SOUTHEAST ASIAN STUDIES: Contents_Vol3-2

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Vol. 3, No. 2, BOOK REVIEWS, Adiwan ARITENANG

Contents>> Vol. 3, No. 2

Achieving the ASEAN Economic Community 2015: Challenges for Member Countries and Businesses
Sanchita Basu Das, ed.
Singapore: Institute of Southeast Asian Studies, 2012, xxvi+347p.

The ASEAN Economic Community (AEC) 2015 is the most anticipated economic integration project for the people in ASEAN countries. Despite being a form of state-level cooperation, the inclusion of the private sector in integration is undoubtedly a crucial factor in the implementation of AEC. This book’s aim is to examine the progress of the states as they implement soft and hard infrastructures to milestones that were attained over the years and how the private sector responded to these achievements.

In the first part of the book the first chapter by Sanchita Basu Das specifically explores ASEAN member countries’ challenges including their infrastructure effectiveness to ensure regional integration and the importance of their business sector’s involvements in realizing an effective AEC by 2015. The second chapter by Pushpanathan Sundram highlights the future challenges that include integration process management and focuses on the non-implementation of regional commitments, and the importance of private sector engagements as drivers of economic integration.

The second part of the book examines the readiness and challenges of individual ASEAN member states with regard to the AEC. The chapters show that as the ASEAN economies widely diversify the variation in progress and challenges also become apparent. For example, chapter 4 by Chan Sophal and Larry Strange, chapter 5 by Pradeep Srivastava, and chapter 11 by Vo Tri Thanh highlight the fact that the main problems for the new member countries of Cambodia, Myanmar, Laos, and Vietnam (CMLV) are domestic ones such as poor capacity for resources mobilization, a lack of private sector coordination and networks, and institution-building. In particular, the importance of the Cross-Border Transport Agreement (CBTA) in Cambodia and Laos on cross border transportation for trade facilitation highlights sub-regional integration issues. On the other hand, the original member countries—with the exception of the smaller ones such as Singapore and Brunei Darussalam—face political and resources mobilization problems. Furthermore, both the Philippine and Indonesian governments are under pressure to address governance issues that may hinder gaining advantages from regional integration and additionally we also see that in Malaysia, ethnic policies have hindered state institutional capacities to support economic growth (p. 96).

The third part of the book discusses the private sector’s readiness for the AEC. This part includes studies drawn from interviews and data analysis of the private sector’s perception and demands on AEC implementation. However, this part is insufficient as it only has one chapter on Vietnam, and lacks concrete studies that deal with CMLV countries case studies. Chapter 18 by Vo Tri Thanh and Nguyen Anh Duong shows how the private sector’s main problem with AEC is poor information dissemination and knowledge. Interestingly, this problem is also the main issue for original member countries: that ASEAN and member countries’ attempts have been insufficient in promoting and accelerating AEC implementation beyond government and academic research. This limited attempt at information dissemination and poor governance of ASEAN as a supra­national institution has been recognized since the implementation of ASEAN Free Trade Agreement (AFTA) with the poor performance of Form D. This form is for applications for a lower tariff under the Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for AFTA ­(Nesadurai 2003; Chandra 2008). The cases in Indonesia and Thailand show that limited dissemination of information on integration processes, tariffs, regulations, and Rules of Origins (ROOs) has undermined the private sector’s enthusiasm for AEC. Furthermore, the chapters on the Philippines and Malaysia show how cultural-related business activities have hindered the rate of AEC acceptance and implementation in these respective countries. Race policy in Malaysia restricts business ownership and poor governance has had a negative effect on the investment climate and private sector innovation, as seen in the continuity of the “Ali Baba” business scheme where the “Ali” or the Malay as the sleeping partner and “Baba” is the Chinese as the active half of the alliance (Whah 2007). In the case of the Philippines, the term ningas cogon (p. 270), is employed to refer to people who are enthusiastic about something but then lose interest quickly. As a consequence, the Philippines faces regulation inconsistencies and constraints with long-term commitments on law enactment, corruption eradication, and rent seeking abolishment (Lim 2013). This hinders the country’s development in the realms of business innovation and trade. Finally, the Singapore case provides an exception whereby the private sectors that felt themselves to be marginalized from the AEC have demanded that the Singapore Business Federation (SBF) accel­erate consultation, coordination, and transparency on AEC milestones programs.

The book provides a general discussion and analysis of the readiness by ASEAN governments and respective private sectors to implement the AEC. The chapters offer discussion, based on secondary data and formal documents, of the achievements of the governments, while questionnaires and fieldworks were used to assess the readiness of the private sector. Based on these studies, the book highlights the importance of private sector involvement in the implementation of AEC and argues that it should go beyond information dissemination and become involved in domestic regulations and administrative reforms.

However, the book suffers from a few structural and analytical problems such as repetitive discussion on individual country’s readiness on AEC in parts two and three on the comparisons of states and business achievements in Brunei Darussalam (chapters 3 and 12), Indonesia (6 and 13), Malaysia (7 and 14), the Philippines (8 and 15), Singapore (9 and 16), Thailand (10 and 17), and Vietnam (11 and 18). Similar discussions, structures and themes among countries lead to a rather monotonous presentation of information and facts. For instance, the lack of information dissemination and poor government capacities are referred to as common challenges faced by the region as it prepares for economic integration. Furthermore, the variation of data availability and questionnaire sizes creates an unbalanced discussion on the analysis of private sector readiness for AEC. These issues should have been addressed by the editor, who should have made sure that qualified researchers and the papers compiled would ensure a better balance and more in-depth discussion on state and private sector readiness on AEC.

Recent developments point to an interesting direction for AEC. For instance, Indonesia has established the AEC preparatory committee to analyze, evaluate, and advise the government on AEC issues. The reason for the establishment of this committee is that Indonesia is not ready and has merely been forced to welcome AEC in 2015. Furthermore, recent riots in Singapore involving immigrant workers have led to further questioning of the national security of member countries following free labor movement under the AEC.

Overall, this book provides a wide-ranging semi-academic analysis on state readiness and achievements, and the current level of private involvement towards AEC. This is an important book, as there are few that detail the current progress of both sectors and how they communicate with each other. In this sense, the book achieves its main aim. However, differences in the depth of analysis and the quality of discussion of specific countries and specific state-private sectors potentially lead to a skewered perception of each country’s progress in the build-up to 2015. Neverthe­less, the book provides a comprehensive analysis on AEC challenges for member countries and business up to 2010.

Adiwan Aritenang
Agency for the Assessment and Application of Technology, Indonesia.

References

Chandra, A. C. 2008. Indonesia and the ASEAN Free Trade Agreement: Nationalists and Integration Strategy. Plymouth: Lexington Books.

Lim, R. Y. 2013. Ningas Cogon and the Filipino Psyche. Malaya Business Insight, October 17, 2013. Retrieved January 8, 2014, from http://www.malaya.com.ph.

Nesadurai, H. E. S. 2003. Attempting Developmental Regionalism through AFTA: The Domestic Sources of Governance. Third World Quarterly 24(2): 235.

Whah, C. Y. 2007. From Tin to Ali Baba’s Gold: The Evolution of Chinese Entrepreneurship in Malaysia. IIAS Newsletter 45: 18.


1) Taken from the citation of the compilation. For instance: Crosby (1986), Grove (1997), Zuckerman (2000), Elvin (2004), Cook (2007).

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Vol. 3, No. 2, BOOK REVIEWS, Joshua GEDACHT

Contents>> Vol. 3, No. 2

The Longest Journey: Southeast Asians and the Pilgrimage to Mecca
Eric Tagliacozzo
New York: Oxford University Press, 2013, ix+356p.

In The Longest Journey: Southeast Asians and Pilgrimage to Mecca, Eric Tagliacozzo presents a magisterial historical survey of the “undertaking of the Hajj from Southeast Asia to Arabia from earliest times to the present” (p. 3). The journey to Mecca required of all Muslims not only surpasses most other religious pilgrimages in size, number, and geographic extent, but also comprises one of the largest annual human migrations on earth—religious or otherwise. In turn, it should be no surprise that one of the biggest sources of Hajjis is Southeast Asia. Tagliacozzo weaves fragmentary extant scholarship and original new research into a compelling narrative of this “enormous phenomenon that draws in literally millions of people and spans the width and breadth of the Indian Ocean” (p. 7).

The Longest Journey is notable for its ambitious chronological sweep, the eclecticism of its methodology, and the range of its subject matter. Tagliacozzo organizes his book into three overarching parts that correspond with the precolonial, colonial, and postcolonial periods, gliding from Marco Polo’s thirteenth century accounts of Hajjis to the machinations of early twentieth century colonial officials like Snouck Hurgronje all the way to the oral testimonies of present-day pilgrims in the twenty-first century. The Longest Journey embraces this longue durée approach without sacrificing the granular richness of Hajji histories or succumbing to an overly deterministic analytic framework. By making use of “archeology, archival history, literary criticism, sociology, epidemiology, political science, and ethnography” (p. 7), Tagliacozzo illuminates the myriad and often idiosyncratic aspects of this enormous movement of people, including some that might surprise readers. Individual chapters cover topics ranging from ancient pilgrims to the management of the Hajj by postcolonial states, from the involvement of sultanates in Hajji routes to surveillance and cholera outbreaks among pilgrims, from literary representations of Hajjis in Joseph Conrad’s work to the experiences of people who made the journey from minority Muslim nations like Thailand and the Philippines. Through this diversity of approaches and topics, Tagliacozzo mirrors the multifaceted nature of this religious procession.

A significant contribution of The Longest Journey lies in its collection, compilation, and collation of a staggering array of historical documentation pertaining to the Hajj. Tagliacozzo not only incorporates classical Malay texts, European literary works, colonial records, statistics, Hajji memoirs, and oral accounts into his work, but also makes these diverse sources accessible to the reader. For instance, the book highlights many firsthand historical accounts as self-contained insets, among them a journal entry from a Javanese Regent about his time in quarantine en route to Mecca and a narrative of sickness among Hajjis by an English traveler (pp. 142–143, 148). Beyond reproducing individual sources, Tagliacozzo deftly encapsulates entire document collections through tables and lists. At one point, he spares the reader the laborious undertaking of poring through the two volumes, thousand-plus page compendia of official advice from Snouck Hurgronje by distilling it into a digestible list of 24 thematic “rubrics,” such as “costs of the Indies Hajj,” “caravan safety,” and “economic effect of the Hajj” (p. 163). Likewise, The Longest Journey provides a comprehensive list of all known classical Malay texts to mention the Hajj between the fourteenth and nineteenth centuries—thus furnishing a sense of the scope of extant indigenous documentation (p. 89). These thoughtful presentations of sources enrich the reading experience for students and scholars alike.

Tagliacozzo also brings analytic sharpness to this treasure trove of documentation by locating the Hajj amidst its political and economic contexts. Although the “Hajj is first and foremost a religious ritual,” Tagliacozzo observes that “devotion cannot be divorced from the ways and means of performing it, namely, the financial wherewithal of undertaking a pilgrimage that may be thousands of miles from one’s home” (p. 63). The Longest Journey illustrates the interweaving of Indian Ocean trading networks with the Hajj while also highlighting surprising historical facts, such as the great profitability of the pilgrimage for European steamship companies. Similarly, Tagliacozzo illustrates how inter-imperial competition and cooperation in the Indian Ocean and Red Sea arenas shaped the contours of the Hajj. Indeed, European projects for controlling their Muslim subjects streaming into Arabia included an interlocking system of consulates in the coastal city of Jeddah and an international sanitary station at the Red Sea island of Kamarin intended to monitor pilgrims as vectors of disease. Much of this analysis also helps to draw out the fundamental paradox that the Hajj burgeoned as an institution at the precise moment that it fell under the control of non-Muslim Europeans. Stimulated by the colonial expansion of commerce and shipping while simultaneously posing a subversive threat to the new imperial order, it was this paradox that drove the projects of surveillance and control described in Tagliacozzo’s book.

Yet, even as The Longest Journey meticulously documents the material underpinnings and paradoxical operations of the Southeast Asian Hajj, it is also careful not to ignore the profound spiritual meaning it holds for believers. Leaving behind the colonial archives, Tagliacozzo devotes his last three chapters to Hajji memoirs and over 100 oral interviews, which he sees as an invaluable resource for retrieving the history of pilgrimage “from the inside” (p. 271). Indeed, this research yields a textured portrait of sojourns to Arabia that would otherwise be inaccessible to many, as “the holy cities of Mecca and Medina are forbidden to non-Muslims” (p. 272). Among other things, Tagliacozzo’s Southeast Asian interlocutors discuss their experience of “holiness and contemplation” at sites like the Plain of Arafat, the feeling some had of being “clean” for the first time in their lives after circumambulating the Ka’ba, as well as recollections of interactions with diverse co-religionists from places as far away as Afghanistan and Africa. Through these stories, the reader can glean an understanding of “what it means to fully give one’s self over to devotion on a journey that lasts a few weeks or even several months but that resonates for a lifetime” (p. 288).

It is perhaps inevitable that a book of such ambitious breadth includes some minor shortcomings. Tagliacozzo’s thesis that the pilgrimage evolved from an individual experience in pre­colonial times to a “state-sponsored” enterprise in the colonial era does not fully wrestle with the question of how the colonial archives might have concealed journeys that did not conform to Dutch or British expectations. Likewise, Tagliacozzo could better explore the implications of what it meant for the Hajj to go from the jurisdiction of non-Muslim colonial states to majority Muslim post-colonial states—a signal transition that Tagliacozzo only touches upon in Chapter Nine. However, The Longest Journey cannot chronicle every aspect of Hajji history, and the small gaps that do exist serve mainly to underscore promising avenues for future research. Tantalizing glimpses into the Arab reception of Southeast Asian Hajjis, for example, such as when Holy City shopkeepers learned basic Indonesian, is suggestive of possible work on local Meccan engagements vis-à-vis Southeast Asian Hajjis, Arab media representations, and Saudi state machinations. In this way, The Longest Journey not only embodies the promise of an interactive, trans-regional history of the pilgrimage, but also charts the path for deepening and extending this research agenda in the years ahead.

Indeed, small quibbles in no way detract from Tagliacozzo’s formidable achievement. Juxtaposing archival and ethnographic research with a strong commitment to accessibility and jargon free prose, The Longest Journey will serve both as an important resource for scholars of Islam in Southeast Asia as well as an indispensable primer for anyone who wants to learn more about the global history of the Hajj.

Joshua Gedacht
Asia Research Institute, National University of Singapore

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Vol. 3, No. 2, BOOK REVIEWS, Ronald D. RENARD

Contents>> Vol. 3, No. 2

Space and the Production of Cultural Difference among the Akha Prior to Globalization: Channeling the Flow of Life
Deborah E. Tooker
Amsterdam: Amsterdam University Press, 2012, 344p.

The Akha were the last highland group to move to Thailand in substantial numbers. On reaching Chiang Rai, where almost all their villages are now located, they were obliged to settle in areas passed over by the groups that had preceded them. When I participated in an evaluation of an indigenous Akha NGO, the Development and Agricultural Project for Akha, in the early-1990s, their relatively late arrival and the generally remote location of their villages seemed to significantly contribute to the difficulties they were facing. Following visits to most of the Akha settlements in the province, the evaluation team could not identify even one thriving village self-sufficient in rice that was not beset with such challenges as the lack of citizenship for its members, victimization of its women such as through commercial sex, and high rates of HIV.

There are indeed thriving villages in neighboring countries at the present time, such as in Mong Long District of Luang Namtha in Laos and in the Mong Pawk area of the Wa Region in Myanmar where the villagers enjoy rice surpluses, sell handicrafts and forest items, and remain relatively free of such problems as sexually transmitted diseases (STDs) and social challenges. However, in Thailand since the 1990s, this has no longer been the case, with most villages suffering food shortages, the threat (sometimes the reality) of being expelled from the country, and obstacles in accessing the public education and health care to which citizens are entitled.

In Space and the Production of Cultural Difference among the Akha Prior to Globalization, Deborah Tooker reviews Akha spatial practices from 1982 to 1985. At this time, there were sustainable and thriving Akha villages in Thailand. Focusing on the use of space and how this deline­ated differences between the Akha and neighboring groups, she has written a focused ethnography on the Akha of the sort that is going out of fashion in anthropology that is increasingly dominated by postmodernist approaches.

This time frame, 1982–85, coincides with the start of her “participant-observational fieldwork” (p. 13) among the Akha, particularly the Loimi sub-group near Mae Sai. In 1985, not only did her initial fieldwork come to an end but she also observed “serious structural discontinuities” (p. 13) that the reader is obliged to conclude were to unsettle the practices she observed during her fieldwork. This year is also when “globalization” began to impact upon the Akha. Although she never defines globalization (despite its use in the book’s subtitle and its absence from the index), it indeed refers here to increased lowland and official Thai government mandates in the Akha hills. More specifically, globalization here refers to “the expansion of capitalism and the nation-state into the Northern Thai uplands” (p. 214).

As explained in Chapter 1, the author studies the use of space among the Akha using three interpretive frameworks. These are “the cultural meaning of space,” “the relationship of that meaning to regional meaning systems,” and “larger comparative and theoretical discussions about the meaning of space in relation to economic and political contexts . . . and identity construction” (p. 21). She explains that her focus is on space because it is “actively produced by social agents” (p. 24) and contributes to cultural differences between the Akha and others. Tooker contends that space is used by the Akha to access the “life force” that she calls “potency” (translated from the Akha term, gýlà). She explains that potency is the force that “maintains, and indeed, serves to construct ‘Akha’ as an autonomous identity” (p. 42). She explains that potency provides access to a “cosmic energy” that maintains and creates social hierarchies both within Akha society and between the Akha and other ethnic groups (p. 24). Spatial practices (or tactics) include the relationship established between the center and the periphery and the direction in which certain features, such as houses and gates, are placed.

She explains further that some may disagree with her viewing the Akha as a bounded culture; yet she takes this view because the Akha see themselves in this way. Similarly, while she recognizes the changing nature of village society, she explains that the main aspects of her study village did not change significantly during her three-year study period (but have since then).

Tooker describes in Chapter 2 how the Akha she studied, although living on the periphery of states run by powerful groups, viewed themselves as autonomous and having their own identity. Special reference is made to the community in which she conducted her research. In Chapter 3, she describes how the Akha’s spatial dynamics, such as orienting the village in a particular direction consistent with cosmic forces, enabled them to access potency without having to depend on the larger states. When the Akha establish villages, they see it as reenacting the creation of the world and in so doing, reestablish critical spatial configurations. Chapter 4 covers how the Akha village is constructed. The Akha see the village as an entity extracted from the wilderness to form a settlement established apart from lowland states. It is through a dialectical relationship between Akha and lowland states, Tooker argues, that defines the Akha polity and identity. This chapter also reviews the “spatial tactics” within the village that are relevant to village-lowland state relationships. In Chapter 5, Tooker provides a detailed description of spatial practices relative to the household and the agricultural fields. She shows how the households have their own independent access to potency as a characteristic of an egalitarian society and that the household’s spatial practices sometimes differ from those of the village as a whole. At the same time, the household and the village exist in a dynamic hierarchical relationship so that the household is never fully autonomous. Chapter 6 reviews the rituals that are related to the Akha’s construction of inside and outside aspects of village life. While inside rituals comprise the Akha world, outside rituals defend the village against external forces that could threaten the community. In Chapter 7, Tooker discusses the relationships between the Akha world and the outside states as well as describing how the Akha view of spatial relationships compares with those of other groups in Southeast Asia.

Tooker argues that previous models of premodern “cosmic polities” in Southeast Asia, such as mandala, galactic polity, and emboxment, have been defined from the perspective of dominant lowland groups (p. 215). This has resulted, she argues, in the scholarship on the subject being skewed to represent a top-down view of premodern states that ignores other models such as that of the Akha described in this book.

It should be noted, though, that the authors of these models referred to by her (such as Heine-Geldern and Condominas, to cite two of them) did not claim to be describing all the models of Southeast Asia. They were depicting the lowland states and other lowland groups such as the Tai whose communities are in valleys.

Heine-Geldern, for example, wrote “I shall confine myself to a discussion of some funda­mental conceptions of state and kingship in those parts of Southeast Asia where Hindu-Buddhist civilization prevailed” (1942, 15). Although knowledgeable of upland societies, having written a thesis at the University of Vienna on highland groups near the border of India with Burma, he wanted here to describe lowland states.

Georges Condominas’ discussions of social space and emboxment referred to the socio-­political organization of Tai groups. In his book on social space, in which the concept (if not the actual term) of emboxment was introduced, he discusses Tai polities in one chapter (1980a, 259–316). In the same book, he describes how the Mnong Gar establish a new longhouse, thus covering some of the same ground examined in Tooker’s book (1980b, 411–430). His review of the spatial and political organization of the people makes no reference to anything that can be compared to emboxment and does not attempt to place how the Mnong Gar organize the longhouse spatially into the system of emboxment.

More important, however, than whether Heine-Geldern and Condominas intended to produce a comprehensive model for all the societies of Southeast Asia is Tooker’s point that there are diverse ways of spatial organization in the region. In making the case for diversity, especially among upland groups in Southeast Asia, Tooker diverges from the approach of James Scott who puts all the uplanders (and some valley dwellers) into the macro-grouping of Zomia (Scott 2009). Although his book appeared too close to the release of Tooker’s work for her to thoroughly integrate an analysis of it into her text, Tooker clearly envisions a diversity of cultures and methods of spatial organization in Southeast Asia.

As an indication of the diversity in Southeast Asia, she challenges the idea that hill people necessarily organize their societies in less hierarchical ways than lowlanders. She points out (p. 233) that “hierarchy is embedded just as much in [Akha] ritual space as it is in that of the lowland polities.” Other examples of hierarchical upland societies were in Karenni and in the Palaung center of Nam San, all of which had leaders who styled themselves as Saohpa (Shan rulers) with palaces and other accouterments of royalty (in what conventionally has been associated with lowland states).

All of this represents the continuing maturation of the study of highland cultures and peoples in Mainland Southeast Asia. As the understanding of highland groups grows more nuanced, the diversity of these peoples is being increasingly recognized as well as the ways that they have changed over time.

The fact that she has studied this village for so long has enabled her to attain a comprehensive understanding of the people and the place. This has precluded the need for her to write (as sometimes happens) a revision of her dissertation to accommodate some important new information she missed while doing her initial field research.

It is hoped that Tooker will continue with her analysis of Akha society into the more troubling times these people have been encountering since 1985 in what she calls the modern age. How the Akha system of spatial organization coped (and/or failed to cope) with the monumental changes of increased access to the lowlands, the expansion of lowland political control over their villages, the spread of new diseases as well as various social problems is of considerable interest. Given her deep understanding of Akha society in the 1980s, any analytical study she might choose to undertake on Akha life since then should be enlightening to students of many disciplines. Such a study would also give clues on how to study Akha society prior to the 1980s as well.

Ronald D. Renard
Center for Ethnic Studies and Development (RCSD), Chiang Mai University

References

Condominas, Georges. 1980a. Essai sur l’évolution des systèmes politiques thaïs [Essays on the evolution of Thai political systems]. In L’Espace social. á propos de l’Asie de sud-est [Social space with reference to Southeast Asia], pp. 259–316. Paris: Flammarion.

―. 1980b. Rites de reconstruction d’un village mnong gar [Reconstruction rituals for a Mnong Gar Village]. In L’Espace social. á propos de l’Asie de sud-est [Social space with reference to Southeast Asia], pp. 411–430. Paris: Flammarion.

Heine-Geldern, Robert. 1942. Conceptions of State and Kingship in Southeast Asia. The Far Eastern Quarterly 2 (November): 15–30.

Scott, James. 2009. The Art of Not Being Governed: An Anarchist History of Southeast Asia. New Haven: Yale University.

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Vol. 3, No. 2, BOOK REVIEWS, Meynardo P. MENDOZA

Contents>> Vol. 3, No. 2

Contestations of Memory in Southeast Asia
Roxana Waterson and Kwok Kian-Woon, eds.
Singapore: NUS Press, 2012, vi+300p.

Is memory a cul-de-sac?

At long last, an anthology of case studies on social memory used the frame that defined memory studies in the 80s and 90s. At that time, when memory studies became popular, the literature were mainly concerned with invented traditions and the problem of nation-building (Hobsbawm and Ranger 1992; Hutton 1991), memories of the Second World War in Europe, etc. (Adorno 1989; Bourget et al.1990; Olick and Robbins 1998; Climo and Cattell 2002). In this book, we can see the lineage of that earlier scholarship and how it is applied to the Southeast Asian region. Overall, the book is notable for its rich mix of talents and topics relating to the vicissitudes of how crucial historical events in the region are remembered by, inter alia, individuals, social groups, communities, and nations. Likewise, the book offers a wide diversity of empirical studies in an effort to elaborate the fusion between historically and geographically specific case studies with memory studies. The book is thus a significant contribution to the vast scholarship on memory.

In approaching the study of memory in Southeast Asia, the book highlights tumultuous events of the last century, thereby anchoring the book to the larger themes that have characterized memory studies: trauma and identity. Specifically, the book highlights the tensions inherent in memory studies between psychological or individual and collective approaches, between the popular and the official, between forgetting and remembering, and between dominant or suppressed narratives. The book is divided into three parts: the first offers a theoretical formulation of memory studies and tries to link this with other disciplinary approaches to the study of memory such as history, sociology, anthropology, and politics. The next two parts are empirical studies dealing with the stories of nations, destinies, and identities (Part II) and those concerned with traumatic memories of select groups and specific historical events (Part III).

Articles in Part I focus on memories of individuals and how they impact on national history and historiography. In Chapter 2 (“Remembering Kings: Archives, Resistance and Memory in Colonial and Post-colonial Burma”) British colonial administrators in Burma, in dealing with the Saya San Rebellion of 1931–32, framed the event as a revolt whereby Saya San (Teacher San), a monk who claimed supernatural powers and monarchical ambitions, incited naïve (read “pre-­rational”) peasants to revolt as a means to justify the state’s suppression of dissenters. Instead, as author Maitrii Aung-Thwin shows, the rebellion was not about rallying peasants incapable of modern political discourse and restoring an abolished monarchy to prevent Burmese unity, but rather a result of the peasants’ increasing economic marginalization brought about by onerous tax policies.

Ong Keo, a member of the Nge ethnic minority and regarded as a national hero in the aftermath of the victory of the Lao revolutionary forces in 1975, is the central figure in Chapter 3 (“Shifting Visions of the Past: Ethnic Minorities and the ‘Struggle for National Independence’ in Laos”). Fighting the aggressors (French), imperialists (American), and their local lackeys (a right-wing monarchy), Ong Keo became a source of identification for the Nge community as they formed part of the Pathet Lao’s narrative whereby “heroic provinces” became an essential element in the struggle for national liberation. With the passing of time, however, orthodox communist renditions of history have taken a back seat to “more purely nationalist sources of legitimization” (p. 84). As author Vatthana Pholsena observes, Buddhism, previously identified with the rival Royal Lao Government, has been relegated to the so-called dustbin of history in the decades following the Pathet Lao victory in 1975. However, the changing political and economic environment has altered the party-state’s historical narrative. The revival of Buddhism as a potent symbol of national identity at both the popular and state levels had brought to the fore the link between Buddhism and socialism. Furthermore, Laos’ economic liberalization has opened the country to the benefits of external trade as well as opportunities for its citizens beyond the avenue provided by the single party-state. As a result, the article concludes that “history as written by authoritarian states constitutes the most extreme example of a highly selective, if not distorted, representation of the past. History must be ‘correct’, that is, it must legitimize the leadership’s rule” (p. 83).

Corollary to the preceding article, Vietnam’s attempts to reconstruct an official and patriotic memory of the “American War” has not brought about the patching up of the country’s ideological and geographical divide after reunification in 1975, but instead has created more ruptures. Monuments and historical narratives that extol the North Vietnamese army and the southern National Liberation Front only betray the difficulty of remembering the opposite side: the soldiers and supporters of the former South Vietnamese regime. Sharon Seah Li Lian’s “Truth and Memory: Narrating Viet Nam” (Chapter 4) highlights the complex relationship between truth, memory, and history, i.e. the telling of one story occludes another, that the “already said” conceals the “never said” (p. 5). As the author concedes, the search for truth would not yield a single historical narrative. History should then be a knowledge-producing process or uncover other narratives to make possible the inclusion of other representations, even if they contradict the dominant narrative.

The theme of how memory is shaped by a changed political and economic setting is repeated in Ricardo Jose’s rendition of memorial and commemorative events relating to the Second World War in the Philippines in Chapter 7, “War and Violence, History and Memory: The Philippine Experience of the Second World War.” If US intentions to liberate the Philippines from Japanese occupation were seen as altruistic and necessary, by the 1970s these motives were now re-­interpreted under the rubric of imperialism. The streak of nationalism and radicalism that swept the Philippines at this time, coupled with the disillusionment of Filipino veterans with getting back pay (financial remuneration for serving under the American flag) plus the payment of reparations by Japan and the latter’s increasing role in the economic recovery of the country further complicated the memories of the war. Moreover, the tensions between official and popular memories of the war were managed by the state in official commemorations of the event in order to dovetail them it with its interests in foreign relations.

However, the succeeding articles that were framed by psychological approaches are not that convincing as far as utilizing the explanatory power of memory studies in understanding these watershed events are concerned. There is a tendency to overstate the topics or to infer a general narrative from very little historical information, a drawback to specialists on the topic. For example, the reader may wonder how representative are the experiences of three wives compared to the thousands of wives whose husbands suffered persecution in the aftermath of the “1965 Event” in Indonesia (Chapter 10).

Ironically, the book exhibits an inherent aversion to history. While the anthology is filled with historically momentous events, the editors juxtaposed memory studies with what may now be regarded as “traditional” history. For example, “although historians have often claimed for their craft a greater objectivity and accuracy, in contrast to memory, which is seen as unreliable and partial, it is clear that much historical writing has itself been driven by mythical meta-narratives concerning issues such as national ‘destiny’” (p. 25). This makes the reader wonder whether the book may have overlooked the many developments in the field of history since the 70s and 80s which profoundly altered the way history is conceived and written. Since then, much of the younger generation of historians has discarded this positivist type of historicizing. And if the book and some scholars of memory studies took a labyrinthine and verbose path of making this point, by elaborating arduously how memories become malleable, contested, and negotiated, historians would simply retort with their dictum “there is only one past but there are many histories!” Indeed, much has changed between the time the book was published and the time when the works cited in the theoretical part and in some of the chapters were being debated.

After reading the anthology, a reader is likely to ask: is memory studies a cul-de-sac, a trap with no exit? Is scholarship on memory studies characterized only by relentless and seemingly never ending contestation? Although the book has amply demonstrated and accomplished what it has set out to do, the question of what happens now to these contested memories is left hanging. It may be said that contested memories can be a good starting point in bringing them to public attention. However, the reader may find it difficult if in the end, memories are simply posed as a problematic. For several years now, other scholars of memory studies, sometimes in collaboration with legal experts and human rights advocates, have grappled with how to address the issue of repairing historical injustices and making memory a tool for redress and reconciliation (Torpey 2003; Hayner 2001; Minow 1998). The main drawback of the book is that it comes too late, and is published at a time when the study of memory has shifted beyond questions of meaning and identity to exploring various modes of redressing injustice. It must be stressed, however, that the book is commendable for putting together a highly interesting anthology that navigates the terrain of Southeast Asia’s contentious past. The book includes many chapters that are of interest to both specialists and non-specialists alike and provides important reading material for the study of the history of modern and contemporary Southeast Asia.

Meynardo P. Mendoza
Department of History, Ateneo de Manila University

References

Adorno, Theodor. 1989. What Does Coming to Terms with the Past Mean? In Bitburg in Moral and Political Perspective, edited by G. Hartmann, pp. 114–137. Indianapolis: Indiana University Press.

Bourget, Marie-Noelle; Wachtel, Nathan; and Valmsi, Lucette. 1990. Between Memory and History. Chur, Switzerland: Harwood Academic Press.

Climo, Jacobo J.; and Cattell, Maria G., eds. 2002. Social Memory and History: Anthropological Perspectives. New York and Oxford: Alta Mira Press.

Hayner, Patricia. 2001. Unspeakable Truths: Confronting State Terror and Atrocity. New York and London: Routledge.

Hobsbawm, Eric; and Ranger, Terence. 1992. The Invention of Tradition. Cambridge: Cambridge University Press.

Hutton, Patrick. 2000. Recent Scholarship on Memory and History. The History Teacher 33(4): 533–548.

―. 1991. The Role of Memory in the Historiography of the French Revolution. History and Theory 30(1): 56–69.

Minow, Martha. 1998. Between Vengeance and Forgiveness: Facing History after Genocide and Mass Violence. Boston: Beacon Press.

Olick, Jeffrey K.; and Robbins, Joyce. 1998. Social Memory Studies: From “Collective Memory” to the Historical Sociology of Mnemonic Practices. Annual Review of Sociology 24: 105–140.

Torpey, Johnm, ed. 2003. Politics and the Past: On Repairing Historical Injustices. Maryland: Rowman and Littlefield Publishers.

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Vol. 3, No. 2, BOOK REVIEWS, Karl Ian Uy CHENG CHUA

Contents>> Vol. 3, No. 2

Global Movements, Local Concerns: Medicine and Health in Southeast Asia
Laurence Monnais and Harold J. Cook, eds.
Singapore: NUS Press, 2012, xxxi+290p.

This edited volume contributes to the growing scholarly literature dealing with the history of medicine. The editors collaborated with 12 scholars of Southeast Asia to come up with an 11-­chapter compilation dealing with six countries, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. This is a difficult task to perform, as most scholarship tends to focus on one Southeast Asian country or a comparison between countries with similar histories, given that a characteristic of Southeast Asian countries is their diversity.

The volume begins by deconstructing the prevalent notion that the term “Southeast Asia” was constructed by North American scholars and its allies during the Second World War as a way to group the countries into “a community of nation-states.” Southeast Asia, to quote Benedict Anderson, is an artificial construct and the region is “remote, heterogeneous, and . . . imperially segmented” (Anderson 1998, 5). Another strategy has been to group these countries according to the influences of the region’s powerful neighbors, China and India. However, this proved to be insufficient with the migration of Arab, Chinese, and Indians to various countries fostering an image of “plural societies.” It was only with the introduction of the Braudelian view of long durée—researching one topic over an extended period of time and analyzing material culture in the context of global history—that a framework for studying Southeast Asia as a whole became possible.1)

The editors of the volume make clear that the chapters deal with issues of health rather than disease in the countries involved. The chapters avoid dealing with “colonial medicine,” and focus on the development of “modern medicine.” Hence, instead of colonial masters imposing their policies upon the locals, the chapters examine the negotiations between colonial masters and locals and the appropriation of medical practices and policies within a local context.

This is a welcome compilation for Southeast Asian scholars and those who study the history of medicine due to its ambition in attempting to tell the history of Southeast Asia using micro-level narratives and social histories. However, one of the main issues that arise out of any compilation on the history of Southeast Asia is the difficulty in grappling with the diversity that exists in region. This difficulty makes itself felt in the compilation and can be seen in the confusing order of the chapters from what initially seems to be chronological (chapters 1 to 8) to an abrupt transition to the modern period with chapter 9, and then back to a chronological order with chapters 10 and 11.

Thomas B. Colvin’s study deals with the expedition of Francisco Xavier Balmis, a doctor to the Spanish court who proposed to bring the smallpox vaccine to all of Spain’s colonies. The ­Balmis expedition brought the vaccine using the “human chain” method, which meant transporting a number of healthy young boys who had not been exposed to smallpox and transferring the vaccine from one boy to another until they arrived at the final destination. The Spanish monarchy approved the expedition in order to increase the population of the colonies that had been afflicted by smallpox and stimulate economic activity in the colonies. Despite encountering problems not only with the locals, but with the Spanish as well, the expedition was successful and would have further influence within the surrounding countries.

C. Michele Thompson narrates how the Nguyen Dynasty addressed the problem of smallpox and how officials transported the vaccine to Vietnam from France. The smallpox vaccination project was a long-term policy; however, the methods in transporting the vaccine introduced by the French proved to be unsuccessful, since it was brought via glass vials, which failed to preserve the live virus on its journey through the summer heat of the South China Sea. With the success of the Balmis expedition, the Nguyen court negotiated with the Spanish to obtain samples from Macao. The negotiations were successful, and the vaccine was transported safely to Vietnam.

Liew Kai Khiun’s study examines the Rockefeller Foundation’s (RF) International Health Board and assesses the influence of America in Southeast Asia. It tries to deconstruct the idea of the Americanism of the foundation as a form of imperialism, such as its anti-hookworm proposal to the colonial officials of the Malay states. The study tries to differentiate the RF project from that of “colonial medicine,” given that RF relied heavily on consultations with local players and their monetary contributions as well as community mobilization. For example, the hookworm campaign implemented in Singapore and Thailand promoted medical research and education, and thus helped finance medical colleges. This project was able to popularize the ethos of western public health in Southeast Asia.

Annick Guenel studies the 1937 Bandung Conference on Rural Hygiene held by the League of Nations Health Organization. The conference gathered together various Asian countries to discuss and deal with issues on rural hygiene and asked each country to survey and provide a country report on health and medical services, rural reconstruction and collaboration of the populations, sanitation and sanitary engineering, nutrition, and measures for combating diseases. The reports presented by the countries carried varied information, given the reluctance of local authorities in their countries to disclose the information requested of them. Another issue was that of cooperation involving regional public health officials and local communities. The body identified the following as primary problems in the implementation of programs in the countries: peasant apathy, customary habits, and local superstitions and religious beliefs.

Raquel A. G. Reyes provides a smooth transition in the book with her study on midwifery in nineteenth century Philippines. Her chapter addresses issues regarding the mistrust harbored by Western medicine towards the practices of local midwives, who were also attacked by western-trained Filipino doctors. While the chapter deals with the concept of science versus superstitions, which is not unique to the Philippines, Reyes further develops her argument from a gendered perspective: most midwives were women and criticism of these women could be seen as a form of colonization of their bodies (both the midwives and pregnant women). Despite the concern with safety exhibited by Western medicine with regards to childbirth, the severe lack of trained professionals allowed for the continued existence of these midwives.

Liesbeth Hesselink continues on the same thread as Reyes in the context of the Dokter Djawa and the Dukun. The Dokter Djawa or locally born, Western-trained physician, was a creation of Dutch colonial rule. The Dutch sought to increase the numbers of trained professionals to service the populace of Indonesia. The Dokter Djawa occasionally used treatments prescribed by the Dukun. Furthermore, due to issues of trust, locals preferred to deal with the Dukun, who was a local medical provider capable of restoring spiritual potency that they believed to be the root cause of illnesses. However, the Dukun also realized the limitations of their abilities, and would occa­sionally ask for help from Dokter Djawa. Thus, we see in the Indonesian context an interesting coexistence between the Dokter Djawa and the Dukun.

Ooi Keat Gin’s chapter deals with the anti-opium movement and its effect on the diasporic Chinese communities in Malaya. Western-trained Chinese physicians attempted to combat the practice of opium smoking by promoting the idea that it was bad for Chinese nationalism because it promoted weakness and was a source of criminality. However, these anti-opium advocates went against a complex structure that included fellow countrymen and British colonials who were involved in the production and trade of opium. Nevertheless, the campaign played its part in eradicating the practice from British Malaya.

Michael G. Vann’s chapter looks at the policies by which the French organized the city of Hanoi. The French embarked on developments and infrastructure within their settlements while leaving the fringes—where the Vietnamese were residing—to their own devices. Hence, during an epidemic, one would find discrepancies in the implementation of policies based on their location. The source of the epidemics originated from locals living in the peripheries, since infrastructure which promoted health and hygiene was grossly lacking within these areas. The failures of the colonial government were aggravated by policies such as forced inoculations, the examination of the dead and the criminalization of the sick among the Vietnamese, all of which provoked resentment and non-compliance.

An advantage of two interrelated chapters would be the ability to cover points that each individual chapter failed to discuss, although there is also the risk of needless repetition of the points discussed in a chapter, as with the chapters by Colvin and Thompson. Furthermore, one of the aims of the compilation is to move Southeast Asian studies beyond colonial history. Despite the efforts of authors to deconstruct the activities of the colonizers or international organizations such as the RF, traces of imperialism or neo-imperialism remain, since the solutions themselves come from the colonizers and organizations who did not “impose” their ideas, but rather “negotiated” with the local populace.

Yu-Ling Huang’s chapter abruptly jumps to the contemporary period, thereby breaking away from the flow of the previous chapters. Huang provides a history of the HIV/AIDS issue and how it was addressed by various agencies and NGOs in Thailand from the 1980s to 2000s. The issue was compounded by the sex tourism industry, and transmissions were largely due to unprotected heterosexual sex. Although campaigns for the use of condoms were launched and generally successful, new cases still emerged and led to the development and importation of medicines to treat HIV. Since Thailand could not manufacture or import cheaper medication, there were still a significant number of deaths. Trade pressures by America via the US Trade Representative and the formation of a global patent regime prevented the Thai government from obtaining better access to HIV/AIDS medications.

Ayo Wahlberg also focuses on the modern period with his chapter on the developments of “Western” and “Eastern” medicine in medical practice in Vietnam. In 1955, through the efforts of President Ho Chi Minh, the use of traditional medicine was promulgated with the establishment of institutions for research, development, and use of traditional medicine. One reason for such a movement was to promote national identity by “de-colonizing” all aspects of Vietnamese society including medicine. The chapter explains the battle of the Vietnamese government against “backwardness,” including health practices that complemented the move towards research on medicine with which people are familiar. The program is not a movement to criticize old practices and medicines, but rather to re-educate Vietnamese people towards better health practices and rediscover effective traditional medicines.

The final chapter is on Thai medical historiography. Chatichai Muksong and Komatra ­Chuengsatiansup look into the histories of Thailand to uncover narratives relating to medicine and public health. Prior to the colonial period, most texts relating to medical knowledge were derived from Buddhism. With the advent of the West colonizing Southeast Asia, there was a surge in the number of Western medical practitioners in Thailand. Rather than being overwhelmed by this new knowledge, the elite attempted to utilize it to further legitimize themselves. This relates to the previous chapter where localization of imported knowledge and practices occurred. The changing political environment of Thailand was accompanied by a subsequent shift from elite medical narratives to their democratization, not only due to the Westernization of Thai medical practices, but also owing to increased access by the general public to medical knowledge through medical schools.

The shortcomings of the book do not detract from the fact that each chapter presents a new perspective in Southeast Asian historiography that goes beyond the colonial framework. However, this does not mean that a Southeast Asian compilation by multiple authors is not with difficulties. A successful example would be Norman Owen’s edited volume entitled The Emergence of Southeast Asia: A New History (2004). As such, owing to the variety and discontinuity of some chapters, one might better appreciate reading the pieces in this volume individually.

Karl Ian Uy Cheng Chua
Department of History and Japanese Studies Program, Ateneo de Manila University

References

Anderson, Benedict. 1998. The Spectre of Comparisons: Nationalism, Southeast Asia and the World. London: Verso.

Cook, Harold J. 2007. Matters of Exchange: Commerce, Medicine, and Science, in the Dutch Golden Age. New Haven: Yale University Press.

Crosby, Alfred W. Jr. 1986. Ecological Imperialism: The Biological Expansion of Europe, 900–1900. Cambridge: Cambridge University Press.

Elvin, Mark. 2004. The Retreat of the Elephants: An Environmental History of China. New Haven: Yale University Press.

Grove, Richard. 1997. Ecology, Climate, and Empire: Colonialism and Global Environmental History, 1400–1940. Cambridge: Cambridge University Press.

Owen, Norman, ed. 2004. The Emergence of Modern Southeast Asia: A New History. Honolulu: University of Hawai‘i Press.

Zuckerman, Larry. [1998] 2000. The Potato: From the Andes in the Sixteenth Century to Fish and Chips, the Story of How a Vegetable Changed History. London: Pan Books.

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Vol. 3, No. 2, BOOK REVIEWS, Somchai Phatharathananunth

Contents>> Vol. 3, No. 2

Thailand’s Political Peasants: Power in the Modern Rural Economy
Andrew Walker
Wisconsin: The University of Wisconsin Press, 2012, xiii+277p.

This is a very important book for understanding political conflict in contemporary Thailand. The stated aim of this book is to investigate “the underlying economic, political, and cultural processes that contributed to Thailand’s contemporary contests over power” (p. 5). To achieve this aim Walker examines “rural transformations that have produced a major new player in the Thai politi­cal landscape: the middle-income peasant” via ethnographic engagement in Ban Tiam, a village of 130 households in Chiang Mai province, a major town of Northern Thailand (p. 5). Walker argues that “in order to understand the politics of Thailand’s middle-income peasantry—including its strong electoral support for Thaksin’s populist policies, the political passions that brought the red shirts to Bangkok, and the electoral triumph of Yingluck Shinawatra—it is necessary to address how power is perceived in a context of rising living standards and a transformed relationship with the state” (pp. 5–6).

According to Walker, most Thai peasants are no longer poor. In the 1960s some 96 percent of rural households were living below the poverty line. However, sustained economic growth since then helped to reduce the number of poor rural households to 10 percent in 2007 (p. 39). Thailand’s poverty line in that year was 57,000 baht per household per year (p. 41). Annual income of rural households was 187,000 baht in the Central Plains, 175,000 baht in the South, 166,000 baht in the Northeast, and 160,000 baht in the North (p. 39). As a result, “In most areas of rural Thailand, the primary livelihood challenges have moved away from the classic low-income challenges of food security and subsistence survival to the middle-income challenges of diversification and produc­tivity improvement” (p. 8). Most Thai middle-income peasants engage in farming and non-farming ­economic activities. Only some 20 percent of rural households rely solely on agricultural income. More importantly, “nonagricultural sources of income have proliferated and they are now more significant than farming for a great many rural households” (p. 8).

The emergence of middle-income peasants mentioned above is a result of state support for rural development. Worried about the spread of communist influence in the countryside, in the 1950s and the 1960s Thai governments started to invest in rural areas aimed at improving the living standards of peasants. A program of investment in rural development was laid out in the first National Social and Economic Development Plan (p. 49). In the 1970s pressure from politically assertive peasant movements and the victory of communist revolutions in Indochina saw the Thai state increase its efforts to win over rural populations. Since then, argues Walker, “there have been important long-term shifts in the fiscal treatment of the countryside, laying the foundation for the emergence of a middle-income peasantry” (p. 50).

Such policy alters state-peasants relationships in areas ranging from taxation to subsidies (pp. 8–9). Agricultural tax, such as the rice premium, which taxed rice exports to generate state revenue and reduce domestic rice prices, was abolished in 1986 (pp. 49–50), while the government invested heavily in rural development. Apart from infrastructure, government supported farmers on price, credit, land tenure, health, education, and welfare among others (p. 56).

Despite the significant improvement of living standards in rural areas Walker argues that disparities in income and living standards between rural and urban populations are widening. The income gap between the richest 20 percent of the population and the poorest 20 percent rose from 8 times in the 1970s to between 12 and 14 in the 2000s. The average household in Bangkok is about three times higher than in the rural northeast and the north. “Although the national (and rural) poverty rate has declined dramatically, poverty is still about ten times more prevalent in the north and northeast than it is in Bangkok” (p. 45). Walker has pointed out that inequality in Thailand is not the product of surplus extraction by dominating elites. The cause of this disparity lies in uneven economic development. While labor productivity in agriculture is quite low, labor productivity in industry increased rapidly during the economic boom from the mid-1980s to the mid-1990s. Labor productivity in industry was about 8 times higher than that of agriculture in 1980 and the number increased to 16 times in 1990. This difference in productivity led to a difference in wages paid in the agricultural and industrial sector. For example, in 2006 wages in agricultural sector were only 44 percent of those in manufacturer sector (p. 48).

Income disparity has caused discontent among peasants, who have pushed for a fair share of the benefits of economic development. Peasants’ bargaining power is enhanced by socio-economic transformations in recent decades. As Walker puts it, “the forces of socioeconomic modernization that increase disparity also increase the power and eloquence of rural political opinion” (p. 48). Such transformations have helped to improve rural education, communication, and mobility. Urban-rural linkages not only supported the likelihood of diversification, promoted new forms of consumption, and blurred spatial distinctions, but also enabled rural dwellers to compare their disadvantages with affluent urban populations. “This heightened awareness of inequality can easily undermine some of the satisfaction gained from improved quality of life” (p. 48).

As we have seen, on the one hand, economic development in Thailand helps to reduce rural poverty and turns a majority of the rural population into middle-income peasants, yet on the other hand, it creates and fosters income disparities between urban and rural populations. For Walker, such a dilemma of uneven development is the root cause of the current political tension in Thailand (p. 220).

To improve their situation, peasants are seeking support from the state. They expect that “the state will improve its efforts to enhance rural livelihoods, reduce inequality, and provide a secure backup when experimental engagements with private capital fail” (p. 221). According to Walker, weaving the power and resources of the state into the economic and social fabric of village life is central to peasants’ political strategies (p. 221).

Thaksin Shinawatra recognized the needs of peasants and shaped his policies around their aspirations. As a result, he received strong support from peasants in the 2001, 2005, 2006 general elections (p. 221). However, Bangkok elites and intellectuals condemned the immorality of ­Thaksin and the electorate that had voted him into power (pp. 23–24). Bangkok elites prefer a “civil society” that emphasized law and institutions over rural “political society” characterized by “special interests, personal ties, a plethora of programs serving specific population groups, charismatic and controversial personalities, and recipients who are skilled in negotiating access to the state’s resources” (p. 22).

The 2006 elite-backed coup ended the relationship between Thaksin and rural political society. In the post-coup period we have seen political conflict in Thailand centered around the contest of power between elites and peasants who mobilize under the banner of the Red Shirts. Contemporary peasant mobilizations, argues Walker, are the actions of rural political society to defend its relationship with the state. As he makes clear, “The red-shirt protesters have been defending political society’s direct transactions with power in all its regular and irregular forms and rejecting the view that economic development and other matters of state should be guided by the elite embodiments of virtuous power located in the nation’s capital” (p. 223).

The above account is the main argument of Thailand’s Political Peasants. The book contains interesting evidence, analysis and insights on rural transformations and political contestation in contemporary Thailand that will be of benefit to students and scholars of Thai and Southeast Asian studies.

Somchai Phatharathananunth สมชัย ภัทรธนานันท์
Faculty of Humanities and Social Sciences, Mahasarakham University

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Vol. 3, No. 2, BOOK REVIEWS, Hjorleifur JONSSON

Contents>> Vol. 3, No. 2

Consoling Ghosts: Stories of Medicine and Mourning from Southeast Asians in Exile
Jean M. Langford
Minneapolis: University of Minnesota Press, 2013, vii+263p.

Consoling Ghosts focuses on how Southeast Asians in the United States—Khmer from Cambodia, and Hmong, Kmhmu, and Lao from Laos; all refugee emigrants from US wars in the region—engage with death, ghosts, spirits, and souls. Jean Langford’s study was initiated when the research unit of a hospital in the United States hired her to interview Southeast Asian emigrants about their ideas concerning death. The idea was that each ethnic group had its unique ideas about death, spirits, and such and that the hospital stood to benefit from knowing the key to each culture. The reader does not learn the details of that initial research (location, duration, or results). Instead, the book is a rich exploration that draws on Langford’s change in focus. She found no particular value in the quest for ethnically specific cultures, and shifted to her own study of how people ­manage the ethics of life and death.

The Southeast Asian materials come from interviews—aided by translators fluent in the four Southeast Asian languages—and the ethnographic literature on the region. These are framed by people’s engagement with hospital and hospice care, particularly the repeated frustrations generated by the expert management of death that precludes Southeast Asian engagements with the dying person, the dead body, and the soul of the dead. The material is interspersed with western theory (Sigmund Freud on the uncanny, Michel Foucault on biopolitics, Giorgio Agamben on thanatopolitics, and so on) and Jean Langford’s own experiences of death and loss. The book’s sometimes-heavy academic tone is balanced, between chapters, by poetry; Kmhmu ritual chants, more self-conscious Southeast Asian émigré reflections on war and exile, and a western doctor’s reflections involving some Southeast Asian patients. “By evoking the possibility of haunting, emigrants call spirits as witnesses to violations of the dead in wartime Asia that resonate with similar violations within U.S. institutions. Rather than read the violations of the dead as metaphorical of violence against the living, I understand them as metonymic of a pervasive tendency within thanatopolitical regimes (in which I include war and state terror alongside medicine and mortuary science) to foreclose social interchange between living and dead” (p. 4).

Chapter 1 brings up the importance of dealing with ghosts of war, through interaction, ritual, and exchange. This is in sharp contrast to the prevailing focus on truth-telling and reconciliation as the adequate closure to wartime. In the stories that Langford heard from Laos and Cambodia there was an excess of suffering and death. No one appears consoled by telling the stories. Instead, the suffering that the Southeast Asian wars triggered appears accentuated “by the everyday ­violence of minoritization, poverty, and social fragmentation in the present” (p. 47). Chapter 2 introduces ideas of place spirits (neak ta, phi ban) and various creatures on the borders of animality. Such discussions never stray too far into ethnographic detail and instead trigger strings of theoretical associations: were-tigers and water serpents evoke Agamben on “bare life,” Derrida on stealthy wolves, and Deleuze and Guattari on “becoming-animal” (pp. 65–70). In one recollection, a log hit a boat carrying people across the Mekong River as they fled Laos at the end of war. The teller of the event was eerily aware of the power of phi-ban place spirits, but for Langford it occasions recall of what Sigmund Freud said of the uncanny and what Dipesh Chakrabarty observed regarding the chance of encountering spirits in modern life (p. 71). But in the context of state violence even spirits suffered; interviewees from both Cambodia and Laos mentioned that the spirits communicated their inability to protect their constituents when Buddhist monks and various spirit mediums were being harassed and persecuted by the authorities (p. 73).

Chapters 3 and 4 bring out various dimensions of how hospitals in the United States control death and constrain how people can engage with it, such as by separating family members from the dying person and insisting on full disclosure of terminal diagnosis to the patient in ways that are disagreeable within Southeast Asian communities. These dynamics have created mistrust among many emigrant communities, and the study brings out some fundamental tensions between the negotiation of soul-stuff and the emphasis on individual autonomy and rational decision making. The “cultural” framework of much hospital work does not get characterized as just another perspective; biomedical control takes its own rationality for granted. Langford’s study shows some of the cultural presuppositions of Euroamerican engagements with death and mourning, including an expectation of a soul that is in the body during life and leaves at death. Southeast Asian notions of souls and the need to tend to them, sometimes to call them back, and then to send them on at death rest on different premises. Death in one scheme leads to loss and bereavement and in the other, to a funeral ceremony that may go on for days and is in part intended to reorient a soul now that it is no longer among the living.

Souls, ghosts, and exchanges are prominent in chapters 5, 6, and 7. What emerges in these chapters is a set of related ideas that crosscut any difference in ethnic culture. There are various Southeast Asian commonalities that the anthropological focus on ethnic specificities has often ignored. Langford’s point is not to reassert areal anthropology but rather to juxtapose Southeast Asian materials with Euroamerican ones to examine bioethics and alternative engagements with life and death. In the aftermath of Asian wars and in the contemporary US context, the Southeast Asian dead appear cut off “from a reassuring participation in daily life, too often inconsolable and therefore without the power to console” (p. 207). The study strikes various balances among Southeast Asian worlds, contemporary western lives, medical practice, and academic orientations, including a welcome move to use Southeast Asian ideas about souls, spirits, and were-animals to put western theory in its place, regarding the recognition of “concrete socialities of living and dead [and the occasional] violation of those socialities” (p. 165).

In the afterword, on the status of ghosts, Langford offers creative play on the binaries of ghosts and guests, and ghosts and ancestors; “the literality of the ghost pulls at certain central thread of biopolitical theory, tending to unravel it” (p. 215). She is clear and sympathetic to the need to engage with the dead on terms other than the predominant Euroamerican one. While she tends to highlight how hospitals assert particular measures of control over life and death, some of the characters in her study suggest alternatives. One is a certain Dr. Stoltz who has long worked with Southeast Asian patients. With his Southeast Asian-language interpreters he has arrived at various creative ways to sidestep the confines of biomedical culture and its discursive regimes of control, in ways that have often surprised him. New options emerge when doctor and patient exchange messages that cannot be translated directly and people instead have to negotiate their differences toward an outcome that somehow facilitates each side toward a positive and agreeable goal (pp. 40–51, 204, 214–215). To me, these improvised balancing acts offered an unexpected parallel to the Southeast Asian engagements with souls and ghosts that Langford describes and analyzes.

Hjorleifur Jonsson
School of Human Evolution and Social Change, Arizona State University

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Vol. 3, No. 2, BOOK REVIEWS, Sverre MOLLAND

Contents>> Vol. 3, No. 2

An Atlas of Trafficking in Southeast Asia: The Illegal Trade in Arms, Drugs, People, Counterfeit Goods and Natural Resources in Mainland Southeast Asia
Pierre-Arnaud Chouvy, ed.
London: I. B. Tauris & Co Ltd, 2013, x+214p.

In the context of regional integration, Mainland Southeast Asia is subject to considerable economic activity and cross border trade. An intimately related question concerns extra-legal cross-border activities, such as the trade in drugs, wildlife, contraband, and people. The scholarly attention to these topics is rather large both within Southeast Asia and beyond. However, few attempts have been made in bringing together these different forms of “trafficking,” both conceptually and empiri­cally. This is what An Atlas of Trafficking in Southeast Asia attempts to do. As editor Pierre-Arnaud Chouvy makes clear in the introduction, the aim is not merely to juxtapose these different forms of trade, but to “provide a regional and systemic understanding of the variety of smuggling and trafficking activities” (p. 3) as well as illuminating synergies between them.

The book brings together several authors with considerable expertise within the region. The various chapters cover diverse topics such as the trafficking in drugs, arms, logging, wildlife, counterfeit goods, and humans. These different forms of trade are supplemented by several colorful maps which visualize trafficking routes and patterns in Mainland Southeast Asia. One of the key claims the book is making is that there is considerable overlap between these trade routes and that they have significant historical trajectories. For example, as argued by David Capie, one cannot appreciate the arms trade in Mainland Southeast Asia without considering the post-conflict situation in several of the countries. Similarly, the contemporaneous drugs trade can only be understood in light of previous drug economies which were often blessed and even actively encouraged by Western powers.

The book is rich in detail and one of its main strengths is its illumination of the various connections between these different economies. In Burma, a country which is subject to considerable inter-ethnic tension, semiautonomous armed groups depend on drug production; similarly drug reduction policies in Thailand are directly related to out-migration, prostitution, and human trafficking in Northern Thailand.

All the chapters consider policy implications. It would have been interesting if the policy implications of regulation and prohibition had been analyzed more explicitly in a comparative framework. For example, Vanda Felbab-Brown’s discussion of the certification of logging (p. 134) raises extremely interesting questions in terms of how this relates to its labor-equivalent (i.e. current certification of labor recruitment firms in the context of legalizing labor migration between Thailand and several of its neighbors).

The conceptual framework, which is outlined in the introduction, relies on Willem van ­Schendel and Itty Abraham’s influential book Illicit Flows and Criminal Things (2005), where a key conceptual heuristic is the interrelation between the (il)legal and (il)licit. A key concern of ­Schendel and Abraham’s work is to critically interrogate the inherent state-ism which is commonplace in much analysis of trafficking and smuggling. For this reason one must avoid treating concepts, such as “illegality,” as self-evident. Although An Atlas of Trafficking is often similarly critical of such concepts, it commonly slips precisely into “seeing like a state” (Scott 1998) in the way it maps trafficking practices in Mainland Southeast Asia. For example in the context of human trafficking, it argues that it is necessary to examine trafficking routes and key border sites. But this is to echo the state’s vision of trafficking which privileges state-borders over the work conditions of migrant laborers. The danger here is ironically (yet fortunately) illuminated by David Feingold in his chapter on human trafficking. It is the fixation with border control in the combat against trafficking, Feingold argues, that is precisely one of the reasons why mobility which is often licit, yet technically illegal, has become more dangerous for young migrants in the region. The state-bias resurfaces throughout the book (many of the chapters consider policy interventions that are largely discussed along these lines), and concepts, such as “illegality” and “the state” are often presented as self-evident.

This conceptual problem is not helped by a rather unclear exposition of “trafficking” and “smuggling.” Smuggling is simply defined as “the importation and/or exportation of legal goods contrary to the law . . .” (p. 5); conversely, trafficking constitutes “trade in goods that are illegal per se—that is, a trade therefore illegal by definition” (p. 5). Again, human trafficking exemplifies how this is highly problematic. It is now well-established that human trafficking often starts off as voluntary, but it is later on in the recruitment process (often at the workplace) where questions of non-consensual labor emerge. At what point, then, does human trafficking become “illegal?” Conversely, does that mean that smuggled people can—in a rather oxymoronic ­fashion—be thought of as “legal goods”? And what about the large body of research that shows how exploitative labor and trafficking may involve perfectly legal recruitment chains that involve the use of passports and working permits? Part of the problem here is that human trafficking discourse blurs the distinction between person and things (Kopytoff 1986). In other words, trafficking in persons intertwines notions of commodification with questions of labor. This in turn raises complex questions regarding markets and the role of the state that could have been more clearly elaborated in the book. The result is that the task of mapping trafficking carries a somewhat equivocal tone throughout many of the chapters.

The book is rather uneven in terms of methodological considerations. There is a puzzling double argument unfolding. Throughout, criticism of the dubious reliability of data reported on by government, aid organizations, and media is provided. Yet, several of the authors tend to rely precisely on this body of source material to advance their points. The methodological problems with such as “dustbag” approach (Anderson 2008) are fairly well known. The accompanying maps are given no methodological explanation, making it impossible for readers to assess their validity. Indeed, I was somewhat struck by the numerous unsubstantiated claims made in many of the chapters. For example, in the chapter on arms trafficking we are told:

There are also sophisticated local and transnational criminal networks that are involved in a range of illicit activities, including drug trafficking, the illegal movement of people, money laundering, counterfeiting and extortion. (p. 92)

The claim may be plausible. But given that the book examines a topic that is widely understood to be clandestine and highly politicized, it is surprising that the volume, which aims to provide a systematic overview of routes, trends, and synergies, does not substantiate these sorts of claims more strongly. No doubt, studying extra-legal trade is very difficult, but evidently there are sev­eral academics who have gone well beyond newspapers and secondary literature on this topic ­(Nordstrom 2007; Zhang and Chin 2002; Scheper-Hughes 2000).

Many of the chapters are on their own terms useful and insightful, such as Bertil Lintner’s discussion of local practices of corruption in Thailand in the context of counterfeit goods and contraband. However, the tremendously fascinating and important comparative study which this book has initiated ought to be elaborated further with a clearer conceptual and methodical consideration, so a more lucid explanatory accounts can come to light.

Sverre Molland
College of Arts and Social Sciences, Australian National University

References

Anderson, Bridget. 2008. Review Essay: Sex, Slaves and Stereotypes. Global Networks 8(3): 367–371.

Kopytoff, Igor. 1986. The Cultural Biography of Things: Commoditization as Process. In The Cultural Biography of Things: Commoditization as Process, edited by Arjun Appadurai, pp. 64–91. Cambridge: Cambridge University Press.

Nordstrom, Carolyn. 2007. Global Outlaws: Crime, Money, and Power in the Contemporary World. Berkeley: University of California Press.

Scheper-Hughes, Nancy. 2000. The Global Traffic in Human Organs. Current Anthropology 41(2): 191–224.

Scott, James C., ed. 1998. Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed. New Haven: Yale University Press.

van Schendel, Willem; and Abraham, Itty, eds. 2005. Illicit Flows and Criminal Things: States, Borders, and the Other Side of Globalization. Indianapolis: Indiana University Press.

Zhang, Sheldon; and Chin, Ko-Lin. 2002. Enter the Dragon: Inside Chinese Human Smuggling Organi­zations. Criminology 40(4): 737–768.

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Vol. 3, No. 2, BOOK REVIEWS, Michael G. VANN

Contents>> Vol. 3, No. 2

Organising under the Revolution: Unions and the State in Java, 1945–48
Jafar Suryomenggolo
Singapore and Kyoto: NUS Press in association with Kyoto University Press, 2013, xiii+215p.

Visitors to Lawang Sewu might be confused as to the building’s significance. Situated in the heart of Semarang on the north coast of Central Java, the building is Indonesia’s most famous haunted house; hence the crowds of domestic tourists. In addition to ghosts, the massive colonial era building is also home to conflicting and competing historical narratives. Once the center of the Dutch East Indies Railway Company, Lawang Sewu was an important site in the history of imperialism and the struggle for independence. Today, as in most of post-colonial Indonesia, the public history monuments in Semarang speak to the role of the military and other state institutions in the revolution. For over three decades, Suharto’s New Order promoted this army-centric narrative as the only acceptable story of the revolution. The Suharto regime explicitly rejected the contribution of the Indonesian Communist Party (PKI), unions, and other workers’ organization to the fight for “merdeka,” freedom and independence. In Semarang, the Diponegoro Division army museum and a generic phallic nationalist obelisk dwarf Lawang Sewu’s small brick memorial to the railway workers who died fighting in 1945. Nowhere is there a mention of history of Semarang as center for union and PKI organization. Indeed, one has to be extremely attentive to find mention of Indonesian workers in the national revolution. Jafar Suryomenggolo’s Organising under the Revolution: Unions and the State in Java, 1945–48 is an important effort to reframe the narrative and write the worker in the revolution.

Organising under the Revolution is ostensibly a work of labor history. However, the implication of Suryomenggolo’s well-researched and carefully argued book go far beyond the specifics of these four years of union activism. This work calls for a reconsideration of the Suharto era paradigm of the army and the state being the primary actors in the Indonesian revolution. He persuasively demonstrates that workers, organized more often as local syndicalist groups rather than in a nationally controlled movement, made independent and significant contributions to both the struggle for merdeka and to the creation of a new socio-economic order. Reminiscent of E. P. Thompson’s argument that the English working class was at its own making and actually played a role in creating its own identity, Suryomenggolo offers a strategic intervention that situates the Indonesian workers as active players in their own history.

While based upon primary research into the details of labor activism in Central and East Java, Organising under the Revolution is also theoretically sophisticated. From the opening sentence the author acknowledges his inspiration came from a reading of Benedict Anderson’s Java in a Time of Revolution (1972). The influence of Anderson’s critical, politically engaged, and intellectually rigorous approach to Indonesian history can be seen throughout Suryomenggolo’s work. Both authors recognize the crucial impact of the revolutionary events on the construction of post-colonial Indonesia. Their concern with the details of the revolution is to reinsert the Indonesian workers into a narrative dominated by the state-centric approach. As both the introduction and chapter one, “Organised Labour and the Postcolonial State,” make clear, what is at stake is not simply getting the details of history right but rather putting the people’s agency back into history. Doing so would return labor’s political credibility, something Suharto successfully destroyed. The implications of the book’s opening argument are that rescuing the lost history of Indonesian labor would help to revitalize contemporary Indonesian labor activism and organizations. ­Suryomenggolo’s de-centering of the state and de-militarizing of the historical narrative, thus has direct implications for issues of social justice in Indonesia’s post-colonial socio-economic order.

The book’s next four chapters present Suryomenggolo’s research. “Workers’ Control and ‘Political’ Activism” details how spontaneous and autonomous actions by rail, plantation, and oil refinery workers caught the new revolutionary state off-guard. Unable to reign in the movement, elite nationalists had to accept such actions as a fait accompli—at least for the time being. This research carefully details the contributions of labor to achieving independence in moves free of state control that the governing elites decried as “anarcho-syndicalism.” The situation set up an eventual state-labor conflict. “The Politics of Labor Union Formation” covers the efforts of the workers to keep control localized in the face of young state system bent on centralization. Perhaps the strongest chapter is “Building up Organisational Strength: The SBKA in Action.” Here we see how the Serikat Boeroeh Kereta Api (Railway Workers Union) defended the interests of its members against an increasingly aggressive state, often manifest in the army. The discussion of army on railway worker violence is one section of the book which is meticulously researched. Suryomenggolo details the use of strikes to resist arbitrary violence and authoritarian bullying by local officers. Faced with an internecine crisis, the fragile state was evidently unable to reign in the army but did increase its surveillance of the unions. Intelligence gathering indicated a less than favorable view of autonomous labor. The SBKA also sought to assist the material conditions and economic interests of its members by pushing for a stronger “Rice for Workers” program. The final full chapter “Labour and the Law: Undang Undang Kerdja 1948,” demonstrates that while unions influenced the first national labor legislation, the state used said legislation to reinforce its dominance over autonomous labor organizations. The paternalist state system defined rights on an individual basis, weakening collective legal identities and limiting collective action. The book ends with an epilogue, conclusion, and appendices on Chinese labor organizations and May Day celebrations. In these final pages we learn that while the state banned strikes in essential industries and government institutions, local army commanders in Java frequently banned all strikes.

This admirable book is difficult to criticize. Theoretically informed, it offers a clear explanation of the significance of this specific historical case study. The supporting research is firmly grounded in archival research in Bahasa Indonesia and Dutch. Perhaps the discussion of the conflict between labor and the army could have been elaborated in more detail. Considering the all-out war on unions and the left that would come under Suharto’s New Order, this is an area of great significance. The book is weak on gender history and analysis. Union and state policies towards women are only discussed on two pages in the middle of the book and not in a sustained manner. There are occasional typos and an inconsistency in spelling (for example, “Suharto” on page 50 but “Soeharto” on page 51).

Organising under the Revolution contributes to a variety of subjects and fields. More than just a history of labor, it offers a revisionist narrative to the state centered story of Indonesia’s revolution. The book offers important theoretical insights into labor historiography and the nature of post-colonial state systems. With its theory firmly grounded in historically specific examples, the book should be of interest to not just scholars of Indonesia and Southeast Asia, but to those who seek to frame labor history in a global comparative perspective. That said, Suryomenggolo’s greatest achievement is to put labor back into Indonesia’s history, thus explaining what is missing from Lawang Sewu. As seen on the various popular television shows where adventurers look for ghosts in Semarang’s famous haunted house, Suryomenggolo indicates that Indonesian historiography is due for an exorcism.

Michael G. Vann
Department of History, Sacramento State University

Reference

Anderson, Benedict. 1972. Java in a Time of Revolution: Occupation and Resistance, 1944–1946. Ithaca: Cornell University Press.

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Vol. 3, No. 2, BOOK REVIEWS, Nikki J. Y. LEE

Contents>> Vol. 3, No. 2

BOOK REVIEWS
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Popular Culture Co-productions and Collaborations in East and Southeast Asia
Nissim Otmazgin and Eyal Ben-Ari
Singapore and Kyoto: NUS Press in association with Kyoto University Press, 2013, x+276p.

The recent growth of Asian media markets coincides with the emergence of an academic area which can be labelled as (inter-)Asian media and cultural studies. English-language academic publications such as Trajectories: Inter-Asian Cultural Studies (Chen 1998) and Recentering Globalization: Popular Culture and Japanese Transnationalism (Iwabuchi 2002) may be given credit for launching this new academic field. Its further development was subsequently enabled by the publication of a string of academic volumes, including Rogue Flows: Trans-Asian Cultural Traffic (Iwabuchi et al. 2004), Asian Media Studies (Erni and Chua 2005), and East Asian Pop Culture: Analyzing the Korean Wave (Chua and Iwabuchi 2008), among many others.

The publication of Popular Culture Co-productions and Collaborations in East and Southeast Asia constitutes an interesting contribution to this rapidly emerging field. In particular, this new edited volume distinguishes itself from previous titles in its focus on cultural production. While other volumes predominantly focus on the international consumption and reception of media and cultural texts across Asian countries, this volume casts light on international dimensions of production. In this way, it extends the primary thesis of the field—namely, the interconnectedness of media and cultural experiences in Asian societies—to the realm of production, which is entwined with processes of transnational creation and construction, not only of cultural products but also of social values.

Yoshiko Nakano’s chapter in this volume is emblematic of such a perspective. It draws upon historical examples which reveal the contributions made by other Asian personnel (Hong Kong and Thai) to the localization (further development) of Japanese rice cookers—often recognized as a quintessential made-in-Japan electric product in Asia. Shin Hyunjoon’s chapter elaborates how K-pop has been developed in line with different agents’ contingent strategies designed to infiltrate into different Asian markets. As a result, according to Shin, the “K-” in K-pop “has become more than the abbreviation of ‘Korean’” (p. 146) and the phenomenon indicates a “trans-Asian version of pop cosmopolitanism” (p. 147). Doobo Shim’s chapter similarly associates the recent development of the Korean film industry with the changing environment of Asian media industries and international cultural flows in the region.

The extension in scope of the regional approach is also one of the book’s strengths. In common with other volumes, it includes chapters which highlight the roles of Japan, South Korea, and Hong Kong as main cultural producers in the Asian region. However, such an emphasis is complemented by chapters covering cultural production (in connection with the outer world) in the Philippines, Indonesia, and China. Rolando B. Tolentino’s chapter presents a historical overview of the international export and the co-production of Philippine media texts. Abidin Kusno’s chapter highlights the appropriation of cultural forms and genres—Hong Kong comics and kung fu novels—in the articulation and assertion of Chinese ethnicity in Indonesia under the repressive Suharto regime.

The volume does not avoid confronting colonial histories and the Cold War era which shaped the process of regional formation of Asia. In his chapter, Nissim Otmazgin underlines the middle class-centered “economic and consumerist” characteristic of regionalization in Asia, in contrast with “the slow progress in the formation of regional political institutions” (pp. 33–34). This insight helps explain why much Asian media and cultural studies research focuses in a limited fashion on the growing volume of contemporary transnational consumption, often bracketing, or otherwise downplaying, historical and political issues in the process. Caroline S. Hau and Takashi Shiraishi’s chapter on Hong Kong cinema’s international collaborations clearly maps out the political configuration of the region, which was set out during the Cold War period, while elaborating on Hong Kong cinema’s various Asian ventures at different times. Leung Yuk Ming (Lisa)’s chapter can be aligned with this work in that it also delves into the critical (and political) issues and practical strategies of the “global” Hong Kong film industry, this time vis-à-vis its lucrative but also precarious China venture: in other words, Hong Kong-China film co-production. Rob Efird’s chapter on a documentary, Li Ying’s Yasukuni (2007), registers not only the ongoing legacies of imperial and colonial history in Asian societies, but also the changes that were brought into those societies—in particular, Japan—by the presence of other Asians. The chapter casts light on some of the positive changes, which may occur within Asian societies with the growing volume of human and cultural traffic in the region.

Last but not least, another virtue of the volume lies in the way in which it deploys the frameworks of co-production and collaboration. Although these frameworks may require further refinement (i.e. how to define collaboration and how to delineate popular culture co-production), this approach encompasses a variety of productive conceptualizations which induce creative and critical thinking. For example, the notion of “niche globality,” advanced by Tolentino, recognizes subtle differences among the particularities of transnational engagements of Philippine media texts: “Other than the enclaves of the nation’s 10 million migrant workers all over the world, the export of Philippine media texts has produced transnational pocket markets—a niche globality in which specific media texts engage with unintended audiences” (p. 152). Kelly Hu’s chapter on Chinese fan subtitling of Japanese and American TV drama series explicates how those fan-subtitlers function as cultural intermediaries linking China with other (Asian) countries and analyzes their affective labor in terms of neoliberal capitalistic work ethics. Hu highlights that, by collaborating with one another to produce subtitles for other Chinese consumers, these fans also “co-produce” global media culture.

In sum, Popular Culture Co-productions and Collaborations in East and Southeast Asia is another valuable entry to the currently burgeoning academic field of Asian media and cultural studies. It engages with a number of important historical and cultural subjects by presenting new conceptual methods for understanding processes of international cultural production in the region.

Nikki J. Y. Lee 이지연
School of Arts and Humanities, Nottingham Trent University

References

Chen, Kuan-Hsing, ed. 1998. Trajectories: Inter-Asian Cultural Studies. London: Routledge.

Chua, Beng Huat; and Iwabuchi, Koichi, eds. 2008. East Asian Pop Culture: Analyzing the Korean Wave. Hong Kong: Hong Kong University Press.

Erni, John Nguyet; and Chua, Siew Keng. 2005. Asian Media Studies. Malden, MA: Blackwell Publishing.

Iwabuchi, Koichi. 2002. Recentering Globalization: Popular Culture and Japanese Transnationalism. Durham: Duke University Press.

Iwabuchi, Koichi; Muecke, Stephen; and Thomas, Mandy, eds. 2004. Rogue Flows: Trans-Asian Cultural Traffic. Hong Kong: Hong Kong University Press.

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Vol. 3, No. 2, Khadijah Md Khalid and Mahani Zainal Abidin

Contents>> Vol. 3, No. 2

Technocracy in Economic Policy-Making in Malaysia

Khadijah Md Khalid* and Mahani Zainal Abidin**

* International Institute of Public Policy and Management (INPUMA), University of Malaya, Academic and International Building, 50603 Kuala Lumpur, Malaysia

Corresponding author’s e-mail: dijut[at]email.com

** Mahani Zainal Abidin was the chief executive of Institute of Strategic and International Studies (ISIS), Malaysia from 2010 until her untimely demise on June 22, 2013.

This article looks at the role of the technocracy in economic policy-making in Malaysia. The analysis was conducted across two phases, namely the period before and after the 1997/98 economic and financial crises, and during the premiership of four prime ministers namely Tun Razak, Dr Mahathir, Abdullah Ahmad Badawi, and Najib Razak. It is claimed that the technocrats played an important role in helping the political leadership achieve their objectives.

The article traces the changing fortunes of the technocracy from the 1970s to the present. Under the premiership of Tun Razak, technocrats played an important role in ensuring the success of his programs. However, under Dr Mahathir, the technocrats sometimes took a back seat because their approach was not in line with some of his more visionary ventures and his unconventional approach particularly in managing the 1997/98 financial crisis. Under the leadership of both Abdullah Ahmad Badawi and Najib Razak, the technocrats regain their previous position of prominence in policy-making. In conclusion, the technocracy with their expert knowledge, have served as an important force in Malaysia. Although their approach is based on economic rationality, their skills have been effectively negotiated with the demands of the political leadership, because of which Malaysia is able to maintain both economic growth and political stability.

Keywords: technocracy, the New Economic Policy (NEP), Tun Abdul Razak, Dr Mahathir Mohamad, National Economic Action Council (NEAC), government-linked companies (GLCs), Abdullah Ahmad Badawi, Najib Tun Razak

Introduction

Malaysia is a resource rich economy that had achieved high economic growth since early 1970s until the outbreak of the Asian crisis in 1998. However, growth has been moderate in the post-Asian crisis period. Malaysia began, in early 1960s, as an agriculture-based economy but had embarked on an industrialization path when growth rates varied substantially due to fluctuating global primary commodity prices. From 1970, Foreign Direct Investment (FDI) inflow and operations by multinational companies in electrical and electronic and textile industries producing for exports were the catalyst for Malaysian industrialization. At the same time, Malaysia also experimented with import substitution industrialization by introducing heavy industries such as the national car, Proton. As the economy matured, Malaysia entered another phase beginning in the mid-1990s where growth was to be based on knowledge and the services sector would play a larger role.

Malaysia is a small but very open economy; trade is twice the size of its Gross Domestic Product (GDP). Its balance of payment has traditionally been characterized by surpluses in the merchandise account from a strong export performance but it has persistent deficits in the services account. In addition to hosting large FDI inflow, Malaysia also received short-term capital, which began arriving in large volumes in the early 1990s. This was a product of globalization and the policy of liberalizing the capital account, which later exposed the economy to new vulnerabilities. During the period 1990–96, total net flows to Malaysia amounted to over 12% of GDP or USD8.6 billion, compared to 4.2% (USD1.5 billion) in the 1980s.

A noteworthy feature of the Malaysian development is that growth was achieved with equity. The incidence of poverty was reduced drastically from 49.3% in 1970 to 3.8% in 2009. This performance was achieved based on stable and sound macro-economic fundamentals and policies. Yet, at the micro-economic level, some distortions took place to accommodate sectoral group or racial interests. Although, the policies were targeting high overall growth, selected sectors were promoted through, among others, direct ­public sector intervention and the introduction of specific programs, which sometime were not consistent with market-based economic principles.

The analysis of Malaysia’s economic performance can be divided into three distinct phases:

(i) From Independence in 1957 to 1981

During the first part of this period (1957 to 1969), although laissez-faire economic policies were implemented, mild import substitution industrialization was also put in place in order to develop domestic industries. This import substitution effort was only partially successful. In the second part, from 1970, industrialization was promoted through the establishment of the export processing zone, which attracted many multinational companies that formed the base for manufacturing exports. Malaysia had taken full advantage of the relocation of FDI from the United States, Europe, and Japan seeking for investment location that offered lower labor costs.

Although industrialization became a major economic contributor, the focus of ­Malaysia’s economic development during this period was developing the rural economy. A lot of effort was undertaken to diversify the agriculture sector and upgrade the rural economy because these constituencies were the base for the ruling coalition party. Malaysia was a major exporter of rubber and tin but subsequently, with the diversification of agriculture, palm oil overtook rubber as the main agricultural export. Large amount of funds were allocated for the rural sector for infrastructure development and activities to raise rural income.

Responding to the racial riot in 1969, the government launched the New Economic Policy (NEP) in 1970 with the twin objectives: poverty eradication irrespective of race and the restructuring of society to correct economic imbalances in order to reduce and eliminate the identification of race with economic functions. The NEP is a major policy that shapes Malaysia’s socio-economic development because there were interventions made to ensure these objectives were met. This policy has a major impact on technocracy in the public sector through the building of human capital and the dominance of one ethnic group—the Bumiputeras (sons of the soil)—in the public sector.

(ii) From 1981 until the outbreak of the Asian crisis in 1998

Dr Mahathir Mohamed became Malaysia’s fourth prime minister in 1981 and he embarked on a developmentalist state strategy that saw high state intervention and the expansion of the public sector’s role in the economy. Many state-owned companies were established, especially those which are entrusted to carry out the heavy industrialization policy. The economic crisis in 1985 due to large fiscal deficits and the collapse of primary commodity prices had triggered a fundamental policy change. The size of the public sector was reduced and privatization was introduced to drive growth and efficiency. This period also saw many liberalization and deregulation measures and the beginning of a closer cooperation between the public and private sectors.

As a result, the 1986–97 period is eulogized as Malaysia’s golden age; from 1990 to 1996 the economy grew at an average annual rate of 8.5%, the longest period of sustained high growth in Malaysian history. Exports grew by double digits annually. Malaysia reached full employment from 1993 to 1997, had low inflation and the public sector registered average fiscal surplus of about 2.4% of GDP annually (1993–97), which is a vast improvement from the 1985’s deficit of 0.6% of GDP. Vision 2020 was launched in 1991 with the aim of turning Malaysia into a developed country by the year 2020. The attainment of this goal is predicated on the economy growing on average at an annual rate of 7% during the period 1990–2020 and therefore it is important for Malaysia to achieve long term macro-economic stability. The private sector was given the task to be the engine of growth while the public sector’s role is to facilitate private sector ­activities.

(iii) 1998 onwards: the Post-Asian crisis period

The economic recession in 1998 was the worst in Malaysian history, with the GDP ­contracting by 7.4%. This crisis was triggered by regional contagion when the Thai baht depreciated massively. However, internal difficulties such as excessive bank lending, and property bubbles had worsened the impact of the regional contagion and loss of investors’ confidence. Malaysia introduced measures that were contrary to the con­ventional wisdom; it introduced capital controls and pegged the exchange rate. Malaysia recovered sharply in 2000, as with the other crisis hit economy, South Korea. Dr ­Mahathir took credit for these unconventional and controversial measures that worked.

During this post-crisis period, Malaysia’s growth has been moderated; GDP grew on average at about 5.0% during the 1999–2010 period as compared to 8.3% during the 1986–97 period. This performance is not unique to Malaysia because other regional countries also had the same sub-par growth. Private investment, which fell significantly during the crisis, has not recovered. To sustain growth, the public sector had to take a leading role by increasing its investment and expenditure, resulting in a persistent fiscal deficit. On the other hand, exports, both manufacturing and primary commodities continue their high performance. This performance has led to the rethinking of the Malaysian economic strategy to put the country back on a higher growth path and to improve its competitiveness and productivity. The New Economic Model (NEM) for Malaysia was launched in 2010 with the goals of achieving a high income economy and inclusive and sustainable growth.

Role of Technocracy in Development

The role of technocrats has become increasingly more prominent in Malaysian development since 1981. Technocrats are an elite group with expert knowledge and ability that has continually served the governing elite (Miyakawa 2000, 11). Technocrats are experts who formulate economic policy and implement it to achieve a set of targets, and are usually civil servants or professionals who receive special training in economics, business, or related field.

At the macro-level, Malaysia is an economic success story. It has enjoyed high, steady GDP and per capita income growth with macro-economic stability. It has become an important trading nation and a host to a large inflow of FDI. In addition, social develop­ment was not neglected—poverty had been significantly reduced and the wealth gained was relatively well distributed. Does technocracy have a role in these achievements?

Technocrats’ role in Malaysia’s economic policy-making and implementation has changed over these three periods. Without doubt, technocrats were given the tasks to manage the economy at the macro-level so that the country could have an impressive economic growth. But, at the same time, technocrats were side-stepped at the micro-economic level. Moreover, the changing role of technocrats depends largely on the balance of influence between technocracy and political leadership.

To understand the role of technocracy in economic development, it would be useful to examine the reasons why political leaders seek the assistance of technocrats, the background of the technocrats, and their relationship with politicians as well as their contributions. As an open economy, technocrats are not needed in order for Malaysia to get international acceptance or assistance. Instead their expertise and professionalism are likely to be used to ensure that development is properly done and the benefits of progress reach the people.

In the early stage of Malaysia’s development, the technocrats came from the civil services but in the later stages, businessmen and professionals had a larger role. There were occasions when technocrats who were given key responsibilities turned to become politicians and be the leaders of other technocrats, many of whom were their former colleagues. What is clear is that the role and contribution of technocrats are very much dependent on the personality and vision of the prime ministers. This economic vision will also determine the type of technocracy needed.

In the Southeast Asian experience, macro-economic management was delegated to largely autonomous agencies and insulated technocrats, who pursued conservative policies. In Indonesia, the so-called “Berkeley Mafia” (a group of economists sponsored by the US Government to receive their tertiary training in US economic faculties) was credited for steering the New Order’s economic policy and emphasizing macro-economic discipline (Neumann 2002). The influence of technocracy on the country’s political leader­ship was such that interests of specific groups were not able to override national interests. Similarly, in Thailand the bureaucrats in the Ministry of Finance (MOF) and the Central Bank were allowed to pursue prudent policies.

Was the high economic growth in Malaysia as well as Thailand and Indonesia due to the economic technocrats being insulated from political pressures? Is it true that a strong developmental state should ensure a high degree of autonomy enjoyed by decision-makers, especially in the bureaucracy? According to Booth (1998) “. . . in Thailand, Indonesia and Malaysia, technocrats in the ministries of finance have been able to insulate key areas of macroeconomic policy-making from overt political interference.” Neumann (2002) is of the view that a hands-off approach in macro-economic management as well as insulating technocrats from political and business pressures had led to stability. ­However, inevitably, vertical patron-client network and political interests would lead to abuse of micro-economic policy for political advantage (ibid., 9). Clearly, there is divergence in effectiveness between macro-economic and micro-economic policies.

This inference raises the question of the role of technocracy in economic policy-making when a country needs to achieve a relatively high rate of growth under increasing challenges of globalization, a public sector that is supposed to take a facilitative role, a dynamic private sector to drive growth, and a democratic system where the interest of the public must be given due consideration. These challenges faced by Malaysia in economic policy-making became more acute in the period after the 1998 Asian financial crisis. An important aspect to examine is whether the separation between economic imperatives and special interests can be done at both the macro- and micro-levels. Thus, the analysis of the role of technocracy in economic policy-making cannot avoid examining the relationship between state and markets and how these two sides interact and influence one another and their effects on institutions and growth performance. Emphasis will be given to the understanding of the dynamics of the relationship between technocrats and the political elite as well as the contribution of the former in the development of Malaysia after the Asian crisis.

The focus of this article is to study the role of technocracy in managing the Malaysian economy during and after the Asian crisis. Economic technocracy should put ­market and economic rationality at the forefront of economic policy to ensure that growth is well founded, resources are used efficiently, and the country is resilient and continues to be competitive. The analysis will focus on two interrelated components—issues and ­players. The issues are economic growth, sustainability, and competitiveness while the players are political leaders, institutions, and technocrats. The conventional wisdom is that the market knows best and by extension technocrats can manage economic matters efficiently to produce the desired outcomes. “. . . The market claims that standard economic solutions as set out by the western capitalism ideals, in particular the neo-classic economics should be the right solution and this claim is presented by technocracy” (Shiraishi 2001). By extension, institutional technocracy advocates “economic ­rationality.”

This article will examine whether the “conventional wisdom” is applied or is applicable to Malaysia, especially in the period after the Asian crisis (the post-crisis period). The discussion begins with a review of the role of technocracy from Malaysia’s inde­pendence in 1957 until the Asian crisis in 1998. This is followed by an analysis of the management of the crisis and the economy during the post-crisis period. The post-crisis period is divided into three phases marked by the changing of the guards in Malaysian leadership. Dr Mahathir Mohamed who steered Malaysia out of the Asian crisis stepped down in October 2003 after 22 years as prime minister and he was succeeded by Dato’ Seri Abdullah Ahmad Badawi. Dato’ Sri Najib Razak took over as prime minister in April 2009, where he had to steer the economy through the global financial crisis which broke out in late 2008. Undoubtedly, the analysis of economic policy-making and management in Malaysia in the post crisis period will no doubt be linked to the vision and style of the three leaders.

The Role of Technocracy in Malaysia’s Economic Development before the Asian Crisis

Although technocrats have always served the governing elite, “. . . however, technocracy is not completely in consonance with the democratic governance of the general public, and as such there has always been tension between governing elite and the ­general public throughout history” (Miyakawa 2000). The tense relationship between rational governance and democracy is brought about by the fact that policy-making depends more and more on technocratic policy analysis and on bureaucratic organizations that have special expertise and relevant information. Consequently, the democratic deliberation by the general public (in Malaysia’s case, the parliamentary deliberation) became less important. Often, policies formulated by the technocracy and approved by the executive branch are passed through the Malaysian Parliament without sufficient deliberation.

Notwithstanding the role of the Parliament, in Malaysia, the more interesting relationship is between the technocracy and the ruling elite as symbolized by the Cabinet. In some periods, the Cabinet is represented by the Prime Minster and thus, the control of economic policy-making is largely dependent on the style and approach taken by the Prime Minister.

Technocracy in Malaysia is inherited from the British colonial system where the bureaucracy is set to be independent from the political process. Besides the civil servants in the bureaucracy, from time to time, selected professionals from the business sector and academia are recruited to join the technocracy for specific tasks. During the early period of Malaysia’s nationhood, the civil service attracted the best brains because it was considered an elite service and many were trained in Britain. They were placed at key ministries and central agencies such as the MOF, the Bank Negara of Malaysia (the central bank), and the Economic Planning Unit (EPU). In the later years, as the size of the civil service expanded, the recruitment was less stringent while most of them received their training in local higher educational institutions. Nevertheless, the upper echelon of the civil service continues to receive their post-graduate training overseas.

Technocrats’ influence is best seen in central agencies such as the central bank, the Treasury, the EPU, and Implementation Coordination Unit (ICU). However, another important aspect of economic technocracy is the role played by government agencies in meeting specific development objectives. These agencies are bodies under ministries that were established with special mandate to upgrade the rural areas and the economic status of the Bumiputeras. Examples of such agencies are the Majlis Amanah Rakyat, Federal Land Development Authority (FELDA) and Federal Land Consolidation and Rehabilitation Authority (FELCRA).

Generally, technocrats are considered to have made positive and influential contribution to the socio-economic development of Malaysia. The imperative of delicate race relations has to a large extent protected macro-economic policy-makers from parochial interference and hence allowed them to pursue long-term strategies without needing to focus solely on short-term outcomes. The strategies and policies formed by these technocrats could have been influenced by their training in Western academic institutions as well as interaction with business leaders and world economic bodies such as the World Bank and the International Monetary Fund (IMF).

The discussion on the role of technocrats in Malaysian economic development ­during the period before the Asian Crisis can be divided into two phases:

(i) From Independence in 1957 to 1981

Under the leadership of Tunku Abdul Rahman (the first prime minister), Tun Abdul Razak (the second), and Tun Hussein Onn (the third), technocrats experienced a relatively harmonious relationship with the political elite. In fact, they were considered as valued partners and their views and advice were taken seriously. Their contributions to economic policy formulation and the implementation of these policies were enormous. The technocrats were instrumental in designing many of the key economic policies such as the green revolution, export-oriented industrialization, national petroleum policy, and the development strategies embedded in the five-year plans.

This close relationship was not surprising, considering that both Tunku Abdul ­Rahman and Tun Abdul Razak were members of the bureaucracy and many of the technocrats studied together with these leaders either at schools or universities. The EPU was perceived to be the most influential institution because it decided on the allocation of development budget. Senior EPU officers such as Thong Yaw Hong, G. K. Rama Iyer, and Radin Soenarno worked closely with the political leaders to implement the government vision and plans. The government agriculture policy, albeit conservative, has success­fully diversified and modernized the sector with the creation of new land development schemes by the federal land authority. These new land schemes, which were planted with palm oil, were used to mitigate the adverse effect of low and fluctuating rubber prices as well as solving the problem of landless farmers.

Tun Razak had paid a special focus on rural development and technocrats were critical in ensuring that his ideas were effectively implemented. For example, Taib Andak, a close friend of Tun Razak was tasked to implement land redistribution scheme for the landless through FELDA. When Taib retired, Raja Muhammad Alias Raja ­Muhammad Ali, another technocrat was given the responsibility on FELDA to ensure that this important project was successful. Likewise, technocrats in the Ministries of Finance and International Trade and Industries (MITI) as well as specialized agencies like the Malaysian Industrial Development Authority (MIDA) played a major role in designing incentives and industrial estates to attract FDI and to promote export-oriented industrialization.

Clearly, the technocrats had enjoyed a considerable leeway and influence in the formulation and implementation of macro-economic policies up to the early 1980s. Politi­cal leaders relied on technocrats not because the latter sought legitimacy or international acceptance but on the former’s ability and professionalism so that development would take place. The technocrats were knowledgeable, professional, and skilful and were able to offer advice to politicians and were effective in implementation. Delegation of macro-economic policy formulation and implementation to insulated technocrats had enabled them to pursue conservative macro-economic policies. During this period, technocrats were in the driving seats and some of the leading technocrats became national figures and household names. For example, Ghazali Shafie, who was the Secretary General of the Ministry of Home Affairs and a very influential bureaucrat, joined the political elite by becoming the Minister of Home Affairs and thus brought the bureaucracy closer to the power apex.

Following the racial riot in 1969, the government declared a state of emergency, suspended the Parliament, and formed the National Operations Council (NOC). This council was chaired by Tun Razak and he was assisted by the bureaucracy, Army, and Police. During this time, the NEP was formulated by key technocrats, both Bumiputeras and non-Bumiputeras.

(ii) From 1981 until the outbreak of the Asian crisis in 1998

The changing balance of influence and role between technocrats and political leadership was evident when Dr Mahathir took office in 1981 as the nation’s fourth prime minister. He introduced measures to inculcate higher discipline in the bureaucracy and demanded greater productivity. Dr Mahathir had strong visionary ideas on how to leap-frog the economy to a higher level of development. Some of Dr Mahathir’s ideas were modeled after the developmental experience of Japan and South Korea, namely state intervention to spur industrialization, which in turn would be the mainstay of the nation’s economic activities.

Heavy industrialization policy was introduced to drive the industrialization process. The public sector was used as a channel to realize these ideas and many government companies were established to implement the heavy industrialization policy such as the national car project. As a consequence, the size of the public sector ballooned. The technocrats’ role was to implement the strategies through the establishment of public enterprises and many were appointed to head these entities and the state-owned companies. Clearly, Dr Mahathir asserted a stronger role of the political elite over the “traditional” economic actors, namely the technocrats.

The 1985 economic recession had changed Dr Mahathir’s economic approach. Liberalization was seen as a way for Malaysia to attain higher growth. The “new Mahathir leadership” became critical of the large bureaucracy and perhaps regarded it even as a hindrance to development. Conversely, the private sector was given the responsibility to drive economic growth, resulting in the “rolling back” of the public sector by privatizing or closing inefficient public sector agencies and departments. To provide the right environment for the private sector to take the lead role, the Government had introduced a number of liberalization measures such as in the banking sector, capital market, and relaxation of equity rules for FDI.

Dr Mahathir brought in Daim Zainuddin, a businessman-lawyer-politician and a close ally, into the government as his Finance Minister in order to implement his new economic approach of liberalization and privatization. Daim supervised the creation of many private companies and nurtured a cadre of young Bumiputera entrepreneurs to ensure that the private sector become the main engine for growth.

The Malaysian Business Council was established in 1991 to bring the public sector and the business community closer. Although the Malaysian Business Council served an important informational function, it had no authority to make decisions or provide direct input for policy-making. During this period, a number of economic ideas, particularly concerning privatization, came from the private sector while the technocrats were given the task of implementing these ideas only. Dr Mahathir’s grand vision of making Malaysia a developed country—Vision 2020—was developed together with Dr Noordin Sopiee from the Institute of Strategic and International Studies (ISIS), a think tank. Subsequently, the role played by technocrats took a back seat.

The increasing influence of the private sector and others from outside the bureaucracy did not mean that Dr Mahathir had totally sidelined the civil service. He trusted and relied heavily on a few key civil servants. Azizan Zainul Abidin, his chief of staff, was entrusted with many important responsibilities and upon retirement from the civil service he was appointed to head Petronas, the national oil company. Chief Secretaries to the government (head of the civil service) such as Sallehuddin Mohamed and Ahmad Sarji Abdul Hamid were close to and highly regarded by Dr Mahathir as they were tasked to ensure that the civil service implement policies efficiently. Similarly, Raja Tun Mohar Raja Badiozaman, a key economic technocrat, was associated with a number of key ­projects such as Proton, the national car and later became the economic adviser to Dr ­Mahathir when he retired from the civil service.

It is clear that Dr Mahathir stamped his own idea on economic growth and along the way reduced the role of technocrats. The fact that his tenure as prime minister covered 22 years meant that he had a longer institutional memory than the technocrats. As a result, he had a better understanding and grasp of the path of economic development that has been or should be taken. His prime ministership also dispelled the idea that technocrats were guiding or advising the government—rather it was the technocrats who were the instruments of political rulers. In effect, technocrats were an endogenous part of some deeper political processes.

Dr Mahathir’s economic vision was largely influenced by his desire to uplift ­Malaysia’s economic status, for it to be a modern economy, have an economic strength and competitive edge, enhance its role in the international trading system, have science and technological capability, and integrate well into a globalized economic system. He believes that input and support from the business sector in economic strategies and growth are critical.

Dr Mahathir’s economic vision was premised on a strategy of high growth, which had also brought some macro-economic shortcomings, namely the formation of a savings-investment gap, persistent current account deficits, and high private sector domestic debt. Looking beyond the traditional indicators of economic fundamentals, there are also some signs of weaknesses such as the de facto peg exchange rate, asset price bubbles, and exposure to a large capital outflow. At the micro-level, deficiencies were even more glaring—the high level of debts accumulated by some major companies, over-reliance on the stock market for funding, asset price inflation, excess capacity in some sectors such as the construction industry, and the promotion of projects with questionable viability.

Macro-economic indicators prior to the Asian crisis showed that the Malaysian economy was well managed. It had a robust external sector, the public fiscal position was in surplus, the banking sector was well supervised and had sufficient capital, it was a receiver of foreign capital inflow (both short- and long-term ones), and its equity market was the third largest in Asia. In addition, it had full employment and inflation was low. These developments were achieved by market-based and private sector driven economic policies. But when the crisis hit, the micro-level deficiencies outweigh the macro-­economic fundamentals and pushed the economy downward, resulting in the strategies and policies being questioned and policy-makers scrutinized.

Management of the Asian Crisis

The impact of the 1997/98 economic and financial crisis was severe and it could destroy all the economic achievements that Malaysia had made over the past 40 years since its independence. The most severe effect was on the financial sector—the ringgit exchange rate depreciated by 45% from its July 1997 level of RM2.50 to USD1; the equity market lost 80% of its market valuation; the short-term capital account showed a substantial net outflow of RM21.7 billion; and the interest rate level had jumped while the level of non-performing loans (NPLs) of financial institutions had increased significantly. The other severe impact was the massive contraction in the construction sector, sharp decline of domestic consumption and domestic private investment. But the crisis also brought some positive effects, namely on exports where the initial exports reduction was reversed when the ringgit was pegged (at RM3.80 for one US dollar). By virtue of depreciation, in nominal ringgit value of the total export, revenue had increased by 29.8%. Fortunately, the price impact was limited with inflation capped at 5.3% and unemployment rate at 3.2% (the unemployment effect was absorbed by foreign labor who returned to their home countries when the economy slowed down).

The impact and the causes of the crisis were the key factors in shaping Malaysia’s response to the crisis. The crisis was triggered by external factors and worsened by internal weaknesses. The contagion effects were set off by the baht devaluation in July 1997, which caused the market and foreign investors to lose confidence in the health of the Malaysian and other regional economies. The “voting by the feet” saw a massive outflow of short-term foreign capital, with the devastating effects of pushing down the value of the exchange rate. The Malaysian domestic private sector which depended heavily on loans from the banking sector and the stock market had to brutally reduce their activities. When interest rates increased and domestic consumption slowed down, the excess capacity especially in the construction industries had forced companies into heavy losses. In sum, these weaknesses were mostly the product of liberalization efforts introduced earlier without the accompanying safeguard measures.

As with the other affected countries, Malaysia’s early response was to adopt the standard IMF-style measures,1) namely tightened fiscal and monetary policies, introduce measures to redress balance of payment deficits and float the exchange rate. The government had also deferred mega projects and initiated cutbacks on government purchase of foreign goods. In the financial sector, a comprehensive set of measures was implemented such as reclassifying the NPLs in arrears from six to three months and greater financial disclosure by financial institutions. A credit plan was also introduced to limit overall credit growth to 25% by end-1997 and 15% by end-1998, where priority was given to productive and export-oriented activities. The central bank had also raised the three-month intervention rate from 10% to 11%, increased the minimum risk-weighted capital adequacy ratio from 8% to 10 %, and reduced the single customer limit from 30% to 25%. The level of provisions against uncollateralized loans was also increased to 20%.

However, these initial policies as advocated by the “Washington Consensus”2) did not produce the expected results. The fiscal reduction of 20% and infrastructure projects deferment had severely contracted domestic demand. In addition, higher interest rate and credit tightening had starved domestic firms of funds at a reasonable cost. As a result, the domestic economy continued to deteriorate and the exchange rate remained volatile. The private sector was in serious trouble and it could not lead the recovery as it did in the 1985 crisis. Moreover, the private sector’s rising debts could threaten the stability of banking institutions due to the inadequacy of capital to meet the rising NPLs. The external environment was very volatile and uncertain and recovery from the crisis would need much more than an export-driven recovery strategy. In other words, the standard solution as suggested by the IMF was not working.

The ferocity and speed of the unfolding events of the crisis required a different and radical approach. If the situation continued to worsen, the crisis could have destroyed Malaysia’s economic achievements. Therefore, a co-ordinated, comprehensive, and centralized approach was adopted. This was a departure from the 1985 crisis management, which was primarily the responsibility of the MOF. In 1985, the globalization was not as extensive and the domestic economy was less integrated with the regional and global economies as in the 1990s. As such, the government had the time to prepare for any transmission of shocks as capital flows was also less volatile then. Unlike in 1998 when the public sector position was a surplus, Malaysia experienced twin deficits in the fiscal and external payment positions in 1985. Hence, the fiscal policy stance adopted by the MOF then was different with the focus mainly on fiscal restraint through a privatization exercise as government downsized its role in the economy.

In 1998 it was the private sector that was the weak link in the economic chain and this posed a greater problem—if the private sector were to succumb to the crisis, and then it would bring down the banking sector in its wake. Fortunately, the public sector was in a stronger position (having a smaller share of outstanding external debt at 11.4% in 1998 as compared to 53.6% in 1985) and so was able to effectively lead in the recovery process. Indeed it was very clear that a hands-on crisis management style of keeping a constant watch on the economy, sometimes down to the micro-level, was needed because of the potentially dire consequences brought upon by the unprecedented speed of crisis.

When the crisis first broke in July 1997, Dr Mahathir was preparing for his retirement and the management of the economy was left largely to Anwar Ibrahim, the Deputy Prime Minister and the Minister of Finance. Dr Mahathir was alarmed and unhappy when the early crisis response measures, which followed the standard prescription of cutback in public sector expenditure and higher interest rate, did not produce the desired outcome but instead made the economy worse. Dr Mahathir decided that the response to the crisis must be comprehensive and quick, address the critical issues, and serve the needs and interest of the nation. More importantly, since the standard economic ­remedies were not working, new measures must be introduced. For quick and effective implementation, a new body must be created that can overcome the issues of overlapping ministerial jurisdiction. The National Economic Action Council (NEAC) was established in early 1998 for this purpose.

The priorities set by the NEAC were:

• The domestic economy to lead the recovery process
In view of the external volatility and uncertainty, expansion of the domestic economy was essential to compensate for the adverse impact of contracting externally linked economic activities.

• Stabilization of the ringgit
With a stable ringgit, domestic production could resume because exchange rate uncertainty would have been removed. Most businesses could operate at any exchange rate level, after making adjustments, as long as there was some degree of stability.

• Regaining monetary policy independence
Malaysia must regain the control of its monetary policy and this could be done only if the link between interest and exchange rates was severed. Monetary independence would allow a substantial reduction of the interest rate without putting pressure on the currency.

• Restoring market confidence
Malaysia had a reputation as a good investment location and the crisis was, in part, attributed to the loss of confidence among international investors. The loss of domestic confidence followed when the economy deteriorated and the exchange rate plunged. The restoration of market confidence, particularly domestic, was crucial to bringing back a favorable environment for investment.

• Maintaining financial market stability
Financial institutions without adequate capital to meet this contingency would not be able to perform their intermediary functions of funding business activities and this could throttle the economy.

• Ensuring adequate liquidity to finance economic activities
For the economy to stabilize and grow, there must be sufficient liquidity and a reasonable level of interest rate, which will allow companies to borrow again and resume their activities.

• Preserving socio-economic stability
In an ethnically diverse society, socio-economic considerations are vital for continued stability and harmony. Experience has shown that economic hardship could feed racial tension, if one ethnic group perceived that it was suffering more than other groups or if one group was less distressed. The recovery measures must ensure that policies were not only economically efficient and market consistent but also supported socio-economic and strategic objectives.

• Assisting affected sectors
Some sectors were more affected than others during the crisis, and since some of them are critical to the economy, steps must be taken to maintain their viability.

Before the formation of the NEAC, management of the economy was primarily in the hands of the Treasury which is, part of the MOF. But the Treasury did not have jurisdiction over other parts of the government structure that are also essential in dealing with the crisis. The government needed a national committee (NEAC) that brought together all the relevant ministries and interest groups to overcome the problem of inter-agency areas of responsibility. This would eventually allow a more focused and integrated strategy, applied consistently to all ministries. NEAC would also consolidate the national institutional capacity in implementing measures and to ensure a quick response to any new challenges triggered by the crisis.

The need for impartiality of the crisis management team decisions was paramount. It must look beyond a particular inclination or stance of any ministry or central public agency. In the early stage of the crisis, the MOF, including Bank Negara Malaysia, favored the adoption of IMF-style solutions. But others, particularly Dr Mahathir, had argued for possible counter measures, namely an easier interest rate and expansionary fiscal policies. This policy dichotomy was not a good platform from which to develop a crisis response. The often cited example of the policy differences between Dr Mahathir and the MOF was the forced resignations of the Governor and Deputy Governor of Bank Negara Malaysia when these officials disagreed with Dr Mahathir’s suggestion that interest rate should not be increased but instead should be lowered.3) Some commentators interpreted these resignations as part of the political feud between Dr Mahathir and Anwar Ibrahim, leading up to the sacking of the latter on September 2, 1998 (Khoo 2003).

Ideally of course, Malaysia would be best served by policies flowing from all ministries and public agencies, which also reflected the general sentiment. Such neutrality would ensure that whatever policies adopted were not perceived by the public and media, as coming solely from one influential group. Also conflicting and over-lapping jurisdiction of ministries and public agencies could vitiate the full implementation of crisis. Unfortunately with the division in views becoming more and more evident, the opportunity to develop consensus was diminishing. Another policy vehicle was needed, one that had credibility and broad bipartisan support. To overcome this, the NEAC therefore had to be a high-level council with a strong executive implementation mandate.

By virtue of its diverse membership and powerful leadership, the NEAC was well positioned to integrate the diverse functions and jurisdiction of the many ministries and government agencies. This later proved to be a key factor in solving the many and complex problems that were to come the NEAC’s way. These two strengths—an integrated policy response and overcoming institutional rigidity—came from having the Prime ­Minister as the chairman of the NEAC. The NEAC members included the private sectors and professionals from outside the bureaucracy. In fact, the Executive Director of NEAC at that time was Daim Zainuddin, a former Finance Minister, businessman, and confidante of Dr Mahathir and some view this as a move to marginalize Anwar Ibrahim. The other members of the NEAC were Anwar Ibrahim (Deputy Chairman), Daim Zainuddin, Dr Noordin Sopiee (Chairman of ISIS), and Oh Siew Nam (businessman). The work of the NEAC was supported by the EPU as the Secretariat and the NEAC Working Group. The NEAC Working Group worked directly for the Executive Director to produce the National Economic Recovery Plan which proposed the response measures to be taken. Members of the Working Group came from the private sector, a think tank, and academia.4)

NEAC was established as a consultative body to the Cabinet, and many parties questioned its effectiveness without an implementation mandate. Moreover, at that time the Treasury was in charge of most economic and financial decisions and so few could imagine that the NEAC was going to lead the crisis management process. However, the NEAC needed a mandate and clout to implement its decisions, something that it would not be able to do should it be just another consultative body. It was decided while the executive powers would remain with the Cabinet and the NEAC be its consultative body on economic matters, the latter should be conferred some executive powers. The control structure of NEAC requires that every important decision made by the Council has to be approved or endorsed by the Cabinet, although sometimes there was a time lag when some of the measures had to be implemented immediately. In addition, the Parliament must also approve any major policies or institutional changes. During the course of NEAC’s operations, however, it became very influential, primarily because the mandate was derived from its chairman, the Prime Minister.

The Malaysian response was certainly unconventional and not based on the standard economic reasoning as advocated by the technocrats. Capital controls were clearly against the economic conventional wisdom and normally introduced by countries to solve non-economic problems. The solutions, which could be interpreted as isolating or insulating the country against external vagaries, were also not usually taken by a small open economy which is dependent on the world for its well-being. Although Dr Mahathir was an early supporter of globalization, his criticism on the harmful side of globalization as exhibited by the Asian crisis is consistent with the Malaysian response to the crisis and could be linked with Malaysia’s stance on a more cautious path to liberalization. For example, Malaysia refused to allow foreign investors to buy distressed domestic assets even though this approach was adopted by the other crisis hit countries in the region.

The measures taken which were considered, at that time, to go against the conventional wisdom are:

• Reversing budget surplus into deficit through fiscal stimulus programs
The budget stance was reversed from a surplus of 3.2% of the GNP in 1998 to a deficit of 6% in 1999.

• Easing the monetary stance
The statutory reserve requirement for banks was gradually reduced from 13.5% in February 1998 to 4% in September 1998. The base lending rate (BLR) was reduced from a high of 12.3% in June 1998 to 6.79% in October 1999.

• Stabilization of the ringgit
Introduced capital controls measures on September 1, 1998. The selective capital controls have two inter-related parts: first, the pegging of the ringgit to the US dollar at a rate of RM3.80 to USD1 and second, the restriction on the outflow of short-term capital.

But at the same time, the political leadership also paid heed to the economic technocracy and introduced market-based measures to address some of the causes of the crisis. These measures, which were based on industry best practice, were targeted to ensure that the banking sector remained sound. For this purpose an asset management company (Danaharta) was set up to manage NPLs of financial institutions. Then, a ­Special Purpose Vehicle (Danamodal) was set up to capitalize the banking sector and the Corporate Debt Restructuring Committee (CDRC) was set up to facilitate debt restructuring of viable companies.

An array of measures was also introduced to further strengthen the governance environment including improving transparency and disclosure standards; establishing a committee on corporate governance; enhancing monitoring and surveillance; enhancing accountability of company’s directors; protecting the rights of minority shareholders; and reviewing codes and acts to minimize weaknesses.

The economic governance process during the crisis, particularly in the key years of 1997 and 1998, was the product of an extremely dynamic situation. The Malaysian economy was, in the 1990s, already very much integrated with the global one, and many of its crisis parameters were external. Thus, any policy decisions must bear in mind the openness of the economy. The question of whether the policies were reactive or pro-active was also critical—in crisis times, while the reactive process dominated policy decisions, the government must also be pro-active for policies to be effective and efficient.

Dr Mahathir was frustrated with the approach proposed by the bureaucracy, which had followed the standard crisis solutions. He wanted a new approach, a “thinking outside the box,” particularly in dealing with the sharply depreciating currency. Nor Mohamed Yakcop, a former senior official of the Bank Negara Malaysia explained to him the workings of speculation on currency and this confirmed to Dr Mahathir that the ringgit had to be pegged if the economy was to be saved. Other ideas on the formation of special vehicles to deal with NPLs and to recapitalize the financial institutions came from ­models that have been successfully implemented in other countries.

In managing this crisis, Dr Mahathir employed a new set of technocrats from amongst the retired civil servants, businessmen, professionals, researchers, and academicians. The civil service was used primarily for implementing the measures suggested by this new set of technocrats. Dr Mahathir took this route because he disagreed with the earlier crisis response measures implemented by the bureaucracy and wanted new solutions, even though they were deemed controversial. However, another explanation is that Dr Mahathir wanted to wrest control of the economy from Anwar Ibrahim and thus, he had to establish a new economic team. Notwithstanding the political struggle between the two leaders, the civil service implemented the measures proposed by the NEAC effectively, particularly the capital controls and the pegging of the ringgit, which were crucial for Malaysia in overcoming the crisis.

The Role of Technocracy during the Post-Crisis Period

Dr Mahathir felt vindicated because although initially the world had denounced ­Malaysia’s response to the crisis, the measures had worked. Malaysia recovered relatively well with less economic and social costs as compared with some other crisis-hit countries. Even the IMF, in time, acknowledged that capital controls could be alternative solutions to a crisis. After recovery from the crisis, Malaysia as many other countries in the region and world faced a number of economic shocks namely the September 11 incidence, SARS epidemic, and the Middle East conflicts. Dr Mahathir, through NEAC, continued the Asian crisis policy response by keeping an accommodative monetary policy and expanding the fiscal stimulus programs. By then, the world had taken note of the earlier Asian crisis experience and response and most countries followed that approach in dealing with these shocks.

It is worthwhile to note that even though Dr Mahathir had introduced response measures that were contrary to the conventional wisdom, Malaysia had followed the standard solutions in other areas particularly in terms of enhancing corporate governance and in dealing with the financial sector’s problems. Dr Mahathir continued the mechanism of economic management even when the economy had recovered from the crisis. Yet, there were also criticisms that Malaysia had refused to “bite the bullet” namely to allow problem companies to fail and for deep restructuring to take place. One thing is clear—the public sector is back in the driving seat for driving economic recovery and growth when the private is unable to do so.

The Asian crisis has redefined the new economic priorities for Malaysia, as follows:

• To achieve a sustained high growth path
The 1997–98 turmoil highlighted the pitfall of a growth strategy based on accumulation of inputs, in this case high capital investment. Therefore, Malaysia’s economic goals—to be an industrialized nation and to restructure its society—must now be based on productivity, technology, and knowledge. The government had announced new policy initiatives to produce high growth, namely:

i. Knowledge-based economy: This strategy is to respond to the changing nature of the global economic activity driven by rapid advancements in information and communication technologies. A key ingredient for a successful knowledge-based economy is the availability of the right human capital, which requires a sufficient pool of educated, flexible, well-trained, and highly skilled manpower.

ii. Human capital: This vision of the future economic and competitive landscape naturally requires a high quality human capital. Malaysia’s education sector has to make a quantum leap to build a labor force that is not only proficient in employing today’s technology but also able to contribute to and shape the technology and ideas of tomorrow.

• New sources of growth: The next growth cycle would have to come from the services sector. To achieve this target, service sector’s productivity must be improved.

• Revisiting the privatization policy: A review is useful to ensure that balance between efficiency and benefit of privatization is maximized.

• Deepening the capital market: One of the main reasons for the 1997–98 crisis was the over-dependence of companies on the banking sector and the equity market in raising funds to finance their activities. The third source of capital, that is the bond market, should be developed further to reduce the reliance on the two other sources and to better match funding risks and returns.

• Increasing economic competitiveness:
i. Malaysia can no longer compete on cost alone: The sales pitch must point to world class quality and service. A key consideration is for Malaysia to reposition itself in the global supply chain by becoming a base for R&D, production of critical components and design and procurement centers.

ii. Continue with plans to liberalize selected sectors: The financial sector consolidation plan has merged 58 financial institutions into 10 banking groups. This exercise is part preparation for liberalization where ultimately domestic financial institutions will have to compete freely with larger and more efficient foreign financial institutions.

• Restructuring of the corporate sector: More professional managers are needed. The question that was put forward in the aftermath of the crisis was whether there is a need to remake Malaysia Inc. because of over-reliance on a number of owner-entrepreneurs has not produced a robust corporate Malaysia. While this model benefits from their risk-taking dynamism, there is concern that this trait would lead to insufficient emphasis on controls, good governance, and risk management and asset-liability management.

• Continuing with the objectives of restructuring the society to achieve a more balanced socio-economic composition: Although the NEP has reduced poverty, it has not been very successful in its task of raising the Bumiputeras corporate equity to the targeted 30% share. The issue of the restructuring of society has now an added dimension: while the numerical targets are still important and are being pursued, of equal importance is the question of quality of these achievements.

When Abdullah Ahmad Badawi took over as Prime Minister in November 2003, naturally there were questions about the new prime minister’s approach towards economic strategy and policy formulation. Highest in the mind of the public and the investing community is whether Abdullah Badawi would maintain the existing economic strategies and economic policy-making structure.

Although Dr Mahathir had set out many policies for Malaysia, it is not unexpected that Abdullah Badawi would introduce his own strategy for Malaysia’s economic growth as well as the players who would influence economic policy. It is worthwhile to note that Abdullah Badawi came from the civil service—he held a high ranking position in the bureaucracy before joining politics.5) Therefore, his preference towards restoring the role of technocrats was understandable. Even though there were calls for the private sector to resume their role as the driver for economic growth, there were little concrete measures to back this call. The government continued to stimulate growth through its investment and thus unable to reduce the fiscal deficits.

Abdullah Badawi’s economic strategy was to focus on soft infrastructure (enhancing human capital and knowledge). Among his major policies were:

• Setting targets forwards achieving a balanced budget

• Continuing the liberalization efforts in order to attract foreign investment inflows, particularly portfolio investment

• Allowing more competition in the automotive industry, which may ultimately reduced the dominance of the national cars

• Deferment of mega projects

• Removal of oil subsidy

• Making the agriculture industry as another engine for growth

• Focus on biotechnology

This focus on soft infrastructure was in contrast to Dr Mahathir’s preference for hard infrastructure (highways, airports, hospitals, and schools) and some groups had interpreted this as reversing earlier policies.

The conservative and cautious approach of technocrats in the MOF and Bank ­Negara Malaysia was obvious in the Government’s response to key contemporary economic issues. For example, the Government was largely silent on the calls to review the ­ringgit peg including from Dr Mahathir, the architect of the scheme, and the ringgit peg was only removed when China did so in July 2005. Similarly, there is no immediate and comprehensive response to the steeper than usual increases in the Consumer Price Index in 2005, as a result of higher oil price.

Abdullah Badawi’s new style of governance is characterized by inclusiveness, which was supposed to be different from Dr Mahathir’s. He urged the people to “work with me, and not for me” and presented a style of leadership that invited greater participation, offered accommodation, and built consensus.6) His people-friendly measures were comprehensive and systematic and extended beyond the public service delivery system to the general public and the private sector. A high-powered taskforce called PEMUDAH was established to reduce bureaucratic red-tape and facilitate the public-private sector partnership and to support the transformation of the public service from a regulator to an enabler. As part of his program to increase professionalism in the government, ­Abdullah Badawi appointed non-politicians—Nor Mohamed Yakcop, who was Dr ­Mahathir’s economic adviser and Amirsham Aziz, a former banker—in his Cabinet.

The expectation that the bureaucracy’s role, which was marginalized and side-lined in key decision-making process in the previous administration would be restored did not fully materialize. It is true that technocracy played a more important role in formulating and steering the economic direction in Abdullah Badawi’s Administration, however, the players were not from the public service but from different groups. Unlike Dr Mahathir, who sourced economic and business ideas directly from top business leaders, Abdullah Badawi sought counsel from professionals in the private sector.

This inability of the civil service to resume a lead role in public administration and in giving advice to the political leaders to meet the more sophisticated and complex demands of the nation’s socio-economic development could be partly due to the structure of the public sector that is heavily dominated by the Malays. In 2010, 77% of the 900,000 civil service was made up of Malays, 9.4% Chinese, 5.1% Indians, and the balance by other Bumiputeras.7) This structure does not reflect the country’s demographic composition of 67.4% Bumiputeras (including Malays), 24.6% Chinese, 7.3% Indians, and 0.7% others. The NEP had favored a higher employment of Malays in the public sector to compensate for the lower ratio of Malays employed in the private sector. In the 1970s and 1980s, there was a higher proportion of non-Malays in the important ministries and in critical posts as compared to now. Some observers concluded that this preference for employing Malays has undermined the practice of meritocracy in the recruitment and promotion in the civil service. Low salary is also a factor that discourages the Chinese from joining the civil service.

Another important departure from the Mahathir era was the appointment of young business professionals in key public sector agencies such as Khazanah Nasional (the investment arm of the government), Tenaga Nasional (the privatized national energy company), and Telekom Malaysia (the privatized national telecommunication company). These technocrats were tasked to transform Khazanah Nasional and government-linked companies (GLCs) to be the new national economic pace setter and create dynamic and efficient companies that would drive the national economic growth. The Government-Linked Company Transformation Program was launched in 2004 and these GLCs were given performance targets. They had performed well and were a dominant force in the economy: during the 2004–12 period, the GLCs gave a 14.5% per annum total shareholder return, increased their market capitalization by USD65.3 billion, and delivered 18.2% per annum earnings growth. As well as having a dominant presence in some domestic industries, some of these GLCs have successfully ventured abroad, particularly in financial and telecommunication sectors in ASEAN.

Khazanah Nasional and GLCs were the new technocracy, where professionals with private sector experience brought new approaches to public sector governance and ­policy formulation. Many of these technocrats were trained in business schools or served in management consultancy. This elite group included Azman Mokhtar (head of Khazanah Nasional), Wahid Omar (Telekom Malaysia and later Maybank),8) and Che Khalib Mohamed Nor (Tenaga Nasional). The injection of these new technocrats, who are qualified Bumiputeras (many were graduates from top tier world universities and have worked internationally) is also to overcome the lack of technical competency in the civil service. Thus, although the NEP remains the underlying policy, the new Bumiputera technocrats are highly skilled, competitive and have international experience. They also work together and are supported by non-Bumiputera technocrats in Khazanah Nasional and many of the GLCs. For example, there are four non-Bumiputera Executive Directors working with four other Bumiputera Executive Directors in the key investments portfolio. Likewise, CIMB Bank, a GLC that was formed through the amalgamation of various banks including the Bank Bumiputera,9) and now one of the top two banks in Malaysia and has a significant ASEAN footprint, has non-Bumiputeras in its top management team such as Deputy Chief Executive Officer (CEO) in charge of corporate banking, Deputy CEO in charge of consumer banking and chief financial officer.

These private sector but government-linked technocrats had the stamp of prime ministerial authority to promote efficiency, effectiveness, and professionalism in the government machinery. This increasing “privatization” of the technocracy (as distinguished from the bureaucracy as a whole) has blurred the lines between a true technocrat and a “corporate-technocrat.” They also increasingly functioned as “mediators” between the Cabinet and the ministries. This is discerned most clearly in the measuring of the performance of ministries under the Ministry Key Result Areas (MKRAs) which was later introduced by the Najib Razak’s administration. It is interesting to note that although Dr Mahathir himself never went that far in the “privatization” of the bureaucracy with the appointment of “outsiders” into technocratic roles and positions, it conformed to his agenda of continuously modernizing the public service. The increasing role and influence of the GLCs strengthens the conceptual framework that the public and private sectors are partners and must develop synergistic relationship.

Clearly in the Abdullah Badawi Administration, technocrats were given a more prominent role but unlike the 1970s and early 1980s, and the control of economic policy-making was with the new technocrats—young professionals with corporate experience—from the GLCs. Another important development was that Abdullah Badawi allowed the Parliament a closer scrutiny of the government economic policies and measures.

The euphoria and “feel-good” sentiments which initially accompanied the results of the 2004 general election, where Abdullah Badawi and Barisan Nasional (the ruling coalition) won the largest mandate, later gave way to cynicism, sense of betrayal, and growing disenchantment. Rising costs of living, rising crime, and the continuance of a corrupt culture were some of the main factors contributing to an increasingly negative perception of Abdullah Badawi—broken promises, unfulfilled pledges, and shattered expectations.

The 2008 general election gave the Barisan Nasional its worst election result, where it lost for the first time its two-thirds parliamentary majority and five states plus the Federal Territory to the opposition coalition.10) Besides the perception of unfulfilled expectations and promises, it was argued that the massive election loss was attributed to the role played by and influence of the “Fourth Floor Boys,” Abdullah Badawi’s young advisers led by his son-in-law, which was touted as the “real power behind the throne.”

With such election results, it was untenable for Abdullah Badawi to continue as Prime Minister. However, Najib Razak only assumed the premiership in April 2009, 12 months after the 2008 general election. The global economy, which had just entered its worst crisis since the Great Depression in late 2008 was not a welcoming curtain raiser for the new prime minister. Although the Malaysian financial sector was not affected, the impact of the global crisis came through the real sector, where the sizeable drop in exports had threatened to push the economy into a recession.

Najib Razak had once described himself as a “technocratic politician” in an interview with the Malaysian Business Magazine (1993). This was based on his early experience as an executive with Petronas from 1974–76. He also served briefly with Bank Negara. Trained as an economist and with Malaysia’s experience in dealing with the 1998 Asian Crisis, Najib Razak firmly responded by launching a large fiscal stimulus package, with a size of about 10% of the gross domestic product and lowering of interest rates. Part of the stimulus package was spent on skills training and infrastructure development. These measures were the new standard prescription for responding to a crisis where the ­market demand collapsed. In such cases, the public sector had to stimulate the economy through fiscal surplus and accommodative monetary policy. These new standard prescription was implemented well by the bureaucracy and the Malaysian economy recovered well in 2010 after declining by 1.7% in 2009.

Since the Asian crisis, the Malaysian economy was only growing at a moderate rate and it was stuck in the “middle income trap.” After attaining a middle income country status in the early 1990s, Malaysia was unable to progress well to join the group of high income countries. Najib Razak saw it as his mission to uplift the status of the Malaysian economy through a new economic model. For this purpose, he established the NEAC in June 2009. The Chairman of the Council was Amirsham Aziz, the former minister in charge of the EPU in the Abdullah Badawi Administration. Two members of the NEAC Working Group under Dr Mahathir (the body that was charged with the formulation and implementing the recovery measures during the Asian crisis, and hence warranting the word “Action” in its name), Dr Zainal Aznam Yusof and Dr Mahani Zainal Abidin were brought back into service. Other members of the Council are Andrew Sheng (former Chairman of the Hong Kong Securities and Futures Commission), Dzulkifli Abdul Razak (Vice-Chancellor, Universiti Sains Malaysia), Dr Hamzah Kassim (technology and ­public policy consultant), Dr Yukon Huang (World Bank), Dr Homi Kharas (Brookings Insti­tution), Prof. Danny Quah (London School of Economics), and Nicholas S. Zefferys (businessman).

Najib Razak also launched the NKEA to complete his economic transformation program. This work has been tasked to Idris Jala, the former Chief Executive Officer of Malaysian Airlines and now appointed a Minister in the Prime Minister’s Department and the head of PEMANDU (Performance Management and Delivery Unit). PEMANDU, formed in September 2009 is also responsible for monitoring the key performance index of ministers and ministries and its staff are recruited from outside of the public service.

Hence, under Najib Razak the trend started by his predecessor, Abdullah Badawi in increasing reliance on the new technocrats is reinforced. It is still too early to determine the impact of these new actors in economic policies on the relationship between the public and private sectors. It is important to analyze if the new technocrats have improved the economic policies and have positively contributed to the modernization and improvement of the bureaucracy. An example is the Iskandar Regional Development Authority (IRDA) staffed mainly by people from outside the public service, which manages the Iskandar Malaysia economic region. IRDA functions as a one-stop center including ­processing investor applications, which tries to reduce the problems of multiple or overlapping jurisdictions, thus saving business time and costs. In other words, IRDA combines the administrative capacity of the bureaucracy with the corporate efficiency of the private sector.

Analysis and Concluding Remarks

Technocrats are a crucial part of Malaysian economic growth and development. In the earlier periods, they were valued because of their ability, skills, and professionalism to advise on policy formulation and to implement measures and programs. Subsequently, the role of technocrats took a lower profile when political leaders had their own visions and strategies on how to develop the country. However, there were still a small number of technocrats who had key roles and were highly trusted by the political leaders. During these periods, technocrats pushed for economic efficiency, liberalization, and rural develop­ment as well as the building of national capacities and industries.

Since the 1997–98 Asian crisis, the role and composition of technocrats have changed. Although there was the pronouncement that the role of technocracy as represented by the public service/bureaucracy would be restored after being marginalized or sidelined during the Mahathir years, this did not actually occur. It is obvious that technocracy is playing a more prominent role in the Abdullah Badawi and Najib Razak’s Administration but the technocrats are not from the public service. These new technocrats are professionals with corporate or consulting experience, many with Masters in Business Administration degrees but not from businesses. This group has the qualification, experience, and skills required to lead the government economic growth initiatives that are mostly carried out through the GLCs. Naturally, public servants do not have such skills because their work and experience are mainly in implementing public policies.

The use of GLCs as the vehicles to generate private sector-led growth is understandable after the failures of government-promoted Bumiputera entrepreneurs during the Asian crisis. Dr Mahathir and Daim Zainuddin nurtured and promoted a number of Bumiputera and non-Bumiputera entrepreneurs through the privatization of government companies, infrastructure projects, and the commissioning of services required by the government. This preferential treatment was resented and when many failed, this was a good reason to seek a new approach to promote the private sector role in the economy.

If the public sector technocrats wish to re-establish their former influence, they must possess the highest level of competency in economic policy-making and implementation as well as corporate governance. Moreover, they have to benchmark their ability with the best in the business world. For this, the bureaucracy must be able to attract the best graduates. Recognizing this, Najib Razak has opened the public service to direct entry at any level for candidates with talent and exceptional qualifications. More importantly, besides having technical competency, the technocrats must uphold the highest code of conduct and yet have to be flexible to accommodate political interests.

The issue faced by the political leadership will continue to be on how to balance the conservative and sound economic policies recommended by the technocrats with the practical demand of the business world, the public and political constituency. For example, although technocrats have advised on reducing the budget deficits by cutting down drastically subsidies, political leaders have to weigh this advice carefully. The losses incurred during the 2008 general election were partly attributed to the decision made by Abdullah Badawi to reduce petrol subsidies, which caused the price of petrol to increase substantially. In working with the new technocrats, political leaders will also have to be mindful of the resentment that may arise from the public service because this may ­jeopardize the effective implementation of policies. There may also be criticism from other quarters if the new technocrats do not put national and public interests above corporate considerations.

Striking this balance and the efforts to distance technocracy from politics, have their roots in the NEP, the role of United Malays National Organization (UMNO) in Malaysian politics and national development as well as the legacy of Dr Mahathir. Until the introduction of the NEP in 1971, UMNO—as the strongest component of the ruling coalition party—had not encroached into the technocratic domain so that the boundaries between politics and government were observed (and respected). In other words, technocratic integrity was upheld on the basis that political interference and intervention was a breach of—at least—the implicit trust between the political and policy-making elites (as two distinct groups in the system of government). That is to say, the technocrats could be relied on to formulate and execute policies in consonance with the political agenda of national development. Any purported attempt to directly manipulate and direct the technocracy as “a government arm of the ruling party” can only disrupt the policy-making processes and concomitantly result in demoralization. This situation, however, was to change in the aftermath of the racial riots of 1969.

UMNO, as much as the country, was to be profoundly affected by the socio-economic changes brought about by the NEP. In fact, one could even contend that the transformation of UMNO went in tandem with the national transformation during the era of the NEP (which actually went beyond the stipulated time-frame of 20 years—1971–90). The ranks of UMNO became swelled with members from “non-traditional” backgrounds and profiles. From humble beginnings with the original membership consisting of teachers and lower level bureaucrats, the image of UMNO had changed “overnight” by the advent of the NEP. This sociological transformation would in turn impact on the party’s relationship and attitude towards the technocracy.

Dr Mahathir’s intrusive role in relation to the management of the technocracy was but a natural reflection of the state-interventionist character of the NEP itself. The “politicized” nature of the NEP—i.e. as a policy tool to consolidate UMNO’s political dominance “required” that the party should be more “audacious” in politicizing the technocracy. In short, the UMNO-ization of policy-making could only be a prelude to the UMNO-ization of the policy-makers themselves. Hence, technocrats who were hitherto politically insulated, became more politically conscious.

The sociological transformation of UMNO, with its growing factionalism (linked to either Razaleigh/Musa or Mahathir/Daim) led to the split of the party in late 1980s. This had an impact on Malaysian domestic politics and economy in the 1980s and beyond. The involvement of UMNO in business and the corporate world reflected the government’s interventionist approach in the economy (i.e. the Malaysian version of state capitalism to promote rapid growth and development). UMNO’s flagship company, Renong, was particularly active in representing UMNO’s presence in the capital market—acquisitions and investments. Thus, Renong acted as a proxy or front company for UMNO as a political party. The nexus between politics and business tended to crowd out domestic direct investment (DDI) either by encouraging capital flight by local businesses (mainly from the Chinese community) or concentrating government procurement in crony companies (as well as “reducing” it to a form of rent-seeking).

Interested parties within UMNO and the ruling government had made it difficult for technocrats and senior bureaucrats to work independently. Daim Zainuddin was appointed by Dr Mahathir as Finance Minister twice (1985–91, 1999–2001) and later served as a powerful UMNO Treasurer for 17 years. Subsequently, the involvement of UMNO in business definitely had serious repercussions not only on Malaysian development in the 1980s and beyond but also on the role and contribution of the economic technocrats. These technocrats and the public bureaucracy were also expected to fulfil the interests of certain UMNO personalities who were either linked or even became part of the ruling government.

Dr Mahathir’s own survival in a faction-riven UMNO meant that developmental policies of the country must also protect his interests and those of his allies or supporters including those outside the party and selective non-Malay businessmen (groups) such as ­Vincent Tan (Berjaya Group), Ting Pek Khiing (Ekran Group), Yeoh Tiong Lay and Francis Yeoh Sock Ping (YTL Group), Eric Chia (Perwaja Steel), and Ananda Krishnan (Usaha Tegas Group).

The involvement of UMNO in business, which in turn, led to the growing problem of money politics in the party—eventually led to the executive overriding the technocracy (primarily via the EPU) for partisan political purposes, which sometimes diverged from policy considerations. In addition, the “traditional” role of technocrats as “advisers” was also eclipsed by the emergence of “new” set of actors such as prominent businessmen or groups. However, one could also argue that Dr Mahathir’s big vision or “mega project” such as the privatization of public services, the Multimedia Super Corridor, the development of Kuala Lumpur City Centre (the “Twin Towers”) and Kuala Lumpur International Airport was inspired by his desire to propel Malaysia to a higher level of development. Certainly this vision is beyond the advice or imagination of “traditional” technocrats.

Similarly, the emergence of MITI and the appointment of one of Dr Mahathir’s most trusted and capable Cabinet minister, Rafidah Aziz, as the Minister increased the government’s expectations of the technocrats. The changing perception of the technocracy and by extension, the bureaucracy was also integral to their modernization and transformation—from a regulator and administrator to an enabler and pace-setter. This required the technocrats to support the government in forging and fostering a strategic partnership to drive growth and promote development in the country. The 1990s also saw the growing importance of MATRADE (MITI’s export promotion arm) and MIDA. Hence, under the Mahathir Administration profound changes in policy also saw a shift in the direction and outlook of the technocracy and a re-definition of their role in economic decision-making.

Dr Mahathir “bequeathed” an inimitable legacy upon leaving office in late 2003. One aspect of his legacy has been the impact of the politics-business nexus on the role of the technocracy in economic decision-making. Technocratic role became more reflective of Dr Mahathir’s agenda for making Malaysia a developed country, in which the private sector will assume a key role. That in effect reduced and constrained the role of the technocracy from being objective and professional policy-makers and administrators to agents of a bigger agenda which include political expediency.

This is not to argue that the situation was part of Dr Mahathir’s political strategy of consolidating both his personal and UMNO’s dominance or hegemony in the government. But rather it was an unintended consequence of Dr Mahathir’s increasing reliance on figures outside the government to be his advisers—reflecting the uncanny resemblance to his broader reputation as a “maverick” politician and Prime Minister (Wain 2009). Furthermore, by having an inner circle of non-technocratic advisers, the technocrats were often by-passed or sidelined. This meant that Dr Mahathir was willing to go beyond the conventions or culture of political and administrative conduct if he felt that the technocracy did not meet with his expectations or were to prove intransigent to his economic plans.

Technocracy under all Malaysian political leaders is intimately and indispensably linked with their respective reform agendas, which promote political legitimacy and regime stability. The background and agenda of the prime ministers, it would seem, are important factors in shaping the attitude and relationship between these leaders and the technocrats. However, the profile and composition of technocrats chosen by the political leaders will depend on the economic environment and imperatives as well as the skills of these technocrats.

Accepted: November 1, 2013

References

Booth, Anne. 1998. Initial Conditions and Miraculous Growth: Why Is Southeast Asia Different from Taiwan and South Korea? London: School of African and Oriental Studies, University of London.

Chang, Ha-Joon. 1998. The Role of Institutions in Asian Development. Asian Development Review 16(2): 64–95.

Government of Malaysia. 2010. Public Service Commission Annual Report, 2008–10. Kuala Lumpur: Government Printers Sdn. Bhd.

Haggard, Stephan. 2004. Institutions and Growth in East Asia. Studies in Comparative International Development 38(4): 53–81.

Jomo, K. S. 1999. Development Planning in Malaysia: A Critical Appraisal. In Political Economy of Development in Malaysia, edited by B. N. Ghosh and Muhammad Syukri S. Utusan, pp. 85–104. Kuala Lumpur: Utusan Publications & Distributors.

―. 1997. Southeast Asia’s Misunderstood Miracle: Industrial Policy and Economic Development in Thailand, Malaysia and Indonesia. Boulder: West View Press.

Khoo Boo Teik. 2003. Beyond Mahathir: Malaysian Politics & Its Discontents. London: Zed Books Ltd.

Malaysian Business Magazine. 1993. Cited from http://hsudarren.wordpress.com/. Accessed May 29, 2014.

Miyakawa, Tadao. 2000. The Science of Public Policy: Evolution of Policy Sciences, Part 1. London: Routledge.

Neumann, Frederic. 2002. Curse or Blessing? Patronage and Economic Policy-Making in Southeast Asia. School of Advanced International Studies (SAIS) Working Paper Series WP/05/02, John Hopkins University, Washington D.C.

Shiraishi, Takashi. 2001. The Asian Crisis Reconsidered. RIETI Discussion Paper Series 05-E-014, Tokyo.

Sivamurugan Pandian; Rusdi Omar; and Mohd Azizuddin Mohd Sani. 2010. “Work with Me, Not for Me”: Malaysia under Abdullah Ahmad Badawi (2003–2009). Asian Culture and History 2(1): 97–107. Accessed May 28, 2014, http://journal.ccsenet.org/index.php/ach/article/view/4819.

Torii, Takashi. 2005. A State with “Seizable” Scale: A Political Economy Approach to Mahathir’s Development Policies and Implementation Mechanism. In After the Crisis: Hegemony, Technocracy and Governance in Southeast Asia, edited by Takashi Shiraishi and Patricio N. Abinales, pp. 105–118. Kyoto: Kyoto University Press; and Melbourne: Trans Pacific Press.

Wain, Barry. 2009. Malaysian Maverick: Mahathir Mohamad in Turbulent Times. London: Palgrave Macmillan.

1) IMF argues that the crises in Southeast Asian countries were not the result of macro-economic mismanagement but their weak institutions e.g. cronyism in government-business relationship, overly geared and overly concentrated corporations, and weak financial systems. The solutions demanded measures that went beyond the usual demand for liberalization and privatization but required programs to transform institutions to unprecedented extent.

2) The “Washington Consensus” list of desirable policies included stable fiscal and monetary policies; low inflation; exploitation of comparative advantage through trade, exchange rate, and foreign investment policies; flexible labor market; and market-friendly—if not exactly laissez-faire—governments.

3) It is unclear whether the Deputy Governor, Fong Weng Pak, was forced to resign or his contract had ended.

4) Members of the NEAC Working Group were Wan Azmi Wan Hamzah (businessman), Thong Yaw Hong (former senior bureaucrat/banker), Dr Zainal Aznam Yusof (researcher), and Dr Mahani Zainal Abidin (academician).

5) Abdullah Ahmad Badawi was the Principal Assistant Secretary of the National Operations Council (NOC)/MAGERAN (Majlis Gerakan Negara), the Director of Youth at the Ministry of Culture, Youth and Sports after that, and later on the Deputy Director-General of the same ministry.

6) (Sivamurugan et al. 2010).

7) Public Service Commission Annual Report 2010 (Government of Malaysia 2010).

8) Wahid Omar is now Minister at the Prime Minister’s Department. He was appointed Senator, and later Minister, after the 13th General Election in May 2013.

9) Bank Bumiputera Malaysia Berhad (BBMB) was established in 1965 in line with government initiatives to increase Bumiputera participation in the national economy. By 1980 it had become the largest bank in the country in terms of assets with overseas operations. In 1999, BBMB and Bank of Commerce merged to form Bumiputera-Commerce Bank. In 2006 CIMB completed its restructuring exercise under Bumiputera-Commerce Holdings Berhad with mergers and acquisitions of a number of banks and financial institutions to become a universal bank, known as the CIMB Group.

10) The five states which were lost to the Opposition coalition were Selangor, Penang, Perak, Kedah, and Kelantan. However, 10 months later, Perak was brought back to the Barisan Nasional (BN) fold when three members of the Parti Keadilan Rakyat (PKR) Opposition coalition declared themselves as BN-friendly independents.

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Vol. 3, No. 2, Teresa S. Encarnacion Tadem

Contents>> Vol. 3, No. 2

Philippine Technocracy and the Politics of Economic Decision-Making: A Comparison of the Martial Law and Post-Martial Law Periods

Teresa S. Encarnacion Tadem*

* Department of Political Science, College of Social Sciences and Philosophy, University of the Philippines Diliman, Quezon City 1101 Philip­pines

e-mail: teresatadem[at]gmail.com

This article looks into the factors which have strengthened as well as weakened Philippine technocracy during the martial law (1972–86) and post-martial law periods. During the former, technocracy drew its strength from the support it received from President Ferdinand E. Marcos and the country’s major international lending creditors, i.e., the International Monetary Fund (IMF) and the World Bank. Both Marcos and the IMF/World Bank shared the technocrats’ economic vision of liberalization and export-oriented industrialization. Among the factors which hindered the technocracy’s bargaining leverage on the other hand were the inability of the leadership to address the economic crisis as brought about by the oil price hike in the early 1980s and the political crisis which was given impetus with the assassination of ex-Senator Benigno Aquino. As for the post-martial law period, the technocracy basically pursued the same economic policy liberalization as during the martial law period with an emphasis on privatization and deregulation. Technocratic policy-making was further facilitated in a period of globalization where the transnational character of economic policy-making further protected the technocracy from public criticism. Its economic policy-making, however, confronted stiff challenges from civil society as well as patronage politics.

Keywords: Philippine technocracy, Ferdinand E. Marcos, International Monetary Fund, World Bank, liberalization, Gloria Macapagal-Arroyo, civil society, patronage politics

Introduction

Despite their being banished to the “Hall of Shame” during the 1986 People Power Revolution in the Philippines, technocracy has continued to persist in the country’s transition from authoritarian rule to democracy and up to the present. Instead, however, of being called “technocrats,” they are now referred to as “economic managers.” The change in “name” is quite understandable because during the martial law period (1972–86), technocracy became synonymous with the repression which occurred during that era foremost of which was economic development at all costs, e.g., dislocation, militarization, and elimination of communities which got in the way of development projects. This reputation, therefore, earned the technocrats the “(dis)honor” of being referred to as the third leg of the stool which propped up the authoritarian regime, the other two of which were the military and Marcos’ relatives/cronies. Thus, the administrations which followed that of the Marcos government were conscious not to “hire” any of these technocrats, particularly, those who came from the World Bank (hereinafter referred to as WB) and the International Monetary Fund (hereinafter referred to as IMF). But the post-martial technocrats, however, continued their predecessors’ policies of liberalization, free competition, and free trade but now under a neoliberal economic dispensation. The question which emerges is why this is the case when technocracy in the Philippines is not able to sustain the economic growth which was seen in the 1950s when the country was second to Japan as having the best economy in Asia and then left-behind in the 1970s by its East Asian counterparts as among the newly industrializing countries in the region. In the 1980s, on the other hand, Philippine economic policies failed to bring it at par with its Southeast Asian neighbors, i.e., Thailand, Malaysia, and Indonesia, which all became New Asian Tigers. The latest blow to the country is that socialist Vietnam, a late comer to the capitalist world, has economically overtaken the Philippines.

This article, therefore, explores the factors which have strengthened as well as weakened Philippine technocracy during the martial law and post-martial law periods. It shows that in general the political leverage of the technocrats came from the support they have received from the leadership who shares their economic vision and the country’s major international lending creditors, the IMF and the WB. The weakening of their political clout, on the other hand, is brought about by the inability of the leadership to address the political and economic crisis. The first section of this article will discuss the rise of Philippine technocracy during the pre-martial law period (1960s–72) and the economic debates which ensued during that period concerning the trajectory of Philippine development. This establishes the very foundation of the strength of Philippine technocracy. The second section, on the other hand, examines the crucial role they played during the martial law period, particularly the economic perspectives they espoused and the challenges these confronted. And lastly, the third section will discuss where Philippine technocracy is headed in a period of “elite democracy” as it confronts challenges to its neoliberal development paradigm and massive corruption.

Defining the Technocracy and Their Development Vision1)

Technocracy is a rule by experts, a temporary form of rule that sometimes emerges after a period of poor governance. The term implies rule by specialists with expertise in non-political subjects, often economics and engineering.2) These “engineers” comprised a “critical new stratum in the industrial production process.”3) They are also referred to as “the scientists, including physicists, mathematicians, chemists, engineers, computer program and others who work in varying degrees of applied or pure research” (Glassman et al. 1993, 84). “Historically, the theory and practice of tech­nocracy have been political and ideological responses to industrialization and technological progress” (Glassman et al. 1993). The trend toward the appointment of technocrats into key government agencies in the Philippines began during the Macapagal Adminis­tration (1960–64) where Filipino graduates from the best foreign universities were recruited to government agencies. These included among others Sixto K. Roxas,4) and Armand Fabella5) who both served as Director-General of the Program Implementation Agency (hereinafter referred to as PIA)6) during the time of President Diosdado ­Macapagal. During this period, the technocracy, through their respective agencies, pressed for an open door policy to foreign investments and foreign loans, mainly from the IMF. Roxas was also known to be the architect of the Philippine financial system.

It was, however, under the first and second terms of the Marcos Administration (1965–71) when more technocrats were recruited into government and further importance was given to them. Among those Marcos recruited during this period were Cesar E.A. Virata7) and Placido Mapa Jr.8) Virata brought in Gerardo Sicat Jr.,9) after reading an article on his views supporting trade and export liberalization which Virata supported.10) Another technocrat closely associated with Virata is Manuel Alba Jr.,11) who was his student and faculty at the University of the Philippines College of Business Administration (hereinafter referred to as UP CBA) when Virata served as Dean from 1960 to 1967. Also identified with Virata’s economic orientation was Vicente Paterno12) whom Virata together with Mapa brought in as Chairman of the Board of Investments in 1970. Armand Fabella continued on from the Macapagal Administration to join the Marcos Administration. The expertise, of these technocrats, continued to be drawn mainly by their access to education both locally and abroad, i.e., they were US graduates in economics, law, and business administration.13)

These technocrats exemplified the concept of “technocracy” which emerged in the 1950s as a spin-off of the Keynesian revolution which placed emphasis on the role of government intervention in the economy. Technocracy was looked upon as a select few who had the expertise in economics management and thus could take on the lead in this endeavor on behalf of the government. As developed further by the IMF and the WB in the 1960s, technocracy was made to look at itself as an elite corps of experts who have the last word in development planning (Bello et al. 1982, 28). This view allies itself closely to the emergence of what is referred to as the “new technocrat” which has been looked at as an “important element in administration not just in production” ­(Glassman 1997). Moreover, they are regarded as “knowledge experts” and are “employed and controlled by the middle and elite managers of the corporation, government bureaucracy and universities of which they are affiliated” (Glassman et al. 1993). An interesting phenomenon is that “technocrats do become members of the management hierarchy in some cases, but they accede to power not as technocrats but as managers.14) The technical expertise of the technocrats therefore establishes their source of political leverage which is not only needed by the leadership but by international lending institutions such as the IMF and the WB. Their economic expertise was also needed in a period whereby the Philippine economy was growing and expanding of which the state plays a primarily role.

Nationalists vs Free Market Technocrats

The technocrats whom Marcos would maintain when he declared martial law, however, also possessed another important political and economic pertinence to the leadership and this was the economic vision they carried. One of these was Sicat who led an attack on the country’s import substitution policy and advocated for an export-oriented industrialization which they argued would benefit the country which has an abundant surplus of labor and natural resources.15) Moreover, these technocrats campaigned for the decontrol program which they described as a return to free trade. These technocrats some of whom have undergone training with the IMF and the WB which advocated for these policies, assumed the role of the major implementers of “free enterprise” in the country. They lectured the Filipino business community to “rationalize their operations, stop asking for government protection and meet their multinational competitors on an equal basis in the free market.”16) This highlighted the growing rift between the two crucial economic planning agencies, i.e., the technocrat-dominated PIA and the traditionally-­nationalistic National Economic Council (hereinafter referred to as NEC)17) headed by Hilarion ­Henares.18) The former won out as the leadership preferred their economic vision over the latter.

Despite the leadership’s support, the technocrats during the pre-martial law period also had to contend with the powerfully entrenched politico-economic elites who were mainly represented by vast landowning families who were expanding to the manufacturing sector in the 1950s. Dealing with them highlighted the differences among the technocrats in the Philippine Economic Staff (hereinafter referred to as PES). For example, Sicat wanted a more rapid approach to liberalization but Virata was more cautious as not to antagonize the influential political families who were against this. Virata supported the concept of measured capacity which was advocated by David Sycip, President of the Philippine Chamber Industries whereby one has to determine the national market plus export to calculate measured capacity.19) This was to prevent wasting capital by over-investment and was seen to address the issue of having to deal with different families in the country wanting to invest on the same thing. Sicat did not agree with this as it went against the principles of free market economy. But he ultimately followed Virata.20)

The continued rift between the nationalist and the free market advocates was also highlighted in the Philippine Congress during the pre-martial law period when Virata, pushed for the passing of the 1967 Investments Incentives Act through the support of Marcos’ key party mates in the Nacionalista Party namely, Congressman Lorenzo Sarmiento who was the chairman for economic affairs in the House of Representatives and Senator Jose Diokno who was the chairman of the Committee on Economic Affairs in the Senate.21) They succeeded to have the investments act passed despite opposition from no less than Senate President Gil Puyat who was also the head of the National Economic Protection Association (NEPA). Puyat was backed by politico-economic families in Congress who feared that the investments act will undermine their local businesses, such as textile, cement, flour milling among others. They wanted more protection for their industries and further support for the import-substitution scheme rather than an export-oriented industrialization which was being pushed by the Virata technocrats.22) Because of this, the Virata-led technocrats, could not pursue the country’s entry in the General Agreement on Trade and Tariff (GATT) to further liberalize the economy. The Philippines, therefore, missed out on the Kennedy Round.23) An important policy which was also pursued by the Virata-led technocrats with the backing of Marcos was the devaluation of the peso to give further impetus to an export-oriented industrialization policy. For the Virata free-market technocrats, they needed Marcos to convince the influential families engaged in import-substitution who would be adversely affected by this, to accept such a policy.24)

During the pre-martial law period, therefore, the political leverage of the martial law technocrats would come from their technical expertise and the support they received from President Marcos as well as his political allies in Congress. Such a support was able to neutralize their two major nemesis which were the technocrats in the NEC and the politico-economic elites in Congress and the business community. For the latter, such a “neutralization” came also in the form of negotiations among politicians and members of the business community which also the martial law technocrats “compromising” their economic policies. But in general, they believed that they were able to get what they wanted.

The Philippine Technocracy and Economic Decision-Making during the Martial Law Period25)

The prominence of the free-market technocracy clique in the Philippines further gained ground during the martial law period, i.e., 1972–86. Although Virata personally felt that there was no need for martial law as Marcos was able to have his economic policies passed, he also saw the advantage of not subjecting the technocrats’ policies to time-consuming debates in the Philippine Congress. Martial law for him allowed their immediate implementation.26) This was because executive, legislative, and judicial powers were all vested in the President who gave his technocrats the liberty to run the country’s economy. The right to strike, picket, demonstrate, and other forms of protest were all taken away to give a facade of political stability in order to attract more multinational corporations. This enabled the efficient pursuit of technocracy’s pet projects. Thus, when “supported by a strong political leader, these specialists were able to impose harsh monetary remedies on countries where financial discipline had often taken second place to political requirements” (Hague and Harrop 2004, 99). Such a phenomenon was also common in Third World societies whereby the

bureaucracy has undoubtedly played a positive role in most authoritarian regimes that have experienced rapid economic growth. (. . .) O’Donnell (1973) coined the term “bureaucratic authoritarianism” to describe Latin American countries such as Brazil and Argentina in which bureaucratic technocrats, protected by a repressive military government, imposed a more modern economy against opposition from social groups. (ibid., 306)

A capitalist authoritarian state-led development under an authoritarian regime also augured well for the technocrats as their

emphasis on the rational coordination of institutional processes to the functioning requirements of the productive system gives rise to a uniquely administrative or managerial conception of the state. Historically technocrats have viewed the state as a positive instrument in the pursuit of economic and social progress. The reason for this stems from the state’s central position in society. Essentially, the state is the only institution capable of engaging in a comprehensive system wide planning and management. (Fischer 1989, 25)

Technocracy’s attitude towards martial rule in the country was expectedly shared by the United States and its financial institutions, i.e., the WB and the IMF. They saw how local technocracy was having a difficult time implementing policies favoring foreign capital because of opposition from the nationalist economists among others. Under an authoritarian regime, any opposition to the government could easily be silenced (Tadem 1985). During the martial law period, therefore one witnessed the emergence of the rule by experts which “provided an instance where technical, depoliticized views of an educated elite came to dominate the political agenda” (Hague and Harrop 2004, 99). Technocracy inevitably became one of the major pillars of the martial law regime not only because of their internationally recognized economic expertise but more importantly, because they provided the leadership with a credible development program which was endorsed by the agents of foreign capital. Major aspects of this were the transformation of the Philippine economy into an export-oriented one and national progress through the massive entry of foreign capital, i.e., foreign investments and loans as well as the removal of all restrictions on trade (Tadem 1985).

The free-market technocracy clique greatly benefited from this led by Virata who retained his post as Secretary of Finance. He was supported by Gerardo Sicat Jr. who became the first Director-General of the National Economic and Development Authority (hereinafter referred to as NEDA) and concurrent Secretary of Economic Planning. He served in this capacity until July 1981. The NEDA was the result of the fusion of the PIA and the NEC, the two economic agencies of technocracy which Marcos abolished in 1972. Mapa served as Executive Director of the International Bank for Reconstruction and Development (WB in 1979) having previously worked in the IMF in 1972.27) Paterno continued to serve the martial law regime as chairman of the Board of Investments until 1979 and concurrently Secretary of Industry from 1974 to 1979. Alba, on the other hand, went on to become Minister28) of Budget from 1981 to 1986.29) Virata also brought in another of his bright student and professor and former Dean of UP CBA, Jaime Laya30) who served as the Secretary (and then Minister in 1981) of Budget from 1975 to 1981 and Chairman of the Monetary Board and Governor of Central Bank of the Philippines from 1981 to 1984. He later on became Minister of Education, Culture and Sports from 1984 to 1986. Through these economic agencies, i.e., Department of Finance, Department of Budget, NEDA, the Central Bank, Department of Industry, and Board of Investments, the Virata-led clique continued its role as the point person in accessing and negotiating loans from international lending agencies, mainly the WB, the IMF, and the Asian Development Bank (hereinafter referred to as ADB). There were, however, also differences within this faction with Sicat wanting a more rapid approach to export-­oriented industrialization and liberalization but with Paterno wanting a more cautious approach.31) Conflict within this faction was settled by Virata.32)

Challenges to the Free-market Technocrat Faction

During the martial law period, there was, however, a different set of challenges, which the Virata-led faction of the technocracy confronted. This was no longer coming from the Philippine Congress but from other key players in economic decision-making.

One technocrat which the Virata technocrat clique had differences with was Roberto “Bobby” Ongpin33) who became head of the Department of Trade and Industry (here­inafter referred to as DTI) from 1979 to 1986 when Marcos decided to fuse the Board of Investments and Department of Trade into one. In the process, the Virata faction lost one of its chief ally in this agency, Paterno as his position was abolished and he was made Secretary of Public Works and Highways. The Virata faction did not like Ongpin’s push for the country to pursue one of ASEAN’s 11 industrial projects in the 1970s which was to build an integrated steel mill. Virata felt that the country could not afford the cost of this.34) Ongpin, together with Marcos, however felt that this was necessary in order for the country to have a heavy industrial base. The IMF/WB, like Virata, did not also adhere to this scheme which led to the mothballing of the 11 major industrial projects because of the failure of the state to acquire foreign loans to finance this.35)

The Virata technocracy faction did not also have the power over the Marcos cronies who were in control of certain key agencies, namely the sugar and coconut industries. These were mainly Marcos “chief cronies,” Roberto “Bobby” Benedicto and Eduardo “Danding” Cojuangco in the latter. These two industries also happen to be the major export dollar earners for the country. Virata was against the coconut levy which was imposed by Cojuangco on the coconut farmers.36) He argued that this levy should be abolished because it only further depresses the already low price paid to farmers for their copra and was not at all for the benefit of the coconut farmers (Bowring 1981, 50–52). Virata also wanted to put an end to the middle-man monopoly by crony-­controlled and state-created bodies in both the coconut and sugar industries. This was in compliance with the wishes of the IMF/WB group (ibid.). President Marcos initially sided with Virata and agreed to have the levy abolished but later reversed his decision during a cabinet meeting when Virata was abroad. Virata was said to have offered his resignation which Marcos refused. The former just consoled himself by saying that he would not abandon the struggle for economic liberalization (ibid.). The Virata faction also could not totally restrain the lavish spending of the First Lady. Mrs. Marcos, for example got USD111,111 from the coffers of the Ministry of Human Settlements which she headed (Sacerdoti 1983). She also had her own technocrats led by Conrado “Jolly” Benitez.37)

The technocrats, therefore, basically saw themselves as the bulwark against crony capitalism (Business International Research Division 1980). This move by the Virata faction was supported by the IMF/WB who also feared that crony monopoly of vital industries in the Philippines would ward off present as well as potential foreign investors in the country because of the absence of competition and free enterprise. The IMF/WB also saw that corruption coupled with growing mass unrest had to be addressed politically with the lifting of martial law and the declaration of a New Republic in 1981 with Virata as Prime Minister backed by a Cabinet composed of WB technocrats, i.e., Virata’s faction.38) What the Virata faction and the IMF/WB, however, underestimated was the disillusionment of the business community, an important ally of the Virata faction against crony capitalism, with regards to the economic policies particularly with the country’s economic downturn in 1981 onwards which was triggered by the Mexican default of 1982 leading to the tightening of credit lines to the country.39) The business community had a positive view of the technocrats. They “sought to encourage what they perceived as a measure of independence between the technocrats and the cronies” (de Dios 1988, 104). Furthermore, the big business community even perceived themselves as a hold out as a possible constituency for the technocrats against the cronies (ibid., 105). But such a perspective was not sustained with the growing disillusionment of the business community with technocracy’s economic policies. It, for example, articulated that the country’s economic crisis was not only due to the inability of the regime to curb graft and corruption and the lack of accountability of public officers but also because of the failed major economic policies of the technocrats which were formulated without consulting them. Its members accused the technocrats of being “too bureaucratic, arrogant and lacking in practical experience.”40) Local businesses also voiced its resentment concerning the bailout of crony companies at the expense of others which did not have the proper connections to the regime and thus could not avail of the regime’s rescue funds (Bello et al. 1982, 28). These businessmen showed their disapproval of the technocracy’s blind loyalty to the policies of the IMF/WB group which led to the centralization and the streamlining of the local economy benefitting only the foreign investors and their local counterparts. All these have led to the gradual elimination of small- and medium-scale industries and commercial establishments in the country and foreign domination of the economy (ibid.).

Prominent members of the business community, therefore, joined the growing anti-dictatorship movement along with victims of human rights violations and dislocated ­communities to pave the way for development projects instigated by technocracy. The technocrats were also blamed for encouraging an apolitical and pro-business atmosphere which gave the leadership a “legitimate” excuse to depoliticize the Filipino people. This was implemented in various forms, e.g. the elimination of leaders of national movements and the denial of civilian rights (Stauffer 1979). Repressive labor policies included the prohibition of the right to strike by both the workers and the rural peasantry and the disbandment and constant harassment of labor unions by the state. These actions were implemented with the excuse that these labor activities were a threat to internal security (Lim 1983). The exacerbation of the economic crisis by the political instability caused by the assassination of ex-Senator Benigno “Ninoy” Aquino, a staunch Marcos opposi­tionist who was deemed to be the next Philippine President if Marcos did not declare martial law, further fueled the anti-dictatorship movement. With the ascendance of his widow, Corazon C. Aquino as the symbol of this movement, this gave the United States an pliable alternative to Marcos. These political events pressured Marcos to call for the February 1986 snap elections where the public believed that Mrs. Aquino was cheated by Marcos paving the way for the 1986 People Power Revolution and with the downfall of Marcos also went with him his technocrats.

The political leverage which the technocrats, therefore, had during the martial law period continued to be the support which they got from the leadership. Such a support, however, was severely compromised with President Marcos’ privileging the other power blocs which included no less than the faction of the First Lady and his “chief cronies,” Cojuangco and Benedicto. The reality was that “Marcos and his cronies used access to the political machinery to accumulate wealth, and—like the major families of the pre-martial law years—had little loyalty to any particular sector” (de Dios and Hutchcroft 2003, 49). The situation was also not helped much that there were other factions within the technocracy as exemplified by Ongpin and Velasco. One source of political leverage which the Virata-faction could pull from was IMF- and WB-support. This was heightened when these two international lending institutions saw the technocrats as a bulwark against corruption. What ultimately pulled down the technocrats, however, was the country’s political and economic crisis leading to the pulling out of US support, and ­consequently, the IMF’s and the WB’s, for Marcos. This was further fueled by the anti-dictatorship movement against the authoritarian regime’s corruption and human rights violations in general and the withdrawal of business community support for the technocrats in what its members perceived as the government’s failed economic policies.

The Philippine Technocracy during the Post-Martial Law Period41)

Despite the downfall of the Marcos technocrats, the Aquino Administration (1986–92) and the succeeding administrations of Ramos (1992–98), Estrada (1998–2001), and Arroyo (2001–10) had no problem in recruiting technocrats who shared the same economic perspective, i.e., liberalization, free competition, and free market as their counterparts during the Marcos administration. This is understandable as they generally came from the same background as the Marcos technocrats, namely, they were US-educated. Like their predecessors, a number of them also came from the UP, the alma mater of the majority of the technocrats particularly from the UP School of Economics (hereinafter referred to as UPSE).42)

The source of political power of technocracy during the post-martial law period would continue to be their economic expertise. But this time, there was a difference of where they were recruited from. During the post-martial law period a number of them came from the banking sector leading to the phenomenon of investment banking ­millionaires-turned-technocrats. Thus, if the martial law technocrats came from modest background, for example, Virata and Sicat were UP academics, a number of post-martial law technocrats, after making their millions as investment bankers, would take on government positions. This was the case, for example, of President Arroyo’s former Finance Minister Isidro Camacho43) from 2001 to 2003, and formerly of Deutsche Bank AG and Vincent Perez,44) Secretary of Energy from 2001 to 2005 and formerly with Lazard Freres & Co. as bond trader and investment banker. An explanation for this is that in an era of globalization which characterizes the post-martial law years, one has witnessed the emergence of multinational banks playing a crucial role in the economic policies of countries. This was different during the martial law period of the 1970s, when this was largely limited to the IMF and the WB.

In terms of the economic vision, the post-martial law technocrats shared the same concern of their martial law predecessors for a development paradigm which was market-driven and was for an export-oriented industrialization and export-oriented agriculture (Bello 2010). This, however, would be pursued under the neoliberal vision as it translated to a more open economy under the auspices of globalization, privatization, and the free market. Another difference is the diminished role of the state as an authoritarian state-led development during the Marcos period which was associated with cronyism and patronage politics and inefficiency. Thus, the goal was to seek state transformation into a minimalist and a regulatory state. This is because the liberal doctrine, as embodied in the tenets of globalization, argues that there should be no government intervention with market forces for economic growth to occur. Furthermore, market imperfections are not justifications to intrusive regulations because the interplay of competitive forces will benefit the consumers in the long run. Moreover, for the neoliberal agenda, the state is “less concerned with issues of sovereignty and power than with creating efficient institutional structures to facilitate the operation of the market.”45)

Criticisms from Civil Society

Whereas during the martial law period such an economic ideology received criticisms from the left movement, during the post-martial law period, the neoliberal paradigm is heavily criticized by civil society. Its critics during these two periods gave similar reasons foremost of which that such a development paradigm is unable to create political oppor­tunity for long term development. A reason for this is that foreign investors can easily leave the host country when the latter ceases to provide them the optimum environment for capital accumulation. “Moreover, emphasis on export would give less attention to the development of a domestic mass following for local products” (Lopez Wui 2006). Another argument is that although the emphasis on export could create more employment for the local workforce because of bigger markets abroad, problems nonetheless arise if importing countries begin to tap other sources offering better quality and priced goods (ibid., 111). Critics of the neoliberal paradigm have pointed out that creating a favorable environment could also mean the repression of workers’ wages. And lastly, the economic policies which the technocrats are propagating are viewed as not addressing the problem of economic redistribution. The argument is that such policies rely on the trickle-down effect which critics argue never seems to happen. Some view it as even compounding further inequalities with advantages being given the private over the ­public sphere.46) Unlike the criticisms during the martial law period which could be parried by repressive policies, the same cannot be said for the economic managers in the post-martial law period. Their economic policies are not only questioned by civil society but also subjected to interrogation of Congress as part of the checks-and-balance which goes with a presidential system.

A. Factors Which Strengthen Economic Decision-Making of Technocrats in the Post-Martial Law Period47)

Despite such a political milieu, however, there are factors in the current dispensation which shield the post-martial law technocracy from intervention in the decision-making process. These include the following:

The Ideological Hegemony of Neoliberalism

One is the very dominance of the neoliberal ideology among crucial policy-makers.48) Unlike the martial law period whereby the liberal market ideology seemed to be the monopoly of the martial law technocrat, this is not the case during the post-martial law period. What has emerged is that the tenets of neoliberalism “is not only tenaciously adhered to but also nurtured by like-minded academic experts, think-tanks and consultancy firms working closely with government” (Quinsaat 2006, 33). The Philippine Congress is also composed of legislators who are advocates of the neoliberal doctrine. Former President Gloria Macapagal Arroyo, when she was Senator, was responsible for sponsoring bills paving the entry of the Philippines into the World Trade Organization (WTO). Her closest economic adviser Representative Joey S. Salcedo of Albay, a former Wall Street stock market investor, has single-handedly pushed for legislative measures with the participation of the UPSE in minimizing the role of the state in the economy. Thus, the reality is that “only a handful of actors has monopoly in decision-making and these are mostly technocrats appointed by a President. While some interest groups are able to permeate the arena, these are mostly the privileged and powerful, such as the landlord-controlled sugar industry lobbyists” (ibid.).

The Nature of the Policy Environment

A second factor which shields the post-martial law technocrats from interference in their decision-making process is the policy environment itself. As pointed out, “while the law may appear sufficient, even socially progressive, equally important are the openness and hospitality of the politico-administrative environment to civil society participation in policymaking.”49) This is the case, for example, of civil society groups which are fighting against the privatization thrust of the technocracy. In the case of the privatization of the water sector, the reality for non-governmental organizations (NGOs) is that they have been generally locked out of crucial negotiations between the government and private concessionaires when they were trying to reach a compromise because of the failure of the latter to perform its tasks. As pointed out by Jude Esguerra of the Bantay Tubig (Guard the Water) Network,

the entire regulatory and arbitration set-up was to blame for the absence of transparency and consumer representation in dispute-settlement processes related to water issues. Consumers and taxpayers have been deprived of our right to have our grievances heard, while water companies can have the arbitration panel convened whenever they are unhappy with the decisions of the Regulatory Office.50)

Economic Policy-Making in a Period of Globalization

What has further protected technocracy from public criticism is the transnational character of economic policy-making, i.e.,

the economic policymaking has created a state of affairs where the Philippine government is more accountable to the institutions of global governance, such as the World Bank (WB), International Monetary Fund (IMF), and WTO, alongside the states which exercise hegemony within and over these establishments, than to its citizens. Relationships with these players in the global trade regime are bestowed with so much importance, either by intention or by sheer mendicancy of the government, such that responsibility to its public is often compromised. (Quinsaat 2006, 33)

The motto of these international financial institutions (hereinafter referred to as IFIs) is to insulate the technocrats from the political pressure on economic decision-making. Thus, even if the country is in a political crisis, the measures are still there to keep the economy going. This is certainly a déjà vu of the martial law period whereby the technocrats found its strength from the support of the IMF and the WB when it was besieged by criticisms of its policies not only from the Marcos cronies but also from the business community and the social movements. The neoliberal ideology is also preserved by the bilateral agreements forged by the Philippines with countries particularly the United States which single-handedly has insulated any attempt to subvert the technocrat’s liberali­zation policy. This was seen, for example, when upon pressure from civil society actors in the local hog industry, the government attempted to secure protection for the hog industry imports. This was effectively shot down by the United States, the country’s most influential trading partner (Ariate 2006).

B. Civil Society Challenges to Technocratic Economic Decision-Making in a Period of Democratization51)

Despite all these “safeguards” to technocratic policy-making, the reality is that in a period of democratization one still has to continue to deal with political interest groups which they view as “the virtual enemy of rational social organizations.” The challenge for technocracy in the democratization process is to replace political and interest group leaders with technical trained experts who “stand above” the political process” (Fischer 1989, 24). Such is an arduous task for the technocracy because as the country democratizes, civil society members are able to explore ways and means by which they intervene in the nature of economic decision-making during the post-martial law period. The most lethal combination is when they are able to team up with national and local officials as well as legislators who do not agree or are adversely affected by the technocrat’s economic policies.

Transparency and Accountability in a Period of Democratization

The 1986 People Power Revolution which toppled the dictator and the ouster of President Joseph Estrada in 2001 for corruption has given impetus to civil society to raise the issue of the need for transparency and accountability in government in general and on its economic policy-makers in particular. This was depicted in civil society’s vigilance with regards to the transparency and accountability of technocracy in cash rich government-owned and controlled corporations (GOCCs). Technocrats occupying positions in GOCCs are now heavily scrutinized specially when their respective GOCCs are losing money52) or even bankrupt like the Social Security System (SSS) and the Government Service Insurance System (GSIS). Every month, around 10% to 30% is withheld from government and private sector employees which go to the GSIS and the SSS respectively for their pension fund. The accusation is that these GOCCs employ technocrats who pay themselves high salaries, e.g., USD9,000/month, when these GOCCs are losing money. The perception is that it is alright to pay these technocrats this amount if the GOCC was earning money, recognizing the fact that “the best and the brightest” can only be enticed to work for government if the pay can be more or less equal than that of the private ­sector. The problem, however, was that this was not the case with the GOCCs. Thus, this was such an “immoral” thing to do particularly when the average Filipino employee earns less than USD200/month (Ibon Facts and Figures 1984, 7).

The Adverse Effects of Globalization

The adverse effects of the technocrat’s push for the country’s rapid globalization has also brought about the alliances of civil society with major political actors to counter act this among which are the following:

Alliance of civil society and local government officials. Civil society has allied with local government officials whose communities have been adversely affected by the country’s liberalization policy. This was seen in the case of the Benguet vegetable industry in Northern Luzon.

Seeing that the industry could no longer compete with the influx of the imports of cheaper vegetables, the local government officials linked up with the communities and civil society groups like the Fair Trade Alliance (FTA),53) through its convener, former Senator Wigberto Tañada and the Kilusang Magbubukid ng Pilipinas (Peasant Movement of the Philippines [KMP]), through its chairperson, Rafael Mariano.54)

FTA was instrumental in the preparation of position papers, particularly on the trigger price55) for vegetables. The alliance also facilitated its participation in consultations in various agencies and institutions. (Quinsaat 2006, 40)

Alliance of civil society with legislators. Another way by which civil society exerted its pressure on technocratic policies on globalization was through its alliance with sympathetic legislators. Although in general, the legislators accept the technocrats’ neoliberal vision, there are also those who do not agree with it and bring out their opposition in the legislature. This was seen in the case of the Benguet vegetable industry whereby

the relentless lobbying of like-minded legislators, mainly from party-list groups such as Represent­atives Loretta Rosales of Akbayan and Satur Ocampo of Bayan Muna, in tandem with a privilege speech delivered by Benguet solon Samuel Dangwa underscored the impact of vegetable importation to the livelihood of the farmers. (ibid., 45)

Rosales also criticized the secrecy of government in its WTO negotiating positions and gave the problems of the vegetable industry ample space in the legislative arena (ibid.).

Alliance of civil society with transnational activists. The era of globalization has also seen the alliance of civil society with transnational activists in questioning the technocrat’s plan of action. An example of this is

the Labor Forum Beyond MFA56) which was formed in early 2003 through the efforts of the International Textile, Garment and Leather Workers’ Federation (ITGLWF) Philippines in order to examine problems experienced by the garment industry in view of the expiration of the MFA and to prepare the workers for the quota phase out. . . . (Lopez Wui 2006, 133)

The important objectives of the dialogues are for the labor organizations to engage in collective action and assess the efforts of employers and government in connection with the quota phase-out. The outcome of all these dialogues was the revival and reestablishment of the Clothing and Textile Industry Tripartite Council (CTITC) (ibid., 135).

Civil society alliances within the business community. Like the martial law period, there are members of the business community who are also critical of technocratic policies which impinge on their profits. In particular, a similar issue which has emerged in the post-martial law period is their objection towards the policy on trade liberalization, particularly, the entry of cheaper imported products. It is with this sector of the business community where alliances have been formed as can be seen for example in the hog industry with the emergence of the Agricultural Sector Alliance of the Philippines (ASAP) in 2001. ASAP consists mainly of feed miller’s and hog raiser’s associations and cooperatives, and other civil society actors in the industry. They launched a confrontational posture against the state with regards to the importation of cheaper meat products. Another alliance formed in 2004 was the Meat and Hog Dealers Association of the Philip­pines (MHDAP) which together with the Slaughterhouse Operators Association of the Philippines (SOAP) would figure prominently in a meat holiday in March 2004 (Ariate 2006, 94).

The 1997 Asian Financial Crisis

The 1997 Asian financial crisis also severely questioned the soundness of technocratic policies espousing rapid economic liberalization. In light of this, civil society have called for the need to institute safety nets to cushion the blow of liberalization. Moreover, the perception is that government should not lower the tariffs for imports without its regard for its effects on the local industry (Lopez Wui 2006, 111). These arguments have put pressure on the need for the state to take on its responsibility towards the underprivileged and to preserve public interest. Thus, unlike the neoliberal perspective, the state should not wither away but assert its role vis-à-vis the forces of globalization particularly in the aspect of imposing strong social regulation.

Civil society in alliance with sympathetic fellow technocrats. It is within this context that civil society is able to forge alliances with sympathetic technocrats who are not completely sold out to the neoliberal ideology and believe that safety nets and strong government social regulation is needed as opposed to the unbridled unleashing of the economic forces of globalization and the market economy. One of this is former NEDA Secretary General of the Ramos Administration Cielito Habito. Another is former DTI and Department of Agriculture (DA) Undersecretary Ernesto Ordonez. As noted in the experience of the Benguet vegetable farmers, Ordonez was deemed as the most sympathetic to their plight “because of his instantaneous response to the problem of importation.57) He was active in bridging the gap between the agency and civil society and was key to the latter’s influencing decisions in the DA.”58) This situation is quite different as compared to the martial law period whereby although there were factions within the Philippine technocracy in terms of economic perspectives, none of these factions allied with members of civil society or social movement players.

Civil society and electoral candidates. Unlike the martial law period, another factor which impinges on the technocracy’s economic decision-making is electoral politics. Economic policies, for example, tend to be sacrificed by technocrats who have political ambitions. This was in the case of “former Department of Trade and Industry (DTI) Secretary Manuel ‘Mar’ Roxas, who although is a supporter of consumer-oriented globalization was opposed to increase in tariff rates . . .” (Quinsaat 2006, 43). When civil society supporting the Benguet vegetable industry went against cheap vegetable importation found out that Roxas had political aspirations and with national elections fast approaching, civil society together with the local officials, “tried to win over Roxas by insinuating that the support of the Cordillera59) voting public would be dependent on his stance on further trade liberalization in agriculture, especially vegetables. Thus in the end, he capitulated and supported the actions of civil society” (ibid., 44).

The Failure of the WTO Uruguay Round

The failure of the Philippines to pursue economic gains during the WTO Uruguay Round whereby civil-society groups were locked out of the domestic negotiation process, resulted in a highly controversial and tumultuous battle on the ratification of the treaty in 1994 (Cajiuat and Regalado 1997). The trade representatives were castigated for keeping the public in the dark on the various concessions they had signed up the Philippines into. They earned the ire not just of social movements but industries as well. As a consequence, the implementation of the GATT-UR lacked the requisite support from its stakeholders. Thus, there are technocrats in government who believe that sound economic policy-making can only be with the support of its stakeholders. This was the case of DA Undersecretary Segfredo Serrano who formed the Task Force on the (Re)negotiations of the WTO Agreement on Agriculture or TFWAAR in 1998 (which later became TF-WAR in 2001) to include stakeholders who are directly affected by the WTO to be part of the shaping of the Philip­pine negotiating strategy in the WTO. The motto of the TF-WAR is not to “junk” the WTO but to assume a “protectionist” and “defensive” position in the negotiating process. Technocrats like Serrano exemplify as “reformist” technocrats who are not hardcore neoliberals and are open to other paradigms.60)

C. Patronage Politics and Technocratic Decision-Making61)

The bigger challenge, however, for technocracy during the post-martial law period is the prevalence of patronage politics which continues to impinge on technocratic decision-making which was exacerbated during the martial law period. The technocrats, in general, have to continue to contend with what is referred to as a “patrimonial state,” i.e., “where practically everything depends explicitly upon personal considerations.”62) ­During the post-martial law period, it was hoped that crony capitalism will disappear with the advent of globalization. But this, however, is not the case as globalization has failed to address the problem of such a state which is lacking the “vision, autonomy and bureaucratic capacity necessary to implement a developmental program” (Budd 2005). The reality is that globalization has only promoted capitalism but not the institutions that are necessary for democratic consolidation (ibid., 54). A result of this is the emergence of partisan politics which has taken its toll on the implementation of economic policies. This can be seen in the attempt of the technocrats to provide an efficient and regulatory state which “uses rules, standards and other public statements as major policy instruments, rather than relying on direct provision of goods and services” (Hague and Harrop 2004, 318). The challenge here is that the regulatory agency is able to insulate itself from external and social forces which may adversely affect the implementation of coherent and effective policies (Molmisa 2006, 167–168). This can be seen in the case of the National Tele­communications Commission (NTC), the regulatory body in-charge of the telecommunications industry. Although the NTC’s strength can be seen in its effort to implement measures to combat mobile text frauds,63) which according to the Anti-Money Laundering, have ripped about P5 million from the victims in 2003,64) it also continues to be affected by partisan politics. “At present, the term of appointment of commissioners depends on the confidence of the President of the country. The ­Congress can also determine its annual budget appropriations.”65) This opens the NTC to influence-­peddling and rent-seeking activities particularly in securing a legislative franchise (ibid., 169).

The Political Crisis of Legitimacy

Such a situation is severely aggravated when there is a crisis of leadership. Generally,

the state is seen as the institution that can stand above the destructive play of competitive interests and thus only the state is potentially capable of providing the coordinating leadership needed to oversee a complex technical societal process. (Fischer 1989, 12)

Such a role, however, cannot be performed by the state when there is a crisis of leadership which seems to have always sealed the fate of Philippine technocracy. This was seen during the martial law years when President Ferdinand Marcos was removed in office by the 1986 People Power Revolution. Together with him went the technocrats. The same could be said for President Joseph Estrada’s technocrats in Cabinet who were replaced in the advent of the EDSA 2 Revolution in January 2001. Almost the same fate seems to lie with the technocrats of the Arroyo Administration. Because of the questions raised whether she is truly the President of the Philippines, having come to power because of a popular uprising, President Arroyo was very much determined to win a formidable mandate during the 2004 national elections. Because of this, the perception was that she wanted to win at all cost. One of the first casualty of this was Finance ­Secretary Isidro Camacho who resigned a couple of months before the 2004 national elections saying that economic policies could not be implemented until after the elections. This implied that economic policies should give way to political considerations.

After the elections, there was hope that the government’s economic policies could now be implemented but her administration was plagued with a series of scandals which broke out beginning in April 2005. Foremost of this was the “jueteng gate” and “Hello Garci Tapes” scandals. Jueteng, which is an illegal numbers gambling game and is mainly condemned by the Church, is said to have benefited the President’s relatives, that is her husband, First Gentleman Jose Miguel “Mike” Arroyo, her eldest son and Pampanga Vice-Governor Juan Miguel “Mikey” Arroyo, and her brother-in-law, Negros Repre­sentative Ignacio “Iggy” Arroyo. They were accused of receiving millions of pesos ­coming from jueteng proceeds. Jueteng was the same issue which brought down President Estrada. The jueteng scandal, however, was nothing compared to the “Hello Garci Tapes” scandal which followed it in May 2005. This was with regards to wire-tapped tapes which revealed President Arroyo talking on the cellphone to Commission on Elections ­(COMELEC) Commissioner Virgilio Garcillano during the counting of the ballots in the May 2004 national elections. Garcillano was based in Lanao del Norte, Mindanao. The public perception was that she was asking Garcillano to pad the votes so she could win by at least one million votes giving her a formidable mandate over her closest opponent, the actor Fernando Poe Jr.66)

Because the political scandal was getting in the way of implementing the government’s economic policies, President Arroyo’s economic and social technocrats67) pressured her to confess to the public that indeed it was her voice and to apologize for this in the hope that this will lessen the backlash. They believed that this was causing political instability which hindered the implementation of their economic policies. President Arroyo agreed and said she was “sorry” to the public for her “lapse of judgment.” The technocrats went a step further by demanding the President to send her husband away because of the jueteng scandal among others, and to fire officials identified with him such as Edgar Manda of the Laguna Lake Development Authority (LLDA) and Efraim ­Genuino of the Philippine Amusement and Gaming Corp. (PAGCOR).68) Her husband agreed to going away but “vigorously opposed the sacking of officials identified with him.” When it became clear to the technocrats that President Arroyo was not going to let go of her husband’s cronies, particularly, Genuino, 10 of them, seven Cabinet Secretaries and three Bureau Directors, resigned on July 10, 2005 and held a conference at the Hyatt Hotel to announce their resignation. They became known as the “Hyatt 10” (Lirio 2005) and they were led by Cesar Purisima,69) President Arroyo’s former Secretary of Trade and Industry who later on became the Secretary of Finance when Camacho resigned. Purisima said that he could no longer stomach the politics which was going on which sacrificed the economic policies which were already set in place and read the group’s statement entitled “Of Leadership and Credibility.” The others who called for her ­resignation was former President Aquino and members of the Makati Business Club (MBC).70)

The “Hello Garci Tapes” scandal, thus, brings forth the reincarnation of the martial law years squabble between the technocrats and the cronies. During the martial law years, close relatives and cronies of President Marcos benefited from government-awarded contracts and outright corruption to the chagrin of the technocrats and the IMF/WB. Such a practice seems to have continued during the post-martial law period. President Aquino, for example, has been accused of having her “Kamag-anak Inc” ­(Relatives Incorporated), while some have found President Ramos guilty of granting independent power producer (IPP) contracts to close friends. President Estrada was also known for his drinking sessions with friends who composed what was called his “midnight cabinet.” It was during these “midnight cabinet” meetings whereby contracts would be signed according to his former Chief of Staff Aprodicio Laquian who was immediately fired after saying this publicly. As for President Arroyo, her “Achilles heel” is said to be her husband, Mike Arroyo, who had a “Wednesday group” which some Palace staff members have referred to as the “Shadow Cabinet” (to distinguish it from the official Cabinet which meets every Tuesday) (ibid.).

There were technocrats, however, who stood by Mrs. Arroyo foremost of whom was Romulo Neri, a professor of Business Administration of the UP, Diliman. Neri, when he was the Socio-Economic Planning Secretary and Director-General of the NEDA was implicated in a corruption scandal involving a Chinese corporation ZTE with regards to a bid to implement a national broadband network (NBN) in the Philippines. Upon his interrogation by the Senate Blue Ribbon Committee, Neri disclosed to the Committee members that he told President Arroyo that Commission on Election (Comelec) Chair Benjamin Abalos, offered him P200 million (USD45 million) to approve the deal. Referred to as the ZTE-NBN scandal, if approved, the Philippine government would have accepted to build the NBN at a cost of USD329 million, double the actual cost by some estimates, although the same project could have been built at no cost to the government. Neri, however, refused to give full disclosure of Arroyo’s involvement in the ZTE-NBN deal.71) Furthermore, he invoked Executive Order (E.O.) 464 “which bars officials from testifying in congressional inquiries without the President’s permission.”72)

“National Security” as Priority over Economic Policies

These scandals further magnified the “crisis of legitimacy” bringing about the call for the President’s impeachment. Although the opposition in Congress lacked the numbers to impeach her, current Senate investigations of questionable government economic transactions continue to bring forth the “vulnerability” of the present government. Such a “vulnerability” plunged the President’s rating to as low as negative 74.7% with 65% of the public wanting her removed from office (Rivera 2005). Some have looked at this as ripe for a military take-over. Because of this, the Palace decided that economic reforms should now take second place to national security. That is, the technocrats will now play second fiddle to government officials, i.e., the Palace’s political “spin doctors,” tasked to defend the presidency.73) The adverse impact of such a political rearrangement on the decision-making powers of the technocracy were seen in the following instances:

“Flip-flopping” on the E-VAT Law

One of the economic policy casualties of the political crisis was the delayed implementation of the expanded value-added tax law74) or E-VAT law which is aimed to increase the revenues, particularly from taxes on fuel and power to solve the country’s fiscal deficit.75) It is also considered to be the Arroyo administration’s key measure to resolve the fiscal problem. Although the imposition of the E-VAT law has been passed as a law by Congress, it was suspended because a case was filed against it in the Supreme Court.76) Purisima and former Trade Secretary Juan Santos accused Malacanang of being behind such an action in the government’s attempt to assuage the public who would suffer from the added tax on commodities. This was one of the major reasons why both chose to resign.77) Administration legislators, including her close economic advisers and the main backer of the E-VAT law Albay Representative Joey Salceda and former government technocrat Senator Manuel A. Roxas, have also filed separate resolutions on September 16, 2005 to delay the implementation of the E-VAT law. For Roxas and Salceda78) “including petroleum and power sales in the E-VAT law’s coverage now would add misery to marginalized Filipinos already suffering from soaring transport expenses and electricity bills. Such a position could be expected from these technocrats-turned-politicians because of the fear of a political backlash from their respective constituencies. ­Malacanang was said to be open to such a proposal.79) On October 18, 2005, however, the Supreme Court declared the E-VAT law as constitutional and the government has currently implemented it.

Re-thinking Debt Payments

Because the political crisis came at the heels of the worldwide oil price hikes, the Arroyo administration also began to re-think economic policies which will further plunge the popularity rating of the President. One of this re-thinking is in the area of debt payments. This is because the government has been allocating at least 30% of its annual budget to interest payments. According to the Department of Finance, interest and principal debt eat up nearly 90% of government revenues (Remo 2005c). In relation to this, Finance Secretary Margarito Teves80) said he was open to the idea of seeking debt relief as a partial solution to the country’s lingering fiscal problem. He, however, added that “the task of communication with foreign creditors regarding the possibility of relieving some of the Philippines’ external debts, however, should be left with people outside the government’s economic team.” Such a position was a turnaround from Teves’ predecessor Purisima who said that seeking debt relief could adversely affect the country’s capability to access future loans.81) Then Speaker of the House of Representative Jose de Venecia, on the other hand, introduced a “debt-for-equity-swap” proposal which was announced in August 2005 in President Arroyo’s five-minute speech at the United Nations (UN) General Assembly. Under such a proposal, “. . . the debt service, or principal amount, should be converted into equity in new projects of at least equal value and with their potential earnings.” These are specifically intended to finance programs under the UN’s Millennium Development Goals which aims to reduce the incidence of poverty in the world by half by 2015.82)

D. The Failure of Technocratic Policies to Address Poverty and Socio-economic Inequalities

In the meantime though, for the post-martial law technocrats, the reality staring them in the face is that the billionaires during the time of Marcos are still the billionaires now.83) These criticisms are vindicated with the failure of the economic policies of the post-martial law technocrats to address the country’s worsening poverty where 27 million or nearly a third of the population of 92 million live in poverty (Esguerra 2010). As the Arroyo government departed, the government incurred a P162 billion deficit which is 55% or more than half of the targeted P293 billion in total (Bello 2010). On a comparative perspective, “the United Nations Development Program’s Human Development Report revealed that the Philippines registered the lowest average yearly growth rate, 1.6 per cent in Southeast Asia in the period of 1990–2005. This was lower than Vietnam (5.9%), Cambodia (5.5%) and Burma (6.6%)” (ibid.). The technocratic policies for economic development has also failed to address the socio-economic inequalities which has perennially characterized Philippine society. Statistics reveal that “the richest five per cent of the households’ account for nearly a third of the national income and the poorest 25 per cent of the households getting only six per cent of the income.” This is according to the World Bank’s WB Development Report of 2006 (Dumlao 2005). These socio-­economic inequalities have also been exacerbated by the end of the Arroyo Adminis­tration in June 2010. Although the country’s economic growth “hit an unexpected high of 7.3% during the first quarter of 2010, this was credited to her controlling the runaway budget deficit, largely through the passage of key fiscal reforms in 2005 despite widespread opposition” (Macaraig 2010). But as noted by UP economist, Cayetano Paderanga Jr. and now, the new Aquino government’s Secretary of Economic Planning, much of the growth came from a few sectors, namely the remittances from millions of Filipino overseas workers84) and a flow-on boom in consumer spending, plus earnings from call centers and other outsourced business. “These sectors, though, are all out of reach of the millions of poor, who have largely missed out on any benefits of economic growth” according to Paderanga and the Dean of UPSE Arsenio Balisacan (ibid.).

Conclusion

This article has, therefore, shown the factors which have strengthened as well as weakened the political clout of Philippine technocracy during the martial law and post-martial law periods. During the pre-martial law period, technocracy drew its strength from the support of the leadership which shared its vision for economic development. The con­tentions which ensued here were between two factions of technocracy, i.e., the technocrats in the NEC which were for an import-substitution and heavy industrialization policy as against the technocrats in the PIA and later on the PES, which favored an export-oriented industrialization, liberalization, and more incentives for foreign incentives. Under President Marcos, the latter faction of technocracy was favored. For this faction, the other political hurdle to technocratic economic policy-making during this period was Congress where one had politicians who had economic interests which went against their development policy as well as those who were nationalists and opposed to the incursion of multinational corporations in the country. But their opposition was readily overcome because of the political acumen of Marcos in dealing with them which was buttressed by the leadership’s received his political allies in Congress.

With the declaration of martial law, the strength of technocracy continued to draw from the support it received from the leadership. It, however, would also encounter opposition to its policies but of a different kind as during the pre-martial law period. The “martial law” technocrats, for example, as represented by the Virata faction no longer had to deal with technocrats espousing import-substitution as well as political opposition from Congress which was abolished but it had to deal with other technocrats who had other economic perspectives and had their own pipeline to the President. Thus, there was no solid technocratic bloc. Like during the pre-martial law period, technocratic policy also had to give way to patronage politics as in the favoring of crony interests particularly in the very vital sugar and coconut industries and to the interests of the leadership’s relatives as epitomized by no less than the First Lady Mrs. Marcos. Like during the pre-martial law period, the martial law technocrats would pursue the IMF and WB line of development and because of this, they received the assistance needed by the country for their economic objectives. Their role as the facilitator of IMF and WB loans to the country was the major political leverage of the Virata faction of the technocracy. Such a political leverage would be translated into the perception of technocracy as the bulwark against corruption in government. Economic and political crisis would wreak havoc on the political clout of the technocrats. In the case of the former, the global economic crisis would severely impinge on the local economy and the capacity of the technocrats to access the needed loans for the country. The situation was further aggravated with the country’s political crisis as triggered by the assassination of ex-Senator Benigno Aquino and Marcos’ failing health. All these gave further fuel to the burgeoning anti-dictatorship movement as brought about by the regime’s human right’s violations, corruption, and failed economic policies leading to the downfall of the dictatorship and with him, his technocrats.

During the post-martial law period, the technocrats’ political leverage would also continue to rely heavily on the support it gets from the leadership. But unlike the martial law period, their economic vision of neoliberalism would also be carried by not only the executive but also the majority in Philippine Congress and in other important sectors of society such as the business community and the academe. As during the martial law period, their economic ideology would be perpetuated externally by institutions of global governance such as the IMF, the WB, and the WTO as well as multinational banks. If the left movement during the martial law period spearheaded the opposition against technocratic policies under the umbrella of the anti-dictatorship movement, in a period of democratization, this was carried out by civil society. The failure of the technocrat’s economic policies to address poverty and socio-economic inequalities as exacerbated by the adverse effects of globalization as epitomized by the 1997 Asian financial crisis brought about the emergence of civil society alliances with prominent allies sympathetic to their cause. These include local government officials, legislators, fellow technocrats, members of the business community, electoral candidates, and transnational activists among others.

The other formidable challenge to technocratic decision-making continues to be patronage politics and massive corruption which characterizes Philippine society. More often than not, this continues to sacrifice economic policies. Such a situation is further aggravated by the political crisis of legitimacy which has brought down another Philippine president and with him his technocrats. In the case of President Arroyo, the crisis of political legitimacy as brought about by political and economic scandals has witnessed priority being given to “national security” over economic policies. The mass resignation of key economic and social technocrats under the Arroyo Administration because of the issue of corruption was the first in Philippine history which highlights the political leeway which technocrats are able to pursue in a period of democratization. Furthermore, these technocrats actively campaigned for the ouster of President Arroyo and failing to do so, heavily campaigned for the election of President Benigno S. Aquino. With the latter’s victory, these former Arroyo technocrats are now back in power. The challenge now is for the Aquino administration’s technocrats to show that it is politics and not economics which is to blame why the Philippines continues to be the basket case of Asia.

Accepted: November 1, 2013

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1) For further details, please see Tadem (2005).

2) Hague and Harrop (2004, 99). The word was coined by William Smyth, “an engineer based in California who founded Technocracy, Inc., in 1919.”

3) Veblen (1963) in Glassman et al. (1993).

4) Roxas graduated summa cum laude in economics from the elite all-male school of Ateneo de Manila. He went on to obtain an M.A. in Economics at Fordham University.

5) Fabella earned an economics degree from Harvard University and an M.A. in Economics from Jose Rizal College which is owned by his family. He also pursued post-graduate studies at the London School of Economics. His wife is a niece of Sixto Roxas III.

6) The PIA was organized to implement the government’s socio-economic plan but it seemed to be more concerned in their implementation. It was created on August 24, 1962 to be President ­Diosdado Macapagal’s technical staff. The agency conducted socio-economic planning, formulated policy recommendations, established priorities, and programmed the utilization of public funds, manpower resources, materials, and equipment (Official Directory of the Republic of the Philippines 1955, 153).

7) Virata obtained a B.S. in Mechanical Engineering and B.S. in Business Administration in 1952, University of the Philippines (hereinafter referred to as UP) after which he went on to become an instructor at the UP College of Business Administration (UP CBA). A year later, he pursued an M.B.A. in Industrial Management from the Wharton Graduate School, University of Pennsylvania in 1953. He became UP CBA Dean before he joined the government in 1967. During the pre-martial law period, Virata served among others as Presidential Economic Staff Deputy Director-General for Investments from 1967 to 1968; Undersecretary of the Department of Commerce and Industry from 1967 to 1968; Director and Acting Chairman of the Board of Directors of the Philippine National Bank from 1967 to 1969; and Secretary of Finance from 1970 to 1986.

8) Mapa graduated from Ateneo de Manila in 1955, magna cum laude and pursued post graduate studies at St. Louis University from 1955 to 1957 and obtained an M.A. and Ph.D. in Economics from Harvard University. He served as Undersecretary of Finance in 1965, Deputy Director General, Program Implementation Agency, Office of the President in 1966, and Director General, Presidential Economic Staff, Office of the President in 1966.

9) Sicat earned three degrees from the UP: B.S. Foreign Service (cum laude), 1957; A.B. (cum laude), 1958; and M.A. in Economics, 1958. He earned his Ph.D. in Economics in 1963 at the Massachusetts Institute of Technology (MIT) in Cambridge, Massachusetts, the United States. Sicat was Chair of the National Economic Council during the pre-martial law period.

10) Virata, Cesar E.A. 2008. Interview by Cayetano Paderanga Jr. and Teresa S. Encarnacion Tadem. Tape recording. June 16. RCBC Plaza, Makati City, Philippines.

11) Alba graduated Bachelor of Science with a Business Administration degree from the UP (Accounting). In 1958, he obtained his Professional License as a Certified Public Accountant. In 1957, he was recruited by Virata when he was Dean of the UP CBA as assistant instructor (to full professor in 1962) of Business Policy, Business Administration and Marketing, College of Business Administration. From 1961–64, he served as Assistant Dean and Acting Dean, College of Business Administration and Director, Graduate Studies Program, UP CBA. Virata was responsible for obtaining a fellowship for him to obtain a Master of Business Administration (Marketing and Transportation) at the University of Minnesota in 1961. He later on graduated Ph.D. in Management Science and Business Administration (with Marketing, Economics, Transportation Management, Operations Research and Social Psychology as specialized areas) at Northwestern University (Chicago and Evanstan, Illinois, the United States) in 1967. He served in 1971 as Executive Director, Philippine Presidential Commission to Survey Philippine Education (with the Commission chaired by former Department of Education, Culture and Sports [DECS] Secretary, Onofre D. Corpuz).

12) Paterno graduated Bachelor of Science in Mechanical Engineering at the UP in 1948 where he and Virata were contemporaries at the UP College of Engineering. He obtained a Master of Business Administration at Harvard University in 1953.

13) The others were Secretary of Trade and Industry Vicente Paterno and his successor Roberto ­Ongpin, Secretary of Agriculture Arturo Tanco, and Central Bank Governor Placido Mapa, all of whom got their degrees from Harvard University.

14) Kellner and Heuberger (1992) in Glassman et al. (1993).

15) Lichauco (1981).

16) Constantino and Constantino (1978).

17) The NEC which was reconstituted by Secretary of Finance Miguel Cuaderno during the time of President Manuel Roxas was tasked to prepare economic plans and to define the country’s major economic policies and objectives. It, however, has no implementing powers, except on foreign economic assistance (The Manila Times, December 25, 1947; January 17, 1955; Philippine Government Directory [1980, 1]; Araneta [1965, 247]).

18) Henares is a graduate of Ateneo de Manila, UP, and obtained his Ph.D. in Economics from the MIT.

19) Virata, Cesar E.A. 2007. Interview by Yutaka Katayama, Cayetano Paderanga, and Teresa S. ­Encarnacion Tadem. Tape recording. December 19. RCBC Plaza, Makati City, Philippines.

20) Virata, Cesar E.A. 2007. Interview by Yutaka Katayama, Cayetano Paderanga, and Teresa S. ­Encarnacion Tadem. Tape recording. November 21. RCBC Plaza, Makati City, Philippines.

21) Virata, Cesar E.A. 2007. November 21. RCBC Plaza, Makati City, Philippines.

22) Virata, Cesar E.A. 2007. November 21. RCBC Plaza, Makati City, Philippines.

23) Virata, Cesar E.A. 2007. November 21. RCBC Plaza, Makati City, Philippines; and Virata, Cesar E.A. 2008. Interview by Yutaka Katayama, Cayetano Paderanga, and Teresa S. ­Encarnacion Tadem. Tape recording. May 2. RCBC Plaza, Makati City, Philippines.

24) Virata, Cesar E.A. 2007. Interview by Yutaka Katayama and Teresa S. Encarnacion Tadem. Tape recording. November 23. RCBC Plaza, Makati City, Philippines.

25) For further details please see Tadem (2005).

26) Virata, Cesar E.A. 2007. Interview by Yutaka Katayama and Cayetano Paderanga. Tape recording. December 13. RCBC Plaza, Makati City, Philippines.

27) Ibon Facts and Figures (1984).

28) In 1981, the Philippines shifted from a presidential to a presidential-parliamentary system, thus the change in reference to the titles and agencies from Secretaries of Departments to Ministers of Ministries.

29) Before that, Alba upon the declaration of martial law continued with his government position as Executive Director, Philippine Presidential Commission to Survey Philippine Education until 1973. From 1975 to 1981 he became NEDA Deputy Director-General (Undersecretary). He was appointed as Deputy Secretary of the Budget from 1979 to 1981 while concurrently Deputy Director-General of NEDA.

30) Laya graduated B.S. in Business Administration at the UP in 1957. He obtained his M.S. industrial management at Georgia Institute of Technology in 1961 and Ph.D. in financial management at Stanford University in 1966.

31) Paterno, Vicente E. 2008. Interview by Yutaka Katayama, Temario Rivera, and Teresa S. Encarnacion Tadem. Tape recording. August 15. 11th Floor, Columbia Tower, Ortigas Ave., Mandaluyong, Philippines.

32) Virata, Cesar E.A. 2007. December 19. RCBC Plaza, Makati City, Philippines.

33) Ongpin obtained his Bachelor’s degree from Ateneo de Manila and MBA from Harvard University. Paterno replaced Baltazar Aquino as Secretary of Public Works and Highway, who did not have a good reputation. Paterno did not like his role as “sanitizer” and in 1981 left the Marcos government and became a member of the opposition (Virata, Cesar E.A. 2008. Interview by Cayetano Paderanga and Teresa S. Encarnacion Tadem. Tape recording. September 30, RCBC Plaza, Makati City, Philippines.)

34) Virata, Cesar E.A. 2008. Interview by Cayetano Paderanga, Temario Rivera, and Teresa S. ­Encarnacion. Tape recording. July 29. RCBC Plaza, Makati City, Philippines.

35) Lichauco (1981, 60).

36) Virata, Cesar E.A. 2008. May 2. RCBC Plaza, Makati City, Philippines.

37) Benitez obtained his Bachelor’s degree from Ateneo de Manila and M.A. and Ph.D. in Stanford University in development planning and development education, 1970.

38) Bello et al. (1982, 28).

39) Virata, Cesar E.A. 2008. September 30, RCBC Plaza, Makati City, Philippines. Virata, Cesar E.A. 2007. November 21, RCBC Plaza, Makati City, Philippines.

40) Bowring (1981, 50).

41) For further details please see Tadem (2005). Because Marcos “lifted” martial law in 1981, people would refer to that year as to the end of martial law. There are those, however, who believe that this was an “artificial” lifting of martial law as Marcos continued to maintain authoritarian powers like Amendment 6 as earlier on discussed in this article. The author is of this view that the article refers to the post-martial law period with the ascendance of Mrs. Corazon Aquino in power.

42) The UPSE generally provided the technocrats for the position of Director General and Secretary of Planning of the NEDA, e.g., Cayetano Paderanga Jr. under the Aquino Administration. Paderanga obtained his Ph.D. in Economics from Stanford University; Cielito F. Habito under the Ramos Administration. He obtained his M.A. and Ph.D. in Economics from Harvard University; Felipe Medalla who served under the Estrada Administration. Medalla obtained his Ph.D. in Economic from Northwestern University; and Dante Canlas who served under the Arroyo Administration. Canlas obtained his Ph.D. in Economics from the UP. UP academics would also be tapped for the position of Budget Secretary, e.g., Benjamin Diokno of the UPSE and the late Emilia Boncodin of the UP College of Public Administration and Governance during the Estrada and Arroyo Administrations respectively.

43) Camacho obtained an MBA from Harvard University.

44) Vincent S. Perez for 17 years worked as credit analysis, investment banker, debt trader and private equity investor. He obtained his Bachelor’s degree in business economics from the UP, Diliman and an MBA from the Wharton Business School of the University of Pennsylvania in 1983.

45) Reid (2001, 788) in Ariate (2006).

46) The technocratic policies for economic development has until now failed to address the socio-economic inequalities which characterize Philippine society. Statistics reveal that “the richest five per cent of the households’ account for nearly a third of the national income and the poorest 25 per cent of the households getting only six per cent of the income.” This is according to the World Bank’s WB Development Report of 2005 (Dumlao 2005). Furthermore, 24.7% of the population are considered officially poor (government statistics) while 70% rate themselves poor based on a Pulse Asia Survey (Newsbreak, May 23, 2005, 14).

47) For further details, please see Lopez Wui et al. (2006).

48) For further details, please see Tadem (2005).

49) Brillantes (1997) in Quinsaat (2006).

50) Bantay Tubig Network (August 9, 2003).

51) For further details, please see Lopez Wui and Tadem (2006).

52) The bulk of the country’s deficit is accounted for by the national government at P67.5 billion and the 14 monitored GOCCs with a registered aggregate deficit of P9.6 billion. There are a total of 76 GOCCs. Among the 14-monitored GOCCs are the Philippine National Oil Co. (PNOC), the Philippine Economic Zone, the Manila Waterworks and Sewerage System, the National Power Corp., the National Housing Authority, the Light Rail Transit Authority, and the Philippine Ports Authority (Lema 2005, S1/1).

53) “FTA is a coalition of various industries, businessmen, labor unions, and NGOs working to review and reverse the country’s trade policies and commitments in order to provide better protection for local industries” (Quinsaat 2006, 40).

54) Raul Molintas (Former Governor, Province of Benguet). 2004. Interview by the Sharon Quinsaat. September 28 (Quinsaat 2006); Johnny Uy (Board Member, Province of Benguet). 2004. Interview by Sharon Quinsaat. Tape recording. September 21 (ibid.).

55) Trigger prices are levels that determine supply situation in the market. Once a trigger price is breached, importation is allowed (Cabreza 2002).

56) The Multi-Fiber Agreement (MFA) grants favorable quotas to Philippine garment exports. This, however, expired in January 2005 upon the country’s ascension to the rules of the WTO (Lopez Wui 2006, 112).

57) Alangdeo, Alfredo (Chair, Benguet Vegetable Distributors’ Cooperative). 2004. Interview by ­Sharon Quinsaat. Tape recording. September 21 (Quinsaat 2006); Kim, John (Board Member, Province of Benguet). 2004. Interview by Sharon Quinsaat. Tape recording. September 20 (ibid.).

58) Fongwan, Nestor (Mayor, Municipality of La Trinidad, Benguet). 2004. Interview by Sharon ­Quinsaat. Tape recording. September 22 (Quinsaat 2006).

59) Benguet province is part of the Cordillera region in Northern Luzon.

60) Please see Borras Jr. (1998). Please also see Tadem (2009; 2010b).

61) For further details, please see Tadem (2010a).

62) Weber (1968, 104) in Budd (2005).

63) “Under the text scam, hoax messages are being sent to the unsuspecting victims using the name of Bangko Sentral ng Pilipinas (Central Bank of the Philippines), the Philippine Charity Sweepstakes, the Philippine Amusement and Gaming Corporation (PAGCOR) and other institutions ­advising the victims about winning a huge amount of prize. The swindlers often instruct their prey that the latter should first deposit a considerable sum of money to the former’s bank account, ­allegedly for tax payments and other fees as a requirement to getting the prize” (Molmisa 2006, 190).

64) Today (April 16, 2004).

65) Esfahani (1994) in Molmisa (2006).

66) There was an order from a very powerful figure in Malacanang to wiretap the cellphone of Garcillano who was given millions to run the special operations for the May 10, 2004 elections to ensure President Arroyo’s victory (Zamora 2005, A6).

67) The economic and social technocrats included Secretaries Cesar Purisima (finance), Florencio Abad (education), Corazon “Dinky” Soliman (social welfare), and Emilia Boncodin (budget), and presidential adviser on the peace process Teresita “Ging” Delez. They urged Ms Arroyo to address the “Hello Garci” controversy (Lirio 2005, A4).

68) Genuino is reported to have delivered jueteng money to church leaders including Cardinal Ricardo Vidal of Cebu. Vidal justified this by saying that the money he received from PAGCOR went to development projects. He also said he stopped accepting money from PAGCOR when the Catholic Bishops Conference of the Philippines (CBCP) resolved that no one in the Church should receive donations which come from gambling money. Genuino was also reported to have made 15 calls to Garcillano from May 25 to June 14, 2004 in his effort to put “Bigkis Pinoy Movement,” a party-list hopeful founded by him (Genuino) and Mike Arroyo’s close allies, in the winning circle (The Newsbreak Team 2005, 25).

69) Purisima used to be the Chair of Sycip, Golez and Velayo (SGV), the country’s top accounting firm. The “Hyatt 10” consisted of the economic and social technocrats who called for President Arroyo to confess to the “Hello Garci” tapes as well as Trade Secretary Juan Santos, Agrarian Reform Secretary Juan Villa, National Anti-Poverty Commission Chair Imelda Nicolas (sister of Carnation Inc. President Loida Nicolas Lewis), Internal Revenue Commissioner Guillermo Parayno Jr., and Customs Commissioner Alberto Lina.

70) Contreras et al. (2005, A1, A2). In a joint briefing on that day at the Peninsula Manila, the Makati Business Club (MBC) and the Financial Executives Institute of the Philippines (FINEX), the groups said that “the resignation of the Cabinet officials illustrates the loss of confidence in the President and her ability to advance economic and social development programs” (ibid., A1). The others who called for her resignation was former President Aquino and then Senate President Franklin Drilon.

71) (Doronila 2009, A1).

72) Doronila (2009, A1).

73) These include Executive Secretary Eduardo Ermita, Environment Secretary Mike Defensor, Chief of the Presidential Management Staff (PMS) Rigoberto Tiglao, and political adviser Gabriel Claudio. Transportation Secretary Leandro Mendoza and Public Works Secretary Hermogenes Ebdane, both of whom came from the military, were also recruited to the President’s inner circle, presumable to handle Garcillano and the “Hello Garci” witnesses (Lirio 2005, A4).

74) The E-VAT law is estimated to generate as much as P31 billion in incremental revenue in the second half of the year, and P105 billion annually starting in 2006. The law will also give President Arroyo a standby authority to raise the VAT rate from 10% to 12% next year (Remo 2005b, A7).

75) Under the proposed 2006 budget, “expenditures are placed at P1.09 trillion, while the expected revenue collection is at P968.6 billion, thus resulting in a deficit of P124.9 billion” (Remo 2005b, A7).

76) The Supreme Court thus issued a restraining order (RTO) which the Department of Finance wanted to contest (Remo 2005d, A1).

77) Remo (2005d, A1). Purisima because of such a statement was charged with contempt by the Supreme Court. This was because the Supreme Court read his statement to mean that President Arroyo allegedly influenced the Supreme Court into suspending the implementation of the E-VAT law (Nocum 2005, A6). He was ordered to pay a fine of P30,000.

78) Both Roxas and Salceda are “former fund managers who remain in close contact with the financial community” (Cabacungan 2005a, A7). Salceda was a former student of President Arroyo in economics and is the principal conduit of policy advice of the UP School of Economics to President Arroyo in the formulation of the fiscal reform program (Salceda 2005).

79) Cabacungan (2005a, A1, A7). The call for the postponement of the E-VAT law also “comes at a time when a survey by the Social Weather Stations (SWS) from August 26 to September 5, 2005 showed that 15.5 per cent of the households nationwide consider themselves as having ‘experienced hunger’ or nothing to eat at least once in the past three months” (Philippine Daily Inquirer 2005a, A1).

80) Teves’ appointment as Finance Secretary to succeed Purisima was hailed by the business community. For Albay Representative Joey Salceda, American-educated Teves as a banker is respected in the business community. “As a practicing economist, he has the confidence of financial markets and credit rating agencies. As a three-term congressman, he has the skills to navigate difficult fiscal reforms through the legislative mill” (Cabacungan and Remo 2005, A1).

81) Remo (2005c). The WB has earlier on “discouraged the Philippines from talking about debt relief, saying it was counter-productive. Unlike Africa, WB country director Joachim von Amsberg said that the Philippines has access to debt markets. The strategy now is how to get the best access” (ibid., B5).

82) Remo (2005c).

83) Cabacungan (2006).

84) Because of the failure of technocracy to address poverty in the country, there continues to be the exodus of Overseas Filipino Workers (OFWs) “which began in the 1970s during the martial law period and which persists today.” The estimated 8.2 to 11 million OFWs are considered to be the country’s number one “export.” As of 2009, their remittance amounted to USD1.5 billion per month or a total of P17,348,052 billion for 2009 (POEA 2010).

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