Introduction: Political Context and Triggering Event

The execution in March 1995 of Filipina domestic worker Flor Contemplacion by the Singapore authorities provoked a national outcry in the Philippines and revived the long-standing debate over the country's two-decades old policy of exporting labour. The execution, which came just weeks before the hotly contested 1995 national elections, threw the spotlight on the plight of Philip- pine overseas contract workers (OCWs) and the inadequate attention given them by successive governments. The furore threatened the ruling coalition's anticipated victory at the polls, forcing President Fidel Ramos to take decisive action to try and defuse the situation. Among others, he set up a fact-finding and policy advisory commission, headed by retired Supreme Court Justice Emilio Gancayco; downgraded diplomatic relations with Singapore; and accepted the resignations of the two officials whose departments had come under particular attack during the period — Roberto Romulo, head of the Department of Foreign Affairs (DFA), and Nieves Confesor, head of the Department of Labor and Employment (DOLE). A number of DFA and DOLE officials abroad were recalled for consultation, and a temporary ban on domestic helpers destined for Singapore was imposed pending the overall findings and recommendations of the Gancayco Commission.

After the elections, overwhelmingly won by candidates from the ruling coalition, Ramos and his administration set to take the OCW issue beyond the Contemplacion case. Government officials, especially from the DFA, DOLE, and Congress, scrambled to introduce new policies and fast-track measures that they perceived would improve the general welfare of Filipino OCWs (for example, Migrant Workers and Overseas Filipinos Act of 1995).

This article seeks to provide an overview of OCWs in the Philippines. Firstly, it describes the relative size and distribution of the phenomenon. This is followed by an evaluation of the relevant economic benefits and social concerns. Finally, the adequacy of past government policies and the overall effectiveness of the new ones (including the Gancayco Commission's recommendations) are examined.

Six years of detention ended in July 1995 for Daw Aung San Suu Kyi, the leader of the political party that won Myanmar's last competitive election. U Nu, the independent nation's first and last democratically elected Prime Minister, died in February. Back in January, the longest running insurgency lost its head- quarters when the Karen National Union (KNU) was driven from Manerplaw. By the year's end the best financed insurgency, Khun Sa's opium-fuelled Mong Tai Army, officially surrendered in the Shan States. Such events mark significant endpoints on several dimensions in the political sphere. New beginnings, on the other hand, were not in evidence; political developments generally followed their established inertial course. No fundamentally new forms of political discourse emerged. Aung San Suu Kyi remained the principal leader of the democracy movement, interacting with the ruling junta in large part via international media. There was some movement at the top of the State Law and Order Restoration Council (SLORC) government, but the leadership style and the composition of the ruling junta remained essentially the same as before. The SLORC-appointed National Constitutional Convention lumbered on towards its fourth year of sys- tematic and desultory sessions. At the international level, questions of legitimacy persisted with no clear resolution. The “constructive engagement” embrace by neighbouring nations continued Myanmar's progression toward membership in the Association of Southeast Asian Nations (ASEAN).

In the economic sphere, growth continued and marketizing policies remained on track. Many fresh foreign investments were announced, several projects were launched, and a number of recently established enterprises proceeded on course. Time and a shifting international climate appeared to be easing the restraint on bilateral and multilateral economic assistance. The interplay between developments in politics and economics was much debated both within and outside the country.

Leading Personages

Several of the dramatis personae moved off the political stage in the course of 1995. Others shifted position during changes of scene.

During 1995 Brunei demonstrated a growing assertiveness within the region. In its continuing quest to preserve political stability and achieve sustainable economic growth, the resource-rich Sultanate attempted to pursue regional economic integration and yet maintain the conservative and absolutist nature of its government. Although a small state, Brunei's engagement in regional affairs has not been insignificant, as evidenced by its commendable chairmanship and hosting of the second ASEAN Regional Forum, which saw the defusion of tension in the South China Sea. Brunei's entry into international financial institutions such as the World Bank and the International Monetary Fund in 1995 also raised its economic profile. It strongly supports the concept of trade liberalization and favours the proposal for free trade within APEC (Asia-Pacific Economic Co-operation) by the year 2020. Within ASEAN, the Sultan has called for the early implementation of the ASEAN Free Trade Area (AFTA). Brunei has also been positive about the benefits that can result from subregional co-operation through the newly-established East ASEAN Growth Area (EAGA) and has been trying to carve out an important role for itself within the growth polygon.

The year also saw Brunei continuing to be plagued by the problems resulting from its heavy dependence on the hydrocarbon industry. Its efforts at broadening the economic base and expanding the non-oil sector have made very slow progress and its growth rate is among the lowest in ASEAN.

Domestic Affairs

The government in 1995 continued to give prominence to Islamic values under the aegis of its official ideology, Melayu Islam Beraja (MIB, Malay Islamic Monarchy), which has been actively sponsored since 1990. While serving to neutralize the appeal of externally inspired Muslim fundamentalism, MIB can also be seen as an instrument of legitimacy for royal absolutism, by marrying the conservatism of Islamic values with that of Malay culture and the traditional unifying role of the monarchy.

Following the end of the reign of King Souligna Vongsa (1633–90), an era commonly referred to as the Golden Era of a united Lao kingdom, the ensuing internal succession struggles, combined with growing external encroachment by its powerful neighbours, led to the division of the land into three distinct protectorates, with centres in Luangphrabang in the North, Vientiane in the Central region, and Champasak in the South. At varying times during the eighteenth century, these distinct areas were at risk of being absorbed by Laos' neighbours because of the competing interests of the more powerful states of Burma, Siam, and Vietnam. By the early nineteenth century, Siam had exerted its hegemony in the struggle over much of what is now contemporary Laos. Political configurations shifted once again as French colonialism extended into the rest of Indochina from Vietnam by the late nineteenth century. Laos was preserved through its role as a buffer state. Since this territorial consolidation, its existence has been greatly marginalized for most of the twentieth century, almost intentionally, as it settled into its fateful position as a complacent junction of mainland South- east Asia. However, in recent years, its sleepy reputation as Asia's fringe state is rapidly changing as the spillover influences of its dynamic neighbours are once again shaking the cradle of its existence.

The events of 1995 can again be epitomized by the themes of greater engagement and regional integration externally, while continuing development initiatives at home. Underlying these rosy visions of enhanced co-operation are what may amount to a myopic view towards the real dangers that may follow. Especially to a traditionally isolated and land-locked country such as Laos, greater openness may be necessary for survival, but at the same time leave it more vulnerable to a host of social, political, and other unwanted influences upon its traditional culture. As evidence of this trend, in recent years, traditional soul and kin mates Vietnam and Thailand, respectively, as well as China, the emerging player to the North, have shown signs of extending spheres of influence, especially towards adjacent provinces in neighbouring Laos.

Singapore's periodic conflicts with the foreign media and human rights groups took a significant turn during 1995, when an opposition leader's willingness to fraternize with the government's critics abroad highlighted the external domain's relevance to domestic politics in an altered global environment.

Though the dominance of the People's Action Party (PAP), which has ruled the country since 1959, remained unchallenged under Prime Minister Goh Chok Tong, this development could have important implications in the longer run for the city-state, whose remarkable economic success has been accompanied by a marked degree of official control over the terms and parameters of political discourse and contestation. Its significance lay in its backdrop, a wave of demo- cratization, working its way through the post-Soviet world order which has seen a number of authoritarian countries in Asia liberalize politically in recent years. Interventions by foreign human rights groups, the media, and sometimes politicians, increasingly meshing in with the United States' desire to police the political morals of the world, have encouraged the process. Though the actual extent of their contribution to change is debatable, their activities have accentuated the process of liberalization which attests to a trend towards political globalization running parallel with the economic, both being based on American values and leadership triumphant in the contest with the Soviet Union. This trend pro- vided the context in which Singapore's political arena and its judicial institutions came under intensified external pressure during the year. While the scrutiny was not new, what lent it a certain weight in Singapore politics was the opposition's response to it. Central to that response was the controversial readiness of Chee Soon Juan, who is secretary-general of the Singapore Democratic Party (SDP), to utilize external forums in his pursuit of political goals within the country. It is perhaps not overstating the case to see that linkage as marking a stage in the internationalization of Singapore's politics.

Nineteen ninety-five saw Malaysia's ruling coalition achieving its greatest electoral triumph ever in the country's nine general elections since independence. Riding on a wave of national euphoria produced by eight successive years of high growth, improving ethnic relations and widening international respect, the Barisan Nasional (National Front) easily swamped the opposition in the parliamentary and state assembly elections held on 24–25 April. The fourteen-party multiracial coalition substantially increased its support among the hitherto pro- opposition Chinese and Indian minority while consolidating its preeminent position among the dominant Malays. Although the Barisan failed to lure Sabah's Christian Kadazan/Dusun population away from Parti Bersatu Sabah (PBS, or United Sabah Party), and made relatively little headway against its old religious rival, Parti Islam SeMalaysia (PAS), in the largely agricultural northern Malay heartland states, its overall performance lent unprecedented credibility to its claim to be the party of all Malaysians, and shattered the Democratic Action Party (DAP), hitherto the chief representative of non-Malays in the country.

For Dr Mahathir Mohamad, Malaysia's Prime Minister since 1981, the results were a massive popular endorsement of his post-1990 policy of subordinating racial redistribution to national growth and development, and he proceeded accordingly, simultaneously pressing his plans to turn Malaysia into a fully industrialized nation by the year 2020, and urging greater efforts to improve inter-ethnic harmony and strengthen national unity. But any hopes Dr Mahathir, who is seventy, might have had that he, and the country, could now leave off politicking to concentrate fully on the business of development were soon dashed by the intense manoeuvring in his core United Malays National Organization (UMNO) ahead of its triennial election in 1996, and by renewed speculation about his relations with his protégé and deputy, Anwar Ibrahim, who is forty-eight. Rumours of a possible bid against Dr Mahathir as party president only ended in late November after he announced to the UMNO general assembly that it would “not be long” before he had to step down and that Anwar would succeed him.

Regional Outlook was first launched in 1992. Designed for the busy executive, professional, diplomat, journalist, and interested observer under severe time constraint, this annual offers a succinct analysis of economic and political trends in the countries of Southeast Asia and the outlook for the prospective two years.

In this endeavour, it is impossible not to be overtaken by events. An analysis such as this serves best when it indicates patterns of development, offers some insight into the unfolding complex dynamics and puts its finger on emerging issues and areas of change. This should provide the necessary background for the reader to interpret new information and data.

In 1996, after initial concern over events in the Taiwan Strait and tensions in U.S.-China relations, attention became focused more on economic issues and developments, in particular the slowdown of East Asian economies, the slow recovery of Japan, and the opportunities and challenges presented by the Asia-Pacific Economic Co-operation (APEC) ministerial and leaders meeting in Manila and Subic Bay in November and by the first World Trade Organization ministerial meeting in Singapore in December.

Regional Outlook 1997–98 was written by a team from within the Institute and without. We thank Daljit Singh, T.N. Harper, Nick Freeman, Mya Than, Sorpong Peou, Leonard Sebastian, Felix Soh, Naimah Talib, Tan Kim Song, Tin Maung Maung Than, T.L. Tsim and John Wong for their contributions. Responsibility for facts and opinions expressed in Regional Outlook of course rests solely with the individual authors. Their interpretations do not necessarily reflect the views or policy of the Institute.

Brunei

Domestically, Brunei continues to emphasize the conservative and traditional nature of its polity. In line with its national philosophy of Melayu Islam Beraja, Islam has been given a higher profile. Like other modernizing monarchies, the Sultanate has consistently made recourse to Islamic themes in a period of rising religious enthusiasm with the aim of reducing or neutralizing the effectiveness of Islamic opposition. Since 1990, the Sultan has called for existing laws in the state to be brought more in line with the teachings of Islam. A step in this direction is the Sultan's call to implement Shariah law beyond the sphere of family law and to apply it to criminal acts. Islamic banking institutions, introduced in the last few years, have reportedly been doing well, and the newly-established Islamic Trust Fund is gaining popularity among the dominant Muslim community.

The tiny kingdom was recently reminded of the tumultuous December 1962 revolt when Zaini Hj Ahmad, an ex-rebel leader, was released from detention and given a royal pardon just a few days before the Sultan's fiftieth birthday celebrations in July 1996. Zaini was one of the leaders of the Brunei revolt and had escaped from detention to Malaysia in 1973 and remained there as an exile until his recent return to the Sultanate for rehabilitation. The year 1996 also witnessed the historic meeting of the General Assembly of the mukim and kampong, local and village, consultative councils which were constituted in 1993 with the objective of consolidating the grassroots institutions of the penghulu and ketua kampong, the local and village heads.

The Royal Brunei Armed Forces will continue its modernization programme and has signed a contract with GEC Yarrows of Scotland for the supply of three offshore patrol vessels which will be delivered in 2000. These will be used to beef up the Sultanate's naval presence in the South China Sea, where it has a long-standing dispute with China over the Spratly Islands.

Cyclical Slowdown

To some, 1996 was the year of reckoning for the economies of the Association of Southeast Asian Nations (ASEAN): after a decade of exceptionally high growth, the region appeared to be running out of steam and was finally slowing down. In countries like Singapore and Thailand, the slowdown turned out to be much sharper than expected, sparking concerns about the health of the underlying fundamentals.

Sceptics of the so-called ‘Asian miracles’ are quick to paint a doomsday scenario, pronouncing 1996 the beginning of the end of ASEAN's high growth era. They contend that the problems faced by ASEAN are structural in nature, not cyclical, and therefore cannot be resolved within a few years. Manifestations of structural illness, they claim, are there for all to see: productivity is low; most industries remain labour-intensive; there is insufficient capacity in these economies for technological change and innovation, and the constraints posed by the infrastructural bottlenecks are insurmountable.

The issues should be seen in perspective. Admittedly, some evidence of these ‘structural’ symptoms exists, but similar obstacles are found elsewhere too. Structural problems are part and parcel of any growing economy. ASEAN economies have been confronted with the challenge of upgrading their industrial structures since the early 1970s. They will continue to face the same challenges as long as they keep growing, even if the exact nature of the problems differ. The slowdown in 1996 was largely cyclical, with a small structural component. Indeed, structural downturn, almost by definition, does not happen overnight. The fact that exports dropped so abruptly in some ASEAN countries last year supports the view that the downturn was driven primarily by cyclical changes.

Changes in both external and domestic conditions converged to bring about ASEAN's cyclical slowdown in 1996. With the potential growth rates in most economies estimated at no more than 7.5 per cent, it is hardly surprising that the production capacity should exhaust itself and that overheating pressures should start to build up, after two years of near double-digit growth. This alone would have been enough to put a brake on the region's growth momentum temporarily.

The current economic slowdown in a number of Asia-Pacific countries is mainly cyclical and therefore temporary. The region's economic dynamism will be sustained. The security problems are not expected to jeopardize the economic prospects. Relations between the United States and China have recovered from their lows of March 1996, and U.S. security commitments to the region have been reaffirmed. The status quo in the Taiwan Strait will probably continue as China seems more willing to take a long term view on reunification. The territorial disputes in the East and South China Seas are unlikely to be allowed to get out of hand because of the larger economic and strategic interests of the powers involved. However, the situation on the Korean peninsula remains dangerous and unpredictable.

Economic Dynamism and Regional Integration

The Asia-Pacific continues to be the fastest growing region in the world and its market-driven integration will continue as greater liberalization and deregulation forge more trade and investment linkages.

In 1996 economic growth slowed down in a number of Asia-Pacific countries, mainly for cyclical reasons. One factor has been the down cycle in the electronics industry, which is an important component in the manufacturing sectors of many countries. Another reason has been the need to cool down some of the economies from the hectic pace of growth of recent years, which had resulted in supply side constraints and increased inflation. Also, the anticipated recovery of growth in Japan did not materialize.

These are temporary problems. According to industry analysts, the electronics industry will recover in 1997 and economies which would have cooled down in 1996 or during the 1997–98 period will resume higher rates of growth thereafter.

The slowdowns must be seen in perspective. For instance the slowdown in 1996 in the region's fastest growing economy in recent years, that of China, still created an estimated 9.8 per cent growth compared with 10.2 per cent in 1995 and almost 12 per cent in 1994. A measure of stabilization will provide the Chinese economy with better macroeconomic conditions for accelerated growth, which the government is indeed expecting in 1997.

The outlook for security and stability in the Asia-Pacific is more promising at the end of 1996 than it was at the beginning of the year, principally because U.S.-China relations are better, even though warier. There are several underlying security problems in the Asia-Pacific, including the Taiwan issue, but the major powers have a strong stake in the maintenance of peace and stability. Therefore, barring uncertainties on the Korean peninsula, adverse developments of a kind which could undermine the economic dynamism of the region are unlikely, at least in the near future.

The economic slowdowns in some countries of Southeast Asia do not change the underlying economic dynamism. No significant adverse political developments are expected within the countries of Southeast Asia in 1997–98, though the situation in Indonesia seems more uncertain.

In this issue of Regional Outlook we have a separate introductory section called The Asia-Pacific Context. The peace and prosperity of Southeast Asia are intertwined in many ways with the broader Asia-Pacific region and a brief assessment of this broader region, especially of the potential conflict areas, is necessary. We have also included in this section two comments on Hong Kong's transition to Chinese rule in 1997. Following this, Southeast Asia is dealt with in two parts, Political Outlook and Economic Outlook. Each part is in turn divided into two sections, first the ASEAN Six (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) and then Indochina and Myanmar.

Different authors have contributed to this volume and we would like to thank them for their contributions. We would also like to thank Mr Christopher Lee and Dr Mya Than for compiling the basic indicators of the Southeast Asian economies in the appendices. These have been obtained from various published sources and are included merely as background data that readers may find useful.