CRC Conference Programme December 16th, 2017

Good evening,

This is the conference programme for next Saturday, December 16th: there will be some changes as new people will join and others cannot attend. The programme is Con-Pro Dec 17.

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Regulating the Governance of Special Economic Zones in the Greater Mekong Subregion

 

I am back from the International Research Symposium on Public Management in Asia: Innovation and Transformation, which was held at the Education University of Hong Kong. My paper was “Regulating the Governance of Special Economic Zones in the Greater Mekong Subregion.”

Abstract:

 

The countries of the Greater Mekong Subregion (GMS) (i.e. Cambodia, Lao PDR, Myanmar, Thailand and Vietnam) have all adopted the special economic zone (SEZ) as a means of facilitating their trajectory through the Factory Asia paradigm of import-substituting, export-oriented intensive manufacturing based on low labour cost competitiveness. The SEZs supplement and in some cases supercede the previously built places of development which are industrial estates and industrial parks of various sorts. They offer the benefit of having demonstrated success (as the hundreds of millions of Chinese people raised out of poverty testifies) with a political system that does not require democracy or political pluralism. This is also not required by the international treaties that are in place in ASEAN and in its relationships with trade partners. In terms of governance, each country has introduced new legislation to regulate SEZs and, thereby, encourage further inflows of foreign direct investment (FDI) and the benefits it is believed that will bring. The range of legislation includes prime ministerial decrees and comprehensive laws aiming to provide all-encompassing treatment of activities. By definition, these regulations apply to specific pieces of territory and not to the remainder of the country. They may also be limited in time, as in Vietnam, where the use of SEZs as a policy experiment is most clearly evident. However, it is not clear that international best practice has been achieved in SEZ governance because each country feels the need to adopt an individual approach to it and each has designed SEZ policy for its own developmental and political goals. These goals range from the need to maintaining good relationships with China in the case of Kyaukphu SEZ in Myanmar to the security issue of migrant workers in Thailand’s proposed border SEZs to the fostering of cross-border activities in the Mohan-Boten zone. This paper examines the different legal frameworks that have been used to regulate SEZs in the GMS and seek to identify which aspects are more useful in attracting FDI and in delivering developmental goals more generally. The paper then goes on to explore the extent to which these regulations may be brought into national usage, which is based on international comparisons.

Keywords: development, governance, Greater Mekong Subregion, policy, special economic zones

Border Economic Zones Linking China with Myanmar, Lao PDR and Vietnam: Categorization and Assessment of Sustainability

I attended the Wenzao Southeast Asia International Conference at Wenzao Ursuline University of Languages in Kaohsiung, Taiwan. The paper I gave was “Border Economic Zones Linking China with Myanmar, Lao PDR and Vietnam: Categorization and Assessment of Sustainability.” Here is the abstract:

China’s southern border region has throughout history been diverse, multidimensional and contested. At least some parts of the area belong to the anarchic upland Southeast Asian region some have called Zomia and labelled beyond the reach of the state. However, in recent decades, even the remotest parts are being brought under state control of some sort, although progress is uneven and sometimes unpredictable. China’s One Belt and Road policy will intensify the ability of state agencies to enforce control but, at the moment, a transitional period may be witnessed in which private sector agencies are taking the place of state agents. The private sector has organized a series of different economic systems in the border regions of Myanmar, Lao PDR and Vietnam, ranging from cowboy capitalism that seems to exploit all it touches to formalized economic zones and special economic zones that systematically organize production activities that have become parts of global value chains. The formation and administration of these different systems is affected by the difficult terrain, the antipathy felt by some peripheral ethnic minority groups to the central authority and the actions of transnational organizations such as the Asian Development Bank aiming to link the region together more tightly through building physical infrastructure. This paper documents the different types and scales of economic activities taking place in the three border regions identified and categorizes them. Suggestions are made as to how to promote higher levels of equality and sustainability of the different categories and an assessment is made as to how these activities will, if at all, be incorporated into the more formal state systems that will in due course be put into place.

Keywords: borders, China, Lao PDR, Myanmar, special economic zones, Vietnam

I am hopeful of the publication of this paper in a subsequent book or journal from the conference organizers in due course.

Minimum Wage Systems of the Greater Mekong Subregion

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Earlier today, I attended the 5th International and National Stamford Conference (http://conference.stamford.edu) at the Asoke campus of Stamford International University at Exchange Tower. My paper was on “Minimum Wage Systems of the Greater Mekong Subregion.”

Abstract:

As a policy, the minimum wage has always been controversial and its results contested. Proponents claim that it leads to the eradication of the worst excesses of exploitation in a labour market, while opponents argue it prices poorly-skilled workers out of a job. Evidence is inconclusive for this basic issue, partly because of insufficient evidence and the research is even more limited when it comes to consideration of subtler objectives of the policy, such as the desire to promote regional development in an unequal society or protect particular sectors (e.g. Malaysian plantation workers) or to reconfigure spatial development within a country so as to manage flows of migrant workers more effectively. The evidence on minimum wages that does exist tends to be derived from the developed economies and to be bound within a single discipline (e.g. economics) which is unable to incorporate the range of other effects and implications with which a minimum wage is associated. Assessing the effects of minimum wages in the Greater Mekong Sub-Region (GMSR) is more complex because of the absence of reliable data in many areas, the prominence of the informal sector, the large-scale undocumented internal and cross-border migration flows and the continued importance of the agricultural sector. Even so, the importance of the minimum wage as a tool of social policy has been intensified as more and more parts of the region become subject to the Factory Asia paradigm of import-substituting, export-oriented, low labour cost competitive manufacturing. Adoption of this paradigm leads to the creation of a working class and significant rearrangement of gender relations, among other changes. There is a need, therefore, to investigate the current minimum wage systems used within the GMSR and the alternatives that might be adopted, seeking to understand how they are set (e.g. imposed by government or as a result of tripartite negotiations), at what levels are they set and why and to what extent is it possible to trace the relationships between minimum wage systems and other forms of social policy. The experiences of the GMSR members in this regard are ranged along the trajectory of the Factory Asia paradigm, with Myanmar and Laos just starting to embrace it and Thailand having reached the limits of what it can achieve and seeking an upwards exit. The minimum wage strategy is, consequently, affected by time as well as space and is also dependent to some extent on the external environment.

Savan-Seno Special Economic Zone and Industrial Development in Lao PDR

 

 

On Friday, I attended the 3rd National and International Conference on Politics, Philosophy and Economics at Rangsit University in Bangkok, which was organized by the Political Science Association of Kasetsart University, which is an active body with various conferences and journals published. It was not a very large conference but it was a friendly one and well-organized.

My presentation was entitled “Savan-Seno Special Economic Zone and Industrial Development in Lao PDR,” which was successfully conducted. There is a full-text version of the paper available but only the abstract was included in the conference proceedings so I will wait to see if it gets published (in revised form) elsewhere.

Provision of Educational Services in Special Economic Zones in the Greater Mekong Subregion

Yesterday I attended the last day of the Newton Fund Researcher Links Workshop at the Asia Hotel in Bangkok organized by the British Council and hosted by Khon Kaen University. The purpose of the workshop is to help foster links between British and Thai academics, particularly early career Thai academics.

My presentation was on Provision of Educational Services in Special Economic Zones in the Greater Mekong Subregion

Abstract

Special economic zones (SEZs) are time and space-limited areas in which the regular laws of the land do not apply. Instead, various provisions are made to privilege capital above labour and, thereby, encourage domestic and especially international investment. States welcome this kind of investment because it provides direct employment and the prospect of technology transfer and industrial deepening. In the Greater Mekong Subregion (GMS) (i.e. Cambodia, Lao PDR, Myanmar, Thailand, Vietnam, Yunnan Province of China and Guangxi Zhuang Autonomous Zone) SEZs are being enthusiastically promoted because of the help it is hope they will provide states in passing through the Factory Asia Paradigm (FAP) – i.e. import substituting, export oriented, intensive manufacturing based on low labour cost competitiveness and a potential exit from it that would represent graduation from the Middle Income Trap. At various stages of the FAP, it is necessary to provide educational services to employees at different levels of seniority. This might include specific on-the-job training, vocational skills-based education or more advanced forms of learning to foster creativity and innovation. Within the GMS, educational provision has begun to be provided in some of the different types of SEZ that have been opened or which are still being built. More will be expected in the future as, for example, the Thai government has recently called for foreign universities to open facilities within its SEZs to try to meet state-level developmental goals. This paper investigates the current level of provision of such forms of education and compares it with what might be required, together with a brief consideration of how the gap might be bridged.

Keywords: education. Greater Mekong Subregion, special economic zones, vocational education

There is going to be book on the workshop’s themes in due course and I plan to submit a chapter to it.

The Role of E-Commerce in Enabling Mekong Region Subsistence Farmers to Enter Regional and International Markets Equitably

This weekend I was at the Grande Westin Sukhumvit Hotel for the Second ERIA (http://www.eria.org/) Workshop on Cross-Border E-Commerce in ASEAN and East Asia.

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My paper was “The Role of E-Commerce in Enabling Mekong Region Subsistence Farmers to Enter Regional and International Markets Equitably.”

Abstract

There are still large numbers of subsistence farmers in the Greater Mekong Subregion who live in or close to poverty. A recent four-country survey found that nearly half of all people interviewed has some form of food insecurity experience over the past year and these results were higher for people in rural areas (Hapfel & Walsh, forthcoming). Problems from which such households suffer include lack of capital and education, poor access to specific inputs and technical knowledge and no awareness of how to obtain market access. When farmers do enter into contracts for cash-crop production, they face problems such as lack of effective contract law, contracts in verbal not written forms and the propensity of either side to the contract to change conditions in response to short-term price changes. In any case, farmers suffer from the need to trade commodities in volatile markets, the lack of local market development that would make product diversification less risky and inability to convert commodities into value-added products in the context of a region vulnerable to environmental shock and the emerging effects of global climate change. While farmers’ fortunes have been transformed in Thailand, this was at least partly the result of an active, interventionist private sector and extensive transportation and distribution infrastructure that do not exist to anything like the same extent in other Mekong region countries. However, what people in rural areas do now have in great numbers is access to the internet through relatively cheap mobile telecommunications. The penetration of mobile telephones in every country has now become very high and, while freedom of speech with respect to political issues is still restricted, this rarely has an impact on commercial relationships and networks. At the very least, this technology permits people to exchange knowledge about market prices and demand conditions for various products. However, the technology does not permit communications with people speaking a different language nor suggest how to find new market contacts, especially when they are cross-border in nature. There is a need, therefore, to try to understand what mechanisms need to come into existence in order to promote the kinds of remote linkages required to help bring farmers into market relationships on a more or less equitable basis. Is it necessary to introduce either new laws or regulations to ensure e-commerce takes place in a desirable manner or else to change the way that existing laws or regulations are policed? This paper identifies the current conditions under which farmers in the Mekong region currently exist and analyses their ability to access both mobile telecommunications in itself and the network benefits that may flow from it. It also outlines what legal and regulatory frameworks exist and how they may need to be modified to promote equitable market development. The analysis leads to a discussion of what might be achieved through e-commerce in this context and provides recommendations for stakeholders at a variety of levels.

Keywords: agriculture, e-commerce, equitable development, Greater Mekong Subregion, markets

The event went well and we researchers are now asked to submit the final version of the papers on August 20th, 2017.