Safety Nets in Shocking Times: Lessons from Indonesia's Cash Transfer Program
In 2005 the Indonesian government announced a program of unconditional cash transfers to its poor and near-poor citizens to help them overcome the adverse effects of fuel price hikes caused by a massive reduction in subsidies. The program—the largest of its kind in the world, covering some 19 million households—was reintroduced in 2008 following another round of fuel subsidy cuts.
How successful was this effort to help poor Indonesians weather these economic shocks? Did the transfers alleviate suffering to the desired extent? Did their unconditional character ensure quick action and wide coverage? Or did it foster dependence on public welfare and depress incentives to work? Were deserving recipients chosen? Or did corruption and conflict distort the process? Are there lessons in Indonesia’s experience applicable to other developing countries? Dr. Sudarno will mobilize quantitative and qualitative evidence to address these questions.
Sudarno Sumarto co-founded The SMERU Research Institute and served as its director for nearly ten years. Under his leadership, SMERU played a vanguard role in helping to reduce poverty in Indonesia through careful empirical research on behalf of improved public policy. His more than fifty publications include studies of economic growth, poverty and unemployment reduction, and the performance of primary-school pupils, among other topics, in the Journal of Development Economics (2009), Beyond Food Production (2007), and SMERU’s own working paper series, among other venues. He has also been active as an advisor to the Indonesian government on poverty issues and as a lecturer at the Bogor Institute of Agriculture.
Daniel and Nancy Okimoto Conference Room
Sudarno Sumarto
Sudarno Sumarto is the Shorenstein APARC / Asia Foundation fellow for 2009-10. He has a PhD and an MA from Vanderbilt University and a BS from Satya Wacana Christian University (Salatiga), all in economics. Prior to joining Shorenstein APARC he was the director of SMERU for nearly 10 years. SMERU is an independent institution for research and public policy studies which professionally and proactively provides accurate and timely information, as well as objective analysis on various socioeconomic and poverty issues considered most urgent and relevant for the people of Indonesia. The institute has been at the forefront of the research effort to highlight the impact of government programs and policies, and has actively published and reported its research findings. The work expanded to include other areas of applied and economic research that are of fundamental importance to contemporary development issues. He was also a lecturer at Bogor Institute of Agriculture (IPB), Bogor, Indonesia.
Sumarto has contributed to more than sixty co-authored articles, chapters, reports, and working papers, including "Agricultural Growth and Poverty Reduction in Indonesia," in Beyond Food Production (2007); "Reducing Unemployment in Indonesia," SMERU Working Paper, 2007; "Improving Student Performance in Public Primary Schools in Developing Countries: Evidence from Indonesia," Education Economics, December 2006; and “The Effects of Location and Sectoral Components of Economic Growth on Poverty: Evidence from Indonesia.” Journal of Development Economics, 89(1), pp. 109-117, May 2009. As well as conducting research and writing papers, Sumarto has worked closely with the Indonesian government, giving advice on poverty issues and government poverty alleviation programs.
Sumarto has spoken on poverty and development issues in Australia, Chile, Peru, China, Egypt, Ethiopia, France, Japan, Morocco, Thailand, and the United Kingdom, among other countries.
November 2009 Dispatch - Forced Labor Redress in Japan and the United States
Last month, on October 23, the Nishimatsu Construction Company reached an agreement in the Tokyo Summary Court to set up a trust fund for Chinese who had been forced into labor in Japan during World War II. According to the Asahi Shimbun, the trust fund—worth ¥250 million—will compensate 360 Chinese citizens who were compelled to work at a hydroelectric power plant in Hiroshima Prefecture. Under the terms of the summary settlement, Nishimatsu acknowledged that these Chinese workers were forcibly brought to Japan and apologized for their suffering.This outcome was both overdue and unexpected, particularly since Japan's Supreme Court in 2007 rejected the original lawsuit that five Chinese plaintiffs brought against the construction company in 1998. Nishimatsu officials maintain that they want to set a new precedent for "social responsibility" in the wake of the corporation's recent scandal involving political donations. The timing of Nishimatsu's decision coincides with the rise of the new Hatoyama administration, which has promised to improve Japan's relations with China and other Asian neighbors.
Former forced laborers and their bereaved families have pursued litigation against the Japanese government and the corporations that employed them, not only in Japan but also in the United States. The Hayden Bill, which passed the California State Senate in July 1999, opened the door for Chinese and Korean victims to sue Japanese corporations and demand compensation for their hard labor in inhumane working conditions. Although the U.S. Supreme Court thus far has rejected such cases, the unresolved issue of Asian forced labor redress has now been introduced into the U.S. legal system, indicating that the United States has become involved in Japan’s historical disputes.
In fact, the United States was intimately involved in the issue of Asian forced laborers during the Allied Occupation of Japan between 1945 and 1952. U.S. Occupation forces initially attempted to retain Korean coal miners until Japanese repatriates replaced them, but riots in Hokkaido and elsewhere forced authorities to abandon this policy in November 1945. Responding to strong Korean demands, in May 1946 a military government team in Hokkaido gathered over ¥3 million worth of wages, bonuses, and death benefits owed to Korean miners. This amount was but a small fraction of the more than ¥215 million that corporations throughout Japan deposited into an account at the Bank of Japan by 1948. Occupation authorities made several unsuccessful attempts to persuade unwilling Japanese officials to pay back the financial assets owed to Koreans, while U.S. policy gradually changed to oppose reparations demands against Japan. Article 14(b) of the American-drafted San Francisco Peace Treaty signed in September 1951 waived all reparations claims, and the unpaid wage deposits of forced laborers remained a well-kept secret of the Japanese government.
When former forced laborers from South Korea and China began appearing in Japanese courts in the 1990s, their lawsuits helped to clarify the historical record of wartime abuse and postwar cover-up. Lawyers, journalists, and researchers supporting the redress movement dug up hidden official documents, such as the voluminous reports by the Foreign Ministry on Chinese forced labor and by the Welfare Ministry on the unpaid financial deposits of Korean laborers, both compiled in 1946. Although the Japanese government refuses to make such ministry reports public, the Tokyo High Court in 2005 confirmed that the state continues to hold the ¥215 million deposits, which have never been disbursed. While Japanese records remain largely closed, declassified American records can help to answer important questions, including how closely the United States was involved in the process of postwar Japan’s forgetting and neglecting Asian victims of forced labor.
An Asahi Shimbun editorial on October 24, 2009 admonished the Japanese state to take action in the wake of Nishimatsu settlement, since other corporations facing litigation have vowed not to pay reparations unless the government becomes involved. The new Hatoyama administration should first make an unambiguous apology, the editorial contends, then propose a new framework whereby the government and corporations can establish a joint trust fund to compensate former forced laborers and bereaved families. The United States can support this reconciliation process by revisiting the unresolved issue of forced labor—which also included Allied POWs—and reinterpreting the San Francisco Peace Treaty to enable these victims to file legal claims in American and international courts. Proactive U.S. involvement at the government level should also be matched by an enhanced effort toward nongovernmental cooperation between researchers in the United States and Northeast Asia. Shorenstein APARC has been contributing to this effort through its Divided Memories and Reconciliation research project, now in its third year. The Center will also host a colloquium series titled “The American Role in Northeast Asian Reconciliation” during the 2010 winter quarter.
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Shorenstein APARC Dispatches are regular bulletins designed exclusively for our friends and supporters. Written by center faculty and scholars, Shorenstein APARC Dispatches deliver timely, succinct analysis on current events and trends in Asia, often discussing their potential implications for business.
SEAF Director Named to Task Force on Burma/Myanmar
The Asia Society has organized a Task Force on U.S. Policy toward Burma/Myanmar, co-chaired by retired U.S. Army General Wesley Clark and Holsman International Chair (and former USAID Administrator) Henrietta H. Fore. The panel comprises a dozen or so individuals from various occupations and backgrounds, including SEAF's director, Donald K. Emmerson. Assisting the Task Force is an also diverse Advisory Group of some thirty experts in Southeast Asian and other countries. The Asia Society expects to release the Task Force's final report early in 2010.
The timing of the study is of interest in view of the Obama administration’s willingness to meet with Myanmar’s rulers.
America’s top diplomat on Asia is Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell. Deputy Assistant Secretary Scot Marciel covers Southeast Asian and ASEAN affairs. In early November 2009 the two men traveled to Myanmar. There they met not only with the iconic opposition figure and Nobel Prize winner Daw Aung San Suu Kyi, but also with Burmese Prime Minister Thein Sein. The latter meeting was the highest-level contact between the two governments since 1995. An even higher-level meeting was being planned for later in November at a US-ASEAN summit in Singapore, which would bring President Obama face to face with Myanmar’s head of state, Senior General Than Shwe.
Further enhancing the timeliness of the Task Force’s work is the announced prospect of national elections in Myanmar in 2010. No independent observers expect the exercise to bring about anything resembling liberal democracy. But some hold out hope that the balloting could yield a marginally more representative and accountable system.
In early November 2009 it remained to be seen whether the current shifting of American policy toward dealing directly with the Burmese junta would prove effective in nudging its leaders toward political reform, or not.
The Task Force’s report, scheduled for release early in 2010, should at least provide food for policymaking thought, as U.S. officials continue to review what has been and could be done with regard to a regime that has so far resisted both isolation and engagement.
Islamism: What is to be said and done?
More than any of his predecessors, President Obama has reached out to "the Muslim world." But what of the terms and the timing of that demarche? If, as expected, he visits Indonesia next year, he will try to build on his oratorical successes in Istanbul and Cairo by addressing Muslims in the country that has more of them than any other. He has a way with words. But what words should he use? Is "the Muslim world" too diverse even to exist? Do "radical Islam" and "Islamism" defame a religion for acts of violence done in its name, or are these terms only politically incorrect? Among Muslims around the world, sympathy for terrorism as jihad appears to have declined. Would the US be better off ignoring religion and dealing with Muslim-majority countries from Morocco to Malaysia in purely secular terms: as nations not congregations? Is it time to revisit the entrenched assumption that the revival of religion has killed secularism and rendered policies based on it as offensively ethnocentric as they are empirically naive? If the "clash of civilizations" misnames a plethora of clashes between Muslims themselves, should the enlightened mutual reassurances of elite-level "inter-faith" dialogues give way to less rhetorical and more realistic efforts toward "intra-faith" understanding and conciliation?
What, in short, is to be said, and done? Prof. Emmerson's talk will also reference his latest co-authored book, Islamism: Contested Perspectives on Political Islam (Stanford University Press, November 2009).
Facts and Myths in the Globalization Debate: How Our National Policies are often Misguided and How the United States Can Continue to Keep Its Global Edge
Few topics provoke more heated debate than globalization. Globalization is considered essential for companies that want to survive in today's economy, but it is also blamed for job losses and the economic decline of the United States. Executives say they hire from abroad because of deficiencies in the U.S. workforce and skills shortages, while worker advocacy groups say it is all about cheap labor.
Wadhwa will discuss how the contentious public debates on globalization and outsourcing commonly use data that isn't grounded in reality. He will show why globalization and outsourcing are the new reality and how this trend will continue to build even more momentum. Finally, Wadhwa will provide concrete advice and ideas on how the United States can regain its edge in the global economy by understanding the new reality and focusing on its strengths such as entrepreneurship and innovation. By effectively harnessing its highly educated and skilled workforce, and balancing immigrant intellectual capital, the United States can continue to be the winner rather than the victim of globalization.
Vivek Wadhwa, currently a visiting scholar at UC-Berkeley, is a senior research associate with the Labor and Worklife Program at Harvard Law School and an executive in residence/adjunct professor at the Pratt School of Engineering at Duke University. He helps students prepare for the real world, lectures in class and leads groundbreaking research projects. He advises several start-up companies, writes a column for BusinessWeek.com and contributes to several international publications. Since joining Duke in 2005, he has researched globalization, its impact on the engineering profession and the sources of the United States' competitive advantage. Mr. Wadhwa holds an MBA from New York University and a BA in Computing Studies from the Canberra University in Australia.
Philippines Conference Room
The Need for Sectoral Reform of the South Korean Economy
Although South Korea is recovering relatively quickly from the worldwide recession in the wake of the U.S. financial sector crisis, it must address major structural weaknesses if it is to sustain growth over the long term. The Korean manufacturing sector is one of the world’s strongest and most efficient, but the services and (much smaller) agriculture sectors remain weak. Former senior South Korean economic policy official Byongwon Bahk argues that only by benchmarking the near miraculous success of its manufacturing sector can Korea convert traditionally weak sectors into new sources of job creation and foreign currency earnings. He will explain the necessity of, and obstacles to, inducing capital, technologies, and marketing from advanced companies in advanced countries; supporting R&D activities and education and training in weak sectors; and opening weak sectors to domestic and foreign competition.
Byongwon Bahk, a former senior South Korean government official, is the Korean Studies Program’s 2009-2010 Koret Fellow. During the past decade, he was in charge of the management of Korean macro-economic policy at the Ministry of Finance and Economy, including as vice minister. Most recently, he served in the Blue House as the senior economic advisor to President Lee Myung-bak. He received a BA and an MA in Law from Seoul National University, an MA in Industrial Engineering from Korea Advanced Institute of Science and Technology (KAIST) in Korea, and an MA in Economics from University of Washington.
This event is supported by a generous grant from the Koret Foundation.
Philippines Conference Room
Byongwon Bahk
Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055
Byongwon Bahk, former Senior Advisor to President Lee Myung-bak of Korea, joined the Korean Studies Program as the recipient of the Koret Fellowship for 2009-10 academic year.
Mr. Bahk served as Vice Minister of the Ministry of Finance and Economy in Korea and was a senior advisor to President Lee Myung-bak briefly. While at the Center, he will lead a reach project on economic affairs of Korea in relations to the U.S.
The Koret Fellowship, generously funded by the by Koret Foundation of San Francisco, was established at the Center in 2008 to bring leading professionals in Asia and the United States to Stanford to conduct research on contemporary U.S.-Korean relations, with the broad aim of fostering greater understanding and closer ties between the two countries.