ns4054 “oil and politics in southeast asia” benjamin smith
TRANSCRIPT
NS4054“Oil and Politics in Southeast
Asia”Benjamin Smith
Author
• Benjamin Smith
• PhD University of Washington 2002
• Associate Professor at the University of Florida, teaching comparative and Asian politics, ethnicity and nationalism, post-conflict peace-building
• Research focus: Separatist conflicts, regime change, democratization, and the politics of resource wealth
• Books and several publications
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Agenda
• Overview• “Old” Oil Exporters• Research Design and Findings• What to Expect to the New Exporters?• Conclusion
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Overview
• Research question
• How is the impact of oil income on politics in Southeast Asia?• Key arguments
• The effects of resource wealth are frequently conditional and therefore dependent on antecedent conditions
• Looks at three oil-shaped dynamics
• The trajectories of older exporters (Brunei, Malaysia, Indonesia)
• Broad regional trends since 1990
• The emergence of three new exporters (Cambodia, Timor-Leste, and Vietnam) since 2000
• Mono-causal approach vs Conditional approach
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“Old” Oil Exporters
• Brunei• Indonesia• Malaysia
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“Old” Oil Exporters
• Brunei
• Independent in 1960s
• Resembles the small Gulf monarchies
• Crude oil and natural gas share 60% of GDP and more than 90% exports
• Oil has small impact to the politics:• “Shellfare” by the regime• Civil-service majority
• Small impact politically and economically during Asian financial crisis
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“Old” Oil Exporters
• Indonesia
• 1960s-1970s : boom years in Indonesia’s oil industry
• Mid-1980s oil price crash: difficult period for the Indonesian government -> more autonomous economy
• Production decline -> left OPEC in 2008
• Results:• Oil-led to export-led manufacturing• Authoritarianism to democracy
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“Old” Oil Exporters
• Malaysia
• Oil dependent
• 1969 race riots -> assertive government response to the violent expression
• 1970s oil boom: a chance to restructure the economy
• Oil revenue was used to boost export competitiveness
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Research Design
• Purpose: to explore the general effects of oil export dependence in Southeast Asia
• Research approach: Quantitative analysis (regression analysis)
• Data used:
• 12 countries in Southeast Asia
• Period: 1990 – 2008 (except Timor-Leste, from 1999)• Using oil income per capita instead of GDP to measure oil
export dependence• Independent variables: Oil income per capita, GDP per
capita, annual GDP per capita growth• Outcome variables: Democracy, Conflict, Governance
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Hypotheses/ Common Trends
• Democracy
• More oil income = less democracy• Conflict
• Oil-rich countries are more prone to internal conflicts• Governance
• Oil exporting countries will score lower on the two governance indicators (Government effectiveness and Control of Corruption)
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Result
Main oil exporters
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Result
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Hyphoteses vs Result
Hypotheses Result
DEMOCRACY
More oil income = less democracy More oil income = less democracy
CONFLICT
Oil-rich countries are more prone to internal conflicts
Oil or per capita wealth does not have significant relations to the onset of violent internal conflicts
GOVERNANCE
Oil exporting countries = bad governance
Oil exporters have more capable government
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What to Expect to the New Exporters?
• Cambodia, Timor-Leste, and Vietnam• Influence of oil revenue to the political economies?
• Likely for Cambodia and Timor-Leste
• Unlikely for Vietnam
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What to Expect to the New Exporters?
• Cambodia
• Oil exploration began in 1969 but stopped when the Khmer Rouge came to power
• Offshore discoveries in 2005• 3-5 trillion cubic meters of natural gas• 400 million barrels of oil
• Problems• Democracy: Cambodian People’s Party has undermined political
freedom• Conflict: Oil income are likely to make renewed conflict more likely• Governance: The government is one of the least capable in
Southeast Asia
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What to Expect to the New Exporters?
• Timor-Leste
• High expectation following 1999 independence
• No progress in 10 years -> disputes with Australia
• 90% of population works in agricultural sector -> unlikely change, due to insufficient technological resources to refine oil
• Problems:• Oil revenue distorts country’s currency• The misuse of oil revenue by politicians• Oil might amplify the problems of poor governance and unresolved
sociopolitical cleavages
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What to Expect to the New Exporters?
• Vietnam
• Oil exploration began in the 1960s, production took place since 1986
• 2004 production reached 400,000 barrels per day from just 275,000 in 1999
• Modest oil effect to a stable authoritarian regime
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Conclusion
• No uniform effects of oil politics in Southeast Asia• Need to have coherent looks at the various trajectories to
understand the political economy of oil• Lesson learned
• Old oil exporters: oil wealth in Southeast Asia has been put to nearly as many political uses as we have yet theorized
• New oil exporters: oil sector influence can be potentially transformative or modest