Jonathan London's Blog

Jonathan London's Blog

Pondering ‘inclusive growth’

This week I am attending the Global Development Network’s 14th Annual Conference, being held in Manila. The theme’s of this year’s conference is “Inequality, Social Protection, and Inclusive Growth.”Here is the conference trailer (yes! the conference has a trailer!)

Last month I attended a similar conference in Jakarta, on “Poverty, Inequality, and Social Protection in Asia.”

These are, no doubt, highly suitable themes given the global aftermath of the world financial crisis and the apparent failures of development policies stretching back several decades.

And the conferences’ themes do betray certain significant changes in international development discourse. There is today greater attention (some would say “lip service”) to themes such as inequality, protection, and inclusion. A notable feature of this discourse is talk of the need to sustain attention to these areas (i.e. inequality, protection, and inclusive growth) not only in times of crisis but in better times.

Inequality in easy enough to grasp and evidence suggests inequalities in Asia are growing. Whether and to what extent growing inequality constitutes a threat to well-being and/or sustained economic growth requires an additional set of questions and answers about the specific features of inequality in specific settings. Anyways, let’s leave inequality to one side for the moment.

What about social protection? This, according to prevailing policy lingo, comprises three major elements:

  1. Social insurance, which comprises income guarantees and protection for formal sector workers in instances of unexpected unemployment and disability and retirement (forms of SI include pensions, unemployment, social insurance);
  2. Social assistance (or “safety-nets”), by contrast, refer mostly to state transfers (and quasi-transfers, such as fees exemptions). Frequently such transfers are targeted (and often means-tested) so that resources are (presumably) efficiently channeled to the ‘deserving poor.’ A classic critique of assistance is that it is expensive, inefficient, and ultimately counter-productive to devote significant resources to ‘count the poor’ and that targeting also ruins social solidarity (more on this later, some day);CCTs (conditional cash transfers) are a ‘hot’ area of social protection that has gained a great deal of attention given some successful experiences in Latin America and in Mexico and Brazil in particular. In Asia, the Philippines and Pakistan are areas where CCT programs are being expanded. Education, water, and energy are all targets. Finally,
  3. Labor market interventions represent a third aspect of social protection and also are central to the notion of ‘inclusive growth.’ Such interventions are geared to stimulate, facilitate, and sustain employment, the idea being that a job is the best form of social protection and implies graduation from social assistance.

A few things need to be said about ‘social protection in Asia’ before talking about the notion of inclusive growth.

One striking figure is that public investment in social protection in Asia is low, comparable only to that spent in sub-Saharan Africa as a share of GDP; this despite the fact that Asia is more prone to natural disasters than any other world region. One should note, the claim that social protection measures are expensive is mostly nonsense. The largest such programs in the region account for less than 2 percent of GDP.

It is also alarming in the face of major changes, including rapidly aging populations, climate change, and so on. Finally, it is notable that social insurance is available only to a tiny share of Asia’s massive population, restricted as it is to the formal sector of the region’s wealthiest countries.

Let us turn briefly to this notion of “inclusive growth,” which is in many respects the buzzword of the moment. In a recent paper presented both at the Jakarta and Manila conferences, prospective ‘cite-monsters’ Fabio Veras Soares, Raquel Ramos, and Rafael Ranieri (of Brazil) have tried to clarify the concept of ‘inclusive growth.’ ‘Inclusive growth,’ they emphasize refers not simply to growth that benefits large segments of the population. It emphasizes not only gains in income, but gains across a multidimensional spectrum of development indicators, with an emphasis on participation and expansion of opportunities. Although I have not read the paper, it seems there is no widely accepted understanding of inclusive growth and, correspondingly, no accepted way of measuring it.

As for promoting equity, protection, and inclusive growth, there are many questions to be asked. It is clear “trickle-down” rarely works and that the “extractive institutions” that Acemoglu and Robinson speak of are generally enemies of inclusive growth growth. When they are successful, protection and inclusive growth help improve economic security by improving equality of opportunity. Yet we are living in an era of ‘market citizenship’ as Kanishka Jayasuriya has put it….with profound questions about the future of citizenship and the possibilities of democratic demands on the state….

Some people think the talk about social protection and inclusive growth is, at worst a hoax, mainly aiming to manage deprivation and conflict…and to expand the role of markets in the regulation of social life as an end unto itself….

Promoting truly inclusive growth is difficult at the best of times. State-socialist economies attempted to do so through the artifice of full employment. Unfortunately this came at the cost of ruinously bad economic incentives that stifled growth overall. In the context of global markets, how can ‘decent and stable employment’ as the ILO calls it, be promoted in the context of endless economic restructuring and the alleged ‘global race to the bottom.’?

Creating durable employment opportunities is structurally difficult given the features of economies in Asia, which is itself a feature of the manner in which these countries are plugged into regional and global production networks. One of the main policy responses has been to emphasize the importance of skilling. Yes, this is a good idea. But in and of itself it says little about what types of skills for what types of jobs. Increasingly the emphasis is not only on conventional cognitive skills but also ‘critical and creative skills.’ Are these the answer? What is the role of public and private agencies in stimulating and governing ‘inclusive growth’?

If ‘inclusive growth’ is about promoting employment and sustainable livelihoods, one major question mark is where people will make their livings. Despite decades of industrialization, the agriculture still accounts for 40 percent of employment in the region, which is the largest share (larger than manufacturing and services). Outside of agriculture, the vast majority of employment occurs in the informal sector, particularly in services. What we observe in many countries in developing Asia, economists observe, is movement from low-value added agriculture to low-value added services.

So, how can developing countries in Asia move toward containing inequalities, improving social protection, and enhancing the inclusiveness of growth? Good question. Perhaps I’ll have something more useful to say on this soon…for know just sharing some notes from the back of the conference hall…

JL, Manila

Eyes on the prize

It is tempting in the context of the most recent developments in Viet Nam – in particular the profoundly disappointing if somewhat predictable conclusion of the constitutional revision exercise, the now-steady stream of arrests of bloggers and emerging concerns over the status of dissident Cù Huy Hà Vũ – to conclude that nothing much at all has changed with respect to Viet Nam’s politics.

The confidence votes taken in the National Assembly last week represent a fast-fading bright spot in what has been a decidedly discouraging few weeks. The confidence votes In my view were and remain a genuinely important development in the evolution of the National Assembly, a forum which from its infancy was made subordinate to the Communist Party of Viet Nam and hence manifests all the limitations of one Party rule. One important contribution of the votes is that they introduced an element of indeterminacy in the country’s politics, something which has been mostly missing in a country where a hierarchical and secretive system of Party cells penetrates virtually all social organizations. The politics of the National Assembly, in other words, are no longer entirely the precooked politics we are so accustomed to. That said, the Assembly is in practice a body constituted by a handpicked group of party members and ‘party people.’

Alas, within a few days of the NA’s confidence voting and the buzz it generated, the sense of possibility has given way to something depressingly familiar. As it now appears the State, presumably under directions from the Politburo, is redoubling efforts to silence and short circuit the development of Viet Nam’s increasingly dynamic reform constituency.

Let us turn briefly to the arrests. Within the space of three weeks, three persons have been charged under the new favorite tool of Viet Nam’s repressive agencies: Article 258 of the Penal Code. This positively Stalinist measure stipulates that “Those who abuse the rights to freedom of speech, freedom of press, freedom of belief, religion, assembly, association and other democratic freedoms to infringe upon the interests of the State, the legitimate rights and interests of organizations and/or citizens, shall be subject to warning, non-custodial reform for up to three years or a prison term of between six months and three years.” I ask, why does Viet Nam, a country with such great potential, remain a police state? How do such repressive institutions contribute to the country’s future?

The arrests, of course, were meant not just to silence a few individuals, but rather to threaten all reform-minded individuals. It is too early to know whether they will be effective. But early indications suggest that the arrests, far from pouring cold water on political protest, have deepened the sense of determination among those within, outside, and on the borders of the state who seek breakthrough political reforms. In the mean time, Viet Nam’s international image and reputation is once again being dragged through the mud.

The arrests also invite a sober assessment of the possibilities and limits of Internet activism in Viet Nam. A recent article in the Financial Times on net activism in Southeast Asia (written by Daving Pilling and with contributions from Nguyen Phuong Linh) noted the power of the internet in development on open political debate. the-net-delusionBut the article also pointed out the limits of the Internet activity in authoritarian settings, here making reference to Evgeny Morozov’s interesting but not unproblematic book The Net Delusion (see a thoughtful review here), which challenges the idea that the internet is an effective tool for emancipatory activism.

Standing back and observing what is going on in Viet Nam today we can also agree that while the Internet in Viet Nam has facilitated the development of lively reform-minded political discourse. Yet until now open political discussions in Viet Nam remain largely in cyberspace. While the discussions are often interesting they also, perhaps somewhat predictably, devolve into a kind of echo-chamber in which great energy is given to a critique of Viet Nam’s backward political tendencies and relatively little energy given (perhaps because of the inherent dangers) to proactive politics.

Social scientific research on social movements suggests that while open calls for reform can be a powerful motive force, such calls only materialize into potent movements when they are focused and supported by well-organized and disciplined actions oriented around specific goals. This, in turn, requires forms of organization than can effectively mobilize and deploy various ‘social movement resources’ over a sustained period in a constantly changing political environment. By contrast, chaotic expression, while perhaps cathartic, is unlikely to bring tangible results in and of itself.

Viet Nam’s reform constituency can indeed be likened to a ‘big tent.’ But until now activities within that tent remain decidedly chaotic. Which brings us the notion of “political opportunity structure.”

The formation of social movements does not occur in a vacuum but rather in a dynamic social environment animated by a continuously evolving set of opportunities and risks.  The success or failure of reform movements globally often rests on how they conduct themselves in the face of such of these risks and threats.

The constitutional reform process is a nice example of the political opportunity structure idea. The discussion of constitutional reforms did not evolve by accident. It was initiated rather clumsily by the state and then seized upon by a group of committed persons who sensed a political opportunity and deployed their resources and talents in an organized and strategically wise manner. What started as a stage-managed exercise by the state evolved (thanks to brave deeds of reform advocates) into a lively national debate that was truly unprecedented in Viet Nam’s history.

Recall that advocates of constitutional reform in this instance were focused on the concrete issue of whether an how to fundamentally reform the constitution, which linked to the larger issue of institutional reforms. Admittedly, the constitutional reform movement (and I do think it was a movement of sorts) has yet to bring significant changes in Viet Nam’s formal institutions, it has brought quite remarkable changes in the tone and character of Viet Nam’s political discourse. And that, in my view, is a very significant result.

Current advocacy around the status of Cù Huy Hà Vũ perhaps represents another political opportunity. Once again, this is an opportunity created by the clumsy acts of a repressive state. But now it has on its hand a determined and eloquent dissident; a figure who commands wide respect both within and outside of Viet Nam.

In the context of an unremitting campaign of arrests and detentions, one ought not lose sight of the forest for the trees. There is value in taking a broader view.

It is safe to say that the last 12 months have been quite different than any comparable period in Viet Nam’s history. The distinctiveness of this period can be seen within the state apparatus, with the Central Committee’s rebuke of the politburo, the tenuous position of Nguyen Tan Dung, and most recently the apparent failure of regime conservatives to usher Nguyen Ba Thanh into the politburo. Ngân và Nhân remain somewhat mysterious persons and it is too early to discern whether their alleged open-mindedness is cosmetic or real.

We are well aware that factionalism has always been present within the Party. Perhaps it is encouraging that the factionalism has taken on a more public face. Indeed, to my mind the more ‘normal’ and open factionalism becomes within the Party the closer Viet Nam will get to the kind of political pluralism that can support a transition to a more democratic future. While it would be foolish to hold our breath, political developments within the Party are significant and must be carefully tracked and responded to in appropriate ways.

In the meantime, outside the party-state, and on its borders, Viet Nam is clearly different than it was a year ago. While one can still be thrown in jail for displaying the ‘wrong’ political symbols or saying bad things about Beijing or calling for the overthrow of the regime, the growing ranks of reform-minded Vietnamese today are at ease in stating their preference is for political reforms, and not only online. For example, many Vietnamese are comfortable in stating their preference for the elimination of Article 4 of the Constitution. These people are not for the destruction of the Party and they are not ‘hostile forces.’ They are patriotic Vietnamese who wish for the Communist Party of Viet Nam to end it political monopoly and compete alongside other patriotic parties in pursuit of the promotion of the national interests in a peaceful, secure, and democratic social order.

In the short term there are important practical questions to be asked. For example, how should pro-reform parties conduct themselves in the face of crude repression along the lines of arrests and detentions under Article 258? That’s a good question. There probably a need to be patient, prudent, imaginative, and resourceful, and to avoid falling into the various traps laid out by enemies of reform.

While it is admittedly hard to do, there is a need to look beyond the institutions and agencies of repression. The police who show up to arrest and intimidate bloggers are in the last analysis only carrying out only human beings operating within a specific institutional orders. They are living, breathing people with families and hopes. Their professional futures hinge on how well they follow orders informed by mistaken policy.

The same can be said for the state-sponsored internet discussants who constantly try to guide discussions with all sorts of false arguments. On my Vietnamese language blog, for example, my observations about political protests in Viet Nam were wrongly construed by some ‘discussants’ as arguments in favor of protesting per se. I emphasized that protest in a democratic polity is a mechanism for bringing pressure to bear on unaccountable political actors. I am not in favor of protest per se and reject violent protest in all its forms. One of these same discussants said I should focus on victims of Agent Orange and dioxin. Absolutely, I should. But this issue itself has nothing to do with political reform. And in the last few days Vietnamese have been subject to ridiculous media reports, which have raised rather than diminished concerns about the status of CHHV.

The arrests and intimidation and the “one-way politics” are dispiriting and not easily dealt with. Yet advocates of true reforms lose when they devote most of their energy to responding to these practices and relatively little in proactive  politics.

A forward-looking (rather than ‘reactive’ – not reactionary) disposition can perhaps help deal with the punishing psychological aspects of living in a police state while also promoting a more constructive approach.

Are there historical examples Viet Nam might look to? In India’s struggle for independence, campaigners refused to be deterred by unjust repression and they directed their energies not at police or their oppressors but at eliminating oppressive policies. In the United States’ Civil Rights movements, activists from diverse backgrounds stressed the need to maintain discipline and to stay focused on the ultimate goal. This spirit was neatly captured in phrase (keep your) “eyes on the prize.” (It should be emphasized here that the success of the US civil rights movement was not about singing songs, it was about organization.) In South Korea, workers and students struggled over the course of a decade for reforms. And today, while South Korea’s politics are not perfect, they are light-years ahead of Viet Nam, which is ironic given Viet Nam’s leaders interest in ‘the Korean model.’ Viet Nam’s own struggle for independence, though it was regrettable violent and destructive, was at times energized by a deep-held confidence in the certitude of ultimate victory. According to many within and outside Viet Nam’s state apparatus, ultimate victory has yet to come.

If Viet Nam is to achieve the reforms it needs to join the ranks of the world’s open and democratic societies, it is precisely careful organization and long-term determination that are needed. History cannot be rushed. But change will not occur without bravery, prudence, and imagination. Advocates of reforms in Viet Nam envision and a society in which freedoms enshrined in the constitution are actually protected. In which Stalinist artifices are a thing of the past. A Viet Nam which is strong, secure, and democratic and is governed by the rule of law, under-girded by a truly independent judiciary. If the Communist Party wishes to bolster its legitimacy, it should dispense with its police-state tactics and get down to the business of promoting the kind of breakthrough reforms Viet Nam so obviously needs. The sooner it does so the sooner Viet Nam can find a truly promising path to its future. But they will only do so if reform champions keep their eyes on the prize.






Some initial thoughts on confidence votes in the National Assembly

The conduct and results of the confidence votes taken in Viet Nam’s National Assembly this Monday and Tuesday on the performance of state and assembly leaders is a certifiably remarkable development. At minimum the development is the latest indication that though Viet Nam remains an authoritarian polity, the country’s political system, in some important respects, is evolving in some encouraging if indeterminate ways.

Public confidence votes are an utterly new phenomenon in Viet Nam. And though their introduction is an artifact of tensions within the state, their appearance is a fresh reminder that Viet Nam’s politics are in uncharted waters. Such a lightly stage-managed affair remains unimaginable in China, for example, a country with which Viet Nam shares many institutional traits.

The results of the confidence votes, which saw the sitting Prime Minister Nguyen Tan Dung receive confidence votes from from only 67 percent of sitting parliamentarians is certainly atypical of a one-party state. Indeed, it is within the range of what we might expect for similar exercises in a pluralistic polity, such as South Korea, to cite a regional example.

The result itself was not wholly surprising, as PM Dung’s perceived mismanagement of the economy and implication with corruption has won him many enemies. But it does indicated that politics in Viet Nam is undergoing a peaceful evolution of sorts. Beyond the results themselves, the very fact that Viet Nam undertook a confidence vote and rather swiftly publicized its outcomes is not merely of symbolic value, has a substantive significance in and of itself. At the very least the results represent a landmark event in the historical development of the national assembly.

Perhaps one unintended consequence of the these proceedings and their outcomes is the that it will reinforce perceptions among Vietnamese of their Prime Minister’s unconvincing grade D performance; a score unheard of in the a country where the leadership has in the past lauded its presumptively unique capacities for leadership. In addition to the Prime Minister, the governor of Viet Nam’s central bank and the country’s education and health ministers also received conspicuously poor scores.

Taken on the whole, there has never been anything quite like on the public face of Viet Nam’s politics. The Party’s internal processes remain as opaque as ever.Viet Nam’s politics retains its fundamental imitations. The power of the National Assembly is modest and the institution lacks autonomy. To say that is a democratic institution of any sort is clearly incorrect as its ‘representatives’ are ‘elected’ through a process that is in effect a Party managed process of political appointments. Nonetheless, the body has adopted an increasing number of ‘accountability’ measures including live broadcasts of what are at times intense query sessions.

Since its earliest days the democratic credentials of the Assembly were short circuited. The Assembly’s capacities are limited, at its numbers are dominated by relatively young and inexperienced delegates with little power of their own.Be that as it may, the public conduct and results of the confidence vote are a notable development in a country infamous for its opaque politics. The results remind us about the deep divisions running through the assembly and the Communist Party itself. Perhaps such divisions are a sign of malaise. Perhaps they represent a process of political maturation.