Essential Outsiders: Chinese and Jews in the Modern Transformation of Southeast Asia and Central Europe

11. Strengths and Weaknesses of Minority Status for Southeast Asian Chinese at a Time of Economic Growth and Liberalization

11 I Strengths and Weaknesses of Minority Status for Southeast Asian Chinese at a Time of Economic Growth and Liberalization LINDA Y. C. LIM AND L. A. PETER GOSLING Southeast Asia is distinguished from other ethnically diverse , economically developing regions by the coincidence ofextreme ethnic and religious diversity with relative interethnic peace and rapid economic growth over three decades.' Stability and prosperity have been achieved, even though small minorities of ethnic Chinese dominate the region's private-sector economies while once-colonized indigenous majorities control the modern nation-state.:' In this essay we seek to analyze, in a comparative regional context, the complex interplay between economic growth, ethnicity, and national policy in determining the state of interethnic relations between the entrepreneurial minority and the majority populations. The central question we address is the extent to which the particular character of Southeast Asia's contemporary economic growth is likely to assuage or aggravate ethnic tensions. In theory, economic growth improves ethnic relations because it removes the tensions caused by potential interethnic competition over scarce resources , jobs,. and business opportunities. The growth in absolute shares of an expanding economic pie reduces concern over relative shares. This is, arguably, what has happened in Southeast Asia, where sustained economic prosperity has minimized the economic basis for interethnic rivalry. Ethnic conflict has been most entrenched in Myanmar, with its poor record of economic growth, whereas Malaysia-with potentially the most volatile ethnic mix, resulting from a colonial-era ethnic division of labor-has not exploded in ethnic violence because economic growth, aided by state policy, has delivered material benefits to all groupS.3 In southern Thailand, a Malaybased ethnic separatist movement disintegrated as Thailand's economic growth accelerated in the 1980s,. whereas the similar Moro nationalist movement in the southern Philippines has persisted in part because of a weaker national economy. 286 LINDA Y. C.!.IM AND L. A. PETER GOSl.ING But economic growth also has the potential to undermine ethnic harmony : first, ifthe growth is unevenly distributed across ethnic groups, or if it is predicated on or generates occupational or class distinctions that correlate with particular ethnic groups; second, if economic success leads to the enhancement of ethnic identity and a resurgence of ethnic pride among ascendant groups, which others resent; and third, if economic growth increases interethnic contact between previously segregated ethnic groups, giving rise to more opportunity for ethnic friction. All of these developments have also occurred in Southeast Asia as part of its recent rapid economic growth, which has enhanced the historically dominant role of ethnic Chinese in the business sector.4 To the local Chinese business families domiciled in the region for generations have been added, since the late 1980s, foreign Chinese investors from Hong Kong. Taiwan, and Singapore. Growing intraregional flows of goods, capital, and labor increasingly involve interethnic exchanges, occurring as they do within the larger geographical context of Asia-wide rapid economic growth, including the spectacular rise of the People's Republic of China (PRC).5 And it is not only overseas Chinese capital and capitalists who have been flooding into Southeast Asia, but also overseas and PRC Chinese tourists and PRC Chinese labor. Even PRC businesses are starting to trickle in. The increasingly visible Chinese dominance of Southeast Asia's modern economic life, interwoven as it is with cultural and political divisions, could indeed exacerbate underlying ethnic tensions, despite the counteracting effects of economic growth. THE EVOLVING CHINESE ECONOMIC ROLE IN SOIJTHE.AST ASIA Chinese immigrants and their descendants have played a disproportionate role in the commercial life of Southeast Asia since (and even before) the European colonial era.6 In the postcolonial era, nationalistic indigenous governments acted to curtail the economic role of Chinese and foreign enterprises and to promote indigenous commercial activity,7 Restrictive licenses , protective tariffs, ownership limitations, preferential credit allocations , and outright bans on Chinese commercial activity in particular sectors were typical policies. This discriminatory infrastructure elicited a range of adaptive responses from the Chinese, including so-called Ali-Baba ventures with indigenous "sleeping partners" in whose names enterprises were registered , direct and indirect payments to local and national government officials to circumvent restrictions or secure protection, and cultivation of MINORITY STATUS FOR SOUTHEAST ASIAN CHINESE 287 powerful indigenous political patrons and sponsors, particularly where there were ruling military regimes.3 Through these and other means, Southeast Asian Chinese businesses succeeded in maintaining the bulk of their operations intact...