Lee Kuan Yew simplified his formula for success with the Singapore economy to two pieces of advice given him by his economic advisor Albert Winsemius in 1961: “First, to eliminate the communists who made any economic progress impossible; second, not to remove the statue of Stamford Raffles” (Lee 2000, 66–7). This was a crude version of the sober dictum of Sutan Sjahrir (1968, 31) at the height of the revolutionary enthusiasm of 1945: “So long as the world we live in is dominated by capital we are forced to make sure that we do not earn the enmity of capitalism.” Most revolutionary leaders of the 1940s had believed the opposite, that Southeast Asian poverty resulted from the sinister control of foreign capital, and that the newly liberated states must nationalize the strategic levers, repudiate foreign debts, and plan for domestically led industrialization. In practice neither formula could be put to the test by early Southeast Asian independent governments torn by internal conflict, external intervention, rent seeking, and capital flight. Although Malaya and the Philippines rebounded fastest from the war by returning to pre-war structures, these economies looked “neo-colonial” to their revolutionary neighbors. Through the 1960s, the apparent discipline of many communist parties, and the stage-managed “success” of communist China in mobilizing a population to industrialize and end poverty, gave socialist central planning and self-sufficiency wide appeal in Southeast Asia and beyond. Sukarno and Sihanouk appeared convinced.
A few months of 1965, however, put some important levers in the hands of the Winsemius view. Singapore’s emprisoning of the charismatic Leftists followed by separation from Malaysia, and Indonesia’s savage turning against its communists, gave leadership in these two contrasted countries to ruthless anti-communists with enough hard-headed pragmatism to link their survival to the need for economic growth. Having benefited from draconian measures against the Left, both leaders had exceptional powers to determine the allocation of internal resources and to keep wages lean and competitive.
Lee Kuan Yew, despite having won elections on an anti-colonial platform, became convinced that the salvation of Singapore in a hostile environment was “to leap-frog the region, as the Israelis had done,” by attracting investment from the First World and disrupting as little as possible of the stability implied by colonial symbols like the Raffles statue (Lee 2000, 75). Singapore already had advantages in the most sophisticated infrastructure, highest incomes and most entrepreneurial traditions of the region, its port facilities essential even to its resentful neighbors. This role recovered quickly as Suharto called off Indonesian “Confrontation” of Malaysia-Singapore (Chapter 20), and it continued to contribute much to Singapore’s growth. The new element was Singapore’s successful wooing of multinational corporations, first American, later Japanese, to make Singapore their base for labor-intensive manufacture and Asian distribution. Unlike other development stories, Singapore wasted little time with import-substitution, but moved aggressively into manufacture for export, particularly in the rapidly growing fields of electronics and office equipment. By the 1980s it was the world’s largest exporter of Winchester disk drives. By the early 1970s manufacturing had become the leading sector of the economy. Overall the Singapore economy grew by a world-leading 10.3% between 1966 and 1980, and a still healthy 7.2% in the 1980s. On a per capita basis incomes were comparable with southern Europe by 1990, and among the highest in the world in the following century.
Of course this first Southeast Asian success story was part of a much larger reordering of global commerce in the 1960s and 1970s, which finally brought real growth to the poorer countries of Asia (though notably not tropical Africa) and reversed their centuries-long decline relative to Europe and America. Wealthy countries had enjoyed a post-war trade boom from 1950 to the oil shock of 1973, encouraged by a progressive lowering of trade barriers through GATT. Although the prices of its raw materials (except oil) and tropical crops continued a long-term relative decline, Southeast Asia became a major actor in the emergence of a new global economy of production. Manufacturers began moving their production centers to wherever they could find favorable political and legal conditions and lower prices for labor, land, and resources. The other Southeast Asian economies were able to profit from the massive expansion in global exchange, later than Japan and the first four “Asian tigers” (South Korea, Taiwan, Hong Kong, and Singapore), but ahead of China and India.
Malaysia was, after Singapore, the best-placed Southeast Asian economy to exploit these conditions, with the next best infrastructure and rule of law, per capita incomes, and entrepreneurial export orientation. From 1970 the Malaysian government vigorously encouraged investment in export-oriented manufacture, leading to an annual growth of 25% in manufactured exports throughout the 1970s. Industry had been only 6% of the Malaysian economy in 1960, but was 20% by 1980. Real GDP grew at 8% a year through the 1970s, and continued at more than 6% up to the financial crisis of 1998, lifting Malaysia comfortably into the middle-income category with little remaining poverty. Electrical and electronic goods led this expansion, and factories sprouted around all the cities of the western communications corridor of Peninsular Malaysia. The bulk of the 1.3 million factory workers by 1990 were young Malay women, the first generation since the peasantization phase of the nineteenth century to return to the commercial export economy.
Thailand, Indonesia, and the Philippines, with their vast and growing peasant populations, represented a completely different challenge. Thailand was the strongest performer among them, averaging about 7% per annum growth as it transformed per capita GDP from US$100 in 1961 to US$2,750 in 1995. It gained something from US aid and was among the first destinations of Japanese and US foreign investment, notably in textile production and agri-business. Perhaps Thailand’s greatest economic advantage, however, was the absence of that barrier between entrepreneurial Chinese and subsistence indigenous economies that bedeviled its neighbors. Chinese male immigrants had routinely married Thais, their descendants becoming bilingual Sino-Thai (lukjin) in one or two generations and Thais thereafter, adopting Thai names and Buddhist practices. Like the Chinese mestizos of the Philippines a century earlier (Chapter 10), the lukjin became an entrepreneurial middle class that moved purposefully into manufacturing, agri-business, and banking in the 1960s. The “big five” lukjin families that had dominated the export of rice since the 1920s were replaced a generation later by diversified conglomerates, such as that of the Sophanpanich (Tan) family controlling the Bangkok Bank and many related enterprises, or the telecommunications empire of Thaksin Shinawatra, later Prime Minister (2001–6).
The Philippines had recovered strongly from the war to be again one of Asia’s wealthiest countries in the 1950s, and had a marked lead in education. Its progress in the following period looked modest by comparison with its stellar neighbors, however, particularly in the 1980s. In per capita income it was passed by Thailand in the 1970s and challenged even by Indonesia in the 1990s. The Philippines was the least able to curb population growth (see below), and its political mix of robust democracy, vested interests, and nationalist resentments also prevented its exploiting the global division of labor as effectively as some neighbors.
Indonesia’s was the most dramatic turnaround, from a 1965 situation in which inflation was over 2,000% a year, foreign debt was unmanageable, and mass starvation threatened. Suharto appeared the opposite of Sukarno in his rural roots, modest education, and quiet (but ruthless) manner. He badly needed the legitimacy of an improved economy and was willing to listen to sensible advice about it. This came from a remarkable group of economists, most of them students first of Professor Sumitro Djojohadikusumo (rehabilitated in 1967 after being exiled for his role in the PRRI rebellion) at the University of Indonesia, and then of the University of California at Berkeley on a Ford Foundation program. These “technocrats,” sometimes called the “Berkeley mafia,” convinced the military whom they already knew from teaching courses at the Staff College to commit to an ambitious program in October 1966. The exchange rate was made realistic, subsidies cut, inflation and debt brought under control (with help from Western donors and the IMF), and resources devoted to expanding agriculture and developing import-substituting investment. Foreign investment in oil and gas was relatively easy to achieve, and provided about a third of all government revenue up to the APEC oil price rises of 1973, and almost half for the remainder of the 1970s. By directing much of this to improving agricultural and transport infrastructure, Indonesia enjoyed unprecedented growth in excess of 7% a year for the whole period 1966–81. Having been one of the world’s poorest countries in 1965, Indonesia ended this phase of rapid growth at the threshold of the World Bank’s “lower middle income” category, with acute poverty reduced from near 60% to 35% of an increasing population.
The leaders of the 1950s had focused most attention on taking charge of the cities, and using what resources were available to build and staff the institutions and symbols of statehood there. Agricultural infrastructure tended to go backward, and neglect of the sector forced Indonesia, Malaysia, the Philippines, and even Viet Nam to devote scarce resources to importing rice on an increasing scale. Indonesia’s rice production declined by 13.6% between 1960 and 1964, even while its population was growing at 3% a year. The replacement of the western-educated intellectuals of the first generation by such homespun leaders as Generals Sarit and Suharto, for all their repressiveness, may have increased the willingness to listen to schemes to help the rural areas they came from. The key change, however, was the technological improvement in varieties of rice and other crops, often labeled the “green revolution” in the 1960s to 1980s. The Ford and Rockefeller Foundations collaborated with the Philippine government to establish in 1961 the International Rice Research Institute at the University of the Philippines agricultural campus at Los Baños. New, highly productive varieties became available from 1966, able to deliver three or four times the product per hectare, with more intensive methods of irrigation and fertilization.
Indonesia, the Philippines, Thailand, and Malaysia were among the first countries in the world to benefit, thanks to their openness to US and World Bank programs and to governments with a desperate need for results. Until the 1960s they had appeared to be part of a more general Malthusian crisis in Asia, whereby population was relentlessly increasing at a faster rate than food production while industrial growth occurred only in the rich world. This pattern was reversed in the next two decades. In Southeast Asia as a whole, cereal production increased from 33.8 million to 73.6 million metric tonnes between 1970 and 1995. Indonesia achieved its goal of self-sufficiency in rice production in 1984, while the Philippines closed the gap for its more rapidly rising population.
This transition accompanied, and to some extent required, a profound transformation of the peasant production pattern established in the high colonial period. The colonial-era myth of a self-sufficient agricultural village as the bedrock of Southeast Asian identities was overthrown in what Elson (1997) called “the end of the peasantry.” Agriculture was revolutionized by a commercial and mechanized pattern of ploughing, harvesting, and rice-milling, spurred by government credit and marketing schemes. Where the rice plant had been considered to be animated by a supernatural life-spirit, only to be harvested stalk by stalk by local women wielding a small finger-knife (ani-ani), the fast-growing, short-stemmed varieties were seen as a commercial resource that could be harvested with sickles by contracted male outsiders. Roads, electrical grids, and telecommunications were extended into rural areas, while the massive import of affordable Japanese motorcycles revolutionized communications even along footpaths impassable by horse- or ox-carts. Motorcycle use took off in Indonesia and Thailand in the 1980s. In the 2000s even cheaper Chinese motorcycles flooded into Viet Nam, Laos, and Burma. By 2010 Indonesia, Thailand, and Viet Nam were the world’s three largest motorcycle markets after China and India, and there was one motorcycle for every four to six people. Education and employment in the cities drew young people away from the farm, but in former rice-bowl areas of central Thailand, Java, and the central Luzon plain diversified employment also came to villages. Agriculture occupied less than half the labor force of all non-socialist Southeast Asia by the 1990s, and even rural villages frequently drew most of their income from off-farm employment.
The surprise reversal of the gloomy 1960s assessments of Southeast Asia’s economy had its counterpart in population forecasts. Post-war independence initially seemed only to increase fertility, threatening the ability even to feed the extra mouths. Southeast Asia as a whole had in 1965–70 a total fertility rate (TFR) of 6.06 children born to every woman, when the population growth rates were about 2.5% a year. The wealthiest countries, Singapore (3.65) and Malaysia, predictably had the lowest TFR, but war-torn Viet Nam was paradoxically the highest, at 7.38. Birth rates began to go down in one country after another, beginning with the wealthy cities, as infant mortality dropped and expectations of survival and education changed. Singapore’s TFR dropped below the 2.1 replacement level in the 1970s, followed by Thailand, Viet Nam, and Burma in succession. These four countries by 2005–10 had a Northeast Asian pattern of extremely low TFR rates of 1.25, 1.63, 1.89, and 2.08, respectively, while Southeast Asia as a whole was at a moderate 2.26. Increasingly, universal education for women and later ages of marriage were part of the explanation for this classic demographic transition, with lowered birth rates following lowered death rates after an interval in which population grew rapidly. In cities such as Bangkok and Singapore, where 15% and 14%, respectively, of women (2005) reached menopause without marrying or giving birth, there is the added Northeast Asian factor of female education and careers outpacing any updating of the traditional deference expected of wives and daughters-in-law.
As noted in Chapter 13 (Table 13.1) populations continued to grow rapidly as the post-war bulge moved through the generations. Fertility was still very high in Timor Leste (TFR 6.53) after its 2002 independence, while the birth rate among Filipinos and Malaysian Muslims dropped less rapidly than elsewhere for complex reasons of which religion was only part. Less populated Laos and recently traumatized Cambodia also had above average fertility. These differentials in birth rates were to some extent offset by high migration from poorer countries to richer ones, to fill roles as manual and construction workers, domestic help, and agricultural pioneers. Singapore had the highest population growth despite the lowest birth rate by encouraging educated migrants from Malaysia (especially disaffected ethnic Chinese and Indians), India, and China, and strictly controlled contract workers from Thailand, Bangladesh, the Philippines, and Indonesia. Thailand welcomed economic and political refugees from Burma, Laos, and Cambodia, more than a million in total by the 1990s. About two million Indonesians were in West Malaysia and Sabah, both as legal contract workers and illegals arriving by boat and melding into the Malay population. As poorly educated but traditionally minded men failed to find marriage partners in Singapore, Taiwan, South Korea, and Japan, an international marriage market developed in the 1990s bringing in wives from Viet Nam and the Philippines.
Communism won the Indochina wars in 1975, but in economic terms decisively lost the peace. Up until that point it was not difficult to argue that the socialist planned economies were delivering a better life to their non-elite peasantry than their capitalist neighbors, that only decades of warfare were holding them back from growth, and that state-led industrialization might make Viet Nam the sort of military power in Asia that the Soviet Union had become in Europe in the 1930s. Statistical comparisons were impossible given the very different accounting methods of the socialist economies from what became in the 1990s the global norm of national income accounting. The strategy and determination that made military success possible nevertheless suggested that communist governments would be able to bury their neighbors industrially. Yet within a decade all four of the socialist experiments (including idiosyncratic Burma) were seen to have failed, their chronic poverty an inescapable contrast to their booming capitalist neighbors. Reforms were then introduced to bring these economies gradually back to the market-driven world.
The first surprise was the intensity of conflicts within the socialist bloc. Pol Pot’s hyper-communism in Cambodia was driven by a chauvinism that provoked a Vietnamese invasion in 1978 to replace that murderous regime by a pro-Vietnamese communist one. Since China considered Cambodia an ally in its struggle against the Soviet Union, it in turn invaded the border areas of Viet Nam early in 1979. Although the Sino-Viet Nam war changed little on the ground, it completely ended Chinese aid, which had been critical to North Viet Nam’s survival and military effectiveness, and even its food supply, before the 1975 reunification. This war intensified what had already become a stalling of Viet Nam’s economy in the years 1977–80, when per capita incomes declined.
Secondly, Viet Nam was poorly suited to implement a Soviet-type emphasis on heavy industry. What little industry existed in the north in 1954 was reduced by US bombing and the evacuation of targets in the cities, so that by 1975 North Viet Nam was a country of poor peasants. Capital, entrepreneurship, and urban labor had long been concentrated in the Saigon area, but the years after its conquest by the North were marked by harsh repression and desperate flight rather than development. The few available resources were wasted in building industrial capacity for which there was little market. Agricultural policy in the south was another disaster, less brutal than the northern collectivization of the 1950s, but more ruinous of production. Whereas the Mekong delta rice bowl was expected to be the salvation of the north, collectivization so reduced output that Viet Nam had to import substantial food in 1977–80 from the Soviet Union. Destitution, and the stubborn resistance of farmers in southern Viet Nam and even more in Laos, meant that collectivization had to be progressively abandoned from 1979, with a key step in 1981 when individual farmers were allotted plots of land on contract. This relaxation began the recovery of agricultural production and staved off starvation, though it was not until the 1990s, and the benefit of green revolution technologies, that Viet Nam returned to its pre-war role as a major rice exporter.
This modest success strengthened the arguments for more radical reform, as did the obvious need for “catch-up” with Viet Nam’s more successful neighbors, now including China under the Deng Xiaoping reforms. In 1986 the sixth congress of the Communist Party endorsed the so-called “new change” (doi moi) program, legitimating a succession of market-friendly liberalizations not only in Viet Nam but also in its then client states of Laos and Cambodia. Crucially, a foreign investment law was adopted in 1987 that enabled Viet Nam to use its exceptionally low wages to attract export-oriented industry. Textile and footwear factories began to sprout around Saigon and Hanoi. The result was that Viet Nam’s economy began to grow rapidly, and that of Laos more hesitantly, from a very low base at least twenty years behind Thailand, Indonesia, and the Philippines (Table 16.1).
Had all the suffering of the war for socialism been a tragic mistake? The regimes firmly in place have certainly not said so. Officially the doctrine was that socialism must be postponed until the capitalist phase has been more successfully passed. As this future grew ever more distant and implausible, the more influential private belief became rather similar to that of Singapore’s ruling party – that a unified, meritocratic, authoritarian ruling party can better deliver welfare for the majority than the messy democracies, ideological battlegrounds, and rampant consumerism of neighbors. There is some support for this in social indicators such as education, health, and life expectancy, where Viet Nam performed better than its lowly economic ranking (see below). The same, surprisingly, seems true for Cambodia, rising from the ashes of the terrible 1970s. A client of Viet Nam from 1978 until United Nations intervention in 1991, Cambodia became thereafter a nominal democracy, forcefully ruled by ex-communist strongman Hun Sen (b.1952). Its relative success in growth and welfare in this period, notably by contrast with Burma, was due more to its unusual openness to international investment and aid projects than to coherent planning.
It is even harder to find positives in “the Burmese way to socialism,” save that it managed the longest of Southeast Asia’s China borders without becoming a Cold War battleground. This was the ideological justification for Ne Win’s military dictatorship (1962–88), nominally incorporating elements of Buddhism’s “middle way” in total military domination of the economy. Existing firms were taken over by rent-seeking generals, and further foreign investment and even foreign travel permission were restricted to a paranoid degree. The economy was in the worst state of any by 1988, when Ne Win was overthrown by his generals and an initially more liberal junta with the acronym SLORC took over. By holding an election in 1990, spectacularly losing it to the charismatic Suu Kyi (b.1945), daughter of independence hero Aung San, and then ignoring the results and harshly repressing the victors, SLORC became even more isolated by embargoes on trade and aid. China, which successive regimes had been careful not to confront openly, became the junta’s favored supporter and foreign investor, further fueling resentment in the country. Increasingly desperate after 2000 to find a formula to remain in power but grow the economy, the military began to allow foreign investment, notably to exploit its abundant oil and forestry resources. Finally, after 2011 it liberalized politically under General Thein Sein, allowing Suu Kyi to return to electoral politics and thereby escaping the international embargoes that had kept it down. After a lost half-century of impoverishment, Burma’s economy began to improve in the late 1990s but still had a huge economic gap to bridge with its neighbors.
Overall, it is impossible to avoid the conclusion that the period since the 1970s has been the best of modern times for Southeast Asia’s inhabitants, though only since the 1980s in Indochina and 1990s in Burma. The wealthiest countries and individuals now have a first-world lifestyle, and the population as a whole lives better than South Asians, though they have been surpassed by East Asians (Table 18.1). They are living longer, healthier lives than ever before, have greater food security, better education, and more access to reliable information. They know this, and share an optimism about progress that is harder to find in the rich countries that began their economic growth a couple of centuries ago.
Table 18.1 GDP per capita by country, 1970–2010, decennial averages.
| 1970–79 | 1980–89 | 1990–99 | 2000–09 | |
| Brunei | 7,484 | 18,111 | 14,854 | 24,240 |
| Singapore | 2,280 | 6,998 | 19,883 | 29,114 |
| Malaysia | 839 | 2,026 | 3,711 | 5,506 |
| Thailand | 353 | 864 | 2,175 | 2,789 |
| Philippines | 346 | 635 | 920 | 1,256 |
| Indonesia | 234 | 590 | 918 | 1,425 |
| Burma | 124 | 154 | 155 | 256 |
| Viet Nam | 90 | 131 | 247 | 654 |
| Cambodia | 85 | 114 | 240 | 473 |
| Laos | 63 | 151 | 283 | 514 |
There are, however, many negative features of the globalization and consumerism that have progressively taken over the region. Growing wealth in general was accompanied by growing inequality. The richest countries, Singapore, Malaysia, and Thailand, had greater inequality, measured by Gini coefficients of 48.1, 46.2, and 40.0, respectively, in the period 2008–10.1 Even while more and more were brought out of statistical poverty and malnutrition, their sense of relative deprivation may have grown through exposure to consumer products and resentment of the rich. Among countries with adequate data, inequality was more marked in some times and places than one would expect from relative income levels. Suharto’s Indonesia was surprisingly the most effective at keeping inequality low at a Gini of around 34 while incomes rose rapidly. The lowest 40% of the population even increased their share of national income from 19.6% to 20.9% in the decade 1976–87 (Rigg 2003, 106). The introduction of a robust democracy in 1998 in the context of the Asian financial crisis set back all incomes briefly. The new de-centered growth of the twenty-first century appears to have facilitated rising inequality. Greater regional autonomy under democratization only worsened the relative poverty of eastern Indonesia, remote from industrial centers and markets. Nevertheless, Indonesian development remained fairer than that of its market-driven neighbors.
Military-dominated Thailand was the worst example of unequal development as the new wealth concentrated around Bangkok and some commercial and tourist centers in the south. Its Gini coefficient rose from 43 to 54 between 1975 and 1992, while the share of the lowest 40% in national income shrank steadily from 16.5% in 1962 to 11% in 1992. In Thailand’s case, the more democratic politics in 1997–2006 coincided with, and perhaps caused in the case of the Thaksin governments of 2001–6, a much-needed turnaround in inequality, as development and welfare finally spread to the chronically poor northeast and north of the country. The weak Philippine state, much derided by its own feisty activists as ineffective and patrimonial, produced less growth but less inequality than this Thailand extreme, its lowest 40% always earning 12–15% of the national income. Its relatively modest growth between 1961 and 2009 coincided with a slight decline in its initially high Gini coefficient, from 49 to 45.
Did Viet Nam’s strong communist state manage its catch-up development more equitably? Comparable figures only became available in the 1990s, and suggest, on the contrary, that the initial phase of marketization benefited privileged sectors and produced unusually high inequality. The earliest Gini coefficient of 45 for 1993 suggests inequality almost as bad as fifteen times richer Malaysia. Compared with post-communist Russia and China this nevertheless looks moderate, and the next two decades saw it come down to a more normal level of inequality for its income, approaching that of Indonesia. The incidence of serious poverty (income below US$1.25 per day at PPP) in the population reduced even more impressively to only fourteen million people in 2012, a proportion no higher than that of richer Indonesia and the Philippines.
If there is an argument for communist effectiveness, however, it lies rather in the ability of the state to lift some measures of social welfare not monetized in the same way. A strong and confident government insisted that everyone go to school, take their vaccinations, and accept the state’s modernization of childbirth practices, hygiene, and female participation in the workforce. Female participation in the once-communist Indochina states, but also Burma, was well above world norms, at 80% or above in the period 1990–2010. Viet Nam (but not Laos) did better than Indonesia and the Philippines at lowering infant mortality, reducing child malnutrition, and distributing contraceptives. In consequence of such measures, life expectancy of Vietnamese was already in 1980 the highest in Southeast Asia except for super-rich Singapore and Brunei, and it remained that way during doi moi (Table 18.2).
Table 18.2 Female life expectancy by country, 1980–2010. Note that male life expectancy is on average five years less.
| 1980 | 1990 | 2000 | 2010 | |
| Singapore | 75 | 78 | 80 | 84 |
| Brunei | 73 | 76 | 78 | 80 |
| Viet Nam | 72 | 75 | 78 | 80 |
| Malaysia | 70 | 73 | 75 | 77 |
| Thailand | 67 | 74 | 75 | 77 |
| Philippines | 65 | 68 | 70 | 72 |
| Indonesia | 60 | 65 | 69 | 72 |
| Burma | 57 | 61 | 64 | 67 |
| Laos | 50 | 55 | 63 | 68 |
| Cambodia | 33 | 57 | 65 | 73 |
This type of international data is collected on a country basis, and reveals interesting comparisons on the relative effectiveness of governments at stimulating growth and distributing its benefits. But more striking than the contrast between countries is the way Southeast Asia as a whole has been transformed since the 1960s. The new commercialization plugged everyone into patterns of consumption, leisure, and communication that began earlier in Singapore, Malaysia, and Thailand, and only reached Burma in the twenty-first century. There is a remarkable commonality in the way the changes have widened opportunities and separated generations. The move to the cities was only part of the story, though it transformed the region from one of the world’s least urbanized in the 1960s to nearly 50% urban in 2010, with Manila, Bangkok, Jakarta, and Saigon among the world’s mega-cities of beyond ten million. Every family was engaged in the city through its studying children, its migrant workers, and the programs beamed on television, radio, and social media. Prosperous rural villages were engaged in production for the market through extensive networks of outsourcing; less prosperous ones were denuded of young people as they moved to opportunities in the city. Air-conditioned shopping malls became the new leisure centers.
This commercialization has also linked Southeast Asians to the world as never before. As of old they travel to Mecca, India, Rome, and Palestine on pilgrimages, and jumbo jets increased their numbers tenfold to almost a million pilgrims each year. But this flow was dwarfed by the millions traveling to the regional shopping and entertainments hubs – Singapore, Hong Kong, Bangkok, and Kuala Lumpur – as well as to study or holiday in Australia, Europe, China, and North America. In the twenty-first century, annual outgoing tourists from Singapore and Malaysia were more numerous than their populations, while around six million each departed from Indonesia and Thailand.
Southeast Asia itself entered the international tourist market in the 1960s, stimulated by the spending of American servicemen on rest and recreation leave in Bangkok. Singapore and Bangkok became the two key transit airports of the region as mass travel took off. Indonesia’s second international gateway was opened in Bali in 1968 and quickly became the leading one for tourists. One center after another developed its formula of cultural exoticism, night life, and tropical beach resorts – Pattaya and Phuket in Thailand, Kuta and Sanur in Bali, Pangkor and Langkawi in Malaysia. Thailand never relinquished its lead in attracting long-distance tourists, with a total of 11.6 million visitors in 2011 and 26.7 million in 2013, 70% of them from outside Southeast Asia. Singapore was next with its pattern of short stopovers between Europe and Australia as well as providing a service and shopping center for the region. Malaysia and Indonesia (primarily Bali) also earned significant revenue from tourism, and in the 1990s peace finally enabled Viet Nam and Cambodia (with its spectacular Angkor ruins) to join the chase for tourist dollars. Southeast Asia as a whole welcomed 43 million outsiders in 2011, while 37 million more visited one another’s countries within the region. The pioneering 1970s and 1980s were dominated by Europeans, Japanese, and Australians, but by 2012 China was much the largest single source, supplying 10% of external tourists.
The prominence of sexual tourism and prostitution in Southeast Asia is the most controversial feature of the commercial turnaround and its tourist face. Colonial governments had regulated prostitution in the interests of their soldiers, and allowed Japanese and later Chinese prostitutes to immigrate to serve the bigger urban centers. Independent Southeast Asian governments, by contrast, all regarded prostitution as illegal, and elite public disapproval was high, notably in Muslim countries. Yet tourists were attracted to Bangkok, Saigon, Manila, and later Phnom Penh for their sexual services, which were publicly on display in various forms.
The economic autonomy but lower status of women, discussed in Chapter 15, help explain the distinctiveness of the Southeast Asian commercial sex industry. Prostitution was already noted in the Siamese capital in the seventeenth century, but the preferred means of dealing with abundant male traders in the ports had been through temporary marriage, profitable and without stigma for both sides (Chapters 1 and 6). This older pattern of serial monogamy, with relatively easy divorce, was adapted in the commercialized late twentieth century to a kind of “contract marriage” (kawin kontrak, in Indonesian), to cater for miners or estate laborers on contracts far from home. A form of “Islamic prostitution” even developed on the edge of Arab tourism in Java, using a legal Saudi concept of “traveler’s marriage” (misyar) to distort an older Southeast Asian habit.
Theoretically monogamous European men, however, needed their guiltier sex to be quick and discreet, and the twentieth-century adoption of urban modernity Asianized the institution of commercial prostitution. Its rewards rose with every influx of well-paid transient men – soldiers and sailors, but also local truck-drivers. The relative affluence of American soldiers during their long engagement with Indochina and the Philippines gave a boost to the sex trade around US bases and in the recreation centers of Bangkok and Manila. When the bases closed, in Indochina in 1975 and Subic Bay with the Mount Pinatubo eruption of 1992, sex tourism provided a new market with high profit margins. Recent studies have shown that the majority of sex workers in both Thailand and the Philippines enter the trade because it offers the highest returns for limited education. They typically support families, either parental or their own, to break out of desperate poverty. Villages in north-eastern Thailand known for sending many girls to the Bangkok sex trade are well provided with new modern houses and ornate Buddhist temples.
Thailand’s pragmatic approach to female and male prostitution made it a leader both in experiencing an epidemic of HIV/AIDS and in combating it through safer practice. Over 580,000 Thais died of the epidemic between 1984, when it was first reported, and 2008. The best-known campaigner for safe sex, Mechai Viravaidya, known as “Mr Condom” for his flamboyant style of offering contraceptives to all, was appointed Minister for Tourism and AIDS Prevention (1991–2), helping Thailand turn the corner toward reducing the incidence of the disease. In Cambodia a high 2% of the population, mostly women connected with the sex trade, were reported to be carrying HIV/AIDS in 1998, sparking a campaign that lowered incidence after 2003. Elsewhere statistics were less reliable, and reported deaths much lower. Indonesia began addressing its problem in 1994, but incidence appeared to increase after 2000, partly through unprotected sex in Papua. In the cities of Indonesia, Malaysia, Myanmar, and Viet Nam, HIV/AIDS came after 2000 to be seen as a problem primarily associated with intravenous drug use.
The commercial turnaround profoundly and rapidly changed the mind-set of Southeast Asians, who became part of a consumption-driven world. In a region previously noted for the world’s greatest biodiversity one must ask how far such commercial expansion was sustainable or prudent when accompanied by rapid population increase. The literature is replete with gloomy predictions of imminent collapse of fish stocks, water supplies, agriculture, and biodiversity. The reduction of the forests that still covered about 75% of Southeast Asia in 1870 was the most visible loss. From then until the 1960s the retreat of the forests was relentless but gradual, resulting from the expansion of the agricultural frontier at the hands of an expanding population and the planting of tropical export crops such as coffee, pepper, tobacco, tea, and, after 1900, rubber and oil palm.
Timber exports had been limited to the prized teak of Burma, Siam, and Java until the 1920s, when other hardwoods began to be exported, especially from the Philippines. Colonial governments boldly declared that forested land belonged to the state, ignoring both the complex arrangements they knew from Europe and the even more complex hunting, gathering, and shifting cultivation practices in Southeast Asia. They established forestry departments, first in Burma (1856) and Java (1869, after earlier short-lived experiments), and began introducing German “scientific” foresters to plan the classification and replanting of lucrative teak forests in the manner of an orderly plantation. They established an important precedent in creating some protected, as well as productive, forests. These were initially for scientific purposes but increasingly also to ensure the survival of endangered fauna – rhinoceros, orang-utan, elephants, and tigers. Their most important legacy was, however, the negative one, of claiming the right of the state to allocate logging licenses over vast territories to timber companies.
The serious assault on Southeast Asia’s old-growth forests of dipterocarps (tall straight hardwoods) took off in the 1960s. The process had begun earlier in the Philippines, with exports initially to the United States, but the vast expanding needs of Japan’s post-war boom quickly took over as the engine of destruction. Having encouraged its farmers to plant timber to meet the needs for reconstruction, Japan soon found it cheaper to use Southeast Asian hardwoods and leave its own forests intact. The loggers moved from the Philippines to new frontiers in Thailand, Borneo, Sumatra, and eventually eastern Indonesia and New Guinea. Indonesia alone increased its annual log production more than tenfold between 1960 and 1995, from 4 million to over 40 million cubic meters. Undisturbed forest cover dropped to 20% by 2000 in the Philippines and Thailand, having been 45% and 55%, respectively, in 1960. Log production declined in these countries and in Indonesia in the 1980s, chiefly because the most accessible forests had gone, but also because of government restrictions designed either to preserve what remained, or in Indonesia’s case to boost employment by permitting export only of processed timber – plywood, pulp, and paper. The loggers responded by moving to new frontiers in Burma, Laos, Cambodia, and New Guinea, often ignoring government restrictions and bribing local power-holders.
The revenues helped fuel the early stages of economic growth, less through the taxes going to government budgets than the rents that enabled power-holders and their business cronies to build corporate empires in transportation, processing, and the oil-palm, rubber, coffee, and other plantations that replaced many of the forests. By 2010 Indonesia and Malaysia, which together produced 85% of the world’s palm oil, had 7.7 million and 5.2 million hectares, respectively, planted in oil palm, increasing at about 7% a year. The advancing frontier of smallholder agriculture also accounted for much of the forest loss, while the brackish waters of coastal mangrove forests were lost to commercial prawn farms. Little more than a tenth of the area felled appears to have been reforested with a view to sustainable logging.
Arguably this transformation of the Southeast Asian landscape, though now in the global spotlight because of its damaging effect on carbon emissions, is little different from the domestication of land for farming and pasture already wrought on temperate forests from England to Australia over the past few centuries. Yet the pace of destruction of tropical rain forest raises some particular concerns. Firstly, the planet’s remaining biodiversity owes a disproportionate debt to Southeast Asia’s humid tropics, including to those of its humans who have somehow maintained a hunter-gatherer lifestyle dependent on the forest. The effect of deforestation in high-rainfall tropical areas affects the local climate and environment even more than the global. Average temperature rises of several degrees over the past two decades have been noted in inland cities such as Bandung and Chiang Mai. Once-navigable rivers have silted up, and flooding becomes more frequent as run-off is not absorbed. Burning for dry-season forest clearance in Sumatra and Borneo has since the 1980s produced periodic acute air pollution throughout the equatorial region, with damaging peaks affecting health also in Malaysia and Singapore in 1997, 2006, 2009, and 2013.
The rapid growth of the region’s coastal cities since 1945 exposed ever-larger numbers to flooding and storm surges in one of the planet’s most dangerous seascapes. The giant Swiss reinsurer Swiss Re in 2013 put Jakarta and Manila among the five most endangered cities in the world in terms of numbers at risk. The coastlines most exposed to tectonic tsunamis on the western and southern boundaries of the Sunda shelf, and to typhoons on the eastern coasts of the Philippines, had been avoided by pre-colonial settlers but now support large cities such as Padang, Cilacap, and Davao. Millions were therefore made homeless by such disasters as the December 2004 tsunami that killed about 230,000 people in coastal cities like Banda Aceh (Sumatra) and Phuket (south Thailand). Typhoons killed a thousand or more in the Philippines in each of the years 2004, 2006, 2011, and 2012, and over 6,000 when Typhoon Haiyuan devastated the central Philippines in November 2013. Cyclone Nargis in the Irrawaddy delta in 2008 killed 138,000 and made millions homeless. Southeast Asia’s biggest cities are sinking at an alarming rate as a result of overbuilding and the extraction of the water table below, factors even more drastic than sea-level rise through global warming. Since 2000, Jakarta, the most imperiled, has been calculated to be sinking at 5 cm a year, and Bangkok and Saigon at more than 2 cm. Siltation and the asphalting of surfaces contributed further to turning annual floods into major disasters. The Jakarta floods of 2007 and January 2013 affected tens of thousands of homes. The flooding that submerged Bangkok and all the deltaic areas of Indochina in 2011 was rated by Swiss Re as the most destructive of property of any freshwater flood in human history, with US$47 billion in losses and over fifteen million people affected.
These environmental costs of rapid development would not have been easy to resolve in well-regulated polities, but were intensified by the flouting of planning regulations by developers and business tycoons with access to national or local power-holders. Corruption, in the sense of distorting the application of neutral law for private gain, was practiced for much higher stakes as the economies took off. Opinion polls put corruption top of popular concerns wherever democratic conditions allowed such views to be expressed. As this book has emphasized, authority in pre-colonial Southeast Asia was personal and charismatic, and a patron’s symbiotic relation with his clients was his most precious asset. Foreign traders learned that in most ports judicious gifts were more effective than observation of law in doing business. The legal-bureaucratic state arrived unusually late, and then was in alien, colonial hands that limited its internalization. Where revolutions overthrew the legitimacy of colonial law, personal authority and charisma became still more important. Suharto’s Indonesia, the communist countries, and Burma routinely resorted to extra-judicial state terror and torture. Suharto was perhaps the only leader to admit these tactics, explaining that when criminals and state enemies were arbitrarily shot, the bodies would be left where they fell as “shock therapy, so that people would understand that criminal actions would still be combatted and overcome” (Suharto 1989, cited Elson 2001, 237). Only in Singapore and Malaysia were colonial legal-bureaucratic values relatively smoothly domesticated into the independent states. Elsewhere military hierarchies and Leninist parties sought to replicate the centralized discipline of former colonial officials, but only Singapore’s People’s Action Party maintained that tight discipline in the face of a booming economy.
Independence hugely inflated the bureaucracies of the new states, as nationalists sought their rewards in prestigious government office. Increasingly poorly paid and motivated, local officials could only maintain their status and livelihoods by requiring bribes for the routine licenses and approvals they issued. The fact that in Indonesia, the Philippines, and Malaysia entrepreneurship was largely in the hands of politically marginalized “Chinese” created a vicious circle of discrimination, bribery, and flouting of the law. At the top of the hierarchy dictators like Suharto in Indonesia, Marcos in the Philippines, and Sarit in Thailand increasingly surrounded themselves with Sino-Southeast Asian cronies who could provide the non-budgeted extra income both to support pet projects and to enrich the dictators and their families. The egregious corruption that transformed them and their relatives into increasingly parasitic billionaires turned public opinion eventually against each of them, making it unlikely that such figures could arise in the twenty-first century.
Corruption is impossible to measure, and the attempts to do so by Transparency International since 1995 have had to rely only on the perceptions of international business as to how far corruption discouraged investment. Not surprisingly, the rankings for transparency given to Southeast Asian countries reflected their wealth and sophistication, with Singapore always in the top five of global rankings, followed by Malaysia and Thailand in the upper-middle and lower-middle, respectively. Indonesia was judged the most corrupt of the 41 states assessed in the first survey of 1995, but gradually improved to about two-thirds of the way down the list by 2010. The (ex-) communist countries fared a little better than their poverty would have suggested when first assessed, but by 2010 they were ranked below Indonesia near the bottom of the league, while Burma was at the very bottom. However flawed, these rankings do provide a corrective to the perceptions of citizens themselves, who tended to be most outraged at the corruption of their leaders when more democratic conditions allowed civil society and the press to expose it. The rankings of Transparency International showed that, on the contrary, Thailand, Indonesia, and even Burma were internationally perceived as less corrupt when they democratized. Thailand dropped again in the rankings after the military coup of 2006, until in 2013 it was below the Philippines, which appeared to be on the way back up after a ranking below Indonesia in 2010 (Transparency International 2014).
Singapore is rightly proud of its excellent reputation for doing business, always ranked far ahead of any other Asian country and matched only by Scandinavians at the top of such league tables. Its formula of paying the political, bureaucratic, and judicial elite the highest salaries in the world and expecting them to adhere to a high standard of probity and loyalty in return, combined with stern corporal and capital punishment of offenders, worked well in delivering a reliable implementation of the national laws. It could not be replicated in larger countries with inherently more dispersed power, nor in democracies with a critical press that would make such high salaries politically untenable. The Singapore model was in fact less attractive to its neighbors than to authoritarian regimes in China and Viet Nam, seeming to offer economic success, social stability, and international respectability with a high concentration of power in a few hands. The democracies suffered a new form of corruption in the form of money politics, whereby politicians could only get elected by distributing rewards that were paid for by vested interests that needed their support. Like much low-level corruption, this at least had the advantage of distributing some of the new wealth to the poor, as Thaksin proved adept at doing in Thailand. More damaging was the chronic inability of Southeast Asia’s “soft states” to implement laws on environmental protection, rational planning, and health and safety because of a prevailing culture of patronage and corruption. While this rightly enraged Southeast Asian reformers, outside observers perceived a marked growth in accountability as power was diffused away from the center through the democratization that followed the Asian financial crisis of 1997, and the rise of increasingly sophisticated critical voices in civil society and the social media.
Most Southeast Asians would agree that the economic gains of this period outweighed its costs. The economic growth that came to Southeast Asia after 1970 was the first time since the sixteenth century that the regional economy not only equalled but outperformed the global norm and closed the gap with earlier-developing industrial countries of the north. It gave the lie to the gloomy analyses of the colonial period that the tropical regions were doomed to shared poverty and Malthusian crisis. The optimism of the nationalist modernizers was at last justified by results. Not surprisingly, the lifting of vast populations out of rural poverty and into expanding globally connected cities had also profound effects on religious and cultural modes of thinking, discussed in Chapter 19.