 I'm very pleased to preside over this inaugural lecture is the fourth one of the series this year, but it seems in some sense one of a pair. This week we have Professor Sa1rrs talking on hybrid capitalism and the development of a welfare state in Asia when Professor Singh will give the vote a thanks. Next week we have Professor Singh talking on democracy and religious minorities in India, a longterm view, and then Professor Saes will give the vote a thanks. Dyma y gall gyd, yr Ynw'r Prifesysau er gael, ac mae'r Prifesysau yn ystod yn ei ddweud yn fawr ac yn gyfryd. Mae'n fawr i'r ddiweddol ac yn cyfrofiad yw ddod yn gweithio. Mae'n gweithio'n gweithio'n gweithio'n gweithio. Y Prifesysau yn yr Ynw'r Prifesysau yn dechrau'r cael y Llywodraeth, amser Yng Ng. Gwng Fyllfaedd, rydyn ni'n ardu yn gwneud yn ei gweithio'r ysgol a'r ddwylliant a allanodd adroddau ar y sicr. Yn ymwneud yw BA, rydyn ni'n ymwylo'i newid yw Castle. Fy flwllfafol i'r ffwrdd am Oxford. Yn ymwneud yw'r gwleidio'r rhaid o gweithio yn llunio'r cyffredinol yn ymddangos, ac mae'r gwleidio'r cyfeir iawn, y nifer i'r Gweithiau. Mae gwraedd yn bryd, mae'r Ynwneud yw'r Professor Gohar Balsing, ynghylch ym ysgrifennu ysgrifennu a'r ffaithau ar y sicr. he really needs no introduction. He specialises on Indian politics, the Indian diaspora, religions and developments. He's also published widely on Punjab and Sikh studies, provides a great bit of media coverage on South Asian affairs. We're very grateful to both of you for being part of today's event. At the end, you'll be invited up to the reception in the Brunai Suite for some wine and canapés. That's enough from me to introduce the main event. I'll pass over to Professor Sydech, Dr Conn, to introduce Professor Sydech. It's over to you. Well thanks Paul, thanks audience for your attendance. It's my pleasure to be here to celebrate the work of Lawrence Syes and in particular to be introducing him and I warmly congratulate Lawrence on his appointment to the post of professor in the political economy of Asia. I've known Lawrence since 2004 when he was a research fellow at the LSE and then he came to do some teaching for our department. He joined the department as a full-time member of the faculty in 2007 during my first year as the chair of the department of politics and international studies. So I've known Lawrence for 10 years in the capacity of colleague, co-teacher and line manager. I can say that Lawrence is a prolific writer on the politics and political economy of South Asia. His work covers both the domestic and the international dimensions and has been published in many high quality outlets. He teaches courses which are well received by students. His contribution to the department and the school extends well beyond that. He's the person who established the presence of the quantitative approach in our department, an important area in which we were lacking. This has been of great benefit to our research profile and the training of the next generation of researchers in the politics of Asia and Africa. He is very entrepreneurial. He is always seeking out large research grants. He is active in public engagement through his media commentating and in the participation in policy organisations and policy forums such as the, he's a fellow of Chatham House and also he has participated in the World Economic Forum. Last but by no means least he is always immaculately dressed for his media performances. He is immaculately dressed today. This morning in my preparation I rewatched some of his YouTube interviews and I would say he is a sartorial role model for our profession. I just came back from Korea last night. In the Korean language there is an expression, 타 제 타능 한 사람 to describe multi-talented people. So Lawrence will be a very good example of 타 제 타능 한 사람. So he will be a very good example of this in our profession. So to sum up he is a valuable asset to our department and to the school and his appointment is richly deserved. So it is time for Professor Sayes to take the stage and deliver his inaugural lecture. Thank you. I just want to make sure that this thing works because okay good. Well welcome. Those of you who came to see me, more especially my son who is obviously the guest of honor for this event. Obviously I would have had my father be here. Unfortunately he died 25 years ago so he would be quite proud of this achievement. It is interesting this dynamics between father and son. A few weeks ago we were in Moscow and I heard my son talking on Skype. I went to sleep and he was talking to one of his friends on Skype and I guess his friend asked him what are you doing in Moscow and Jackson answered well you know I hear my dad and then I guess the friend asked him you know what does he do and then he said well he's a professor and then I couldn't hear what the other person was asking but the next response from Jackson was I'm not quite sure what he teaches. So this is not uncommon. Most people in my department, most of my friends have no idea what I'm up to. So today I will give you a little bit of an introduction as to what I'm working on and the type of things that intrigue me. If you're not an academic, don't be put off by the title. It appears to be much more difficult than it is. It is a fairly simple concept. I'm trying to understand why is it that in some countries in Asia you have the prospects of development of a welfare state and why there's variation across different countries in Asia. I mean it could be summarized in one sentence but of course it would not be a very interesting lecture to have one sentence lecture but maybe next time. I will talk a little bit about mapping Asia especially for those of you who are unfamiliar with the area. I'll talk about virus of capitalism which is important literature in comparison with the political economy. I will talk about the typology of hybrid capitalist market economies that I'll be looking at and then I'll talk about the development of a welfare state more broadly but also more specifically in Asia than I'll suggest I guess in the question and answer period if there are questions about how to develop this agenda further. First I'll look at mapping Asia. Generally the way I look at Asia tends to be from a political economies point of view but I look a lot at income levels as being a determinant of a number of issues in the region. So if you were to look at the World Bank for instance they categorize countries according to different types of income and so you have low income countries such as the ones on the on the screen Afghanistan Bangladesh and so on and so what I find in my analysis of Asian economies is that low income economies have faced severe challenges that older Asian economies of which the ones that I'll be looking at in more detail do not. These are the different type of categories in terms of lower middle income and upper middle income economies. As you can see the division between lower middle income and upper middle income is actually quite arbitrary. It's defined by the World Bank and actually if you look at the amounts we're talking about one thousand dollars a year two three three thousand nine hundred seventy five dollars a year annual income you can imagine that that this area is still quite poor in per capita terms and so you have many countries like Bhutan Armenia Indonesia India that fall into that category of lower middle income economies. Much of my work on on comparative political economy has been in fact motivated and enhanced by my interactions with my colleagues in the department especially Tatyankong who specializes in and analyzes some of these economies that fall into the broad middle income bracket economies that started off poor and became much wealthier over time. Then on the other side of the of the screen you find upper middle income economies obviously the one that has captured a lot of people's attention is China. I think overwhelming these students are drawn to understanding China. Obviously if I were a student I would want to study China and as an academic I have also done some work trying to compare different outcomes between India and China specifically but you find other economies in that bracket. I would point out perhaps Malaysia. I mean a lot of there's been a lot of discussion recently about Malaysia the mishaps relating to the to the lost airplane but it still is an impressive economy in Asia that doesn't get a great deal of attention. It's been you know it's almost in a few years will be an upper income economy. Many of these economies in both in the lower middle income and the upper middle income bracket face what some comparative political economies refer to as the middle income trap. Namely they can they have a problem in terms of being able to maneuver beyond being middle income. Obviously we will anticipate that China will surpass that and become an upper middle economy and the same thing we will see for for countries like Malaysia. On the other hand countries that are middle income economies that are unable to overcome that middle income trap may face difficulties. People's expectations of what they would work are to receive from the state for instance increase and if the state is unable to deliver the government is unable to deliver they're more likely to be problems in terms of riots and violence. This are the high income economies of which Japan, South Korea and Taiwan. As I mentioned to you in fact in the course that Tatyong Kong and I teach we highlight a lot the the the miracle really of South Korea and Taiwan in terms of the rapid economic development in the 1960s onwards. When we look at Asia or political economies look at Asia there are specific characteristics that are intriguing. I have highlighted a few six of them I mean there could be more I'm sure that if we were to have a debate about the or tutorial about the what is characteristic about Asian economies and the way in which they engage in capitalist activities we could come up with more. However for the purpose of keeping the discussion short I looked at six colonial legacies. The ethnic links and commercial activity is quite important in Asia. The role of the state of the government in directing capitalist activity is important. You find that many Asian economies have an important role of the military in terms of how the how the economy actually works and if you analyze specific economies you find that the military is actually pretty much the dominant player in that economy for instance Pakistan to use an example. Technology clusters and democratic regime types are peculiar to the way that capitalism has developed in Asia and most importantly I guess from the point of view of my own work which is where this lecture is heading is really to discuss the welfare state regime namely the development of a welfare state as you find perhaps in Scandinavian countries in most advanced western economies. In terms of the colonial legacy many of you who are analysts of the region obviously this would be fairly basic but it has what I think is distinctive about Asian capitalism is that there are episodes of internal colonialism namely some Asian countries colonizing other Asian countries and that is quite unusual. You don't find for instance western countries colonizing each other necessarily like France colonizing Germany and so on but you do find examples for instance of Japan being a colonial presence in other Asian economies and as a result of that having a great impact on the development of industry for instance in those countries and also those those internal colonial powers also competed with European colonial powers and so that that dynamic creates a distinctive characteristics for Asian economies. Colonial powers you could argue assisted in development of capitalism by providing highly centralized bureaucracy in some instances and by providing some regular framework for economic activity. Much of the analysis of the work that I do looks at institutional development and you find that those countries that have stronger institutions often as a result of colonial presence are able to be much more successful than those that don't have that. Another interesting feature about capitalism in Asia is the the the role of ethnic links. This is an area that really is not fully studied and hopefully in the future this will be much more analyzed much more critically but capitalism in Asia is is is embedded as I argue within the prism of ethnicity. You find many Asian countries where for instance the Chinese community may be a dominant player in the economy in some instances they're the dominant player but they're still perhaps not fully recognized in terms of political engagement. In Sri Lanka to use another example you find Tamals who were overwhelmingly educated relative to the rest of the population and having a great impact on the type of relations internally ethnically and in the type of activities that take place in terms of trade and commerce and then you also find that ethnically it's so important in terms of ethnic diasporas and you find many differences in many Asian countries the role of Chinese ethnic diasporas assisting each other and also in the development of family-owned firms is going to be an unusual characteristic of Asian countries. You also find that the state I mean many of my colleagues know that at least ideologically I guess if it were I have kind of some sympathies for what is referred to as neoliberal institutionalism is something that actually most aggravates most of my colleagues but I do I'm aware that the state is quite important in economic activity especially in Asia where it has assisted in the formulation of a national policy in some countries investment promotion and so you find that Asia is unique in that respect compared to other parts of the world where it's not that present in actually enabling positive economic engagement in development in those areas much of the the work that the conference has done engages with the specific facet of state-directed capitalist activity. The role of the military I mean from my point of view an unfortunate involvement in many countries for which it is involved but you do find that given that the authoritarian regimes with weak political institutions is a feature of many Asian countries the role of military is an important one and so it becomes a central in the way in which many countries such as in example Thailand the military forms a key part of economic activity and plays a part in who is the in power and who's out of power in that specific state so it forms part of what in political science we refer to as a political coalition that maintains authoritarian regimes in power. The involvement of the military as a critical actor in economic activity is well known it's been studied from country to country Pakistan being one of the most notable examples but then you also find that the military was quite critical in Malaysia, Indonesia, Thailand and more recently in Myanmar or Burma so that is something that you don't find in other countries where the economic activity of the military is so central to capitalist development. We also find or I find that you find that early industrializers have moved in the direction of greater consolidation of democracy this is something in my view quite positive but you do find that there's a link between technology development in some areas and democratic regime types. This is a slide for instance from one of my star students at SOAS um I have actually I have a lot of quibbles with her the way that she she presented the the specific set of countries but her argument which I think is is is an intriguing one she worked for the economists and so she's tried to pull data from from the economist and to try to make an argument about low income economies of the type that I described before low middle and high income economies and in terms of the the the quality of the technology in terms of the of those countries and so her argument which I think is fairly I mean it's a fairly linear one is that countries that that there are high income countries also are likely to have high levels of technology but most importantly you do find that those countries move away from from authoritarianism over time in some cases they never were authoritarian at all but over time you find that even those countries that that initially began a transition towards a high levels of economic development also began to move at some point away from from authoritarian regimes this would anticipate my my reading of this would be that over time a country like China none on on this basis but among other other areas you would anticipate that China at some point will become democratic and if you want to have a bold prediction from me about this will be that it within our lifetime you will see a transformation of that type in China other countries for instance those that are low income economies also have low levels of of technology quality and also they they're they tend to be embedded in authoritarian systems and so they have difficulties pulling away from from that from that structure finally the other characteristic of Asian economies is the um the role of the welfare state as we know it in the west um normally cross national evaluations of state uh funded welfare provision show that Asian countries have not developed a significant welfare state public goods in other words the state does not provide a great deal of welfare provision for instance uh assistance of the elderly unemployment compensation that type of thing that that we would anticipate in uh in many advanced level of economies the percentage of public health expenditures as the overall proportion of health expenditures for instance is 44.2 percent in Asia well below the world average of 62.8 percent so you do find that that the state is not a great provider of that specific type of public good uh there are also differences uh this is i mean it's maybe kind of tedious but it's something that i'm trying to to develop into an article for comparative politics which is one of the leading journals in political science and i'm trying to kind of highlight the differences in the types of welfare state provision in across different Asian countries some of them which emphasize private and funds such as Indonesia Malaysia and Singapore and others that emphasize social insurance such as Japan Korea Philippines Taiwan and Thailand mostly stressing educational expenditure so you do find some differences within Asia and and which which denotes that the state is trying to has specific strategies in how it allocates resources to different sectors in this case health or education there are links to literature i mean this is mostly for my colleagues who always want a theoretical link to the literature most most people who don't work in academia don't care whether it's any theory behind what is being said but generally much of the work that that links to the to the old that my work engages is with is what's referred to as the varieties of capitalism literature that tries to understand within the political compared to the political economy framework differences in different forms of capitalism one of the main books in this specific areas that has sparked a great deal of literature on this front is the work by Haul and Saskis you know barriers of capitalism i have tried to engage that in that with that work focusing on India which is one of the my specialist countries within the framework of the barriers of capitalism literature they classify capitalist economies according to five criteria in terms of industrial relations vocational training and education corporate governance what they refer to as inter firm relations and then the the relationship between employee essentially employee relations and so they what the the authors do is to try to look at and see different countries in the world and see to what level to what within what framework do they fit are they closer to what they refer to as a coordinate market economy where the state directs economic activity or the more geared towards what they refer to as a liberal market economy which enables private sector actors to be much more engaged and so these are going to be some of the the basic differences between what they refer to as liberal market economies and coordinate market economies namely they they they they they they argue that that in liberal market economies such as the US and the UK you have a competitive inter firm relations flexible labour markets namely you can hire and fire people much more freely low levels of unionization and high income inequality that's some of the features that they they identify with liberal market economies on the other hand that you find or they find a coordinate market economies mostly Scandinavian countries Germany France where they argue that there are a collaborative inter firm relations rigid labour markets in other words it's hard to fire or hire fire somebody higher levels of unionization membership and unions and then low income inequality among this features the ones that that intrigue me in my analysis of the welfare state provision are the low levels versus high levels of unionization which will become one of perhaps one of the explanatory variables in terms of what happens as to why in some countries in Asia you do find some levels of welfare state development in that and others however and I think in my my colleagues who work on this area and I tend to believe that that this basic framework of dividing the world into a coordinated or liberal market economies that's not really fit Asian economies primarily among some of the conditions that I mentioned to you before some of the characteristics that make Asian countries much more distinctive there are no pure models of liberal market or coordinated market economies in examples in Asia we do find high levels of state involvement with selected business conglomerates for instance the Chavals in South Korea Kiritsu in Japan and so on which which kind of fits somewhat closer to the coordinated market economy but they're not fully good examples of that we do find in in analysis of Chavals style business conglomerates which are family owned highly centralized horizontal but they are not able to own their own financial institutions in that creates a set of relationships that are distinctive to what you would anticipate in a coordinated market economy model also the Japanese style Kiritsu business conglomerates are led by professional managers they're highly decentralized with the ability to to own their own financial institutions and so also that creates a set of distinctiveness that that you don't find in in western business conglomerates the state also is typically does not encourage in many Asian countries open competition for new market entrants and so this is something that if you were to to analyze them in terms of looking at the US where in some sectors you do find the state trying to prevent new market entrants new competitors in Asia is much more more fully developed so on the basis of this we don't think or I don't think that there is a a good model of liberal market economy coordinated market economy in Asia and so we talk about hybrid models essentially something that is that combines the elements about liberal market economy in a coordinate market economy so what are the you know if you were to identify what are the characteristics of a hybrid capitalist market economy namely there's something that is not either a coordinate market economy or a liberal market economy it's going to sound third element you could perhaps extend it further and say that that a coordinate market economy could lead to some sort of hypothetical pure socialist state in a liberal market economy would come closer to a pure capitalist state and so in this framework a hybrid market economy is somewhere in between combining both the elements of the coordinated market economies and then of the liberal market economies and so in some instances when you look at different countries in Asia they could go in either direction closer we can add a model that's closer to the coordinate market economy model that that's illustrated before or closer in some instances like Hong Kong to use an example to the liberal market economy models that that we were familiar with there are many types of hybrid capitalist market economies each one I think would merit a whole lecture in terms of the the differences the characteristics of them the the effects of having to live under one of these types of economies generally you find some sort of kind of transition from some some socialist market economies for instance Vietnam towards perhaps a state capitalist economy it's a great deal of focus now on China has been a role a model of a state capitalist economy as I mentioned to you before my colleague that Hong Kong he worked has in fact I would say probably one of the world leaders in terms of the analysis of capitalist economic economies such as Taiwan and South Korea and then you find also what are facets of chronic capitalism in most Asian economies in some sense undermining the capacity of the private sector to actually generate growth the characteristics are extensive of hybrid market economies namely once again that the state acts as an important economic actor that the state acts as a considerable influence over the allocation of credit and investment the state some sort of planning body centralized planning body tends to direct industrial and agricultural agricultural policy you do find the presence of corporatized government and state owned firms in these Asian economies you find it less and less in advanced western economies the state coordinates strategic economic activity in collaboration with these private with favorite privately owned firms business activity in hybrid market economies is heavily regulated by the state the state also directs private firms to provide a significant public services of the types that normally the state will provide such as health and education and the type of transfer welfare transfers that I discussed before generally in hybrid market economies the private sector is provided is protected by a by legal system but it's a fairly tenuous protection and so you so it makes it difficult to then determine whether private property actually exists in some of these cases entrepreneurial capitalist activities allowed in certain sectors of the economy I think the example of the IT sector in India would be one of such but whereas other sectors are heavily restricted and so it's somewhat by chance that you find this a more liberalized sector in some countries in some areas than in others and in some instances the the state encourages in some cases even mandates makes it mandatory for labour union membership to occur and so those are some of the characteristics of hybrid market economies of which many Asian economies would fit that profile so um how does this link to the development of a welfare state which is the core of what I'm trying to to discuss um much of the of the literature on the development of a welfare state focuses on the importance of labour unions in fact we live and we're going to live through many strikes labour unions provide direct demands in that in that in that way and you find that this is one of the the the argument that is made as to why in some cases you have countries that have more advanced welfare states than others namely on the strength of labour unions and in other cases however the spectators the labour unions are not like to be actors capable of issuing demands if their labour unions are weak so if you have weak labour unions people don't belong to a union then they're they're unlikely to issue demands on the state and that the state is has no incentive to then provide welfare benefits of any type and then there this literature relating to the support of labour unions and industrialists for specific types of reforms in this case in the the the the cited author in terms of support for democracy but you can spread this further to also discuss support for specific types of economic reforms including reforms to provide more welfare provisions what we find in asia is that there's uneven levels of unionisation across asia in some countries you find that it's quite high it's almost 100 mandatory because in many cases it's mandatory in other countries unionisation is quite weak normally most Asian economies have had weak welfare states as i mentioned to you before i illustrated this um before um and but this is a growing trend towards welfare provision by the state uh if i were to make a guess as to what's going to happen in asia in terms of welfare provision over over time i would anticipate that more more countries will move towards a social democratic model as you would find perhaps and um welfare provision as you find in scandinavian countries or at least moving in that direction perhaps um upper and middle income and upper income asian states have an incentive to develop a full-fledged welfare state partly because of the inherent inequalities that capitalist activity tends to generate as some people become wealthier as a result of economic capitalist activity you find that growing inequalities in some some countries many governments in asia are quite concerned about the unrest that could emerge from that and so as a payoff and normally you find some sort of welfare provision uh to to address that so concerns about political stability and uh also as a part of this result of labor union strength you find that perhaps on those in some countries in Asia you would find an incentive towards greater welfare provision so you took to move more in the direction of concluding and i have to mention this because the catering wants to know when am i going to stop talking so much of thomas here so uh if you're here the 20 minutes are up food is important and drink is important so don't worry it will come soon so there's variation in welfare provision across asia um this chart is is unfortunately quite hard to read um for some reason uh i'm obsessed with that in fact i've been spending i would say on anordinate amount of time trying to fill in the blanks that you find but you find if you were to have supersonic eyesight you would find on one side you find asian economies of the types that the world bank defines as being asian economies you would find years over time in fact much of the work this is something that i'm quite excited about a lot of the work in terms of the um of welfare provision is actually done uh it's it's going to initiative at sauce um the social welfare social protection index one of the more exciting things that i have seen my colleague produce that relates to my own work and it comes from from uh so i will try to engage with them a bit further but i want to do my own analysis first and see how it coincides with their own um assessment of uh state protection of social protection but if you were to look at the figures uh you would find some countries were were the the the provision uh namely in terms of social security and welfare as a proportion of thorough government expenditures quite high in some cases princess you know 30 percent princess you find japan in the specific example i can even read the numbers myself so i'm just going to guess but you do find other countries where it's quite low um close to 10 percent um and so this variation for for compared to political economists is quite intriguing why is it that you find is in country a Cambodia a lower level of welfare provision than a country that's quite similar in outland in terms perhaps in terms of income what is it that makes that that that that variation and so there are perhaps several explanations um i'll call them hypotheses uh not i'm not the work is not fully developed to the state where i could actually formalize them as a hypothesis but generally there are four potential explanations to why you find that variation um one explanation is that authoritarian regimes are more capable of directing investment for welfare expenditure if you're if you don't have to answer 21 you can direct investment and allocate it in the way that you want and so that could be done in form of welfare provision so that could be one explanation it can a political political science explanation the another alternative one will be that democratic regimes are more responsive to popular demands and and those demands typically come especially in countries that are poor for visitor distribution namely poorer people want wealth distributed and so they make demands on the state to make that possible through taxation or some other form so that could be another explanation for the variation and then another potential explanation that links to the literature that I just before is that you have some countries that have high levels of unionization and they are more likely to make demands on the state and accordingly the state rewards them with welfare payoffs and then finally the last one is that that you need perhaps a high level of income to actually afford welfare provision and so high income countries are more likely perhaps to afford expensive welfare expenditure programs as as we find in the development of welfare states in the west welfare provision expands over time becomes quite sorry quite central in fiscal provisions and so you anticipate that that only a state that has the capacity to do that is able to provide that in a sustainable level in other countries that we have seen in the past for instance Argentina for example where welfare provision was quite extensive if the state doesn't have the resources to actually provide for that welfare typically you find that those states falter if you were to look at a modern country I think that Venezuela for instance is facing the same problem namely to have very generous welfare provisions provisions but then the state doesn't have the capacity to actually afford them and so you anticipate that over time those economies will collapse so what's my conclusion this is the if I had a drum this will be the one that that will lead you to to see what is it that is leading to the variation and welfare provision in different Asian countries and this is the outcome of a great deal of research this is the the moment in which you cannot go oh this is very exciting um what I what I found I have I tried to to to look at different um ways of analyzing the data that I had that that that unreadable chart that I had before and compiling in a way that makes sense my conclusion is that um union density union density is is a measure of of union participation in labor unions in countries combine with per capita income so if you have union density on its own it doesn't really tell you much of a story but if you combine it with per capita income so namely countries with high levels of unionization and that are also wealthy are likely to develop a welfare provision much more clearly than those that are poor and or that have also combined uh low levels of unionization so if you have a country with low levels of unionization that is poor it is unlikely that the state would also provide for welfare provision and so the the outcome of this that you find some countries that countries in asia over time will be moving in the direction as to what you would anticipate uh western developed countries to to to generate in terms of welfare provision combined with union density um so this is the um I could say the the the thrust of my work um I'm sure that that many of you will will will ponder this this ideas uh I thank you for your attention and your patience and um I think that I have a good help I'll say come next to to to close this ceremony thank you