Introduction: Inequality and Exclusion in Southeast Asia

Inequality presents challenges to countries the world over. Persistent gaps in income, wealth and opportunity, and entrenchment of power and privilege resonate globally and regionally. Waves of popular discontent towards a system perceived or experienced as unfair serve notice to governments, and can influence the outcome of elections. Inequality is a flourishing subject of empirical study and policy advocacy. International agencies, notably the United Nations Department of Economic and Social Affairs (UNDESA) and United Nations Conference on Trade and Development (UNCTAD), have given prominence to the problem, with attention to disparities within countries and between countries, regional trends, and changing distributional dynamics over time (UNDESA 2013; UNCTAD 2012).

Disparities in economic opportunity and entrenchment of privilege, mirrored in the concentration of wealth and influence in the top 1 per cent, have attracted particular interest in these times (Atkinson, Piketty and Saez 2011). Piketty (2014) has also shone light on the increasing share of income going to capital instead of labour, and the importance of analysing distributional issues jointly with economic growth and production, as interrelated and co-dependent phenomena. Milanovic (2011) argues that inequality is a problem in terms of sustained economic performance, social cohesion and political stability. Gallas et al. (2016) collate a set of country studies and thematic studies, striving to include more cases of inequality in the South and to provide a labour perspective.

The realization of inequality as a defining issue of our time, in both academic and political spaces, took a sharp turn after the Global Financial Crisis of 2008/2009. International non-government organizations (NGOs), the World Bank, and more recently the International Monetary Fund (IMF), have since joined the fray, commissioning more studies and policy papers on inequality. Oxfam, drawing on Credit Suisse data, has established itself as a voice of conscience—estimating global wealth concentration and advocating policy responses to broad, popular audiences (Oxfam 2017).

Inequality also resonates closer to the region of this journal's focus. The Asian Development Bank's 2012 Development Outlook, themed "Confronting Rising Inequality in Asia", and the recently published Demystifying Rising Inequality in Asia (Huang, Morgan and Yoshino 2019), have drawn attention to the phenomena in the continent. These reports, covering the 1990s into the 2000s, find rising inequality in the major developing economies—especially China, India and Indonesia—which lend gravity to the issue. The World Bank's 2018 East Asia and Pacific Regional Report, Riding the Wave: An East Asian Miracle for the 21st Century, probed questions of inclusive growth and upward mobility, also with reference to select Southeast Asian economies. These documents cover important issues—structural change, technology, education, employment, skills premiums, social protection, gender gaps and urban-rural divides—that deserve to be followed up in country-specific detail.

Southeast Asia shows a mix of trends. As shown in ADB (2012), from the mid-1990s to the late 2000s, income or expenditure inequality grew in Indonesia, Singapore and Vietnam, but dropped in Cambodia, Malaysia, Thailand and the Philippines. The report highlights the urgency of confronting inequality, which if left unaddressed, not only undermines the poverty reduction impact of economic growth, but also threatens the basis of growth itself.

However, the post-2010 period has received relatively scant attention. Southeast Asia stands out in some ways; the 2010s have seen most countries in the region reduce income gaps. Nonetheless, inequality levels remain high, especially in the middle-income to high-income countries, and there appears to be a growing disconnect between the macro-data and realities on the ground. Widespread discontent and economic anxiety prevail, even while macroeconomic indicators paint a more buoyant picture.

Furthermore, although income gaps have broadly declined in the past decade, inequality levels remain high in most countries, and these macro snapshots, based on national survey data and aggregate indicators such as the Gini coefficient, only tell part of the story. Across the region, societies express discontent towards economic systems that are leaving many in the lurch.

Southeast Asian nations have broadened access to schooling and maintained relatively low unemployment, but inclusion in the growth process for a majority of the...