There's been a surge
in labour movements in Asia’s three biggest countries - China, India and
Indonesia - and these activities appear to point towards a change in state-society relationships in
this part of the world. Indian
had a two day Bharat Bandh (a nationwide strike) in February this year, Indonesia’s in October cost 1
trillion rupiah ($104 million), while China saw a 40% and 160% annual
increase in labor protests in Guangdong and Zhejiang respectively. The pressure does seem
to be on Asian governments to pad welfare systems.
Granted, one key raison d'être of the welfare state is to overcome the democratic class struggle. With the Great Depression and collapse of the Gold Standard revealing the harsh reality of pure liberalism, a “social democratic consensus” was struck in which the state was to provide jobs and social services in return for political acquiescence, particularly from labour unions. This (oversimplified) historical narrative laid the foundations of the welfare state: to dissipate tensions generated when the offerings of a democracy is accumulated in the mass organisation of the left and coincides with the imbalances generated by a capitalist economy. However, applying this account to China, India and Indonesia doesn't work. For one, the quality of unionisation in these countries is inadequate. China’s only labour union, the All-China Federation of Trade Unions (ACFTU), is fused at the hip with the Party and monopolises all unionising activities by law. Indonesia’s labor parties still suffer from the legacy of Suharto’s repressive New Order regime and continue to fail spectacularly on the electoral stage, garnering less than 1% of votes every year (check out the excellent title of this article. Indian trade unions are absent in many industries (such as for small businesses) and labor union culture is weak with deep divisions and frequent political manipulation. Most importantly, the informal sectors in each of these countries are fast expanding thanks to globalisation and pressures to deregulate labor markets - with India’s informal workers making up 90% of all workers - but organising this disconnected and diverse group of workers is not easy.
Beyond unionisation, other factors limit the development of a welfare state in these countries. India’s state capacity is too weak to deliver electoral promises to the periphery and her miracle growth rates unfortunately cemented inequality along various dimensions, tilting capitalist power decisively in the favor of business and property-owning classes. Likewise, Indonesia's years of piecemeal social programs have not accomplished much - Jamkesmas, a health insurance program, budgets less than $10 per person and "80% of cardholders do not know what they are entitled to". As for China, recent strikes by Honda factory workers, independent of the ACFTU, offers hope only to the naïve. The Chinese government is unlikely to permit full independence of spontaneous labour unions if it means jeopardising the FDI activities that form the basis of its pro-GDP agenda. It would be more accurate to consider this buzz as experiments to pit one labour group against another, giving workers breathing space while keeping full-blown worker agitation under wraps.
Is the welfare state doomed in Asia’s largest countries then? No, I think the potential exists, but how it can happen differs. Indonesia’s massive strike last year did not happen by labour organisation but by ordinary activism: the purported 3 million workers, not bound by union affiliations, took to the street to demand higher minimum wages, that are now in place. Democratic forces in India have given life to social movements in “non-class modes,” most notably the Dalit (“Untouchables”) movement, which has made possible the election of a Dalit president, Narayanan and chief minister, Mayawati. Reservations and welfare provisions for lower castes/classes naturally followed (and those for Christian/Muslim Dalits seem to be underway). China lacks such democratic mechanisms of empowerment but has a deeply embedded history of providing welfare in a top-down manner via Confucian paternalism in late imperial China and by the “iron rice bowl” cradle-to-grave equivalent during the Communist era. These historical precedents frame welfare as strategic social policy and China has begun formulating a social agenda termed “Harmonious Society” that bears similarities to social insurance models (as opposed to rights based model) of countries such as Singapore, in which individuals contribute and the government is first a regulator, then a financier.
Asian states may have once brushed aside welfare systems as a sure-fire route to low productivity, high debt, and freeloader epidemic. However, in a context of increasingly complex power structures, more demanding populations and growing inequalities, Asia is not only forced to provide some form of welfare but has attempted to find industrious ways to do so. There's been a lot of talk about this Asian model of welfare, and some analysts like Ian Holliday describe a distinctly Asian experience in welfare, thought to have paternalist heritages, to be absent of a solid political left and/or strong labour unions, and founded upon a “productivist” outlook (see Holliday's much cited paper) that treats social policy as means to economic ends. It's clear, however, that there is a lot more heterogeneity in the Asian experience than appreciated. The rise of Asia has already complicated the development narrative - and it looks to be adding flavour to the possibilities of welfare provision as well.
Granted, one key raison d'être of the welfare state is to overcome the democratic class struggle. With the Great Depression and collapse of the Gold Standard revealing the harsh reality of pure liberalism, a “social democratic consensus” was struck in which the state was to provide jobs and social services in return for political acquiescence, particularly from labour unions. This (oversimplified) historical narrative laid the foundations of the welfare state: to dissipate tensions generated when the offerings of a democracy is accumulated in the mass organisation of the left and coincides with the imbalances generated by a capitalist economy. However, applying this account to China, India and Indonesia doesn't work. For one, the quality of unionisation in these countries is inadequate. China’s only labour union, the All-China Federation of Trade Unions (ACFTU), is fused at the hip with the Party and monopolises all unionising activities by law. Indonesia’s labor parties still suffer from the legacy of Suharto’s repressive New Order regime and continue to fail spectacularly on the electoral stage, garnering less than 1% of votes every year (check out the excellent title of this article. Indian trade unions are absent in many industries (such as for small businesses) and labor union culture is weak with deep divisions and frequent political manipulation. Most importantly, the informal sectors in each of these countries are fast expanding thanks to globalisation and pressures to deregulate labor markets - with India’s informal workers making up 90% of all workers - but organising this disconnected and diverse group of workers is not easy.
Beyond unionisation, other factors limit the development of a welfare state in these countries. India’s state capacity is too weak to deliver electoral promises to the periphery and her miracle growth rates unfortunately cemented inequality along various dimensions, tilting capitalist power decisively in the favor of business and property-owning classes. Likewise, Indonesia's years of piecemeal social programs have not accomplished much - Jamkesmas, a health insurance program, budgets less than $10 per person and "80% of cardholders do not know what they are entitled to". As for China, recent strikes by Honda factory workers, independent of the ACFTU, offers hope only to the naïve. The Chinese government is unlikely to permit full independence of spontaneous labour unions if it means jeopardising the FDI activities that form the basis of its pro-GDP agenda. It would be more accurate to consider this buzz as experiments to pit one labour group against another, giving workers breathing space while keeping full-blown worker agitation under wraps.
Is the welfare state doomed in Asia’s largest countries then? No, I think the potential exists, but how it can happen differs. Indonesia’s massive strike last year did not happen by labour organisation but by ordinary activism: the purported 3 million workers, not bound by union affiliations, took to the street to demand higher minimum wages, that are now in place. Democratic forces in India have given life to social movements in “non-class modes,” most notably the Dalit (“Untouchables”) movement, which has made possible the election of a Dalit president, Narayanan and chief minister, Mayawati. Reservations and welfare provisions for lower castes/classes naturally followed (and those for Christian/Muslim Dalits seem to be underway). China lacks such democratic mechanisms of empowerment but has a deeply embedded history of providing welfare in a top-down manner via Confucian paternalism in late imperial China and by the “iron rice bowl” cradle-to-grave equivalent during the Communist era. These historical precedents frame welfare as strategic social policy and China has begun formulating a social agenda termed “Harmonious Society” that bears similarities to social insurance models (as opposed to rights based model) of countries such as Singapore, in which individuals contribute and the government is first a regulator, then a financier.
Asian states may have once brushed aside welfare systems as a sure-fire route to low productivity, high debt, and freeloader epidemic. However, in a context of increasingly complex power structures, more demanding populations and growing inequalities, Asia is not only forced to provide some form of welfare but has attempted to find industrious ways to do so. There's been a lot of talk about this Asian model of welfare, and some analysts like Ian Holliday describe a distinctly Asian experience in welfare, thought to have paternalist heritages, to be absent of a solid political left and/or strong labour unions, and founded upon a “productivist” outlook (see Holliday's much cited paper) that treats social policy as means to economic ends. It's clear, however, that there is a lot more heterogeneity in the Asian experience than appreciated. The rise of Asia has already complicated the development narrative - and it looks to be adding flavour to the possibilities of welfare provision as well.
