Richard Robison

It was only two decades ago, in the 1960s and 1970s, that popular Western images of Southeast Asia were dominated by rice fields and peasants, military coups and generals. In many ways this was not an unreasonable representation of the social and political realities of the times. However, it is some measure of the rapidity with which changes have taken place in the intervening period that these old icons have been replaced almost entirely by new ones in which factory workers and businessmen, politicians and traffic jams are the central images, at least in Australia, which is the most sensitive barometer of the Asian region in the so-called West.

Among the critical questions that have defined debates about the politics of Southeast Asia, three have been especially enduring. One of these asks why liberal politics has proven so fragile across the region and why various forms of authoritarianism or electoral politics based on one-party rule or money politics have been so pervasive. A second question is concerned with the relationship between market capitalism and political institutions and ideas; in particular why various forms of interventionist state and predatory systems of governance have survived and flourished despite the embrace of market capitalism. A third is concerned with more recent patterns of decentralization of authority, the spread of democratic reforms and the participation of social movements and local actors in the political arena. It is a matter of contention whether these developments signal the long-awaited rise of a progressive and self-reliant civil society or the consolidation of new social and economic oligarchies and mechanisms for control on the part of the state. This chapter examines how these important questions have been addressed within different schools of thought and how they have themselves been consolidated and transformed over time.

This collection provides an authoritative and comprehensive overview of the major themes and issues that have defined the politics of Southeast Asia in the modern period. It brings together scholars who have influenced the way the politics of the region has been understood over several decades and others who are opening new and innovative ways of looking at things. It seeks to engage the Southeast Asian experience more family with larger debates about how modern political systems and modern states are formed and how countries and regions are drawn into the global system. The chapters will be relevant to larger, comparative and theoretical debates as well as providing solid empirical investigations.

In the middle of 1997 East Asia was gripped by a major financial crisis that continues to affect the region. What was initially taken to be a relatively isolated shock has intensified and generated increasingly widespread economic and political effects which threaten to overturn much of the region’s established political and economic order. These events have been remarkable enough in themselves. For observers of the region there has been an additional, if rather less traumatic, consequence of the crisis: quite simply, it has forced a major reassessment of our understanding of the way political and economic activity is organised within the region, and about the place of the region in an increasingly integrated international system.

Nowhere has the Asian economic crisis been felt with such devastating effect as in Indonesia. A massive speculative attack on the rupiah following the collapse of the Thai baht triggered a rush for dollars by domestic private sector corporations to cover their predominately short-term and unhedged foreign debts (Asian Wall Street Journal (hereafter AWSJ), 31 December 1997; Forum Keadilan (hereafter FK), 8 September 1997 and 12 January 1998). Driven in part by this rush the rupiah was to slump more than 80 per cent in value. Attempts in December 1997 to persuade creditors to roll over the private sector’s short-term debts were unsuccessful and by late January it was apparent that most of Indonesia’s conglomerates were technically bankrupt (Bisnis Indonesia 5 December 1997 and 24 January 1998; Indonesian Observer 26 January 1998). At the same time, the rupiah’s collapse also generated a fiscal crisis for the Indonesian government. Contracting revenue sources and increasing demands for social sector subsidies meant that by mid July, 1998, the government was operating a budget deficit of 8.5 per cent of GDP, leaving it with little option but to reschedule its foreign debt commitments and seek increased amounts of foreign aid. In late July, total budgetary collapse was averted when western creditors pledged US$7.9 billion in loans and grants to the government (AWSJ 31 July-1 August 1998; Jakarta Post (hereafter JP), 21 July 1998).

Asia’s recent financial crisis has been more than just an economic shock. In several key instances it has unraveled entrenched economic and political regimes. Faced with collapsing currencies, fiscal crisis and rapidly spreading public and private debt, beleaguered governments in Thailand, South Korea and Indonesia have found themselves forced into agreements with the IMF requiring extensive deregulation in trade and investment and the reform of public and corporate governance (Robison et al. 2000; Pempel 1999). Banks were closed and recapitalized and corporate groups forced to write down debt, moves that threatened the financial regimes holding together privileged leagues of private oligarchies. As capital flight took hold, governments had little choice but to accede to the IMF demands. As IMF Chief, Camdessus observed, those who benefit from global capital markets must also observe its disciplines (Asiaweek October 3, 1997:62, 63).