Why China cares about the label of

democracy

Author: Xunchao Zhang, University of Wisconsin-Madison

27 January 2022

If you access any Chinese state media or pro-state social media published in late 2021, you will be bombarded with attacks on US President Joe Biden’s ‘Summit for Democracy’ and relentless insistence that China is the world’s largest democracy. Beyond the fear of geopolitical containment, it is puzzling why China cared about Biden’s democracy summit.

It is not initially clear why China would insist on being a democracy when claiming democratic status risks falling into a rhetorical trap.

While most Western media dismisses China’s claim to democracy as simply a cynical propaganda ploy, some ‘democratisation optimists’ in the West have suggested that China’s reaction to Biden’s summit shows China’s commitment to some vague notion of eventual democratisation. These observations miss the point. China’s reaction to the summit — clinging onto the concept of democracy — largely reflects a lack of a conceptual alternative, geopolitical fear and some genuine domestic perception that the country is democratic.

The most important problem facing China is a lack of alternative concepts to legitimise the state. Although contemporary China is the heir to a socialist revolution, beyond nostalgic leftist circles, orthodox Marxism cannot capture the public imagination as an alternative to liberal democracy.

Granted, there is growing intellectual interest in critiques of democracy such as meritocracy and the Schmittian notion of self-justifying authoritarian state power. Eric Li is perhaps the most eloquent critic of democracy in China offering universal critiques of liberal democracy, such as institutional vulnerability to being captured by elites and the tendency to be gridlocked in unhealthy partisanship and identity politics. Beyond critiques, there are also alternative visions being offered, such as by Daniel Bell who often characterises China as an examination-based meritocracy rather than electoral democracy.

Yet, so far, none of the alternative concepts of legitimisation have gained official endorsement. You will not find meritocracy or citation of Carl Schmitt in the plethora of documents produced by China Communist Party plenums. These alternative concepts are rare sights even in the less rigid Chinese media propaganda targeting foreign audiences.

There are also geopolitical concerns. Embracing any legitimisation concept other than democracy by China, even one that is not explicitly anti-democratic, may unite the Western world in a democratic alliance against China. There are anti-democratic leaders and anti-democratic movements all over the world, usually referred to as ‘populists’, who do not have a systematic anti-democratic ideology. Most of these populists also take up anti-China foreign policy positions. Some even treat China as a scapegoat for their domestic grievances. There is little chance for anti-democratic solidarity between China and the international populist right.

It is advantageous for Beijing to cling to the democratic label to avoid contributing to the formation of a united Western democratic coalition against China. Plenty of people in China genuinely believe their country is democratic. One historical reason behind this is the presence of so-called ‘people-oriented (minben)’ thought in traditional Chinese political culture, which emphasises governance ‘for the people’, rather than government ‘by the people’. Mencius outlined the classic Confucian ideal of state–society relations, under which ‘the people come first, the state comes second, [and] the ruler comes last’.

Yet a state that works for the benefit of the people is not necessarily democratic. People-oriented governance often means a paternalistic but responsive form of authoritarianism. Elites and the public in China often use performance metrics, rather than procedural and institutional criteria, to measure how legitimate or ‘democratic’ the state is. These performance metrics include economic growth and also Beijing’s ability to avenge China’s century of humiliation and reclaim China’s great power status.

The primacy of performance metrics over procedural ones is also reflected in survey data. Pollsters repeatedly find that a majority of Chinese respondents consider China a democracy. It would be self-deceiving for Western observers to dismiss these survey results as a simple reflection of public quiescence under state pressure. A more nuanced interpretation is that ‘democracy’ is simply what the public calls a state that functions well enough to live in.

Despite skepticism aboard, China’s endeavour to redefine democracy in its image has a receptive audience domestically. As long as enough of the Chinese public recognise their country as a ‘democracy’, there is no urgency for Chinese leaders to seek out risky alternative concepts of legitimisation.

While it remains advantageous for China to cling to the label of democracy in the short term, China’s claim to the label is risky. It is difficult for Beijing to redefine democracy in its own image internationally. And claiming to be a democracy makes China’s political system more vulnerable to Western critiques. By clinging to the democratic label, China risks falling into the rhetorical trap of having to keep defending how democratic it is.

Unless the Chinese state offers official backing to an alternative theory of legitimacy for its political system and provides more space for political theory and alternative discourses within China to flourish, it is unlikely that China can escape this rhetorical trap anytime soon.

Xunchao Zhang is a PhD student in the Department of Political Science at the University of Wisconsin-Madison

https://www.eastasiaforum.org/

The Rajapaksa family’s tightening grip on

Sri Lanka

Author: Shyamika Jayasundara-Smits, Erasmus University Rotterdam

29 January 2022

In 2021, the COVID-19 pandemic provided additional cover for a regressive turn in Sri Lankan politics. The consequences of economic and political crisis became starkly evident shortly before the year ended as the hold of the Rajapaksa family on the Sri Lankan state tightened.

From early 2021, the dead came to haunt the Rajapaksa regime, as the government — against all medical and scientific advice — continued to enforce the cremation of deceased Muslims. This drew major backlash from local civil society groups, the medical community and some in the international community. When the policy was eventually changed, it was not due to any government change of heart, but more likely intended to avert harsh words at the UN Human Rights Council’s March deliberations in Geneva, when a country-specific resolution on Sri Lanka was delivered.

While alleged war criminals continue to enjoy impunity, the regime clamped down on freedom of expression, harassing and intimidating journalists and expanding the use of draconian laws, including the Prevention of Terrorism Act (PTA). Though such moves were noticed in international fora, the government used the pandemic as an excuse to silence dissenting voices and clamp down on protests. These included mothers in the North seeking justice for lost children, youth protesting the privatisation and militarisation of higher education (the KNDU Bill) and farmers protesting overnight import bans on chemical fertilisers.

Strong words at the UN Human Rights Council in March and in the High Commissioner’s September oral report on Sri Lanka added pressure on the government to address lingering injustices with seriousness and urgency. Strong objections were raised to Sri Lanka’s poor human rights record during debates related to extending the EU GSP+ tariff scheme at the European Parliament in June. Sri Lanka’s Foreign Minister in Geneva and permanent representative to the United Nations in New York both claimed an international conspiracy in response.

There were a few glimmers of hope for the victims of war crimes in practice. The administration of US President Joe Biden imposed travel bans on some of the Sri Lankan military’s top brass. The Hague-based people’s tribunal indicted the Sri Lankan government after probing the 2009 killing of Lasantha Wickramatunge — a vocal journalist who reported on the infamous 2006 MIG-deal implicating Sri Lankan President Nandasena Gotabaya Rajapaksa, who was then defence secretary.

The government played the victim in the domestic arena. The newly-formed Commission on Political Victimisation was mandated to investigate the ‘victimisation’ of public servants and state officials working in corporations, the armed forces and police. The Commission’s lofty aims were not met, and instead it became a means to ensure the ruling Rajapaksa family and their friends continue to avoid facing justice. Those who lodged legal complaints against the regime’s supporters were ‘persuaded’ to withdraw them.

Further militarisation of the state was evident with the appointment of more military personnel to civil posts. Partisans, military elites and Buddhist monks were richly rewarded for supporting the regime, while Rajapaksa ensured an intensified ‘Buddhisation’ of state institutions. Prominent Buddhist monks were given high-ranking positions on the Human Rights Commission and one was appointed as Vice Chancellor of Colombo University. The Bodu Bala Sena (Buddhist Task Force) leader Galagoda Aththe Gnanasara — a convicted criminal who has incited violence against the minority Muslim community — was ironically appointed to the President’s new pet political project, ‘One country, One law’.

The Rajapaksa regime’s economic mismanagement of state resources through continued rewards to capitalist cronies and family members further reinforced Colombo’s economic decline. Credit agency Fitch Ratings predicted impending economic crisis after downgrading Sri Lanka’s economy to CC status in December 2021. In the last quarter of 2021, Sri Lanka’s economy contracted by 1.5 per cent and foreign currency reserves shrank from US$7 billion in 2019 to US$1.5 billion in December. Subsequently, government import restrictions led to widespread food and fertiliser shortages.

Further misery was added to households battling soaring inflation by a series of gas cylinder explosions due to poor quality gas imports. Colombo also fell out of grace with the IMF, which offered COVID-19 relief packages to most countries other than Sri Lanka, citing the government’s unwillingness to restructure its ailing economy. Rapid passage of the Port City Bill concerned some citizens and the media, who noted that the bill mainly benefits close friends and relatives of the Rajapaksas — while reinforcing close ties with Chinese state companies.

While Fitch downgraded Sri Lanka’s economy to CC, disheartened citizens downgraded the President’s status from the ‘Terminator’ to ‘Nandasena’, his first name. This symbolic political move was an attempt to distinguish between the decorated war-winning defence secretary — often identified by his second name, Gotabaya, or pet name ‘Terminator’ — from the President entrusted with the responsibility of looking after the welfare of all.

It is hard to imagine what positive political and economic developments can reasonably be expected in Sri Lanka in 2022. The pandemic means that global economic growth is likely to be sluggish or even negative, and Sri Lanka’s political elite seem intent on worsening the domestic economic crisis. Perhaps Prime Minister Percy Mahinda Rajapaksa’s spiritual visit to India at the end of the year — as well as the offerings he made to Indian deities — will miraculously cure Sri Lanka’s ills. The US$500 million in emergency loans requested by Colombo from India that may materialise in 2022 more likely will.

Shyamika Jayasundara-Smits is Assistant Professor in conflict and peace studies at the International Institute of Social Studies (ISS), Erasmus University Rotterdam.

https://www.eastasiaforum.org/

Solving Japan’s wage stagnation

Author: Richard Katz, Carnegie Council for Ethics In International Affairs

1 February 2022

The issue of wages has been on Japan’s political agenda since former prime minister Shinzo Abe urged companies to raise wages to fight inflation. Prime Minister Fumio Kishida included wage hikes in his slogan of ‘new capitalism’. But the government has only applied toothless measures, such as requests by the prime minister for companies to alter their behaviour, applying temporary tax cuts for permanent wage hikes and enacting a series of weak ‘equal pay for equal work’ laws.

Japan is hardly the only rich country where price-adjusted wages have been suppressed in the last few decades, but it’s second only to crisis-wracked Greece in showing virtually no growth in labour pay over the past quarter century. For most of the past two centuries, wages in industrial countries grew over the long term at around the same rate as GDP. Then, beginning in the late 1970s, things changed.

The wage share of national income has now fallen to its lowest level in a half-century. Between 1996–2019, productivity grew at around an average of 30 per cent in 16 rich countries, including Japan, while real hourly compensation grew only 19 per cent in the typical country. In Japan, it was a negligible 3 per cent. Until recently, Japan’s workers ironically got a higher share of national income than workers elsewhere.

While economists disagree on whether policymakers can remedy the situation, the brunt of the evidence suggests that they can.

Some economists contend that the primary factor is the rise of Information and Communications Technology (ICT). To a greater degree than in past technological waves, ICT has decreased demand for low- and medium-skilled labour, and this has not been sufficiently offset by increased demand for high-skilled labour, so, more of the fruits of growth have gone to owners of capital via profits. The OECD estimates that new technology and related trends caused about 80 per cent of the decline in the wage share of income. If technology is destiny, then policy solutions are limited.

But technology cannot be the whole story. After all, wage suppression began two decades before the marriage of the personal computer and the internet sparked the ICT revolution. In Japan, it goes back to at least 1980 (the earliest comparable data available). Besides, rich nations have access to the same technology, so why do outcomes differ so much from country to country?

For these reasons, some experts correctly stress the declining political and bargaining power of labour. As early as 2001, Olivier Blanchard, later the IMF’s chief economist, argued that wage suppression resulted from diminishing union membership, neoliberal deregulation measures and the weakening of past alliances between labour and political parties. The decline in the labour share of national income has been most severe in countries like Japan, the United States and South Korea, where union contracts cover the smallest share of the labour force.

There is a marked difference in wage outcomes depending on the extent to which countries apply ‘active labour measures’ — some of which can raise the labour share of income by several per cent of GDP. These measures help unemployed workers find new jobs via retraining or matchmaking between employers and employees, enhancing their ability to resist demands for wage restraint. Japan and the United States unsurprisingly come near the bottom in spending on such measures as a share of GDP.

The diminished enforcement of antitrust measures in many countries has also enabled ‘superstar’ companies to gain an inordinate market share, increasing their bargaining power in a growing number of industries. In those industries, the labour share of income declined even more severely.

Japan’s situation is even worse than these global trends. The biggest reason for this is the sharp upsurge of poorly paid non-regular workers who rose from 15 per cent of the labour force in the 1980s to nearly 40 per cent in 2021. While regular workers on average earn 2500 yen (US$21.50) per hour, temporaries make just 1660 yen (US$14.30) and part-timers a meagre 1050 yen (US$9.05).

France, too, has a third of its labour force as non-regular workers, yet it suffers only a small wage–GDP gap. In both countries, the law requires equal pay for equal work. While France enforces its law, Japan has not mandated any Ministry to investigate companies and prosecute violators. Virtually all French workers are covered by union contracts, whether or not they belong to a union. In Japan, only union members are covered by contracts, and temporary workers are legally banned from joining. The result is that in France, unlike Japan, regular and non-regular workers labouring side by side in the same job get the same compensation per hour.

If Kishida wants results, enforcing ‘equal pay for equal work’ laws and instituting active labour measures would be good places to start, along with enabling temporary workers to join unions. But that would step on the toes of the powerful employers lobby, while the penny wise and pound foolish Ministry of Finance would likely object to spending money on active labour measures. Kishida’s actions on this issue are a key test of whether his ‘new capitalism’ is anything more than a catchphrase.

Richard Katz is a Senior Fellow at the Carnegie Council for Ethics In International Affairs. This is an excerpt from Toyo Keizai.

https://www.eastasiaforum.org/

Japan’s new model of capitalism in an uncertain world

15 February 2022

Author: Shujiro Urata, Waseda University

The year 2021 began with hope that the successful development of a new vaccine would relieve the world from the COVID-19 pandemic. But while vaccines were rapidly deployed in Europe and the United States, the Japanese government’s slow approval process delayed its rollout.

Under former prime minister Yoshihide Suga, the vaccine rollout was eventually accelerated after administrative and logistical hiccups were resolved, contributing to a decline in the number of infections. A state of emergency continued until 30 September as Suga needed to keep cases low to host the Olympics and to increase his chances of being re-elected as leader of the Liberal Democratic Party (LDP) in the late-September election.

Suga hosted the Olympics in the face of general public opposition. The number of infections skyrocketed during the event, resulting in a rapid decline in Suga’s approval rating and forcing him to cede his leadership of the LDP. Fumio Kishida replaced Suga as prime minister and won the general election in October owing to the support of key conservative party members, weak opposition parties and a sharp decline in COVID-19 cases.

Japan’s economic performance was stagnant throughout 2021. According to IMF projections, Japan registered a 2.4 per cent GDP growth rate for the year — an improvement from -4.6 per cent in 2020 — mainly due to inactive consumption from continued uncertainty surrounding COVID-19. A shortage of semiconductors resulting from the pandemic disrupted production of automobiles and electronics among other products, causing a slowdown in economic activity.

The economic consequences of COVID-19 are characterised by a K-shaped pattern reflecting two divergent trends — upward and downward. An increase in demand was found in the technology sector, especially for products such as office machines, while a decrease in demand was found mainly in service sectors such as tourism. Another K-shape consequence was observed for the rich and the poor. The wealthy saw the value of their financial assets rise, while the poor suffered from declining wages and unemployment, resulting in widening inequality.

Looking forward to 2022, Kishida must achieve economic recovery and sustainable growth in an increasingly uncertain environment caused by the new Omicron variant of the virus, climate change and US–China rivalry, among other factors. In response to COVID-19, Kishida is ready to take necessary measures — including accelerating the rollout of vaccine booster shots, speeding up the approval of oral treatments and providing government support for people and companies negatively impacted by the pandemic.

Kishida has advocated a ‘new model of capitalism’ to promote economic growth and equitable distribution simultaneously. The model’s two components are to be achieved by generating a virtuous cycle of economic growth and increasing wages through the collaboration of public and private sectors.

The model’s first component for economic growth has four sub-components, innovation, digital economy, climate change and economic security. The government is to play an active role in each of these. For innovation, the government will support start-up companies and develop human resources in science and technologies. For digital economy, it will build digital infrastructure to provide various services throughout the country. For climate change, it will undertake investment and regulatory reform in the clean energy sector to achieve carbon neutrality by 2050.

Kishida is particularly keen on economic security. He realises the increasing risks of supply issues for strategically important materials and technologies due to heightened geopolitical tensions and possible natural and health disasters, including new infectious diseases. Following similar actions taken by the United States and other major countries, Kishida created the position of minister in charge of economic security in his new cabinet. He is also expected to pass the ‘Act for Promoting Economic Security’, which contains provisions to strengthen supply chains and build critical infrastructure. 

A major element of the model’s second component, which focusses on achieving equitable distribution, is increasing wages. For this reason, fiscal measures including tax breaks to companies, increasing wages and direct subsidies to selected groups of workers such as nurses are being considered. The impacts of these measures are likely to be small. A variety of government support for child-rearing — such as expanding capacity for nurseries and childcare centres and the provision of a housing allowance to families with children — are also included. Yet more drastic reform in the labour market must be undertaken to increase overall wages.

The possible economic consequences of Kishida’s new form of capitalism demand closer scrutinisation. This is particularly the case for economic security, as national security is often considered without factoring in economic consequences or costs. Kishida’s new model of capitalism will require large government expenditure, increasing Japan’s already substantial fiscal debt. Kishida needs to provide a blueprint for achieving fiscal sustainability, otherwise citizens will fail to increase spending, against his expectations.

Full implementation of Kishida’s policy hinges on many variables, including an LDP victory in the upper house election in July 2022. To win, Kishida must handle the pandemic successfully. While the IMF projects 3.2 per cent growth for the Japanese economy in 2022, this growth rate may be significantly lower if COVID-19 is not controlled. Only time will tell the success of Japan’s new capitalism.

Shujiro Urata is Professor Emeritus at Waseda University.

This article is part of an EAF special feature series on 2021 in review and the year ahead.

Kishida’s new capitalism raises more questions than it answers

7 February 2022

Author: Aurelia George Mulgan, UNSW Canberra

Japanese Prime Minister Fumio Kishida’s new economic program is gradually taking shape via a series of major policy announcements and record-breaking government spending initiatives. These include ‘an economic stimulus package that dwarfs anything announced by his predecessors’, the biggest supplementary budget in history amounting to 36 trillion yen (US$314 billion) for fiscal year 2021, a national budget plan allocating 107 trillion yen (US$933 billion) for fiscal year 2022 and a fiscal year 2022 tax reform plan.

The stated mission of the government is to deliver economic measures that will ‘overcome COVID-19 and pioneer a new era’ including ‘the realization of a new form of capitalism, the linchpin for reviving the Japanese economy’. For Kishida, ‘new capitalism’ represents a necessary economic model upgrade where ‘rather than leaving everything to markets and competition … public and private sector entities together play their roles’.

Promoted through public–private partnership, this ‘new form of capitalism’ is intended to lead to faster economic growth and higher wages. Kishida’s ‘new capitalism’ rejects neoliberalism predicated on market dominance, which he holds responsible for promoting greater inequality and poverty, as well as for exacerbating climate change.

Kishida wants to distribute the fruits of economic growth more directly to lower and middle-income groups through redistributive policies rather than rely on the ‘trickle-down’ economics that characterised the Abe administration. ‘New capitalism’ embodies an implicit rejection of Abenomics in terms of both national economic strategy and policy sloganeering. Politically, this is a deliberate challenge to Abe’s legacy and appears to be a popular move with majority support among the Japanese public. Whether this rejection extends beyond rhetoric is questionable, however, particularly in areas such as massive fiscal stimulus, quantitative easing and policies that deliver wage increases.

Questions arise about how the range of spending and incentive programs will create a ‘new form of capitalism’. The connection between new capitalism, the targets for government assistance, and other proactive measures, needs careful clarification. Promoting new industries is not necessarily synonymous with establishing a new form of capitalism. Although Kishida has made clear his dedication to implementing his policy agenda, ‘new capitalism’ is fast turning into a label of convenience for a range of disparate government measures and spending initiatives.

In Kishida’s New Year’s speech, he nominated specific elements — digitalisation, climate change, economic security, innovation, and science and technology — as ‘engines of growth’, reiterating the importance of tackling disparities, bringing about redistribution through wage increases initiated by companies, and greater investment in people. But the respective roles of these factors in establishing a ‘new form of capitalism’ still needs elaboration. Whether private corporations will fall into line with Kishida’s wishes also remains an open question.

Kishida’s economic program has been heavy on rhetoric but light on reform. The overarching goals set for his administration incorporate variants of the phrase ‘growth and distribution’, including ‘creating a virtuous cycle of economic growth and wealth distribution’.

In practice, Kishida quickly reversed the order of his ‘virtuous cycle of growth and distribution’ to ‘distribution to spur growth.’ Distribution has clearly become the top priority — sourced primarily from government coffers in the form of a ‘cash splash’ and baramaki (government handouts) — rather than the fruits of economic growth or reform.

Implementing Kishida’s ‘new capitalism’ has thus entailed all gain and no pain at the public’s expense. It has become a convenient label for a traditional LDP-style big spending policy — albeit, for spending targets that focus on large social and economic groupings, and on strategically and socially important industries, rather than on traditional LDP special interests.

During his campaign for the LDP presidency, Kishida very quickly backed off the main policy instrument that would have provided a source of cash to be redistributed to employees and to lower and middle-income groups — taxing investment income by raising the capital gains tax, thus making corporate profits a source of economic growth.

Nor is Kishida seeking funds from sources such as corporate tax hikes which, if combined with increased financial income taxes, would have amounted to substantial tax reform. He has also failed to implement the introduction of a carbon tax levied in proportion to companies’ greenhouse gas emissions in line with new capitalism’s major goal of transitioning Japan to a carbon-free society.

These policy backdowns have disappointed expectations given that economic reform was touted as the most urgent item on Prime Minister Kishida’s policy schedule. Yet being in pre-election mode means that Kishida is under pressure to come up with policies that deliver economic and financial benefits quickly and directly to Japanese voters. Economic reform has, so far, taken a back seat to Kishida’s spending, a commitment he can justify in terms of invigorating the Japanese economy suffering from COVID-19 fallout.

In pushing Japan’s fiscal debt beyond an unprecedented one quadrillion yen (US$10.5 trillion) in outstanding government bonds, Kishida has prioritised the political rationale for ‘big spending’ — promoting economic measures that maximise the benefits to as many voters as possible, ensuring the consolidation of his leadership and the LDP’s success in the July general election.

The ‘big spend’ is coming first because of the electoral timetable and the convenient rationale that the COVID-19 economy needs boosting. But if Kishida were serious about the necessary economic reforms to create his ‘virtuous cycle of growth and redistribution’, he would implement policies with far greater potential to boost economic growth such as adopting measures to raise real wages and productivity, and completing the structural reforms promised but not delivered by Abenomics.

Clearly Kishida’s ‘new capitalism’ remains a work in progress. Perhaps realising the ideals and objectives of his newly announced ‘grand design’ of ‘new capitalism’, and implementing his summer action plan for ‘new capitalism’, will provide the answers.

Aurelia George Mulgan is Professor at the School of Humanities and Social Sciences, the University of New South Wales, Canberra.

Indonesia’s gig economy falling short on

decent work standards

Author: Trevi Putri, Gadjah Mada University and Richard Heeks, University of Manchester

3 February 2022

Indonesia’s gig economy is dominated by two mega-platforms, Grab and Gojek. The gig economy contributes at least US$7 billion to Indonesia’s economy and employs at least four million workers. The sector has been plagued with controversy, beset with worker strikes and complaints about pay and conditions. These controversies are well-founded as labour standards have consistently fallen short of decent work standards.

In December 2021, the Fairwork project released a report evaluating nine of the most prominent platforms in the country. This included car-based taxi services, motorcycle-based taxi and delivery services, and courier services. The report scored each platform against the five global principles of Fairwork — fair pay, fair conditions, fair contracts, fair management and fair representation. Indonesia’s gig economy fell short across all metrics.

The Indonesian government has previously introduced guidelines for per-kilometre fare payments to meet minimum wage standards. Yet no platform studied was able to show evidence that fair pay for its workers was being provided. Once a worker’s logged hours and work-related costs were taken into consideration, many did not take home a minimum wage. Those who did earn more than the minimum wage often worked long hours — nearly 20 per cent of workers interviewed regularly worked more than 100 hours a week.

Indonesia’s gig workers constantly face risks from accidents, scams and COVID-19-related loss of income. Only a third of the platforms studied had sought to provide fair conditions by taking measures to protect their workers through accident insurance, emergency helplines, access to health insurance and COVID-19 sick pay.

Most of the platforms have clear and accessible terms and conditions for workers that contribute toward fair contracts. But the terms and conditions typically feature an unfair distribution of risks and liabilities, given that workers are less able than platforms to bear such burdens.

Only Grab and Gojek were awarded scores for fair management. These two platforms documented channels for communication with workers and initiatives seeking to address discrimination and inequities, including those relating to gender. This is particularly important given the challenges facing female gig workers in Indonesia — those interviewed were sometimes faced with male customers refusing to travel with them or sexually harassing them.

These problems are exacerbated by a lack of fair representation of workers across all platforms. Worker associations exist in Indonesia, but they are often locality-based and informal. They are not formally recognised in law or by the platforms, giving workers no legitimised way to express their collective concerns and to negotiate with platforms. Workers also reported being wary of joining protests or strikes due to fears of penalties. Without fair representation, the grievances expressed by workers cannot be fully addressed.

The ratings for 2021 reflect an urgent need to ensure fairness in Indonesia’s gig economy. Two main actions are needed to address the substandard working conditions.

The claim that gig workers are ‘independent contractors’ needs to end. Gig workers are dependent on platforms for their livelihoods, and their work is directed and monitored by the platform’s app. The government needs to change the law to recognise that gig workers are akin to employees, and to give them associated rights and protections. As part of this, gig worker associations must be given recognition in law as labour unions, allowing them to enter into formal negotiations with the platforms on behalf of workers to reduce the current power imbalance between platforms and their workers.

Consumers in Indonesia should be provided scores on how each platform is performing in terms of decent work standards. When selecting which platforms to use, consumers can then choose a higher-scoring platform where possible. This will help to incentivise proactive steps among the platforms to meet key metrics and exceed minimum labour standards in the gig economy. Large organisations are also encouraged to sign up to the Fairwork Pledge as a way to pressure platforms to improve.

Providing platforms with incentives to show leadership in raising work standards can affect meaningful change. Worker protests, dissatisfaction and unfair treatment are detrimental for brand image and reputation at a time when platforms are seeking to engage more with corporate social responsibility in order to attract consumers and investors.

Regulatory change and consumer pressure for improvements in gig work conditions are found in a growing number of countries around the world. With some initial signs of movement in Indonesia for legislation on gig work and the willingness of consumers to boycott brands that treat workers poorly, platforms would do well to get ahead of this wave so that they can shape, rather than be driven by, the coming changes.

Trevi Putri is a lecturer in the Department of International Relations and a researcher in the Center for Digital Society at Gadjah Mada University, Indonesia.

Richard Heeks is Professor of Digital Development in the Global Development Institute at the School of Environment, Education and Development, University of Manchester.

Thailand doubles down on authoritarianism

Author: Greg Raymond, ANU

4 February 2022

Thailand became less free and more authoritarian in 2021, as the democracy movement felt the heavy hand of Thailand’s illiberal constraints on basic civil liberties. COVID-19 also devastated the Thai economy and health system, presenting additional challenges in the new year.

In 2021, the Delta strain broke Thailand’s model of containment. This model — based on a sophisticated series of community level organisations managing close-contact cases, monitoring individuals in quarantine and manning check-points — earned praise from the WHO. But with nationwide vaccination rates at a paltry 5 per cent as a consequence of overconfidence and poor worst-case planning, the Delta variant surged, especially through poorer communities. The hospital system was overwhelmed and public distress and disorder began to emerge. Photos were posted on social media showing COVID-19 patients lying in a hospital parking lot next to biohazard dumpsters.

The loss of tourism, which accounts for 11–12 per cent of Thailand’s GDP, combined with public health measures combating COVID-19, meant Thailand’s economy shrank by 6.1 per cent in 2020. The World Bank’s growth outlook for Thailand was 1 per cent in 2021, and the economy is not expected to return to pre-pandemic levels until 2023.

Comparing tourism volumes before and after the pandemic illuminates the extent of Thailand’s economic crisis. In 2022, Thailand is predicted to welcome a total of 1.7 million tourists. Before the pandemic, Thailand received more tourists every two months from China alone.

Thailand has been able to offer more fiscal stimulus to the public than many of its neighbours, but still less than the average levels in the West (Thailand’s was less than 15% of GDP but France and Japan’s were each above 20%). Thailand lifted its debt ceiling from 60 per cent to 70 per cent of GDP to protect jobs as growth slowed. Across the country, some 100,000 restaurants vanished between January 2020 and June 2021. Even wet markets, a lifeblood for locals, closed periodically due to virus outbreaks.

In 2022, economic recovery will be slow, especially now that Omicron has delayed the restoration of tourism. In the long term, one of the worst impacts may be on the country’s youth. Bangkok closed its schools for four months in 2021, and as many as 15 per cent of students will not return, having dropped out of school entirely.

In 2020, Thai democracy activists took advantage of Thailand’s exemplary handling of the initial phases of the pandemic to express discontent with the Prayuth government, the monarchy and aspects of Thailand’s hierarchical culture. The strength, breadth and intensity of the protests shook the government and conservative establishment. In particular, unprecedented calls for monarchical reform were discussed widely in media and in parliament. A new generation of liberal-minded Thai youth, many astonishingly articulate and courageous, made their views heard.

In 2021, the conservative empire struck back. Thai authorities pursued 486 cases against 1,171 protestors. The reintroduction of lese majeste charges led to activist leaders being jailed or caught up in endless legal battles. The law allows for the prosecution of minors and up to 15 years jail time. Protests dwindled, barring the Bangkok suburb of Din Daeng, where alienated youth engaged in violent battles with police, and in the provinces, through car mob protests. But nothing as powerful as the protests of August to October re-emerged, and the space for discussion of monarchical reform dwindled.

With the Constitutional Court’s November ruling that even discussing the topic of monarchical reform was unconstitutional, the chill on public protest deepened. Meanwhile, the government moved ahead with plans to pass a bill that would force non-government and civil society organisations to register in order to continue. This law will foreclose on Thailand’s political space even further, especially if progressive think tanks like Ilaw and Prachathai are muzzled. Thai disillusionment with the political system has been expressed in a movement to emigrate. But while the Thai police and military remain loyal to the government, its hold on power is assured.

Other political developments included moves to reintroduce a two-ballot paper electoral system and some infighting in the government’s party, Phalang Pracharat. The former would advantage larger parties, such as Phalang Pracaharta and Pheu Thai, but disadvantage the Move Forward Party — the party most threatening to the conservative establishment. The latter could indicate tension between Prayuth Chan-ocha and erstwhile military colleagues, especially former Deputy Prime Minister Pravit Wongsuwan. This could mean that Prayuth’s continuance in power beyond the next election, expected in 2022, may not be assured, even if his party can overcome community anger at his government’s vaccination failure.

Gregory V Raymond is a Lecturer in the Strategic and Defence Studies Centre, The Australian National University.

https://www.eastasiaforum.org/