Natasha Hamilton-Hart

The Singapore state revisited

Singapore’s governing elite is less bureaucratic and less separated from private interests than commonly thought. The bureaucracy has little independent strength and the political leadership is entwined with leading members of the business community, particularly the financial sector, to the point that the line between public and private is frequently indistinct. Given that democratic or interest-group constraints are minimal, transparency low and the rule of law in doubt, why Singapore’s activist economic policies have not decayed into a search for private rewards is rather puzzling. This article argues that Singapore’s record of sound government rests on informal governing institutions as well as attributes of the formal government sector. The informal institutions encompass nominally public and private actors in a systematized way, structuring the incorporation of private actors to embed the values of performance-based merit and working with, not against, government. The system of government is, however, fragile and may be showing signs of decay.

ANTI-CORRUPTION STRATEGIES IN INDONESIA

During 19992000 Indonesia pursued many anti-corruption reforms but appeared to achieve little success in reducing the level of corruption, which remained a high profile problem in all branches of government. This article summarises the reform initiatives carried out since 1998 and offers an explanation for their very limited success. Obstacles to reducing corruption in Indonesia include the economic and political constraints facing the current government and the entrenched nature of corruption. The content of the reform program itself may also contribute to the persistence of the problem. The program consists primarily of moves to introduce monitoring and sanctioning mechanisms that are external to particular government organisations. Internal reforms that aim to improve organisational self-discipline have received much less attention. The reform program may thus be inherently incomplete.

Taxing Times in Indonesia: The Challenge of Restoring Competitiveness and the Search for Fiscal Space

Indonesia’s economic growth picked up slightly in mid-2016 but remains below the level demanded by government and popular aspirations. Despite a plethora of reforms intended to increase efficiency and productivity, some policies are perverse and longstanding problems of implementation remain. The share of manufacturing has declined, the real exchange rate has appreciated, exports have dwindled, and growth has been trending downwards. The banking sector is stable but inefficient, with wide net interest margins and numerous barriers to competition. Trade protection, particularly in basic food commodities, has created high costs that weigh particularly heavily on the poor. Declining government revenues have placed increasing pressure on the public budget, even as the current administration aims to increase spending on infrastructure and welfare and to enhance productivity. In an effort to increase revenues, the government has announced a tax amnesty program and other measures. In addition, Sri Mulyani Indrawati, the new finance minister, has taken steps to cut non-essential expenditure in order to secure high spending on infrastructure and at the same time keep within the 3% budget deficit limit stipulated by law. Although the overall debt situation is not yet alarming, declining revenues and budget cuts that do not fully reflect this decline are putting pressure on increasing debt levels. The government’s high-profile tax amnesty program was the major policy initiative implemented in the second half of 2016 that aimed to relieve this pressure. Despite widespread criticism of, and scepticism about, the tax amnesty (both within and outside Indonesia), its first phase had a much higher participation rate than most independent accounts expected. Revenues raised so far through the amnesty are less than 60% of the official target, but this is actually a strong result for the short term. The bigger question, however, is whether the amnesty is a key element of a more encompassing strategy to overhaul the system of taxation and tax administration.

What Do Changes in Corporate Ownership in Indonesia Tell Us

This article documents the pattern of corporate ownership in Indonesia before and after the 1997–98 Asian financial crisis. We draw on an original dataset that identifies ultimate owners of the country’s 200 largest publicly listed corporations in 1996 and 2008, and supplement these data with additional information about unlisted firms. Corporate ownership and business–government relations in this period exhibited continuities as well as notable changes. Although family ownership remained the most prevalent form of ownership, there was considerable churning in the identities of the most powerful family owners. Listed state-owned corporations were more prominent after the crisis than before it, and foreign governments (particularly Singapore and Malaysia) substantially increased their ownership stakes in many of Indonesia’s largest corporations.

Monetary Politics in Southeast Asia: External Imbalances in Regional Context

Rather than conforming to a single model of export-driven growth, countries across the Asia-Pacific vary in terms of their external imbalances and the domestic politics of monetary policy that underlie them. This article argues that while there is evidence of what can be called monetary mercantilism – a deliberate policy of currency management to retain export competitiveness – in some countries, others exhibit a very different pattern of monetary politics. Domestic political change may be bringing Southeast Asias more democratic countries closer to the consumption-driven model of developed economies such as Australia and New Zealand. Conversely, despite much higher per capita national incomes, less rebalancing has occurred in traditionally export-driven countries. Rather than being symptomatic of strategic success, the accumulation of external assets by surplus countries is costly and risky. Their mercantilist strategies have perverse domestic and international implications, including the continuation of privileges enjoyed by the USA as the issuer of the worlds international currency. Although they face long-term incentives to change strategies, surplus countries face domestic distributional pressures that perpetuate the status quo.

The costs of coercion: modern Southeast Asia in comparative perspective

Abstract Violent conflict tends to be costly overall, but can, under some conditions, yield net gains for the initiators of violence, thus creating incentives for coercion. This article explores the economic incentives for coercion across three different arenas and types of conflict: international conflict among states, organized political violence within the state, and relatively unorganized domestic conflicts over property rights. Although these conflicts are normally studied in separate scholarly traditions (respectively, international relations, domestic security studies and political economy), drawing from these different traditions can help explain the comparative incidence of coercive force in different conflict arenas by identifying conditions that create incentives for violence. Using cases from Southeast Asia, the article offers an explanation for the empirical pattern of violence in the region being more prevalent currently at the domestic, rather than the international, level and most pervasive in apparently low-level and unorganized forms. At least in part, this pattern is a consequence of the relative stability and consistent protection of what may be thought of as international property rights claims, compared with the greater uncertainty and inconsistency in the enforcement of domestic rights claims. While intuitively paradoxical when viewed through Westphalian lenses, which assume international anarchy and domestic hierarchy, greater contention over domestic rights claims is consistent with the relative asymmetries in coercive capabilities and institutions for dealing with rights claims at the domestic level, compared with the international arena.

Distribution, Domestic Politics and Monetary Cooperation in East Asia

Since the financial crises of 1997, East Asia has made modest but nonetheless significant steps towards greater regional integration and cooperation in the areas of finance and trade, accompanied by progress on institution-building at the regional level. Monetary cooperation, however, has not proceeded to anything like even the modest levels registered for other functional areas of cooperation. This paper investigates this discrepancy. It asks whether monetary cooperation is simply an unattractive proposition because it promises fewer net gains than cooperation on other issues, or whether there are other explanations for the absence of monetary cooperation in the region.

Opting for Openness: Capital Mobility and Monetary Sterilisation in Malaysia

ABSTRACT Malaysia gained attention for its use of capital controls in 1998, but since the early 2000s it has emphasised its commitment to an open capital account, despite experiencing volatile capital flows. As well as opting for financial openness, Malaysia chose to manage the value of its exchange rate after de-pegging from the US dollar in 2005. In a bid to escape the macroeconomic constraints that arise from capital mobility, Malaysia also chose to sterilise a large portion of capital inflows. It then made a further choice to use market-based sterilisation instruments more than regulatory sterilisation measures. These choices have carried costs and led to a build-up of economic risk. Three interrelated factors explain these choices: Malaysia’s strategy to manage the stigma arising from its imposition of controls in 1998, the increased level of financial integration that followed from this strategy, and the politically privileged position of groups that have benefitted from Malaysia’s commitment to capital openness.

The End of Monetary Mercantilism in Southeast Asia

Since the financial crisis at the end of the last century, Southeast Asian countries, along with the rest of the wider East Asian region, have amassed extraordinary levels of foreign currency reserves.1 The region’s accumulation of foreign reserves is unprecedented in scale and unmatched by that of countries in other world regions. Reserve accumulation has provided ammunition for foreign critics, who have touted the region’s staggeringly large reserves as evidence of unfair manipulation of currency values in order to boost exports. There are also domestic critics. In some countries, there is now a level of debate and contestation over exchange rate policy that has not been seen in nearly half a century. What lies behind the renewed attention to international monetary policy in East Asia? Is a form of mercantilism pervasive across much of the region? If there is evidence of mercantilism, what are the implications of such a strategy?

International Intervention and Local Politics Shahar Hameiri, Caroline Hughes, and Fabio Scarpello (Cambridge: Cambridge University Press, 2017)

for its communists and revolutionary Naxalites. Following independence, Kolkata’s population grew substantially with an immediate influx of some 700,000 political refugees (159). The infrastructure of the city was unable to cope with such a large increase, eventually totalling two million, and this exacerbated a struggling economy, damaged by the partition of Bengal at independence and the war that followed in East Bengal/Bangladesh. The problems this posed for urban planning were huge and the Communist Party of India (Marxist) organised extensively at the grassroots. Sen laments that this left little space for non-governmental organisations, considering them “empowering,” although no evidence for this claim is made nor comparative instances of “empowerment” cited (177–181). It is not clear why the author dismisses the Communist Party as practising “urban populism,” when this “political mobilization. . .[was] facilitated through the provision of land, housing, and other urban services” (179–180). Presumably these mattered for the grassroots. Chapter 5 examines the marketisation of Kolkata with a turn to economic liberalism from the 1990s. The result has been suburbanism, gated estates, department stores, malls, condominiums, fast food, foreign investment, special economic zones (considered “exceptional” by post-structuralists but, in fact, unexceptional in a world of global supply chains) and other homogenising features of globalisation seen everywhere. Sen blames the Communist Party for holding all this back and yet acknowledges that it was this party “reinventing” itself that resulted in the deepening of marketisation (195). Sounding like the colonialists of previous centuries, twenty-first century Kolkata was marketed to global corporations and the domestic capitalist class as a city governed by concerns for “hygiene, order, and beauty” (196). Real estate development boomed and Kolkata’s urban society became demarcated by class. In the conclusion the author seems disappointed that, for all this liberalisation and marketisation, Kolkata is not yet a global city (241). Sen’s book is a useful contribution to the literature on Kolkata’s history, adding a perspective from architecture and planning. The publisher has permitted it to be lavishly illustrated with 109 maps, art works and photographs; if they had been in colour, the impact of the book would have been greatly enhanced. As has been seen in this review, the puzzling aspect is Sen’s avowed radicalism but an analysis that isn’t particularly radical. The author notes this “paradox” and seeks to explain it by referring to the disjuncture between Marxism as theory and Marxist-inspired government (32–35). There’s something to this, although there’s not much that is radical in post-structural and post-colonial approaches.