Globalization is a commonly cited process in the study of political economy, but its complexities can be easily overlooked. When examined with a comparative lens across many Chinese cities, the story of globalization becomes one of institutional tension and individual ambition. 

According to emerging research by Ling Chen, a 2013­–14 Shorenstein APARC Postdoctoral Fellow in Contemporary Asia, the connection between government and industry, particularly in an authoritarian country like China, reveals a web of competition among, and within, city bureaucracies. These agencies coordinate relations between foreign and domestic firms, sometimes leading to policy manipulation.

Ling Chen

China’s increasing interest and interaction with foreign firms is clear, but the creation of policies affecting industry, and their patterns of implementation on the ground, remain vague. What happens after industrial policy is created? How does policy affect the way that local governments allocate resources among businesses? What are the implications for foreign and domestic firms going forward?

Chen, a scholar of comparative politics and political economy of East Asia, seeks to uncover the decisions and flow of resources related to foreign direct investment, and its impacts on local government and domestic firms. She finds that bureaucracies in many Chinese cities have industrial policies that favor certain firms over others, for example, in government funding, tax breaks and land allocation. And as resource competition in China rises, rivalry among and within Chinese bureaucracies is only destined to grow.

Chen gathered qualitative and quantitative data through intensive fieldwork between 2008 and 2011 on China’s east coast, and did additional follow up interviews this past June. In total, she has conducted about 270 interviews with Chinese bureaucrats and firms, and even observed a few official bureaucratic meetings, an opportunity not afforded to many. Chen’s research at Shorenstein APARC furthers her dissertation work, which she is expanding into a full book manuscript. Before her departure, she spoke with Shorenstein APARC about her research. 

Can you tell us about China’s system of local governance? What are bureaucrats competing for, and what institutional rules exist?

China’s bureaucratic system is very complicated, and being a successful bureaucrat means you are selected for promotion among the 8,000 people working for the government in a typical large city. This implies that bureaucrats compete with each other in order to improve their own status. The party branch and city governments, which are always under pressure for cadre evaluation, appoint bureau leaders based on an assessment of their performance in terms of policy targets each year. Typically, bureaucrats compete for political survival, control over policies, and resources associated with these policies. These factors can help create opportunities for political achievement and facilitate their promotion. So, in general, the institutional rules encourage competition. Whether such competition is good or bad is another question. Interestingly, I found through text analysis of interview transcripts that inter-department and intra-department competition have different influence on the implementation of policies, with the former impeding the process of policy implementation, and the latter facilitating the process. And the types of foreign firms that the government attracts precisely affect such patterns of competition.

Chen visited the Global Center in Chengdu, the largest building in the world, which houses businesses and various recreation centers.

What is policy manipulation, and which policies concern both government and foreign firms?

The policies that interest both sides include: government funding (who gets funding for projects), tax breaks (exemption or reduction), and land (who gets access to economic development zones). Policy manipulation occurs when an agent outside of the issue area diverts resources from its original purpose to another purpose. For example, the government has set up high-tech economic zones and incubators for innovation purposes. But, if bureaucrats utilize the advantages of these zones for other purposes, like attracting foreign firms interested in cheap labor, this reflects policy manipulation because the original goal of the policy is not fulfilled. Bureaucrats are the immediate agents implementing industrial policies, but foreign firms are important as business clients of particular bureaus. Foreign firms’ outsourcing strategies affect the division of labor among government agencies and their local perception regarding who to gain and lose from certain economic policies.  

How do patterns of government-foreign firm interaction and power seeking differ in the rural versus urban settings?

My work mainly concerns the urban areas, but there are interesting variations between rural and urban areas. Due to limited land availability in China, many firms now locate their manufacturing in rural areas, while their headquarters remain in urban areas. In cities that host leading global firms, such as Intel and Foxconn, the firms’ leadership and top city bureaucrats interact directly and often. Typically, the government gives those firms land in top-ranked development zones, whereas rural areas are no longer allowed to host industrial parks to attract foreign firms. If the government allowed rural areas to attract investment, those areas would garner some smaller foreign firms (guerilla investors), and cause messy overlaps with industrial park policies, especially those concerning the hiring of immigrant labor. During the early reform days in the late 1980s and early to mid-1990s, some of these firms were registered as collectively-owned firms under government corporations and only later became independent foreign-invested firms. Interestingly, they didn’t hire local peasants because their village could rent land to earn money. In this situation, you see highly planned bargaining and formal negotiation on the one hand, and on the other hand, informal deals tailored for the firm through various dense networks.

What is the business environment like for foreign firms in China? What does the future hold?

In the eyes of many Chinese bureaucrats, few countries can compete with China in providing services to foreign firms. China attracts firms by setting up “hotel-style” hospitality to cater to the firms’ needs. Some bureaucrats, in my earlier interviews in Jiangsu in 2009, showed that accommodation of foreign firms was written into city rules in the 1980s. If you ask bureaucrats to rank who comes first in the business environment, the answer will often be foreign firms and state-owned enterprises. Domestic private firms are located on the other side of the scale. According to my later research, the situation is slowly starting to change today. Two main reasons are behind this change. First, as land resources become scarce, the city government, particularly on China’s east coast, has been more selective in its preferences. Officials are now mostly focused on the number of global Fortune 500 companies there. Second, the government now has increasingly shifted its focus to innovation and technology capabilities. In contrast to the 1990s, when local governments focused on attracting foreign firms, the support for local R&D by China’s own enterprises has steadily increased. However, the Chinese government is very cautious in saying that they promote domestic firms, at least to external media, because they don’t want to lose investment or violate any World Trade Organization rules. 

On a rainy day last November, twelve fellows made their way up the steps of San Francisco’s City Hall, a true initiation to the town that’s often shrouded in fog. But the grey didn’t affect the day’s mood. Meeting with representatives from the Mayor’s Office, the fellows learned about California’s legislature through the unique lens of San Francisco, the only city statewide that is also designated as a county.

City Hall is just one of many site visits that the fellows attended during their time in the Corporate Affiliates Program at the Shorenstein Asia-Pacific Research Center, a cornerstone initiative that has brought professionals from Asia to Stanford since 1982.

“This year, our class was one of the most diverse ever, with fellows coming from Northeast to South Asia and representing a wide array of expertise from business to aerospace,” says Denise Masumoto, the manager of corporate relations at Shorenstein APARC. “We structured the program to support their interests and spur conversation with APARC scholars, and with those in the community beyond.”

The Corporate Affiliates Program provides yearlong fellowships for professionals from Asia who come to Stanford to learn about the United States, exchange ideas and participate in activities of mutual interest. The fellows keep a busy schedule: conducting a research project, auditing classes and attending site visits and seminars.

Now at the end of the academic year, the 2013–14 class has all but just departed. Before this, Shorenstein APARC spoke with three fellows about their experience: Tetsuo Ishiai from Tokyo, Japan; Tejas Mehta from Mumbai, India; and Wendy (Wei) Wang from Beijing, China. Highlighting moments and memories, the fellows struck conversations that underlined a few common themes.   

Thinking dynamically

At the heart of Silicon Valley, Stanford offers a unique base for fellows. As a hub for technology and venture capital, the area has an entrepreneurial buzz that grabs your attention, Ishiai says.

“To move toward open architecture, this entails movement to a more service-oriented structure,” he explains, and says that industry must ask the right questions. “What specialized services and facilities are required for this? What should be developed as the standard going forward?”Ishiai, who normally works at Mitsubishi Electric’s headquarters in Japan, has examined the shift in data management practices and its implications for business during his time at Shorenstein APARC, leveraging his experiences from over twenty years at the company.

When asked if he would share anything when he arrived back home, Ishiai says a message he will convey is the importance of creativity and determination.Ishiai says Silicon Valley offered an excellent environment to perform his research; he joined conferences at Stanford and visited many IT companies in the Bay Area. Ishiai also talked with industry executives through his courses at Stanford’s d.school.

“Exciting thinking and passion for starting new business ventures was very evident in Silicon Valley culture,” he says. “This type of support and ambition should be encouraged in Japanese corporate culture, especially among young employees, who can often be less recognized.”

Ishiai says he made many connections here, and looks forward to returning to Stanford in the future.

Finding partners

When asked to describe a favorite memory, Wang says that challenges have brought forth her richest experiences as a fellow. Speaking English on a daily basis and finding a stride in university life again were obstacles at first, she says, but when paired with the right people and resources, good things happened.

“I connected with a graduate student at CEAS, who I met with weekly to practice my language skills and share cultural observations,” she says. “We became close friends – I even hosted members of his family when they visited California.”Wang normally works in corporate banking at the Industrial and Commercial Bank of China (ICBC), an entity with an expanding scope of business overseas. To suit this trend, Wang says she sought to improve her English skills while in the United States. Masumoto encouraged her to seek out Stanford’s Center for East Asian Studies (CEAS), which offers advanced Chinese language instruction. There, Wang found a surplus of graduate students who were eager to help.

The theme of collaboration echoed in the courses she audited at the Graduate Business School, which allowed her to interface with top executives from JetBlue and Nike in a small group setting, and through dialogue with her research advisor, Jean C. Oi, a professor and director of the Stanford China Program at Shorenstein APARC. 

“Each time I met with Jean, she would offer up a slew of new questions,” Wang says. “She pushed me to really examine the details of my research – a different experience than I’m used to in China where expression is less direct, open.”

Comparative perspective

The global pharmaceutical industry sees extensive overlap between the government, business and academic sectors worldwide, but the variation across countries is what makes it so interesting, says Mehta, who has worked in medical marketing at Reliance Life Sciences for nearly a decade.

“A significant difference between India and the United States is the two country’s health care systems with respect to their insurance structures,” he says. “However, all stakeholders, whether in the United States or India or elsewhere, share the common objective of improving patient’s treatment outcomes and reducing overall cost of healthcare.”

Mehta analyzed challenges for pharmaceutical businesses through his courses at the Graduate Business School, such as “Leading Strategic Change in the Health Care Industry.” The course is structured to examine the environment for incumbent health care players like companies and hospitals, but also to look at the dynamics for entrepreneurial start-ups. A prime opportunity, given the budding initiatives for innovative treatment and health information services in Silicon Valley. A comparative perspective is necessary to learn from and question how things are done both at home and abroad. Mehta says being at Stanford, an institution with a strong foundation in medicine, greatly informed his research. His focus on theranostics, an emerging field of customizable testing and treatment for patients, was enhanced through dialogue on- and off-campus.

The classroom experience, coupled with visits to a variety of businesses in the Bay Area, gave Mehta a fuller view of the intricate market for U.S. medicine, and its relations with government and the private insurance system.

Looking back, he says it is hard to single out a few memories because there are many, but one that would top his list is visiting City Hall.

Northeast Asia is a global center of economic dynamism, propelled by phenomenal growth in social and cultural interactions among the region's nations. Still, wounds from past wrongs, committed during times of colonialism and war, have not yet fully healed, and the question of history has become a highly contentious diplomatic issue. After one and a half years in office, the leaders of China and South Korea (Korea hereafter) still refuse to hold bilateral summits with their Japanese counterpart, largely due to disputes over the past. Questions about history touch on the most sensitive issues of national identity, making it very difficult for countries to compromise.

How should we understand and approach current historical tensions in Northeast Asia? Pessimists worry that the legacies of the past will persist and that there is not much we can do about it. Optimists believe that these issues will inevitably fade over time as the wartime generation passes away and the countries of the region become increasingly integrated economically and culturally.

Last summer, I had an opportunity to deliver a special lecture series at a Korean university. More than 30 students from China, Japan, Korea, the U.S. and Europe attended the lectures, which focused on problems related to the modern history of Northeast Asia and territorial disputes. I asked students whether they thought Japan had apologized for its past actions of aggression. Korean and Chinese students mostly replied that Japan had either "not apologized at all" or was "not sincere." In contrast, most Japanese students were hardly aware of the misfortunes of the past and the controversies about the government's stance.

The historical amnesia of Japanese students is most worrisome, but the insistence by Chinese and Korean students that the Japanese have not apologized at all is troubling, too. Although the definition of "apology" may vary depending on circumstances, it is undeniable that Japanese leaders, including prime ministers, have directly expressed regret about Japan's actions of aggression to Koreans and Chinese. Of course, legitimate doubts arise in Korea and China as to Japan's sincerity. More than once, a prime minister's apology has been undercut by the denial of wartime responsibility by his education minister, or by a subsequent visit by the prime minister to the Yasukuni Shrine to Japan's war dead.

My teaching experience illustrates the danger posed by a crucial gap in perceptions. History does not merely narrate events or developments. In reconstructing the past, it is inevitable that certain parts are omitted or stressed, producing different views. Divided historical memories separate nations, resulting in distinct, often contradictory, perceptions. Those perceptions become deeply embedded in the public consciousness, transmitted to succeeding generations formally by education and informally through the arts, popular culture and mass media.

Time isn't a cure-all

Why have these nations developed distinct, and incomplete, memories of the wartime period?

One common answer is that Japan was an aggressor while China and Korea were victims, but this is too simplistic to explain the complexities of modern history and collective memory in Northeast Asia. Different events acquire disproportionate weight in the formation of each nation's historical consciousness. For China and Korea, Japanese acts of aggression -- such as the Nanjing Massacre or forced labor and sexual slavery -- constitute the most crucial elements. For Japan, events related to U.S. actions, such as the firebombings of Japanese cities or the nuclear attacks on Hiroshima and Nagasaki, are more important. Korea and China are a less significant element in Japan's memory, while Japan looms large in theirs.

Japan's focus on U.S. actions, over the sufferings of Koreans and Chinese, explains the country's historical amnesia and reluctance to come to terms with its Asian neighbors. Unlike Germany, postwar Japan developed a mythology of victimhood, shaped by the sacrifice of hundreds of thousands of civilians in the massive incendiary and atomic bombings of its cities. Victim consciousness provided fertile soil for the growth of postwar neo-nationalism that justified colonialism and war and denied Japan's responsibility for atrocities.

Balanced historical memory with a better understanding of the perspective of the other side is urgently needed. Japan needs to clearly comprehend the mindset of its neighbors, instead of complaining about its "apology fatigue." China and Korea are also responsible for educating their citizens about Japan's own struggle to come to terms with its past. That kind of mutual understanding rests on resuming efforts at joint historical study with a commitment to open-minded debate. Only then can the nations of Northeast Asia begin to narrow perception gaps and forge a shared view.

This is a task not only for governments but for civil society. We should encourage exchanges among young people from the three countries, including joint visits to historic sites such as the Nanjing Massacre Memorial Hall, Hiroshima Peace Memorial Park and Seodaemun Prison History Museum in Seoul. Such gatherings would constitute a regionwide attempt to share and heal the pains of the past. Disregarding or ignoring dark events means not only evading historical accountability but also missing the opportunity to learn from history. Germany's failure to learn from its defeat in World War I led to the rise of Nazism and another world war. The German experience should provide a valuable lesson for all, especially Japan.

We cannot depend on time alone to heal these wounds. When issues of the past posed a stumbling block in improving relations between China and Japan in the 1970s, Chinese leader Deng Xiaoping said, "Because our generation is not wise enough to resolve all of the pending questions, let's leave the unsettled ones to the next generation." Contrary to his expectations, however, the two countries are stricken today with a worse situation involving history and territorial disputes, and the younger generation tends to be even more swayed by the fever of nationalism.

This is a moment of both danger and opportunity for Northeast Asia. The current impasse in regional relations demands a commitment to confronting the corrosive nationalism fed by the unresolved issues of history. As the wartime generation passes from the scene, they are called upon to leave behind a wiser generation capable of realizing the potential of Northeast Asia to be the center of the 21st century.

This article was originally carried by Nikkei Asian Review on 25 July and reposted with permission.

Human Capital & Ageing

as part of the "Next World Program"

Harvard School of Public Health

Boston, Massachusetts

April 13-14, 2015

Organized by:

David E. Bloom, Harvard School of Public Health, USA; David Canning, Harvard School of Public Health, USA; Karen Eggleston, Stanford University, USA; Wang Feng, Fudan University, China; Hans Groth, World Demographic & Ageing Forum, Switzerland; Alfonso Sousa-Poza, University of Hohenheim, Germany; Thomas Zeltner, Special Envoy, World Health Organization, Switzerland.

Topic

One of the challenges faced by ageing societies is maintaining a workforce large enough to supply the goods and services needed by a country's entire population. In the coming decades, industrialized countries will experience a steep increase in the share of elderly persons in the population and a fall in the share of the working-age population. In some countries, the number of people aged 60-64 (many of whom are about to retire) already exceeds the number of people aged 15-19 (the cohort soon entering the labour market). There will, however, be mitigating factors that will tend to decrease the effects of declines in the working-age share of the population: (a) the burden of caring for a high number of elderly people will be offset by there being fewer children to support, and (b) the proportion of adult women who work will rise when there are fewer children to take care of. Still, if there is no change in work and retirement patterns, the ratio of older inactive persons per worker will almost double from around 38 percent in the OECD area in 2000 to just over 70 percent in 2050 (OECD, "Live Longer, Work Longer", 2006). In Europe, this ratio could rise to almost one older inactive person for every worker over the same period.

Ageing on the anticipated scale will place substantial pressure on public finances and economic growth. According to the OECD, on the basis of unchanged participation patterns and productivity growth, the growth of GDP per capita in the OECD area would decline to around 1.7 percent per year over the next three decades, as compared with about 2.4 percent per year between 1970 and 2000. These negative consequences of ageing could be possibly offset by postponement of retirement, greater immigration, faster productivity growth, or higher fertility (although the positive economic effects of higher fertility would only come several decades after an uptick in fertility rates). While these developments would all help offset the negative effects, they need to go hand-in-hand with attempts to mobilize available labour in order to sustain economic growth. One of the most significant sources of additional labour supply is older people who are currently inactive. Indeed, as labour markets tighten, companies will soon have little choice but to be more welcoming of older employees. Prompt action to harness – and enhance – the contributions of older workers could become a key competitive advantage.

The objective of this workshop would be to discuss one important topic related to an ageing workforce, namely human capital. How does a worker’s human capital change over the life course and what role does the health and skill status of workers play? The answer to these questions is of great importance, not only for adequate human resource policies, but also for macroeconomic policies, especially those associated with retirement and economic growth. Despite the importance of this issue, this question is not easily answered.

The workshop will bring together researchers to present recent research on ageing and human capital. Research questions and topics that could be dealt with include:

• Human capital, economic growth, and the demographic dividend.
• Firm-level experience in promoting human capital among older workers.
• Evaluation of policies aimed at enhancing the quantity, quality, and value of older workers’ human capital.
• The relationship between human capital and productivity.
• Training and wages of older workers.
• Technological change, knowledge replenishment, and productivity. 

Submission for the Workshop

Interested authors are invited to submit a 1-page abstract by the 30th of September 2014 to David E. Bloom (dbloom@hsph.harvard.edu) and Alfonso Sousa-Poza (Alfonso.sousa-poza@uni-hohenheim.de). The authors of accepted abstracts will be notified by the end of October and completed draft papers will then be expected by the 28th of February 2015.

Economy class travel and accommodation costs for one author of each accepted paper will be covered by the organisers.

A selection of the papers presented at the workshop will (assuming successful completion of the review process) be published in a special issue of the Journal of the Economics of Ageing.

Submission for the Special Issue

Interested authors (also those not attending the workshop) are invited to submit papers for the special issue in the Journal of the Economics of Ageing by the 31st of May 2015. Submissions should be made online at http://ees.elsevier.com/jeoa. Please select article type “SI Human Capital.”

About the Next World Program

The Next World Program is a joint initiative of Harvard University’s Program on the Global Demography of Aging, the WDA Forum, Stanford University’s Asia Health Policy Program, and Fudan University’s Comparative Aging Societies. These institutions will organize an annual workshop and a special issue in the Journal of the Economics of Ageing on an important economic theme related to ageing societies.

Update: A full report summarizing the discussion of the 12th Korea-U.S. West Coast Strategic Forum is available below.

Northeast Asia has been rife with animosity over the past year. Among the outstanding concerns are China’s naval movements in the South China Sea and the threat of a fourth nuclear missile test by North Korea. While no major incidents have occurred in recent months, the uncertainty weighs heavily on policymakers and observers. What if an accidental clash happens in the sea or air?

Senior security scholars and practitioners from South Korea and the United States recently gathered for the Korea–U.S. West Coast Strategic Forum, a Track II workshop to exchange views on these major issues impacting the Northeast Asia region.

The Strategic Forum, established in 2006, is held semiannually and alternates between Seoul and Stanford, hosted by the Korean Studies Program at the Shorenstein Asia-Pacific Research Center. The Korean counterpart organization is the Institute of Foreign Affairs and National Security, the foreign ministry’s think tank within the Korea National Diplomatic Academy. 

Twenty-four participants gathered on June 20 at the Bechtel Conference Center, and offered a diversity of opinions on Korean peninsula issues and the potential impact they could have on the countries’ allies. The participants collectively expressed a desire for regional stability, increased dialogue, and commitment to maintaining the U.S.–ROK alliance and cooperation on other trust-building activities.

The conference operates under the Chatham House Rule of individual confidentiality to allow for candid conversation. A few main points from the sessions are disclosed below:

Session I: Northeast Asia Regional Dynamics

Many participants shared the concern that trilateral relations between China–South Korea–Japan are at one of the worst points in recent history.

China’s current attitude toward its neighbors and the United States was discussed at length. Many participants discussed the strategic trajectory of China and how the country’s domestic situation may challenge its ability to effectively move forward, contrary to popular perceptions that simply straight-line its current growth rate into the indefinite future. 

Korean participants expressed concern toward Japan’s position, particularly following Prime Minister Shinzo Abe’s visit to Yasukuni Shrine and the stance he has taken on other wartime issues like “comfort women.” They said they hoped the United States would do more to help Korea–Japan relations, as participants recognized the desirability of increased trilateral U.S.–Japan–Korea security and diplomatic cooperation.

Session II: U.S.­–Korea Free Trade Agreement (KORUS FTA)

Participants shared the view that the U.S.­–Korea Free Trade Agreement (KORUS FTA) is serving to broaden and deepen the U.S.­–ROK relationship.

The KORUS FTA is only in its second year of implementation, so additional time is needed to make a comprehensive evaluation, but it appears that it will significantly increase bilateral trade as time passes.

Session III: U.S.–ROK Alliance

The U.S.­–ROK relationship, on the whole, is in very good shape. South Korea and the United States have similar policies in most strategic areas.

The two countries cooperate on many diplomatic and security initiatives, such as the U.S. 28,500-strong troop presence in South Korea and many United Nations peacekeeping missions abroad. 

Session IV: North Korea

Participants agreed that North Korea continues to engage in provocative behavior. This remains the chief concern of the U.S.–ROK alliance, as well a priority of the international community in total.

The policies of the United States and South Korea toward North Korea are well-coordinated and principled, but a number of Korean and American participants expressed concern that more creative thinking was needed, as the challenges North Korea poses are increasing. 

Reports from past forums are available on the Shorenstein APARC website.

Over 215 million Muslims live in the Asia-Pacific region, but despite their number and proximity to record growth and opportunity in greater Asia, their experience has been one of persistent, widespread socioeconomic and political decline. 

A new book, Modes of Engagement: Muslim Minorities in Asia, published by the Walter H. Shorenstein Asia-Pacific Research Center (APARC) and distributed through The Brookings Institution, offers leading research on this topic and places it in a geographic perspective. Edited by Rafiq Dossani, a senior researcher at the RAND Corporation and Professor at the Pardee RAND Graduate School of Public Policy, the book paves new paths to understanding the paradox of Muslim minorities in Asia. 

Dossani was at Stanford University for nearly fifteen years as a senior research scholar at Shorenstein APARC and as the executive director of the South Asia Initiative, studying the plight of Muslims and higher education in India, among other topics. The book is a result of a seminar series with the book’s contributors.

“Since the 1970s, especially in China, Asia’s growth rate has been unprecedented within Asia’s own history,” Dossani says. Mainstream Asia has seen a rise in job opportunities and income levels, and as a result, an individual ability to accumulate wealth and commit resources to long-term investments, such as education and innovation activities.

However, not all people have found benefit from this modern, economic transformation. Most notably, Muslims have seen a severe decline in their social and political space, as well as a narrowing of their identity.

Analysts find this surprising because history reflects a narrative that says Muslims should have profited along with the rest. “It wasn’t expected that Muslims would lose out in the countries in which they were minorities,” he says.

The volume investigates this puzzle through three case studies: the Philippines, India, and China. In each country, Muslims are at least 5 percent of the population, the largest number being in India. Dossani weaves together common threads that define the Muslim minority experience. Similarities include the impact of state-led ethnic nationalism and forced assimilation. He also writes that Muslims have been unable to use protest to secure any significant, long-term gains.

Given this dire reality, what prospects lie ahead for Muslim minorities? In conversation, Dossani suggests a few policy priorities gathered from the case studies featured in the volume.

Democracy is not the answer

Democracy, a form of governance that is often championed for its equal civic participation, has not facilitated a level playing field for Muslims when theory dictates it should.

“Democracy is not the answer to handling these problems,” says Dossani, emphasizing, “it is a most inadequate answer.”

This situation is evident in the case of India where Muslims have probably done the worst, compared to the Philippines, which also shares a legacy of colonial rule and transition to democracy.

Muslims in India, who have attempted to elevate their interests on the national stage, are stopped by coalition politics. Larger interests of the group can subsume their own, encroached upon further by caste issues, language barriers and other dividing factors. China’s Hui have found a significantly better experience than the Uyghurs, who were separated from mainland China early on and excluded from opportunities afforded there (the Uyghurs reside in a northwest region, Xinjiang). In the case of India, Muslims make up only ten to fifteen percent of the population in almost every state, thus their voice fails to find leverage in the political sphere, and effectively lose out.

Furthermore, democracy is not a panacea when states are vulnerable.

“When you have very weak and fragile states, where intuitions are subject to capture easily, democracy doesn’t work,” Dossani explains. Muslim minorities are unable to gain clout because the majorities, and elites attempting to fill a power vacuum, crowd them out.

Thus, collective interest and concerted efforts on the part of governmental and non-governmental organizations – a larger nexus of individuals working toward common goals – are essential to create momentum and staying power behind Muslim issues.

“You need civil society where it explicitly deals with the issues of minority populations and tries to convince the national government and state governments that improving the lots of minorities should be a national project with commitment to their improvement,” he says.

Development as a way forward

Some national projects were developed to openly address Muslim issues, but this led other internal ethnic and religious groups to ask, “Why are you appeasing the Muslims?”

Especially since 9/11, governments have increasingly come under pressure. Stigmas that narrow Muslim identity into “extremists” and “terrorists” are more progressively shared, making it near impossible for governments to explicitly offer a helping hand to Muslims without domestic backlash. 

But even with the odds against them, Muslim minorities still have a way forward.

In the three countries studied, Muslims have found traces of success, and in other Asian nations such as Sri Lanka and Nepal, there has been considerable accommodation of Muslims. Across all circumstances, “Muslims have done best in countries where the state has focused on education for all,” Dossani says.

Instead of providing ethnic-based aid, governments should focus on resource availability as a main qualifier for assistance. State-sponsored education and health care initiatives that capture the poorest populations help Muslims who inherently fall into this category. 

“Any wise government would say ‘look we want to connect education to development and focus on the poorest, no matter who they are.’ If they do that, Muslims will automatically get their fair share,” he says. The Philippines has already recognized this reality, and begun to implement development projects that naturally include Muslims.

Regime change can also motivate Muslim accommodation, either directly or indirectly, as is likely in the case of India.

Newly appointed Prime Minister Narendra Modi, although said to have an anti-Islamic stance in the past with the Bharatiya Janata Party, may in fact create policies that favor Muslims because it fits in with a grander vision of national growth. 

Referring to Prime Minister Modi, Dossani says, “It’s not clear that he cares about Muslims, but in some ways, he cares about development.

“At some point, any development-conscious person will realize that no country can progress if 15 percent of the country hangs behind.”

Diaspora matters

The swell of migration in the globalized era has made the formation of diaspora communities, dispersed populations outside of country of origin, a common phenomenon. Muslim minorities are a large part of this movement, seeking opportunity and using their ethnic or religious connections to establish a new life elsewhere.

Muslims of Asian origin are located beyond Asia – in the Middle East, North Africa and Southern Europe, among other areas. But despite being removed from their native soil, an allegiance and interest in the homeland typically remains.

“Diaspora exists in a very big way,” Dossani explains. Their influence should not be underestimated, both financially and politically. The Muslim diaspora provides an important channel of support that helps struggling Muslim populations.

Remittances from relatives overseas can bring in substantial transfers of money and support to populations that may not otherwise have enough resources, or be supported by the government. For several years now, one of the single largest inflows of money into the Philippines has been from these outside sources. India’s Muslim diaspora has a strong diasporan foundation with codified institutions set-up to organize relations. China’s experience is less documented, Dossani says, although he conjectures that some diasporan support exists, whether formally or informally.

Diaspora organizations, often led and supported by expatriates, appear to be growing worldwide, and can play a crucial role in the formation of Muslims’ global identity and network of support. Neighboring countries with Muslim majorities, such as Malaysia and Indonesia, have also offered themselves as diplomatic partners in resolving conflicts over Muslims’ conditions, given their own long histories of addressing them internally.

Fourteen Stanford researchers addressing global poverty through a range of academic disciplines are receiving a total of $4.6 million in awards from the university-wide Global Development and Poverty (GDP) initiative.

Their projects, which are the first to be funded by the GDP, deal with challenges of health, violence, economics, governance and education in the developing world.

“GDP seeks to transform scholarly activity and dialogue at Stanford around the topic of global poverty, so that the university may have a greater impact on poverty alleviation in developing economies,” said GDP faculty co-chair Jesper B. Sørensen. “By focusing on placing a small number of big bets, GDP encourages researchers to think big, and to move beyond the conventional way of doing things. We are thrilled by the inaugural set of awardees, as they demonstrate the creative, inter-disciplinary approaches that will make Stanford a leader in this area.”

The GDP initiative is part of the Stanford Institute for Innovation in Developing Economies (SEED) and is administered in partnership with Stanford's Freeman Spogli Institute for International Studies (FSI). The GDP is co-chaired by Sørensen, the faculty director for SEED and the Robert A. and Elizabeth R. Jeffe Professor of Organizational Behavior at the Graduate School of Business; and Mariano-Florentino Cuéllar, senior fellow and director of FSI and the Stanley Morrison Professor at Stanford Law School.

SEED, which seeks to alleviate poverty by stimulating the creation of economic opportunities through innovation, entrepreneurship and the growth of businesses, was established in 2011 through a generous gift from Robert King, MBA '60, and his wife, Dorothy.

Through complementary areas of focus, GDP funding and other SEED research initiatives will stimulate research, novel interdisciplinary collaborations and solutions to problems of global poverty and development. GDP research aims to pursue answers to crucial questions that are essential to an understanding of how to reduce global poverty and promote economic development. That includes governance and the rule of law, education, health, and food security – all of which are essential for entrepreneurship to thrive. By contrast, other SEED research focuses on innovation, entrepreneurship, and the growth of businesses in developing economies.

Since 2012, SEED’s Entrepreneurship and Innovation in Developing Economies Award program also has doled out 22 awards and seven PhD fellowships to help support and scale businesses in developing economies. Among the $1 million in funded projects were studies of how to improve the livelihoods of small-holder cacao farmers throughout the tropics; how to identify startups with high job- and wealth-creating potential in Chile; how political accountability affects the ability to attract investment in Sierra Leone; and how managerial practices affect trade entrepreneurship in China.

First GDP Awards

The first 14 GDP award recipients are professors of economics, political science, law, medicine, pediatrics, education and biology, and senior fellows from FSI, the Woods Institute, and the Stanford Institute for Economic Policy Research (SIEPR).

“Each of these projects cuts across disciplines, reflects innovative thinking, and has the potential to generate crucial knowledge about how to improve the lives of the poor around the world,” Cuéllar said. “These projects, along with a variety of workshops engaging the university and external stakeholders, will help us strengthen Stanford’s long-term capacity to address issues of global poverty through research, education and outreach.”

Among the award recipients is Pascaline Dupas, an associate professor of economics and senior fellow at SIEPR. Dupas, along with faculty from the Center for Health Policy and Center on Democracy, Development and the Rule of Law, will launch the Stanford Economic Development Research Initiative using GDP funds.  This initiative will focus on collecting high-quality institutional and individual-level data on economic activity in a number of developing countries over the long term, and making these data available to scholars around the world.

Beatriz Magaloni, an associate professor of political science and senior fellow at FSI, is receiving an award to lead a team focused on criminal violence and its effects on the poor in developing economies, and the practical solutions for increasing security in those regions.

Douglas K. Owens, a professor of medicine and FSI senior fellow, was awarded an award to help him lead a team that will develop models to estimate how alternative resource allocations for health interventions among the poor will influence health and economic outcomes.

Stephen Haber, a professor of political science and history and a senior fellow at the Hoover Institution, received an award to bring together Stanford researchers interested in examining the long-term institutional constraints on economic development. Their goal will be to provide policymakers with a framework for determining the conditions under which particular innovations are likely to have positive payoffs, and the conditions under which resources will likely be wasted.

Other projects will address the educational impacts of solar lighting systems in poor communities; identifying interventions to improve the profits and safety among poor, smallholder pig farmers in Bangladesh and China; the role of law and institutions in economic development and poverty reduction; and how to rethink worldwide refugee problems. Awards are also being provided to researchers focused on microfinance, online education and teacher training.

The project proposals were reviewed by an interdisciplinary faculty advisory council chaired by Cuéllar and Sørensen. 

“We were very encouraged by the impressive number of project proposals from a wide range of areas and are looking forward to introducing several new capacity and community-building activities in the fall,” Sørensen said.. “This wide range of research initiatives will form a vibrant nucleus for Stanford’s growing community of scholars of global development and poverty.”

In early 2014, Stanford Graduate School of Business (GSB) launched a new organization structured to further increase the research support of our faculty and their teaching objectives. That group, called Centers and Initiatives for Research, Curriculum and Learning Experiences (CIRCLE), supports areas of academic focus including social innovation, entrepreneurship, value chain, data and analytics, and corporate governance, in addition to China-related work.

With staffing and a facility now grounded in Beijing, the GSB is transitioning management of our China initiatives to CIRCLE led by Wendy York-Fess, Assistant Dean and Executive Director. Within CIRCLE, Frank Hawke, located in Beijing, is the director of GSB China-related activities designed to continue the focus on building a bridge between China and Silicon Valley.

Going forward, updates on China programs will be communicated through other GSB online channels. Content hosted on this site will remain available, and we encourage you to engage with our rich library of videos, podcasts, and stories.

China 2.0 originated from within the Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE), which was active from 1998 through fall 2013. Led by faculty co-directors William F. Miller and Henry S. Rowen, with Associate Director Marguerite Gong Hancock, SPRIE was dedicated to the understanding and practice of innovation and entrepreneurship in leading regions around the world. SPRIE fulfilled its mission through interdisciplinary and international collaborative research, seminars and conferences, publications, and briefings for industry and government leaders.

“We are grateful to have made our home at two remarkable parts of Stanford, the Shorenstein Asia Pacific Research Center until 2011 and then the Graduate School of Business,” said Henry Rowen. William Miller added, “The impact of SPRIE’s work among leaders around the world has been made possible through wonderful relationships with faculty colleagues across the university and beyond, active Advisory Board members, generous donors, engaging alumni and students, strong corporate and government partners, and extraordinary staff.”

SPRIE’s work resulted in publications in journals and monographs, as well as three books published by Stanford: The Silicon Valley Edge (2000), Making IT: The Rise of Asia in High Tech (2006), and Greater China’s Quest for Innovation (2008), including editions in Chinese, Korean, and Japanese. During the most recent phase of work, SPRIE included four major projects: the Silicon Valley Project, Smart Green Cities, the Stanford Project on Japanese Entrepreneurship, and China 2.0.

Through conferences at Stanford University and in Beijing, to date China 2.0 has engaged with more than 100 speakers, dozens of media, and more than 2,500 Stanford faculty, students, and alumni. China 2.0 seminars have enhanced student educational experiences and facilitated cross-campus faculty and student interaction. China 2.0 content has become part of our classrooms, online resources, and also reached hundreds of thousands of viewers in English and Chinese.

As part of the GSB reorganization, we are pleased to announce that Marguerite Gong Hancock is now the director for a new CIRCLE research effort called Stanford Project on Emerging Companies 2.0 (SPEC 2.0), where she will focus on supporting faculty research on entrepreneurship, as part of the Center for Entrepreneurial Studies.

While our organization has changed, Stanford Graduate School of Business remains committed to bringing together executives, entrepreneurs, investors, policy makers, academics and students through a number of existing and emerging programs related to innovation and entrepreneurship around the world.