as well as the socio-political forces that determine and affect migration on the global plane. The collection, by way of the introduction, also asserts that migrants are “not passive victim[s] of structures, but [are persons] with human agency and subjectivity who [are] able to navigate through and negotiate with formidable structural forces” (Aguilar 2002, 2).

The following essays in the collection are significant for this review. “From Registered Nurse to Registered Nanny: Discursive Geographies of Filipina Domestic Workers in Vancouver, B.C.,” by Geraldine Pratt, examines discursive constructions of “Filipina” as these are lived out by Filipinas in Vancouver. Using poststructuralist theories of the subject and discourse analysis, the essay looks into how workers come into an understanding of their conditions, given the restrictions placed on them by their work and immigration status. Five other essays present valuable research on overseas Filipino domestic workers: “Sexuality and Discipline among Filipina Domestic Workers in Hong Kong,” by Nicole Constable; “Domestic Bodies of the Philippines,” by Neferti Tadiar; “Stress Factors and Mental Health Adjustment of Filipino Domestic Workers in Hong Kong,” by Christopher Bagely, Susan Madrid, and Floyd Bolitho; “Romancing Resistance and Resisting Romance: Ethnography and the Construction of Power in the Filipina Domestic Worker Community in Hong Kong,” by Julian McAllister Groves and Kimberly A. Chang; and “At Home But Not at Home: Filipina Narratives of Ambivalent Returns,” by Nicole Constable.

Based on her doctoral dissertation, Nicole Constable’s Maid to Order in Hong Kong: Stories of Filipina Workers (1997) draws from the insights of Michel Foucault and Antonio Gramsci on power, resistance, and accommodation to demonstrate that household workers do not just passively give in to the authority of the employer and to their poor working conditions. By centering on human agency and assuming individuals to be free agents in society, it argues that these workers subvert and resist the dominant power relations around them. Maid to Order looks at power and resistance as these are performed by Filipina domestic workers in Hong Kong.

Servants of Globalization: Women, Migration and Domestic Work (2001) by Rhacel Salazar Parreñas is an ethnographic account of the lives of Filipino domestic workers in Rome and Los Angeles. These workers do the menial tasks that local women have renounced for more “productive” work. The book analyses, at the level of the subject, the costs of labor migration to women who “leave behind their families to do the mothering and care taking work of the global economy in countries throughout the world.”

A book that is outstanding in spelling out interconnections between migrant labor, sending and receiving countries’ migration programs, and globalization and the impact of these on the lives of individual workers is Bridget Anderson’s Doing the Dirty Work? The Global Politics of Domestic Labour (2000). This study includes research on Filipina domestic workers based in Europe and analyzes the dynamics of class and race in the global market. Despite the common denominator of gender, this incisive research scrutinizes the politics of race in paid domestic work in the West as it challenges feminist principles of equality, even the notion of “sisterhood.”

Two studies from the Institute of Social Studies at the Hague are available in research centers in the Philippines: Mary Alice P. Gonzales’ Filipino Migrant Women in the Netherlands (1998) and Marilen Abesamis’ “Romance and Resistance: The Experience of Filipina Domestic Workers in Hong Kong” (1999).

The current phenomenon of female labor migration has also spawned academic debate that largely centers on the efficacy of postmodern theories in feminist research on the plight of Filipina labor migrants. In “Imperialism, Female Diaspora, and Feminism,” Delia Aguilar interrogates the significance of such theories as well as posing a challenge about the state of the women’s movement in the United States.

Notwithstanding the importance of analyzing the impact of the current wave of labor diaspora on the level of the individual, international labor migration is undoubtedly a development concern. At issue is the unequal distribution of resources and opportunities at the national and global levels, which force people to migrate. Undeniably, the current wave of international migration is intricately linked to the existing economic model of globalization that fails to improve the life chances of the great majority of people.

Odine de Guzman is an assistant professor in the Department of English & Comparative Literature at the University of the Philippines, Diliman. She is the editor of Body Politics: Essays on Cultural Representations of Women’s Bodies (2002) and From Saudi with Love: Poems by OFWs (2003). Research for the section “Migration in the Region” was conducted while she was on fellowship at IKMAS, Universiti Kebangsaan Malaysia, under the Southeast Asian Scholars and Public Intellectuals Fellowship (SEAF) Program in 2001.

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Gonzales, Mary Alice P. 1998. Filipino Migrant Women in the Netherlands. Quezon City: Giraffe Books.

Gonzalez, Joaquin L. III. 1996. “Domestic and International Policies Affecting the Protection of Philippine Migrant Labor: An Overview and Assessment.” Philippine Sociological Review 44, nos. 1-4 (Jan-Dec): 162-177.

________. 1998. Philippine Labour Migration: Critical Dimensions of Public Policy. Singapore: Institute of Southeast Asian Studies.

Heyzer, Noeleen, Geertje Lycklama a Nijeholt, and Nedra Weerakoon, eds. 1994. The Trade in Domestic Workers: Causes, Mechanisms and Consequences of International Migration. Kuala Lumpur: Asian and Pacific Development Center.

Hugo, Graeme. 2002. “Indonesia’s Labor Looks Abroad.” Migration Information Source: Country Profiles. Washington DC: Migration Policy Institute. http://www.migrationinformation.org/Profiles/display.cfm?ID=53, Jul 26, 2003.

_______. 2000. “The Crisis and International Population Movement in Indonesia.” Asian and Pacific Migration Journal 9, no. 1: 93-129.

_______. 1995. “Population Movements in Indonesia: Recent Developments and their Implications.” In Crossing Borders: Transmigration in Asia Pacific, ed. Ong Jin Hui, Chan Kwok Bun, and Chew Soon Beng. Singapore: Prentice Hall.

Immigration Laws. 1995. “Indonesian Workers Complain of Extortion.” May, no. 22. http://www.migrationint.com.au/news/armenia/may_1995-22mn.html, Jul 26, 2003.

Jayasankaran, S. 2003. “A King’s Ransom.” Far Eastern Economic Review, February 20: 46.

Jones, Sidney. 2000. Making Money Off Migrants: The Indonesian Exodus to Malaysia. Hong Kong and New South Wales: Asia 2000 Ltd and Center for Asia Pacific Social Transformation Studies, University of Wollongong.

Kanlungan Center Foundation, Inc. 2000. Fast Facts on Filipino Labor Migration. Quezon City: Kanlungan Center Foundation, Inc. and Evangelische Zentrallstelle Für Entwicklungshilfe e. V.

_______. 2001. Fast Facts on Filipino Labor Migration. Quezon City: Kanlungan Center Foundation, Inc. with support from Evangelischer Entwicklungsdienst e.V. (EED).

Laguindam, Imelda L. 1988. “Letter to President Corazon C. Aquino.” Letter of the United Filipinos in Hong Kong, Feb 7. In “The Manila Ban on Maids: Boon or Bane? A Documentation.”

Manila Bulletin. 2000. “President seeks continued OFW support.” Dec 10: 1, 8.

Migrants Rights International. 2003. “International Law on Migrants’ Rights Protection Enters Into Force.” http://www.migrantwatch.org/, Sept 23, 2003.

National Statistical Coordination Board. 2000. “Results of the July 2000 Labor Force Survey in the Philippines.” http://www.nscb.gov.ph

Nguyen Ngoc Quyuh. 2000. “Labor Migration in Vietnam.” Asian Migrant 13, no. 3 (Jul-Sept): 87-89.

Ocampo, F. T. 1988. “The Ban on Domestics.” Philippine Daily Inquirer, Jan 29: 5.

Orozco, Wilhelmina S. 1985. “Economic Refugees Voyage of the Commoditized: An Alternative Philippine Report on Migrant Women Workers.” Quezon City: Philippine Women’s Research Collective monograph

Osteria, Trinidad S. 1994. Filipino Female Labor Migration to Japan: Economic Causes and Consequences. Manila: De La Salle University Press.

Palma-Beltran, Mary Ruby, and Aurora Javate De Dios, eds. 1992. Filipino Women Overseas Contract Workers: At What Cost? Manila: Goodwill Trading Co., Inc.

Parreñas, Rhacel Salazar. 2001. Servants of Globalization: Women, Migration and Domestic Work. California: Stanford University Press. Reprinted in the Philippines by the Ateneo de Manila University Press, 2003.

Perez, Aurora E., and Perla C. Patacsil. 1998. Philippine Migration Studies: An Annotated Bibliography. Quezon City: Philippine Migration Research Network.

POEA InfoCenter. 2002. “Deployment of Land-based Newly Hired OFWs By Skills Category and Sex, 1992” (Tables 1992 to 2001). Updated September 9, 2002. Mandaluyong City: Republic of the Philippines, Philippine Overseas Employment Administration, c. 2000-2001. http://www.poea.gov.ph/stats/st_dlbnh_sex92-2001.html, Jan 26, 2003.

Ponnampalam, Lingam. 2000. “Mirror or Mold: Newspaper Reportage on Unskilled Labor Migration in Singapore.” Asian Migrant 13, no. 3 (Jul-Sept): 75-80.

Republic of the Philippines. 1996. “Republic Act No. 8042: Migrant Workers and Overseas Filipinos Act of 1995.”

Sivahalan, E. 2000. “Media Reporting on Labor Migration: The Malaysian Experience.” Asian Migrant 13, no. 3 (Jul-Sept): 81-86.

Sta. Maria, Amparita S., Gilbert V. Sembrano, and Ma. Glenda R. Ramirez. 1999. Filipino Migrant Workers in Singapore, Malaysia and Brunei: What They Need to Know – And What They Have to Tell. Makati: Ateneo Human Rights Center.

Stalker, Peter. 1994. The Work of Strangers: A Survey of International Labour Migration. Geneva: International Labour Organization.

_____. 2000. Workers Without Frontiers: The Impact of Globalization on International Migration. Geneva: International Labour Organization/Lynne Rienner.

Sukamdi, Abdul Harris, and Patrick Brownlee, eds. 2000. Labour Migration in Indonesia: Policies and Practices. Yogyakarta: Population Studies Center, Gadjah Mada University.

The People’s Movement for Human Rights Education (PDHRE) / NY Office. “The Human Rights of Migrant Workers.” http://www.pdhre.org/rights/migrants.html, Sept 23, 2003.

The United Filipinos Against the Ban. 1988. “Press Statement.” February 28. In “The Manila Ban on Maids: Boon or Bane? A Documentation.”

Tirtosudarmo, Riwaanto, and Romdiati Haning. 1998. A Needs Assessment Concerning Indonesian Women Migrant Workers to Saudi Arabia. Jakarta: Center for Population and Manpower Studies, Indonesian Institute of Sciences.

Wong, Diana. 1996. “Foreign Domestic Workers in Singapore.” In Asian Women in Migration, ed. Graziano Battistella and Anthony Paganoni. Quezon City: Scalabrini Migration Center.

Yap Mui Teng. 2000. “Labor Migration in Singapore: Policy and the Role of the Media.” Asian Migrant 13, no. 3 (Jul-Sept): 68-74.

Selected Research Centers and Organizations

Asian Migrant Centre (AMC), 9F Lee Kong Comm. Bldg., 115 Woosung St., Yau Ma Tei, Kowloon, Hong Kong SAR, China, amc@asian-migrants.org http://www.asian-migrants.org/

Asian Network for Women and International Migration (ANWIM), Asian and Pacific Development Centre, P.O.Box 12224, Pesiaran Duta, 50770 Kuala Lumpur, Malaysia, gad@pc.jaring.my

Asian Partnership on International Migration (APIM), c/o United Nations Development Programme, Wisma UN, Blok C, Kompleks Pejabat Damansara, Jalan Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia, apim@tm.net.my http://www.apim.apdip.net/

Asia Pacific Migration Research Network (APMRN), Secretariat c/o CAPSTRANS Migration & Multicultural Studies, Institute of Social Change and Critical Inquiry, University of Wollongong, Australia, apmrn@uow.edu.au

Kanlungan Center Foundation, Inc., 77 K-10th St., Kamias, 1102 Quezon City, Philippines, kcfi@philonline.com.ph, http://www.kanlungan.ngo.ph

Management of Social Transformation Programme (MOST), http://www.unesco.org/most/welcome.htm

Migrant Forum in Asia (MFA), Regional Secretariat, c/o Unlad Kabayan, 9-B Mayumi St., UP Teachers’ Village, Quezon City, Philippines, mfa@pacific.net.hk http://www.migrantnet.pair.com

Scalabrini Migration Center (SMC), P.O. Box 10541, Broadway Centrum, 1113 Quezon City, Philippines, smc@skyinet.net, http://www.skyinet.net/~smc

TENAGANITA, 11th Floor, Wisma Yakin, Jalan Masjid India, 50100 Kuala Lumpur, Malaysia, tnita@hotmail.com, http://caramasia.gn.apc.org/tn_page0.html

The Network Opposed to Violence Against Women Migrants (NOVA), c/o Kanlungan Center Foundation

The Philippine Migration Research Network (PMRN), Philippine Social Science Center UP Post Office Box 205 Diliman, Quezon City 1101 Philippines tsis.section@skyinet.net / pssc@skyinet.net

--------------------------------------------------------------------------------

[1] See, for example, Today’s article on Anita Fernando and Marivic David, 28 September 1996; J.T. Burgonio, “Jailed Pinay home to hero’s welcome,” Philippine Daily Inquirer (hereafter PDI), August 17, 2001, p. A6; Fernando del Mundo, “RP’s new heroes subjected to abuse,” PDI, January 7, 2002, pp. A1 & A15; AP, “HK man convicted for scalding RP maid,” PDI, March 20, 2002, p. A4; Dennis Estopace, “NGO calls for gov’t to address trauma of forced OFW repatriation,” Cyberdyaryo, http://cyberdyaryo.com/features/f2002_0426_02.htm, Aug 17, 2002; A.D. McKenzie, “Literature: Eating Curses, Breathing Humiliation,” IPS: The Philippine Migration Trail, http://www.ips.org/migration/1304.html, Aug 17, 2002.

[2] Rhea delos Santos, “Overseas Filipino Workers: Migrant Workers Act fails to protect overseas Filipinos workers,” IBON Features (IBON Foundation Inc., 2002), http://www.ibon.org/news/if/01/28.htm, Jan 26, 2003.

[3] Some parts of this section are revised and updated data from my essay published in Women and Gender Relations in the Philippines: Selected Readings in Women’s Studies, vol. 1, ed. Jeanne Frances I. Illo (Quezon City: Women’s Studies Association of the Philippines, 1999).

[4] See David Lazarus, “Factors that led to Manila’s ban on maids,” New Straits Times (March 1, 1988); “Ban on maids may be lifted if…,” Malay Mail (March 2, 1988); “Ban on Filipina maids may affect lifestyle,” New Strait Times (February 29, 1988); “Cory defends ban on Filipino maids,” New Straits Times (Feb. 9, 1988); Felix delos Santos, “Ban on maids assailed,” Philippine Star (Feb 1, 1988); F.T. Ocampo, “The ban on domestics,” Philippine Daily Inquirer (Jan 29, 1988) all compiled in “The Manila Ban on Maids” by the Center for Migrant Workers, Bukit Nanas Heights, Kuala Lumpur.

[5] Based on reports of members of FGCC, a Christian Ministry based in Kuala Lumpur, who attended the welcome dinner in honor of the president.

[6] Business News, 14 June 2000, quoted in Eko Susi Rosdianasari.

[7] Immigration Laws 1995, Paul Jacob, news reports from Straits Times, April 19,1995 and Xinhua News Agency, April 18, 1995.

from :Kyoto Review

The Last Samurai: Diversity issues through a Buddhist lens

2007-04-20T00:54:00.001-07:00

by
Snea Thinsan

Diversity necessarily implies that there are differences among human beings. Cultural, ethnic, and gender diversity is the issue of interest when we refer to diversity, but the scope can go much more beyond that. The diversity program at the School of Education, Indiana University confirms such a broad scope:

We recognize that diversity embraces a broad range of differences, including gender, race, ethnicity, sexual orientation, social class, abilities, religion, and national origin. One of the important goals of achieving diversity at our institution and in our society is to include those groups that have historically been discriminated against, excluded or marginalized in school and society.
http://www.indiana.edu/~ediverse/mission.html

Strictly in the academia, diversity fits the best under the umbrella of multicultural education, which is very well defined by Sonia Nieto (2002) as follows:

Multicultural education is a process of comprehensive school reform and basic education for all students. It challenges and rejects racism and other forms of discrimination in schools and society and accepts and affirms the pluralism (ethnic, racial, linguistic, religious, economic, and gender, among others) that students, their communities, and teachers represent. Multicultural education permeates the curriculum and instructional strategies used in schools, as well as the interactions among teachers, students and parents, and the very way that schools conceptualize the nature of teaching and learning. Because it uses critical pedagogy as its underlying philosophy and focuses on knowledge, reflection, and action (praxis) as the basis for social change, multicultural education furthers the democratic principles of social justice. (Nieto, p. 208)

What does diversity mean to me? This question moves me deeper into the soul of the term through my personal world views philosophically influenced by Buddhism. The Buddha recognized differences that inevitably exist among human beings based on their past and present deeds, or according the karma law. Instead of emphasizing the differences, Buddha, however, saw all human beings, as well as all creatures, as equal or the same in that they all have certain destiny in common: they are to be born, aged, sick, and deceased, all alike as long as they have not reached nirvana. Differences in Buddhist view, therefore, should not create tensions or conflicts because, as friends of the same fate, people are taught to coexist to give and take in harmony. Hence, differences among human beings are, to me, the existing reality that we cannot avoid. In other words, we can say that diversity exists naturally and human beings have been living in diversity. However, issues surrounding how tensions, or conflicts caused by differences among people in given societies are created, viewed, and treated are not to be taken for granted. Given the rapidly changing world, in which differences lead to or are intertwined with discrimination and oppression, diversity issues must be examined seriously. Having watched the Last Samurai, I was led to see the following issues.

Diversity issues in The Last Samurai

A few most interesting themes that emerged in the Last Samurai deserve our attention.

How differences become conflicts

Differences are inevitable, but do not necessarily need to lead to conflicts or tensions, as I stated above. My personal analysis of the stories of the Last Samurai has led me to see a bigger picture of factors that turn differences into destructive confrontation.

Modernism, or capitalism to be precise, was responsible for the conflicts in Japan in the 19th century. In this film, the Samurai had worked faithfully to protect the Japanese Emperors for so long before the Emperor, under the influence of Omura and his business associates who dominated the congress, decided to modernize the country. Foreign experts and resources were brought in to Japan: lawyers from France, engineers from Germany, architects from Holland, and weapons from the U.S. The Samurai, led by Katsumoto--a main character, thought the changes were too fast and saw foreign forces as potentially harmful to Japan; thus, he led other Samurais to disrupt the process. Their actions were considered rebellious by Omura, who can be regarded as a representative of the capitalists in the modern world and who wished to gain wealth from trading exchanges with the U.S. and other foreign businesspersons.

Capitalism created consumption craze and more chaotic society, to the benefit of the more powerful elites, entrepreneurs and foreigners, who were considered the sources of knowledge, wealth, threatening external forces, and owners of superior cultures. Japan, after having closed itself to the world for over a century, found itself behind western countries and felt the threat brought around by the western countries seeking colonials and economic victims enslaved by unfair, if not unwanted, trade agreements. Modernizing the country seemed to be the only way out. Colonialism indeed began to disguise itself with capitalism as a tool then. Consumption of foreign goods and knowledge was evident in Japan during which era. Western clothes, watches, food, and even guns were not just normal commodities, but also symbolic representations of desired power and prosperity that the Japanese wished they had had then. Consumerism imposed by the influx of Western cultures can be negated. The harm that consumerism brings about cannot be overlooked because consumerism are at the roots of problems in our present world, not merely in Japan in the 19th centery. Sivaraksa (1999), a Noble Prize nominee from Thailand defines and negates 'consumerism' as follows:

Consumerism is the personification of greed and people don't realise that one can die for greed just as one can die for nationalism. It drives a person to work too hard, to desire money and to consume. One is conditioned to think that without consumer goods one is nobody. 'I buy therefore I am' is the slogan of the modern age. We must understand consumerism as a new demonic religion and find a spiritual alternative. (p. 13)

Capitalism, the twin of consumerism, on the surface promises wealth, comfort, convenience, physical satisfaction, and yet, at the roots, greed. Greedy tradesmen would do anything to get what they want, and Omura was a great example. In order for capitalism to prosper and yield him profits, he regarded the Samurai "terrorists" that needed to be eradicated. Little did he know that getting rid of that small group of people also meant dumping the Japanese's old virtues and ways of life. In all, we can see that greed that is usually provoked by capitalism and consumerism turn differences into conflicts and lead to destruction of the weaker force or culture.

Familiar consequences

When diversity becomes conflicting differences, the following scenarios are common.

Inferiority

Once "modernized", members of the local communities usually regard their old ways of life inferior to the new ways. Indeed, the word "modernize" indicates clearly that the old ways must be either ignored, abandoned or replaced, or even eradicated. The samurai suffered the same phenomenon, in which the ways they dressed, carried two swords, and lived their lives were insulted by modernized Japanese on the street. This is when diversity education counts. By promoting acceptance of differences without being judgmental of the different ways of life in light of the changing world, diversity education promises a more harmonious society. Whether and how well education can function in light of the fierce power of capitalism remains educators' duties and perhaps top priority.

Marginalization/ Otherness

When conflicts of interest occur, the weaker or smaller groups are generally marginalized in the capitalistic world. The samurai's interest of protecting Japan from foreign influences inevitably clashed with that of modernized, capitalistic Japanese and of the foreigners who had entered Japan looking for sources of profits and wealth: whale oil, new market, etc. In fact, the history of the samurai had been rough already before this era. Being elites, they had not been able to fit properly in the later Japanese society, where there were not wars in which to fight. They then already were the minority of the society, who could not do any work considered lower than their social ranks. Once Japan was lured into the capitalistic dreams under the modernization scheme, the samurai became the unwanted group of people. They were labeled rebels, barbarians, uncivilized group, and old-fashioned, unwanted minority.

Domination

Power relations among the Japanese and between them and foreigners were also very interesting as reflected in the film. Among the Japanese themselves, we could see that the ruling class changed from the Shogun and the samurai to be business-oriented groups. These business-oriented people under the umbrella of "modernization" imposed, with or without awareness, new ways of living and thinking. Their voices became louder than any other voice. People were told that Japan was modernizing itself and its promising future lied on the acceptance of foreign assistance. What they probably did not realize was that they were imposing on the Japanese the foreign culture and capitalism, that could potentially harm Japan at least because most of the actions would benefit only Omura and his colleagues and of course foreign firms/governments. Imposition is a one-way, top-down approach; thus, we can say that what happened in The Last Samurai was in line with Freire's notion of "cultural domination" (Freire, 2002). Foreign cultures became prominent in the Japanese society as a result. Cultural domination, according to Freire, occurs when the superior group as outsiders impose their way of thinking and conducting on the weaker, local groups. Domination can also come in the subtle form of cultural consumption under capitalism. I this case, the outsiders do not need to do much in order for their cultures to dominate the local one, because once the common goods and ways of operating things (i.e. uniform, weapons, experts, etc.) are accepted by the local as better and so are the culture embedded within them. Ironically, the film about the Japanese's strong virtues of keeping honor, discipline, and dignity was created by the U.S.-based producers!

Death of indigenous cultures & identity loss

The above scenarios can lead to the most threatening effect on the local cultures; the death of indigenous cultures. Cultural diversity that many try to promote practically is at stake if we look at how capitalism, which carries the power of the stronger groups of people and more powerful cultures, can intimidate, marginalize, dominate, and even destroy the local cultures. New, usually foreign, cultures under capitalism always flourish on the expense of the local ones. The death of the samurai perhaps marked the beginning of the loss of, or changes in, identity among the Japanese. Experts typically are made from foreign education and are more likely to adopt the foreign ways of thinking, expressing, and operating. Increasingly, the medium of communication in local, regional, and global levels necessarily becomes the language from the dominant culture. Now, as a result, intellectuality and aptitude of non-English speakers are tested in such the dominant language of the world, GRE, GMAT, TOEFL, to name a few. How adoption of equipment, approaches, thinking, generally foreign cultures to replace the indigenous ones can affect members of the indigenous cultures has not been studied adequately. However, it is said enough in the literature of multicultural education that language policies and learning cultures that ignore the backgrounds of the students can put the students from the marginalized cultures at a disadvantage (See for instance, Walsh, 1996; Heath, 1999; Delpit, 2002).

Lessons

The Last Samurai does not only provide the typical reflections of how the world works, it also informs us of whatit takes to promote diversity in light of extreme tensions.

For people from two cultures to understand each other, it is necessary that both sides are willing to "have a good conversation." Perhaps, Freire's dialogic approach to co-learning when outsiders are trying to make sense of a new culture applies here. Mutual respect is also the tool that two peoples need in learning about each other.

Keen interest in each other's culture is also very important. Algren and Kutsumoto both show interest in each other. While Kutsumoto took Algren to his village, observed his movements, and read his confiscated diary to study about his new enemy, Algren had read translated books about the Samurai and later at the village always kept his eyes, ears, and mind open.

Cultural sensitivity is perhaps another quality required for living in diversity. Observing eyes, keen ears, and open minds, therefore, are very important. Algren often showed us such a quality. He, for example, took off his shoes entering the house after he had learned that Taka, the host, had to clean the floor messed with the dirt from his shoes.

Non-judgmental attitude appears to be important, too. The movie often presents us with the lines that reflect the characters' biases, stereotypes, and quick judgments. We can always find something to say about strangers, but time often reveals to us that we can be wrong.

A most important lesson we can learn from the movie is that, in spite of many differences, we human beings are similar in many ways. Algren and Kutsumoto came to understand each other so profoundly because they realized that they were both 'the students of wars". Perhaps, instead of focusing on differences alone, we should try to emphasize similarities in diversity promotion, too. In the Buddha's eyes, we are all friends of the same fate within the same circle.

To understand a new culture enough to appreciate its glory, Freire's praxis, which requires both critical reflections and actions, seems to fit well. It took Algren more than just reading books to appreciate the Samurai ways. Algren merged himself in the Samurai ways of life by living with a family and doing what the Samurai did. Perhaps, this can encourage us, educators, to be more ambitious; that is, we should do more than just having cultural fairs or talent shows.

The other obvious lesson is the notion of language as an important tool for cultural understanding. Not only can learning a new language be a way to get closer to the people in the new culture, it is also a tool to help facilitate understanding at a deeper level. The fact that Kutsumoto could speak English and that Algren learned to speak Japanese reflect the importance of learning the target culture's language.

References

Delpit, L. & Dowdy, J. K. (2002). The Skin That We Speak. New York: The New Press.

Heath, S. B. (1999). Ways with Words. New York: CUP.

Nieto, S.(2002). Affirming Diversity: The Sociopolitical Context of Multicultural Education, New York: Longman Publishers, 3 rd. ed., 2000 (first ed., 1992; second ed., 1996).

Sivaraksa, S. (1999). Global HealingWalsh, C. E. (Ed.) (1999). Education Reform and Social Change. Bangkok: Ruankaew Printing House.

Walsh, C. E. (Ed.) (1999). Education Reform and Social Change. New Jersey: Lawrence Erlbaum Associates, Inc.

from สยามเสวนา

Cinematic Narratives in Hero: Primordial Father and Assassins

2007-04-20T00:53:00.001-07:00

By Pandit Chanrochanakit

I. Introduction
This paper begins with questions on what message Hero,1 a film by Zhang Yimou, conveys to its audience and how the story operates to convey this message. The message is really a simple idea of “peace under one ruler,” but the ways it presents the unification of China through cinematic narrative is fascinating.

The national imaginary portrayed in Hero is of an archaic China in the midst of turmoil during a period of fighting among seven independent kingdoms. Qin, leader of the Qin kingdom, finally defeats his enemies to become supreme ruler of China. However, a number of assassins want to kill him, including Nameless, Sky, Broken Sword, and Flying Snow. Nameless wants revenge because Qin destroyed his “country,” Zhao. Nameless studied swordsmanship to achieve his goal of killing Qin. However, after meeting Broken Sword, an assassin who has decided to forgo his mission, Nameless decides not to kill Qin. Instead, he sacrifices himself for the ideology of “peace under one ruler.”

This paper attempts to interpret cinematic narrative of Hero and investigating how it contextualizes the story. The paper uses Slavoj Zizek’s Lacanian cinematic materialism to examine the idea of unification under one ruler. The investigation reveals that homoeroticism is working in the film to convince the audience of the importance of a primordial father, as represented by Qin's relationships with his would-be assassins, Sky, Broken Sword, and Nameless. Flying Snow represents a stain on the dominant male discourse; she therefore has to die in the film. This paper concludes that the ideals of unification and "peace under one ruler" are ways in which some Asians, director Zhang Yimou in this case, resist the Western Gaze on Asian politico-cultural practices. Hero convinces its audience that peace under one ruler is worth any sacrifice.

II. Colorization in Hero

William E. Connolly points out that film is an intersection between cinematic techniques and a critical story. Techniques are a kind of micropolitics, an “organized combination of sound, gesture, word, movement and posture through which affectively imbued dispositions, desires and judgments become synthesized.” 2 The micropolitics, as introduced by Connolly, help the audience understand how a film works or operates and what kind of ethic is promoted in a film. The micropolitics in Hero operates through colorization. “Colorization” originally meant tinting black and white film. But in my treatment, colorization means creating turning color film into a monotone. This is unlike Steven Spielberg’s Schindler’s List or Saving Private Ryan, that were deliberately shot in black and white film. Hero uses color film, but shoots scenes that are constructed in monotone, specifically in following the narratives of Nameless and Qin.

Hero can be separated into six acts. The color of each act plays a crucial role in creating a sense of place. Different moods are also set by using the colors black, red, blue, white, and green. As in Akira Kurosawa’s Rashomon, in which each protagonist describes the same event from a different perspective, in Hero, the narratives of different stories become a form of negotiation between Qin and the assassins. Each of these narratives is divided by color.

The stories told in Hero are depicted within a large frame or vast landscape unless a fighting scene needs a close-up shot. The landscape in Hero represents the homeland of everyone under the Qin kingdom. The royal palace of Qin is at the center of Hero. People’s identities are embodied in their behaviors, especially that of the assassins, who are all people of Zhao. We can see in the third act that the people of Zhao are characterized as appreciating calligraphy, which represents their deep scholarly roots. Rather than taking up martial arts or inventing weapons, they practice calligraphy until the last moments of their life. Ironically, all of the assassins are people from Zhao.

The first act depicts gloomy gray clouds over a valley rushing with chariots and cavalrymen. This scene presents China in turmoil and unrest. The terrain depicts China in drought, a vast field under gray cloud, but does not locate a specific place in China.

The second act, rendered in red tones, depicts scenes in the Zhao kingdom. We cannot tell how far Zhao is from the Qin kingdom to Zhao, but we can see Zhao’s vast landscape. The film shows crowds of foot soldiers and archers moved freely from place to place. There are no long marching scenes, but we also see Qin’s invincible artillery.

Nameless narrates different stories of how he crushed other assassins, starting with Sky. The duel between Nameless and Sky is described in detail to convince Qin that Nameless is a mighty warrior. We find later that the duel is made up. The scene is set in black, representing sadness and Nameless’ intention to kill Qin.

In the third act, Nameless tells Qin how he overcame Broken Sword and Flying Snow, two assassins that had almost finished their mission. These scenes are again rendered in red, representing jealousy, lust, desire, anger, and falsehood. Nameless tells Qin that he took Sky’s spear and traveled to Zhao, where he showed the spear to Flying Snow and Broken Sword. Flying Snow loves Broken Sword, but kills him because she him betraying her by making love to his maid. She also has intimate feelings for Sky, and wants to revenge him by killing Nameless. Nameless takes advantage of Flying Snow's weakness at hearing the bad news of Sky's death to kill her.

Qin finds out that Nameless lied to him about killing the two assassins. The color turns to blue in the fourth act, representing royalty, as Qin then tells his story. Qin valued Broken Sword and Flying Snow as self-respecting warriors who would never have committed the acts told by Nameless. He interprets Nameless' story as a conspiracy among the assassins to achieve their goal. Because Nameless’ skill with the sword is limited to within ten paces, he needs to get closer to Qin by hunting Broken Sword and Flying Snow. Qin believes Nameless had to convince them of his plan and his ability to carry it out.

In the fifth act, Nameless hesitates to kill Qin. The real story, revealed by Nameless, shows that Qin underestimated Broken Sword, who has persuaded Nameless to abandon the mission. The color turns into white, representing mourning, sadness, illumination, and purity. The story tells why Broken Sword abandoned his mission and why Nameless hesitated. Qin is delighted by Broken Sword’s words “All under Heaven,” meaning he has understood Qin’s ideal of a united China. Qin even lets Nameless have his sword so that he can make the decision whether or not to accomplish his mission. In the last act, the color turns black again when Nameless sacrifices himself for his ultimate goal, peace under one ruler.

According to Connolly, the micropolitics of colorization helps set the stage for macropolitical action by the audience. 3 The macropolitics of Hero, I assert, is the ideal of “peace under one ruler,” represented through the conversation between Qin and Nameless. This conversation is the only experience that the audience observes. All of the conversation between Qin and Nameless is colored black. The monotones of each act creates a color-blind effect in the sense that everyone and every object in that scene is the same shade. The audience is forced to perceive the particular messages being given by the colors; the audience is thus colonized by these messages.

III. Lack of Being
This section discusses Slavoj Zizek’s concept of the “lack of being.” 4 Zizek examines film using a Lacanian interpretation which focuses on the primordial father, the phallus, sacrifice, and jouissance or lack. 5 Zizek investigates the idea of the Thing, which appears within the diegetic space of cinematic narrative. The Thing emerges in different forms (e.g., alien, rock, robot) in various films. The gigantic buffalo in The White Buffalo, for instance, represents the primordial father as a sacred Native American animal. The buffalo is used to portray the wild and natural discourse of America which was disrupted by Capitalism, represented by the hunting of the white buffalo.6

In Titanic, the gigantic ship represents the phallus disrupted by intercourse between Jack and Rose, who are from two different economic classes. The sinking of the Titanic is punishment for disrupting the natural order of human society. 7

Zizek uses the notion of jouissance, or lack, to mean that people are convinced they are missing something. Sacrifice, on the other hand, means to fulfill the lack of the other. 8 These two notions can be used to explain the cinematic narratives of Hero.

The film begins with the appearance of the assassin, Nameless. He is searched for weapons before being allowed to attend a ceremony in honor of the new emperor. Nameless is a low ranking officer of Qin who has already accomplished his mission of killing assassins who threaten Qin. Later, we learn that Nameless is himself a war orphan from Zhao who wants revenge on Qin for destroying Zhao. His non-name shows that he has no real identity, and also represents his lack of a father. When Nameless encounters Qin, he cannot kill him because of he has discovered a primordial father, the founder of a nation. His lack of a phallus is represented by his self-sacrifice for his primordial father’s ideal.

Broken Sword represents the impotent phallus. Both his name “Broken Sword” and failure to kill Qin show that he is sexually impotent. Even though the film actually shows him having sexual intercourses with Moon and Flying Snow, these stories are told through Nameless’ words and Qin’s imagination. His thick, broken sword not only connotes his sexual impotence but also his inability to kill the primordial father. In addition, he persuades Nameless to abort his mission.

Broken Sword expresses male intimacy towards Nameless when he draws on the desert ground the words “All under Heaven," enabling Nameless to look through his eyes. When Nameless encounters Qin, he has already abandoned his goal of assassination.

Of the assassins, Flying Snow has the strongest commitment to killing Qin. Qin had killed her father, a Zhao general of Zhao. Flying Snow’s jouissance is to kill the primordial father. Her support of Nameless is outweighed by Broken Sword’s influence, since he and Nameless share the ideal of peace under one ruler. Flying Snow thus becomes a stain on their homoerotic male relationship and she needs to be eliminated.9 This story operates similarly to Solaris, when the reappearance of Harey disrupts the norm of the idea that “woman merely materializes a male fantasy.” 10 In Hero, the male fantasy is the unification of China. As a stain, Flying Snow must die to preserve the fantasy.

Qin is portrayed in Hero as a primordial father, a mythic figure, a tyrant, and a lover. 11 He explains that he needs to unify China to make life easier for people. Unification will lead to the pursuit of peaceful life by living under the same standard i.e. literature and measuring.

Sky represents the dead. He conspires with Nameless, but fails to accomplish his task. Unlike Broken Sword, Sky never gets close to achieving his mission. Sky sacrifices his spear to convince both Broken Sword and Flying Snow of his honorable intentions. Although at first Sky seems to be the most skeptical about the ideology "All under Heaven," we later find out that he did not die in a duel with Nameless. The duel is only a conspiracy between him and Nameless. After Nameless failed to assassin he “gave up” his sword to pay homage to his fallen friends.

This Lacanian analysis of the protagonists in Hero is the basis of the next section, where I show how these warriors are involved in a political economy of friendship, an exchange of homoeroticism.

IV. The Political Economy of Friendship in Hero

This section attempts to answer the set of questions: “What kind of political economy occurs in Hero?” “What is exchanged in the film?” “What is the use of value and exchange of signs in Hero?” My analysis reveals that the object of the economy or circulation among the heroes Sky, Nameless, Broken Sword, and Qin is a homoerotic relationship, in a sense that they believe in the same token “All under heaven.” They exchange and share this ideology at any cost, including their lives.

First of all we need to treat homoeroticism, which characterizes asymmetrical relationships between adult men and boys or young men. The older partner takes the initiative and gains sexual pleasure, while the younger (the boyfriend or loved one) gains the friendship and help of the older man. 12 The homoeroticism as shown in Hero is not relationships between adult men and boys but rather relationships among adult men who believe they can sacrifice their lives to achieve their goals. A warrior or a hero is a person who will sacrifice anything for the collective good of society. The collective good, in Hero, is peace, which can be achieved only under one ruler. Hence, the political economy of homoeroticism operates in that they exchange their “lives” for both an ultimate good and friendship.

In his documentary film Yang and Yin: Gender in Chinese Cinema, Stanley Kwan traces how gender issues are represented in Chinese films back to the 1930s.13 He shows how male intimacy or homoeroticism is presented in Chinese films, including the swordplay genre (e.g., in films directed by Chang Cheh), Kung fu genre (e.g., in films directed by Bruce Lee), and gangster genre (e.g., in films directed by John Woo). 14

In Kwan's documentary, Peggy Chiao, a film critic, expresses her feelings about male bonding, muscles, and nudity, saying, “it's like a male paradise. It’s all very sexual.” 15 Homoeroticism is not only depicted in half-naked male bodies, but also in male friendships, which are treated as prior and more important than male-female bonds. As director Chang Cheh remarks in Kwan's documentary, “Chinese hero has no truck with woman, he is much more concerned with his male friends.” 16

The boundary between friendship and homosexuality blurs. This can be seen in Chinese films that portray high levels of masculinity and intimate male bonding rather than heterosexual intimacy. Cheh further explains that, “It’s my reading of Chinese tradition, nobody thinks of [the novel] The Three Kingdoms as gay.” However, he admits that Freud’s interpretation of sexual drive is important. 17

Chinese films only present men as sharing passion and intellectuality. In The Killer, a film by John Woo, men help each other even when they are opposed to each other. 18 In this film, a detective extracts a bullet from a hit man’s arm. The scene reflects the hit man’s face showing both pleasure and pain when the detective inserts a knife into his wound. Woo remarks that their intimate eye contact is unconscious, a way of depicting their mutual admiration as though it were a “first date,” even though it is not conceived in sexual terms. 19

The sword represents the phallus, as Kwan points out. Hero shows the impotent phallus of Broken Sword, who aborted his mission, Nameless' lack of father and discovery of fraternity with a primordial father, and Qin as that father, the first emperor of China. Only Sky that seems to be a normal person, but he loses his phallus-spear to Nameless. Flying Snow shows her jealousy of the male phallus, her female jouissance. Qin, the primordial father, is the only potent person in the film in that he achieves his ultimate goal.

To achieve swordsmanship one must unite himself with one's sword. Broken Sword, Sky, and Nameless fail to unify with their swords or spears. Among these assassins, Broken Sword is the most outstanding swordsman. His calligraphy shares the same principles with swordsmanship, but he cannot keep his “broken phallus.” Nameless, too, lacks a phallus. Together, they agree that “the swordsman is at peace with the rest of the world [when] he vows not to kill and to bring peace to mankind.” 20 Since calligraphy and swordsmanship share the same essence, Nameless asks Broken Sword to find the twentieth way to write the word “sword” in order to evaluate his skill as a swordsman. From the Zhao perspective, this is art and creativity, but for Qin it is too diversified. He claims that once he has unified China, he will “eradicate this problem” by consolidating calligraphic writing. 21

The relationship between the swordsman and his sword is intimate. Qin, talking about Broken Sword, remarks on the martial art principle that “once the unity between swordsman and his sword is attained, even a blade of grass can be a weapon.” 22 This is because “the sword exists in one’s heart.”23 The ultimate achievement is actually the absence of a sword because it means the swordsman and his sword are united. The hesitation and abandoning of their mission is really their inability to possess their swords. They become impotent assassins in front of Qin, the primordial father.

I would like to point out that Hero uses homoeroticism to create a sense of non- hierarchical relations among men, including even between Qin and Nameless. Their relationship has no power dimension. It seems that they are independent from each other, they each have free will to make decisions, to kill or not to kill, sacrifice or not sacrifice, take action or remain passive, be dead or alive. It is Qin’s wit that allows Nameless to hesitate. Male bonding is a strategy for dealing with assassination. His statecraft leads him to hand Nameless his sword, since Qin believes that Nameless will never kill him.

The homoeroticism in Hero depoliticizes heterosexual relationships. Broken Sword and Flying Snow are lovers, but their love is trivial compared to the love shared among the male heroes, Nameless, Broken Snow, Sky, and Qin. These male warriors do not ask for understanding from their friends because they already understand each other. Flying Snow, by contrast, fails to understand why Broken Snow aborted his mission even at her last moment of life. If she had understood, she might not have been willing to die. Flying Snow is the female stain who disrupts the flow of homoeroticism and, at the same time, allows men to practice their love. 24

The words of Broken Sword, “All under Heaven,” do not immediately encourage Nameless to abort his plan to assassinate Qin. Nameless later changes his mind because he is hungry for “the greater good for all,” which he comes to understand means peace under Qin’s rule. He believes that one person’s suffering is nothing compared with the suffering of many. The conflict between Qin and Zhao is trivial compared to the greater cause. 25 In Hero, friendship is intrinsic to philosophical thought. 26 Friendship shapes the cinematic narrative of Qin’s supremacy.

V. Who is the Real Hero/Heroine?
There is only one dead body seen in Hero, that of Flying Snow, the female protagonist. Death in Hero seems unreal in that Sky, Flying Snow, and Broken Sword do did not die fighting Nameless, as portrayed in his narratives. They are surrender to death. Only Nameless’ funeral is celebrated as a heroic funeral, but we do not see his dead body. The death of Flying Snow is left ambiguous in that females do not really fit into the swordplay film genre, yet her death is presented as more real than that of the men in the film.

But who is the real hero/heroine? The macropolitics of the film shows that the one who can manipulate the relations among male bonds or homoeroticism is the real hero. Qin is the real hero in that he is even impressed by his enemies and he installs his regime within a national narrative and imagination. As the primordial father, Qin achieves his goal: Qin as the supreme mono-emperor.

According to Michael Shapiro, cinematic nationhood is the process through which film articulates nation-building and sustains the projects of states.27 Albeit Hero was labeled an “unashamed compromise,” 28 it is an exemplar of how cinematic narrative works on the project of cinematic nationhood. Hero provides a set of ideas: peace under one ruler; unification prior to peace; peace and unification worth any sacrifice. This set of ideas forms the narrative of a national imaginary, constructed within the cinematic narrative of Hero.

Notes

1. Hero, pro. and dir. Zhang Yimou, Zhang Yimou Studio Production et.al., 2002, VCD format.

2. William E. Connolly, “Film Technique and Micropolitics,” Theory and Event 6, no. 1. See also Lars Tonder, “Between Lack and Abundance: Introducing the Zizek/Connolly Exchange on Film and Politics,” Theory and Event 6, no.1. I admit that using Connolly and Zizek in this paper presents some conflict in my analysis. However, since I found that both theorists contributed to my understanding of the film Hero, I decided to keep this conflicted approach.

3. Connolly, “Film Technique and Micro Politics.”

4. Tonder, “Between Lack and Abundance.”

5. Slavoj Zizek, “The Thing from Inner Space,” Sexuation. Ed. Renata Salecl. (Durham and London: Duke University Press), 2000, pp. 216-259.

6. Ibid., pp. 217-8.

7. Ibid., pp. 222-4.

8. Ibid., p. 246.

9. The notion of “stain” is the idea that an object that goes against nature has to be removed from the picture or natural landscape. In this case, Flying Snow disrupts the flows of homoeroticism. Bonitzer explains how stain makes film works because it induces the gaze. See Pascal Bonitzer, “Hitchcockian Suspense,” Everything You Always Wanted to Know About Lacan (But Were Afraid to Ask Hitchcock) (London: Verso), 1992, p. 21.

10. Ibid., pp. 228-9.

11. Many film directors produced the mythic stories of the many assassination attempt on Qin's life. For example, Chen Kaige produced two films on Qin: The Emperor’s Shadow and The Emperor’s Assassin.

12. Plato, The Symposium (New York: Penguin Books), 1999, pp. xiii-xv

13. Stanley Kwan (Director), Yang and Yin: Gender in Chinese Cinema. London: Connoisseur Video, 1996. Videocassette.

14. John Woo was an assistant director to Chang Cheh.

15. Kwan, Yang and Yin.

16. Ibid.

17.Ibid.

18. Ibid. See also John Woo (Director), The Killer. Hong Kong: Fox Lober Home Video, 1994. videocassette.

19. Kwan, Yang and Yin.

20. Yimou, Hero.

21. Ibid.

22. Ibid.

23. Ibid.

24. See Pascal Bonitzer, “Hitchcockian Suspense.”

25. Zhang Yimou, Hero.

26. Gilles Deleuze and Felix Guattari, What is Philosophy? (New York: Columbia University Press), 1994, pp. 2-3.

27. Michael Shapiro, Method and nations: Cultural Governance and the Indigenous Subject (Unpublished manuscript, 2002), 207.

28. Susan Jakes, “Play Safe,” Time Asia 160, no. 24, 23 December 2002, (5 May 2003).

Glossary of Film and Electronic Media Terms by cyber internet campus http://www.internetcampus.com/gloss/gloss_c.htm (24 November 2003)

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