Issue 13 The Rural Challenges Sep 2011

13 ISSUE

THE RURAL CHALLENGE

RISE OF SOUTHEAST ASIA’S RURAL MIDDLE CLASS THE FUTURE OF DOMESTIC MIGRATION IN SOUTHEAST ASIA FUTURE OF DECENTRALIZATION IN SOUTHEAST ASIA INTERVIEW WITH LAKKANA PUNWICHAI INCLUSIVE HEALTH INSURANCE: THE LONG MARCH OF THAI HEALTHCARE SYSTEM!

2

Rise of Southeast Asia’s Rural Middle Class

EDITORIAL

DR. PUN-ARJ CHAIRATANA Managing Director, Noviscape Consulting Group

This issue marks the beginning of the second year in which our TRENDNOVATION SOUTHEAST newsletter has been published. The newsletter is being circulated to audiences throughout the academic and practitioner international communities who share an interest in the future of Southeast Asian poverty reduction and development. We hope that the small contribution of these insights on the weak signal for change in our region will be another seed for thought for your research and activities.

This year, apart from our focal areas of interest on social and technology changes, and urbanization and development, we include “geopolitics and security” as a new dimension for our horizon scanning. It brings us a different set of multi-disciplinary tools and techniques for insight into the driving forces beyond that of the general public’s perceptions. It gives us a big picture on how politics at the local and global level impact all of humankind’s evolving affairs. It also plays a crucial role in poverty eradication in contemporary globalization, particularly on issues of health politics for the poor, green politics on resources and resilience, governance and urbanization, the social contract and justice, and regional non-traditional security, and so on. New info-graphic section highlights some regional foresight results.

BY DR. PUN-ARJ CHAIRATANA Managing Director, Noviscape Consulting Group

IDEA Southeast Asia is the world fastest growing region for urbanization and industrialization. Even though such development has been taking place in both urban and rural areas, there remains an inferior image of the ‘villager’ on mainstream TV programs, films, fictions, and in other media (Keyes, 2010). A very high proportion of people still live in rural areas, particularly in Indochina, Indonesia, the Philippines and Thailand. For example, at the end of the 2000s Thailand had a 66 percent rural population, the highest percentage among the other leading economies in the region and quite similar to its neighboring countries (See Chart 1). Rural identity has been passing through decades of major socio-economic transformation. This article attempts to explore in more detail the changing identity of rural people, those who won’t be moving into the big cities and mingling with their urban-dweller relatives.

3

KEYWORDS:

Identity; rural cosmopolitism; rural sage and philanthropy; rural innovation

SCENARIO The contemporary villager is no longer a traditional rice farmer who lives his/her life around a primarily agrarian existence with inadequate or misguided understandings of the civilized and larger world. ‘A rural middle class’ is a reflection of the identity revolution in process in Southeast Asia’s unfavorable regions influenced by a struggle around infrastructure justice, intercultural integration, and diffusion of technological innovations in the rural Southeast Asia.

Chart 1: Selected Southeast Asia Percentages of Rural Population and Employment in Agricultural Sector (1987 – 2009)

A general perception on the “middle class” in this region has been evolving through arguments about “rich vs. poor”, “urbanization vs. migration”, and “westernization vs. nationalization”. UNESCAP indicates that the region has had great success in poverty eradication in the rural area since the start of the new millennium. In this issue, we raise questions on what will be a future of rural peoples in Southeast Asia, and how Southeast Asian villages will continue to be changed.

We begin our journey with an observation on the conventional socio-economic paradigm that categorizes villagers as technological laggards and poor. To the contrary, decades of techno-globalization have put this group of people on the front line on technological applications of the green revolution (agricultural biotechnology), as well as information and communication technology (ICT). In fact, they are rational practitioners and prime movers on the expansion of the technological life-cycle and extension for various general purpose technologies (GPT). With this combination, a new rural middle class has evolved as the new identity for cosmopolitan villager.

A scanning exercise in the second article brings us into the future of migration in Southeast Asia. More rural-urban migrants, more female migrants, and more temporary migrants will be the trend for the next decade. This rural middle class population will continue to expose themselves to a global village lifestyle, with an increasing level of rural-urban mobility.

Our geopolitics section focuses on the future of rural governance by illustrating that some groups of peasants have already mobilized their networks to be more proactive in community activities, claiming their rights through actions under decentralization of governance and democratization. They are potential local political entrepreneurs and social change agents.

Beneficiaries of social reform and export-oriented policies are not only the urban middle class, but also the rural people. Some of them have shifted their destiny from the green fields into the concrete jungle, with lessons learned from city life and work, while decentralization has already created ‘new rural challenges’, both in positive and negative ways.

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.

Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.

Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

4

5 developed to become the center of gravity for rural capacity building in responding to issues in various dimensions of inequality (gender, human rights, and social opportunity), population dynamics (migration and resettlement), social protection (natural disaster, rural ageing and disability), especially in a group of economically dynamic countries.

Growth of rural cosmopolitanism Since the 1980s, basic education has been leveraged along with sanitation and other physical infrastructure in many villages. Currently, only around forty percent of jobs in the rural area of Southeast Asia are in the agricultural sector, and a quarter of the rural population has moved into the industrial and service sectors (See Chart 1). Differences in living standards and quality of lifestyle between the urbanite and the peasant have been reduced, although the general perception of rural backwardness still remains the same and has so for the last three decades. This marks the beginning of cosmopolitanism in the rural areas of Southeast Asia.

The rural cosmopolitan is a person who originates from the rural area and becomes a bearer of cultural versatility by turning their rural roots to some advantage, in either their home space or their non-rural place of destination (Gardner & Osella, 2003: 345). The rural middle class has intertwined their cultural roots with an urban lifestyle, while they still understand their origin and place within their communities and increasingly dignify their existence like other cosmopolitans.

In the future the time is coming for a reverse rural-urban cultural revolution. Penetration of ICT into the village is not only supporting knowledge diffusion and economic opportunity for the rural middle class, it is also increasing a demand for greater connectivity among the rural residents and their relatives who work or live in the city.

As a significant number of the villagers are already experienced and consume the tailor made local news and media in their own dialects, there will be more small scale local edutainment and community media to serve these particular groups of audiences. With better local logistics, connectivity and mobility, the rural culture and lifestyle will be moving closer and becoming diffuse as a part of the city life lived through their relatives, who live and work alongside the parochial urbanite.

The arrival of foreign sons-in-law Having foreign sons-in-laws is a rising trend, not only for Northeastern Thailand (Isaan region), where rural poverty still exists, but for other regions as well. This trend can be seen in the non-Muslim countries in Southeast Asia, particularly in Cambodia, the Philippines, and Vietnam (exclusively among Koreans). ‘Foreign sons-in-law’ have received positive acceptance among the local folk, either because of their contributions of hard currency or simply due to the openness of the villagers towards foreign culture. They are very active in leveraging the physical means of living and shaping local attitudes. Currently, the majority of them are middle aged or of retirement age, but in the near future younger foreign sons-in-laws will become more visible, resulting from an increase in ICT connectivity and intercultural communication. The resources and returns of these global workers, together with their relatives and the other newcomers, will accelerate an emergence of rural cosmopolitanism.

Mr. Chob Yodkaew, a Thai peasant economist

Rural Change Agents

Local Sage & Migrant philanthropy Social development forums are often dominated by issues such as community welfare and poverty reduction.

They tend to focus on the problems of the poor on the periphery, particularly the rural and urban poor led by public authorities and non-governmental organizations (NGOs). The emergence of the social well-being society concept, which has its foundation in Buddhism, is a new and Asian “Third Way” between neo-liberalism and socialism that takes into account the social and cultural capital inherent in traditional community and family structures, and paves the way for the role of the local sage, particularly in Thailand, while a Catholic version of local development agent comes through migrant philanthropy by Overseas Filipino Workers (OFW) (Opiniano, 2009).

Networks of grass-rooted movements on self-reliance among the rural middle class will be more active in order to re-negotiate on the range of social contracts, from basic rights to more weighty matters, like climate change.

Sooner rather than later, the rural areas in Southeast Asia will increasingly be faced with an irreversible threat from government led mega-development projects. As just one example, there is a local campaign to reduce air pollution caused by the largest open lignite mine in Thailand at Mae Moh district in Lampang, which has destroyed the surrounding natural area, and has sacrificed local health and the environment for coal power production in support of national economic growth.

IMPLICATIONS • After the millennium, there has been a shift of perception and focus on rural poverty among international development agencies (UNESCAP, ADB, and others), central government in developing countries, and non-governmental organizations (NGOs). Within the next decade, apart from an on-going techno-globalization, food and livelihood security and extreme natural disasters will shape their identities and communities. Instead of giving only a priority to basic education, agricultural development, and healthcare in order to reduce gaps with those who live in urban areas, a broader social development paradigm has slowly

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.

Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

• Promoting dual tracks of a rural innovation system or pro-poor innovation system, a concept that has recently been introduced in Africa and South Asia, as an alternative, broad based approach aimed at the systemic understanding, facilitation, and management of the interaction among all factors and actors for generating, diffusing, and utilizing new knowledge for rural development, particularly in agriculture (Berdegué, 2005). This conclusive approach could benefit an primary stage of rural development in Cambodia, Laos, Myanmar, and Timor Leste to increase their local food producing capability, while the rest of the more advanced regional rural community would benefit more from rural investment in green energy and public services particularly on sanitation (village’s garbage collection), and climate change management.

EARLY INDICATORS • There are more than 10 million Overseas Filipino Workers (OFW), who have origins from rural areas of the Philippines; they work in various economic hubs of Asia, USA, and Europe. Migrant philanthropists give mainly to their local NGOs, community churches, and their local charities.

• An increase in match-making and intercultural marriage between Southeast Asian peasants and foreigners will continue to unfold. For instance, there has been a match-making boom between Vietnamese and Koreans, Westerners and Filipinos, and Westerners and Thais.

• An expansion is occurring of self-help community financial institutions that keep savings within the community and use generated revenue for local benefits without the need to rely on corporate social responsibilities (CSRs) from the private sector or public services. At this moment, there are around 3,000 financial contractual (Sajja) saving groups that originated from the idea and leadership of Mr. Chob Yodkaew, a peasant economist in Songkhla, a Southern province of Thailand.

DRIVERS & INHIBITORS • Leveraging on digital literacy in three dimensions— comprising the media, information and ICT—will accelerate the pace of lifelong learning among the laggard and peasants.

• The return of village sons and daughters from a long time gold digging abroad.

• West meets East, the new form of rural family, from marriages between Westerners and locals.

• Increasing agro-industrial activities around the existing fertile rural areas in Thailand and around its borders (Cambodia, Laos, and Myanmar).

REFERENCES Berdegué, J. A. (2005). Pro-Poor Innovation Systems: Background Paper.

The International Fund for Agricultural Development. Retrieved from http:// www.ifad.org/events/gc/29/panel/e/julio.pdf Charoenmuang, T. (2008). Civilized Democracy. September 17, 2008.

Retrieved from http://www.thaifreenews.com/?name=politics&file=readpolit ics&id=360 (in Thai) Gardner, K. and Ossella, F. (Eds.) (2003) Contributions to Indian Sociology.

Keyes, C. F. (2010). From Peasants to Cosmopolitan Villagers: the transformation of ‘rural’ northeastern Thailand. Retrieved from http://tusocant.posterous. com/audio-from-peasants-to-cosmopolitan-villagers Kohn Kaen University National and International Conference 2011 Discussions (2011, January 27-29). “Current and future problems in rural Thailand, the country’s development”. Future of Thai Rural Area: A Solid Foundation for Sustainable Development. Diamond crown at Kosa Hotel in Khon Kaen city. Retrieved from http://ora.kku.ac.th/CSCD/2011/VDO/VTS_02/FLV_02. html Montlake, S. (2004, July 20). Thailand’s ‘Swiss village’. BBC News. Retrieved from http://news.bbc.co.uk/2/hi/asia-pacific/3907581.stm Onishi, N. (2007, February 21). Marriage brokers in Vietnam cater to S. Korean bachelors. International Herald Tribune. Retrieved from http://www. nytimes.com/2007/02/21/world/asia/21iht-brides.4670360.html Opiniano, J. M. (2009). Pinoys Abroad as the Future of Filipino Modernity. Retrieved from http://www.ofwphilanthropy.org/2011/index. php?option=com_content&view=article&id=74&Itemid=74 http://www.schoolforwellbeing.org/

ABOUT THE AUTHOR Dr. Pun-Arj Chairatana is the Managing Director of NOVISCAPE CONSULTING GROUP and the Principal Investigator of TRENDNOVATION SOUTHEAST NEWSLETTER. He has been involved with various regional scenario buildings and future exercises since 2000. As a policymaker, he was Director of the Policy Entrepreneur and Foreign Affairs Department at Public Policy Development Office (PPDO), the Office of Cabinet Secretariat.

He has a background in economics for technological change, innovation management, health and nuclear physics. His expertise is in the areas of strategic foresight, technology and innovation management, public policy, trend analysis and political economy.

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.

Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

6

7

The Future of Domestic Migration in Southeast Asia BY DR. APIWAT RATANAWARAHA Department of Urban and Regional Planning, Chulalongkorn University

IDEA Domestic migration will continue in most countries in Southeast Asia. It will continue in all spatial directions— from rural to rural, rural to urban, urban to rural, and urban to urban—and in all temporal dimensions—permanently, seasonally, and temporarily. As social and economic opportunities pull people into some locations, the lack thereof will also push people away from others.

Cross-border migration will also increase, but domestic migration will continue at much greater magnitudes. Domestic migration will remain a major force that creates impacts on the society, economy and polity, and thus is of increasing importance to policymakers and donors.

KEYWORDS:

Rural-urban migration, feminization of migration, temporary migration, mobility restrictions decrease while rural-urban migration will increase, not only in relatively prosperous countries like Thailand but also in poorer countries such as Laos and Cambodia.

Increasing rural-urban migration will be disproportionately directed towards megacities and industrial zones, such as Thailand’s Eastern Seaboard and Vietnam’s Ho Chi Minh City. Particularly attractive are those industrial areas where foreign direct investment is concentrated.

Feminization of migration intensifies

An increasing proportion of unmarried young women will continue to shape the regional pattern of ruralurban migration. While young adults have continued Three major trends in domestic migration are to continue, to be the main age group among these migrants, the albeit in different degrees in different countries. Gener- female ratio has increased significantly. This is expected even in Malaysia, where migration has always been ally, there will be more rural-urban migrants, a greater predominantly by males.2 Female migrants tend to be proportion of female migrants, and more temporary younger than male migrants. In Vietnam, the highest migrants. Migration will remain area, gender, and rates for male migrants are among 20-24 and 25-29 age selective. We may also see more U-turn rural-rural age groups, while the highest rates for women are for migration, in which migrants move back to their original ages 15-19 and 20-24. Women migrate independently locations due to changes in practices and locations of for work and not just as accompanying partners. This crop farming. “autonomous female migration” has increased because of various economic and social factors. Industries and As industrialization continues, services demand more female workers, and societies are coming to terms with women’s economic indepenrural-urban migration increases dence and mobility.

It is likely that export-oriented, low-skilled, labor-intenYoung women will move to work predominantly in sive, manufacturing-based industrial development will factories and in services. As middle-class female profesremain as the core development strategy in Southeast Asia for quite some time. As a result, people’s move- sionals have little time to take care of household chores, domestic helpers are increasingly in demand. Neverthement from villages to cities will not wane and will only less, most young girls would rather work in factories grow. In Indonesia and Thailand, more people will be living in cities, while in Vietnam, Cambodia, and Laos, and retail than work as full-time live-in maids. They are opting for personal freedom and social life, something the shares of rural population will remain high in the they have yearned for in their place of origin, as they next decade or so.1 Rural-rural migration will continue leave their villages behind. This has already happened as the dominant migration stream in Vietnam, where in Thailand, where it is difficult to find Thai domestic workers from poorer regions travel to the relatively irrigated and fertile areas to find work on plantations. helpers and nannies. These jobs are gladly filled by female migrants from Myanmar. Families who can afEven in these countries, the share of rural-urban migration is expected to increase significantly. As indus- ford them try to hire English speaking Filipina nannies, so their children can learn English from them as well. trial development continues, rural-rural migration will

SCENARIOS

1 2

The Philippines is very urbanized, as more than half of its population already live in cities.

Statement by Malaysia’s Ministry of Women, Family and Community Development at the 41st session of the United Nations Commission on Population and Development, 8th April 2008.

More temporary migration Domestic migration in Southeast Asia is also characterized by seasonal and temporary migrants, who are usually male laborers in the construction sector during off-harvest seasons. In Thailand, temporary moves have been estimated to account for one-third of all migration with durations of one month or more. Similar trends have been noted in Indonesia and Cambodia. This is partly attributed to improvement in transport networks and information and communication technology (ICT).

The demographic characteristics of temporary migrants are different from long-term migrants. They are more likely to be male, older, have lower levels of education, married but usually leave their families behind, living in poor conditions and remitting more of their income.

Even though domestic migration is generally longdistance, smaller moves are observed to smaller towns.

For instance, several thousand temporary migrants come to Vietnam’s Ha Giang Province from nearby rural provinces.

Migration is sometimes induced by a force majeure.

Natural disasters leave people no choice but to move away from their villages. Ho Chi Minh City experiences a massive seasonal influx of people when the Mekong River floods. In some cases, such as after the 2004 tsunami, migrant workers are forced to move back to their home villages. There are more unfortunate cases as well: more than 1,200 children in Northeast Thailand lost their parents who had moved to work at coastal towns hit by the tsunami. For an extended period of time, more than 500,000 people were displaced in Aceh in Indonesia because of the 2004 tsunami. With climate change increasingly showing signs of influencing rainfall and temperature patterns in this region, we may expect more forced migration due to natural disasters.

make the U-turn. A similar U-turn migration also is happening internationally with Indonesian migrants who are moving back home from palm plantations in Malaysia.

RESTRICTIONS ON MOBILITY Despite the inevitable trends, the policy climate in several countries continues to curtail migration through regulations on population movement and on informal sector activities. For instance, the Ho-Khau system in Vietnam was devised to control urban growth and population movement. People have been categorized under five tiers of registration statuses, from residential registrants to temporary registrants, to those without registration. But this has not stop migrants from coming to the cities. Instead, it has had negative impacts on them, limiting their access to formal employment, secure housing tenure, and other social services. They are also denied some of their social and political rights.

Although the system has not been strictly enforced, it still makes migrants vulnerable to manipulation and extortion by the authorities. For instance, temporary migrants are not eligible for the Hunger Eradication and Poverty Reduction program, which includes low interest loans, free healthcare, and exemptions from school fees. Because of this registration requirement, more than a quarter of the babies born in 2000 weren’t registered. In just one year that implies there are 250,000 undocumented children.

Return migration to the new rubber belt The future picture of domestic migration in this region will follow the current trends. But one emerging trend needs closer attention: a rural-rural return migration due to the proliferation of new crops in unusual places such as the new “rubber belt” in Northeastern Thailand.

In several areas in Southeast Asia, farmers are changing crops from traditional ones such as rice to more lucrative kinds, notably rubber and oil palm. This change in types of crop farming, from growing food to growing crops for fuel and feedstock, will continue.3 This trend has implications for migration. Previously, male workers from Northeast Thailand migrated to the South to work in rubber plantations. With improvements in farming technologies and new crops that are adaptive to a less-humid climate, rubber can now be grown in the Northeastern part of Thailand as well. An increasing number of rubber plantation workers are returning to their villages. They have brought back with them the skills to grow the rubber trees, to seed and to transform the rubber. As this region will soon become the chief rubber producer in Thailand, more migrants are likely to 3

See issue 1 of Trendnovation Southeast “From Forest to Food to Feedstock”.

©2011 PACEYES - Rural workers and international tourists at Hua Lam Pong Train Station, Bangkok, Thailand

IMPLICATIONS Rural-urban migration continues to be the quickest way out of rural poverty, as people expect better livelihoods and well-being elsewhere. They are moving to cities to work in the informal sector, where the wages are expected to be higher and more stable. Many of these migrants may be considered urban poor, but their more stable income from non-agricultural sources puts them among the non-resident middle class in the villages where they are from.

8

9

Remittance is the migrants’ strategy to increase their rural wealth and to retain a connection with their villages.

Remittance is thus an important factor in alleviating rural poverty. The total volume of internal remittances is enormous. Remittances can account for a substantial proportion of household incomes, especially for the poor, with the proportion being much higher among the landless. Migrants and their families use remittances for all sorts of expenses, from daily needs and medical care, to house building and loan payments, and hiring other people to work on their farms. Remittances help to reduce intra-rural household income inequality. But not all migrant workers are created equal. While many migrants are landless, others own land back where they come from. These land-owning migrants use their urban income to hire workers and invest in producing rice and other crops back in their villages.

There are some successful initiatives that support domestic migrants. Plan International has run a campaign to have every child registered at birth. Because of the residency requirements in Vietnam, a large number of children have been unregistered at birth, affecting their birth rights in many different ways. The organization has helped the registration of two million children, who would not have otherwise been registered. The Baan Mankong program in Thailand is a notable example of how housing poverty among long-term migrants can be alleviated by securing land rights while building local capacities, and with moderate financial support from the government.

But migrants usually engage in occupations that require little skill and provide little chance for upward mobility.

In many jobs, they face health and safety hazards from which they are not well protected by laws. Children and the elderly are often left behind in villages, creating considerable social effects. Migration is found to have changed elderly living arrangements from co-residential to living alone, as well as had negative effects on intrahousehold elderly care in terms of receiving food and being taking to the hospital when necessary. Migration thus has serious implications for a wide range of issues and policies.

The first step before any policy intervention is the change in attitude and perception towards migrants. The government has to recognize the contribution of migrants to the economy. This means it is the responsibility of the state to provide them with adequate living conditions and social services, decent and just wages, and freedom from exploitation. Attempts to stop migration by regulations are counterproductive, and would just unnecessarily add hurdles to their survival and livelihood. Such regulations should be abolished.

• Industrialization will continue to promote ruralurban migration.

• Disproportionate public investment for urban infrastructure will continue pulling people into cities.

• As young people leave farms and villages, there will be fewer people left to work on farms.

• Advancement in transport and ICT networks will allow for even more population mobility.

• Changing patterns in agricultural production will affect migration patterns.

• Climate change will increasingly affect migration patterns and magnitudes.

Because migrants are heterogeneous in their backgrounds, needs, priorities, and movement patterns, interventions should account for such differences and be tailored to the specific conditions of each group.

At the structural level, migration policies should target rural-urban linkages rather than thinking of urban or rural problems as separate issues. Instead of focusing only on mega-cities, development of secondary urban centers should be encouraged. At the micro level, the key issue is how to build and support social and economic support for migrants. Particularly needed is better infrastructure for migrants, such as transport and communication networks, access to health services such as mobile health care and child care for female workers, temporary decent settlements, and better facilities for remittance transfer. Training and skill-development support as well as local employment and investment opportunities should also be provided. Social insurance programs have to be developed that do not exclude migrants who work in the informal sector. This requires a legal and institutional framework that clearly defines the rights of migrants and duties of governments at all levels to ensure the provision of services and protection for migrants.

DRIVERS/INHIBITORS

ABOUT THE AUTHOR Apiwat Ratanawaraha is an Assistant Professor at the Department of Urban and Regional Planning, Chulalongkorn University in Bangkok, Thailand, where he teaches infrastructure planning and finance, urban management, and economic development. His current research includes projects on city innovations in Southeast Asian megacities, on infrastructure justice, and on inequality in access to basic services in Thailand. He has been a Visiting Assistant Professor at the Department of Urban Studies and Planning at MIT, teaching infrastructure finance and energy security. He was a Doctoral Fellow at the Belfer Center for Science and International Affairs, Kennedy School of Government, Harvard University, conducting research on infrastructure, technological development and innovation policy.

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.

Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

Future of Decentralization in Southeast Asia BY KAN YUENYONG Founder, Siam Intelligence Unit

KEYWORDS:

IDEA “Decentralization” is one of the popular buzzwords used in recommendations for reform packages. The UN paper on Decentralization: Poverty reduction empowerment and participation (2005) suggested that not only does decentralization play a role in power plays between the center and the periphery; it also can reduce poverty via economic growth and redistribution.

Decentralization allows communities to make decisions that shape their future, by empowering them in the allocation of resources while equipping them to become accountable and execute decisions on their own behalf.

Furthermore, decentralization should make government more efficient, which could mean better responsiveness and service for its own citizens. It has been suggested, for instance, that Cambodia transfer responsibility for planning, management, and the allocation of resources from its central government agencies to local government control to reduce poverty. There is evidence for applying such a decentralization framework to the Commune/Sangkat Councils. Meanwhile, a popular village funds policy in Thailand can be considered as one form of decentralized effort in encouraging rural people to manage their own public projects.

SCENARIOS Theoretically, the centralized state faces a dilemma: the livelihood of local people, especially in rural areas, depends on a central budget rather than local capacity, which is also known as “Hamilton’s Paradox”. Normally, a political party will only offer a universal public policy, which hardly resolves the complexity of social and economic problems, such as with education, healthcare, and income disparities. Thus, people at the local level who cannot achieve a proper public service will ask a local “baron” (most of whom are local politicians) to compete on their behalf for central budget allocation.

This reality ultimately corrodes citizenship, especially for the poor, and causes corruption to flourish.

Those regions possessing either a strong political ideology or a unifying religious belief will try to self-assemble its community in order to establish its own self-sufficient

Reform; auto re-improvement; people movement; governance; citizen empowerment

economy and local public service. If, in case of unjust treatment by central authorities caused by differing ethnicity or religious beliefs, a radical separatist ideology may emerge, even developing into an insurgency or even a separatist movement, such as has happened in Southern Thailand and the Southern Philippines.

©2007 PACEYES – Citizen hearing for Lampoon foresight 2020, Lampoon, Northern Thailand

Contemporary governance and decentralization have been evolving from these original concepts. For example, after the 1997 Asian financial crisis, with a restricted solution proposed by the World Bank and the International Monetary Fund (IMF), Thai intellectuals modified “governance” from a sense of public sector reform into “Thammarat” (just state) and “Thammapiban” (governing justly), which mainly focused on the battle against corruption and for clean and fair politics. However, decentralization in Thailand has silently been pushed from behind the scenes by an unintended amalgamated demand from various political players, such as top business elites who need to ease burdensome general regulations, by public policy seeking to engage on public service or concessionaire system,

by NGOs and technocrat who want to exercise their knowledge about political reform to resolve problems of inequality, and by the local communities themselves (with strong ideological commitment) who want to be involved in their own self-governance.

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.

Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

10

11

While many other Southeast Asian countries formed their centralized character after becoming independent from western’s colonization, some had problems during the process such as Malaysia, Singapore and Brunei.

Fred W. Riggs suggests that in developing countries, although no longer traditional feudal states, the reforming has not been fully success. They remain stuck in the middle between the traditional and the modern society, in what has been labeled the “Prismatic” society. A prismatic society such as Thailand, although having clearly written laws, still applies a “double standard” on their own people. Thus modern “governance” reform in the “prismatic” society will generate a hybrid and different kind of such reform from original “governance”.

Public officers will then try to create patronage with local barons in order to access and exchange their people and resource allocation (in both a central and local interest manner). Most informal lobbying is staged to encourage such patronage relationships, and takes place on a “special” high level in cross-cutting sectors academic courses, which copy from an original training program for both senior military officers and civilian courses, such as “Wor Por Oor”, from the National Defense College of Thailand. The decentralization in this kind of prismatic society will thus never really be allowed to happen. It will let the decentralization be announced, but will never seriously become engaged.

Once there is a serious decentralization effort, they will resist such an attempt by claiming to preserve the national sovereignty, and attack such decentralization effort as either a separatist movement or a dangerous foreign idea.

According to the above notions, we may have three future scenarios with special reference to the decentralization in Southeast Asia, including 1) an emergence of Southeast Asian Keiretsu-style governance, 2) a blossom of insurgency and separatist movements, and 3) a dynamic balance between the local and central “governance”.

An emergence of Southeast Asian Keiretsu-style governance The force of techno-globalization will stimulate the pace of social transformation from the prismatic society into a modern society. Decentralization will inevitably be adopted. There will be some resistance from the old establishment, but most existing bureaucratic mechanisms will switch sides and join forces with either the business elites or technocrats and NGOs. Thus the final outcome will depend on who will be the major political power in the society of the future. Some in the business elite will aim for a model such as Singapore’s People’s Action Party (PAP) which has been the city-state’s ruling political party since 1959. Nevertheless, in more diverse societies like Thailand and the Philippines, this kind of socio-political model has a low probability of success.

What is more likely is a more practical model, similar to Japan’s Keiretsu style of governance (an alliance between business moguls and technocrats), that could lead these countries to compete in the global economy.

IMPLICATIONS • Support more hub cities and cross border economic zones in less favorable areas. These kinds of hub cities and economic zones will demand more self-governance. For example, Thailand has self-governance for the Bangkok Metropolitan Area and Pattaya, and they also exist for cities and townships in the Philippines. More successful pilot cases will convince people and central government to engage further in decentralization programs. More economic zones will eventually help generate increased domestic demand, hence a resiliency for the country’s economy instead of a dependence only on exports.

• Increase more non-violence training, peace education and networking in order to deal with violent movements peacefully. In the second scenario, the unstable society will be prone to generate more insurgency and separatist movements. Non-violence methodology will reduce conflict and create more trust among people, and help reach compromise among factions. Once unity and a trustful society have been generated, decentralization can be successfully achieved. ©2007 PACEYES – Lampoon foresight 2020 Mindmapping exercise among local residents, Lampoon, Northern Thailand

A blossoming of insurgency and separatist movements However, if the state cannot handle the conflict between centralized need and local autonomous demand properly, violence will expand and blossom into insurgency and separatist movements. The paper Decentralization and poverty in developing countries: Exploring the impact suggests that unstable countries such as those with civil wars or ethnic conflicts will face worse outcomes than stable countries. Continued internal conflict will affect people’s daily lives and finally adversely affect the quality of life and poverty levels, as they have in the deep southern provinces of Thailand, southern islands of the Philippines, and Ajeh in Indonesia.

A dynamic balance between the local and central “governance” A preferred and ideal scenario would be an efficient central government together with various forms of local governments. There will definitely be a bargaining of power and resource distribution between the central and local government through negotiation and dialogue, thus a dynamic balance will evolve between the two. This kind of governance will finally empower citizenship and create more efficiency, which means a better chance of reducing poverty and improving the quality of life of its citizens.

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.

Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

• Engage the news media to support and innovate civil society, by accountably monitoring media to support both education on public policy and civil dialogue. It will help people to control their representatives to execute and distribute public resources for public use efficiently. Active citizens will prefer more self-governance than central government.

DRIVERS & INHIBITORS Drivers: • Local and international academic communities continue strong support for decentralization.

• More flexible and successful self-governance cities will encourage more such efforts at engaging in decentralization.

• More active citizens will promote self-governing options and decentralization.

• Study and comparison from the Internet and social media will make people aware of benefits of self-governing and decentralization.

Inhibitors: • Local conflicts and ethnic conflicts will bar central government from supporting decentralization because of security reasons.

• Central bureaucrats’ self interest will cause central government to raise objections and delay decentralization.

REFERENCES Bowornwathana, B. (1997). Transforming bureaucracies for the 21st century: The new democratic governance paradigm. Public Administration Quarterly.

Bowornwathana, B. (2008). Importing governance into the Thai polity: competing hybrids and reform consequences.

Comparative governance reform in Asia: Democracy, corruption, and government trust. Research in Public Policy Analysis and Management, Volume 17, 5-10.

Burns, D., Hambleton, R., and Hoggett, P. (1994). The Politics of Decentralisation, Revitalising Local Democracy. Hong Kong: Macmillan.

Decentralization: Poverty reduction empowerment and participation (unedited version). (2005). New York: United Nations.

Peters, B. G. (1993). The public service, the changing state, and governance. Canada: Canadian Centre for Management Development.

Suwanmala, J., Kruethep, W., Kaewsakul, D., Patamasiriwatna, D., Wannapruek, P., Leerasiri, W. & Preechametta, A. (2011).

Challenge issues in Thailand decentralization and local government. Bangkok: Chulalongkorn University Press.

Jütting, J., Kauffmann, C., Mc Donnell, I., Osterrieder, H., Pinaud, N., and Wegner, L. (2004). Decentralisation and poverty in developing countries: Exploring the impact. France: OECD. The Geopolitics of Thailand: A Kingdom in Flux. (2009). Texas: Stratfor.

ABOUT THE AUTHOR Kan Yuenyong is a co-founder and executive director of Siam Intelligence Unit (SIU) h t t p : / / w w w. s i u . c o . t h , a n alternative think tank and research service on various social, environment, business and economic issues. He is now studying in the advanced certificate course on Promotion of Peaceful Society (class 3) at King Prajadhipok’s Institute. He was selected by The Friedrich Naumann Foundation to represent Thailand in seminars on Strategic Planning and New Public Management in 2009, held at the International Academy for Leadership, Germany. He formerly worked at Internet Thailand Public Company Limited.

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.

Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

12

INTERVIEW BY DR. PUN-ARJ CHAIRATANA Managing Director, Noviscape Consulting Group

Q

A

What is your perspective on the emergence of the rural middle class?

“For me, the image of the rural area that I know is based on Northern and Northeastern Thailand. I can imagine a new look for the village, based on my memory of the district where I was born and lived for about 40 years, which was Sankayom village and nearby areas.”

1

“The rise of the rural middle class can be seen very clearly from that village, but I’m not sure if it represents Thailand or Southeast Asia as a whole.

However, it should be similar to those who live in an agrarian area in the region. In the past, most people there were farmers and during the off-harvest season they did gardening of soybeans, vegetables, etc. Roads were gravel; dam irrigation systems were very restricted, and water was vital to agriculture.

My family had a business, so we had cash on hand more than other agriculture families who had only land and produce.”

“The majority of people lived in cottages and not many have toilets! Health stations and the improvement on sanitation came together with modern medical knowledge. There had been a clash between modern medical providers and folk medicine men.

Forty years on, there have been many tangible changes. There were the first toilets, the first televisions, and the first radios. People shifted away from agriculture, as women got hired to do a variety of jobs such as umbrella painting and longan harvesting outside of the farming season. Children of those people got to study until the sixth or ninth grade, and were able to go on to become skilled craftsmen in many areas.

“They were the first generation of the rural middle class, not only in economic terms but also in the lifestyle dimension. For example, once they had achieved a sixth grade education, they then went on to work as housemaids or babysitters in the cities.

When they had collected a certain amount of money, they returned with that money, which the intention of using it for investment and a lifestyle they had 1

In Sansainoi sub-district, Sansai district, Chiang Mai Province

W

I

T

H

13

Q

A

Lakkana Punwichai learned from families in cities they had visited, like Bangkok. With the local economic system shifting to become more cash-intensive, opportunities for educational advancement grew through the National Economic and Social Development Board (NESDB); previously parents only graduated with a sixth grade education, but their kids have had the chance to study up to the ninth grade, twelfth grade, or even the Bachelor’s degree.”

“When I was young, there were not many wooden houses; 70% of homes were covered with cogon grass but nowadays it is all concrete. These developments are not only the consequence of earning money from working, but also land use has been changing rapidly over the last 20 years. Many of those who possessed lands sold out their holdings almost entirely, keeping only enough land for their homes. Chiangmai’s urban planning has been changed by the construction of two outer beltways, which have led to many housing projects and subsequently led to the transfer of land ownership – from agricultural lands to housing projects.

The owners of those lands then got modest chunks of money for investment, in a humble manner, like opening a savings deposit in a bank, buying bonds, supporting their children’s education, and opening a small shop or buying other land. These people are neither like those whose lifestyles are completely middle class nor metropolitan people, but they are no longer the rural people we have imagined. For leisure time activities, in the last 10 years or so, this new generation has gone abroad more, but not on luxurious trips to Europe; rather, they have travelled to Vietnam or Penang in Malaysia by car. We have seen a lot of local travel companies spring up, and their advertisements appear even on news programs. These tours have begun to expand more afar now that some have gone as far as Shanghai, resulting in the mobilization of the countryside, and knowledge of geography spreading, which has consequently led to some new realization of lifestyles beyond the local rural areas.”

What will rural areas look like in the next 10 years?

If regional democratization goes well, rural people will entirely transform to become entrepreneurs, allowing the rural middle class to be more distinctive.

Meanwhile, the transformation from rural middle class to rural people migrating to the cities will increase, such as when children go on to become doctors in cities. There will be fewer in quantity but more intensity in some ways. It depends on the direction of development, such as can we make agriculture occupations more attractive for the next generations? Or will Thai farmers become like those in Japan, where not many farmers remain in the rural areas, having attained wealthy status, but none of their children aspire to follow in their parents’ farmer footsteps and instead have moved to big cities like Tokyo and Osaka. The cluster of prosperity will not change much as decentralization policies achieve only a certain extent, but the linkages between rural and major cities will increase but it also depends on welfare and how decentralization policies work out.

From a global perspective, food security will be very important in the future. That means the rural middle class will be even more important as food producers while the rest of the world faces food shortages and supply problems.”

Q

In the future, which generations will stay in rural areas?

Will migrants return?

A

“The rural middle class will be the older, live their lives in a form of associations, and work through local administrations. Therefore, activities in the rural areas will mainly focus on the greying population such as the Association of Buddhism, Tai Chi and other development activities. The future is unsecured, the new generations all move to somewhere else but there might be an exception. The younger generation in the villages may discover that resources in the cities are too scarce, with too many competing for the same resources. They could think it would be more productive to start businesses in their home villages instead. For example, one young man came to work for advertising agencies in Bangkok and went back to farm on a longan plantation in his hometown, then developed it as successful home stay and coffee shop, offering luxurious tastes. His customers are Bangkokians who when they go on a trip want to consume everything they have in the capital. With this trend, the locals will find that they have abundant resources at home, and can turn these into cultural capital that can be further commoditized.”

Q

With the emergence of the rural middle class, poverty starts to blur.

Where will it mobilize to?

A

“I think foreign labor will continue to be the victim of this as they are oppressed to bear our costs, and also those urban middle class office workers,

who have to carry high living expenses while not receiving sufficiently high salaries to support their more expensive lifestyles. They are poor in terms of dreaming, just like the UK riots of summer 2011. They are not poor because they don’t have money, but have the perspective of being poor in that their ability to consume has not kept pace with their widened desires. For example, others read magazines with conspicuous consumption like Hello or Image, while you can only look at them when you are not so far away. This is marginalization of consumption. In Japan, the rich are too few as well as the poor, so they don’t face the same problems.

Q

How do you define the future of rural middle class cosmopolitanism?

A

“People are no longer being exclusively farmers for their livelihoods; they are able to hope that their children can have best education available, and no longer expect their children to follow in their footsteps and live the same way. The way forward is to move to the better environment, but remain in the countryside. As the older generations had no or little potential to move anywhere else, they retain their native places, but if their children have chances to go abroad, they will be very happy. Those in cities often believe that people in the up-country are sticking with their origins as they sell their own lands.

The up-country folks I know don’t cling to their parents’ lands, as they rather viewed it as capital for supporting next generations. Rural people are making more of entrepreneurship than those in cities; they think in costprofit aspects a lot more than they should be regarded as greedy. But they are actually seeking opportunities, being realistic and if they are in agriculture sectors, they do things in a very business-oriented manner, such as contract farming of onions. Their businesses deal with millions of baht, not just tens of thousands, and so do their debts. The rural middle class has the ability to be more self-dependent than those in cities, while facing risks in terms of lacking state welfare – they are not secured by health insurance.”

ABOUT LAKKANA PUNWICHAI

Lakkana Punwichai is one of the famous contemporary Thai columnists. Some have compared her to Carrie Bradshaw from the television series and movie, Sex and The City. “Kamparka” of “Goblen flower” is her pseudonym for columns written with a special focus on women, relationships, gender and contemporary issues that appear regularly in some magazines and leading newspapers in Thailand.

She earned a Master’s degree in human environment studies from the University of Kyoto. Prior to that, she read history at Chiangmai University.

She has five books to her name, mostly compilations of her articles. Letters from Kyoto (2001), a book written while living in Japan where she spent seven years, has sold particularly well.

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.

Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

14

15

Source: Thai Health Insurance Foresight, Chulalongkorn University and APEC Center for Technology Foresight, 2008.

Dr. Pun-Arj Chairatana Dr. Apiwat Ratanawaraha Kan Yuenyong

Co- Principal Investigator

Dr. Donald Arthur Johnson

Editor

Preeda Chaiyanajit

Project Co-ordinator

Passapong Boonlueng

Graphic Designer

Regional Horizon / Environment - Scanning (HS/ES) and trend monitoring for issues relevant to people. life, and regional transformation across the Sotheast Asian region.

Dr. Pun-Arj Chairatana Dr. Apiwat Ratanawaraha Kan Yuenyong Lakkana Punwichai

Author/Information Specialist

Trendnovation Southeast Newsletter is published by

Noviscape Consulting Group (NCG) www.noviscape.com Contact Us

contact@trendsoutheast.org http://twitter.com/trendsoutheast http://facebook.com/trendsoutheast