Exploring Key External and Internal Factors Affecting State Performance in Southeast Asia

Jakobsen, Michael Working Paper Exploring Key External and Internal Factors Affecting State Performance in Southeast Asia Copenhagen Discussion Papers, No. 2015-48 Provided in Cooperation with: Asia Research Community (ARC), Copenhagen Business School (CBS) Suggested Citation: Jakobsen, Michael (2015) : Exploring Key External and Internal Factors Affecting State Performance in Southeast Asia, Copenhagen Discussion Papers, No. 2015-48, Copenhagen Business School (CBS), Asia Research Centre (ARC), Frederiksberg, https://hdl.handle.net/10398/9142 This Version is available at: https://hdl.handle.net/10419/208647 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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Copenhagen Discussion Papers cannot be republished, reprinted, or reproduced in any format without the permission of the paper's author or authors. Note: The views expressed in each paper are those of the author or authors of the paper. They do not represent the views of the Asia Research Centre or Copenhagen Business School. Editor of the Copenhagen Discussion Papers: Associate Professor Michael Jakobsen Asia Research Centre Copenhagen Business School Porcelænshaven 24 DK-2000 Frederiksberg Denmark Tel.: (+45) 3815 3396 Email: [email protected] www.cbs.dk/arc 1 Exploring Key External and Internal Factors Affecting State Performance in Southeast Asia Michael Jakobsen. Associate Professor at Asia Research Centre, Department of International Economics and Management. Copenhagen Business School Abstract The main aim of this article is to identify key external and internal factors that are capable of impacting and thus influencing directly or indirectly state performance in Southeast Asia with special emphasis on Myanmar, Vietnam and Singapore. The theoretical aim is to develop a framework for partly being able to delineate some external boundaries for state manoeuvring and partly delineate the internal size of the space or ‘room’ that conditions state performance in an international cum national context respectively. On the basis of the above this article thus argues that the state is sandwiched between external and internal factors as the two respectively define the outer boundaries and internal size of the room in which the state has to perform. Key words: Glocalisation, State Performance, Civil Society, Southeast Asia, Myanmar, Vietnam, Singapore 2 Introduction The main aim of this article is to identify key external and internal factors that are capable of impacting and thus influencing directly or indirectly state performance in Southeast Asia with special emphasis on Myanmar, Vietnam and Singapore. The theoretical aim is to develop a framework for partly being able to delineate some external boundaries for and partly the internal size of the space or ‘room’ that conditions state performance in an international cum national context respectively. Before being able to do that, however, it is important to conceptualise how to think economic globalisation and how such a perception relates to a given national and local societal level respectively. The conception forwarded here is the notion of glocalisation that acts as a key premise in that the global and local cannot be disentangled as the two mutually condition each other. This conception is graphically depicted as a triangular structure so as to illustrate the independency between the global, the national and the local. In order to identify the international or external factors affecting state performance the article further divides the global economy into developed markets, transitional and emerging markets, and ‘bottom of the pyramid’ (BOP) exemplified by Singapore, Vietnam and Myanmar respectively. The reason for dividing the global economy in this manner is to analyse the way in which states operate in these different types of markets. The specific type of market thus provides the key signifiers for identifying the external ‘room’ or set of constraints that states have to take into account when performing in an international context. 3 In identifying the internal factors affecting state performance an institution-based view is employed. It focuses on the dynamic interaction between institutions as well as between institutions and societal agents. According to this view strategy making on behalf of agents are the outcome of an exchange of preferences between institutions and agents. Institutions are thus not to be conceived of as a set of static structures. Rather, they are to be thought of as a kind of structuration of social and institutional interaction thus making the institutional setup dynamic. 1 This negates the perception of the institutional frameworks as having a capability to dictate pre-defined adjustment paths for agents within the institutional setup. Accordingly, institutional frameworks may constrain but may also offer new possibilities for agents as these constraints also allow for new modes of learning that may go beyond the possibilities originally recognised. This creates tensions between the state and the institutional set-up in which the former is embedded. States are generally working towards institutional stability whereas the institutional set-up is in a constant state of flux due to the dynamic interaction between the institutional setup and societal agency. This schism allows us to identify the internal size of the ‘room’ for state performance. On the basis of the above this article thus argues that the state is sandwiched between external and internal factors as the two respectively define the outer boundaries and internal size of the room in which the state has to perform. 1 According to Giddens, human agency and social structure are not two separate concepts or constructs, but are two ways of considering social action. According to him there is a duality of structures that on the one hand is composed of situated actors who undertake social action and interaction, and their knowledgeable activities in various situations. At the other hand there are also the rules, resources, and social relationships that are produced and reproduced in social interaction. Structuration thus means studying the ways in which social systems are produced and reproduced in social interaction. Basically Giddens defines structuration as ‘the structuring of social relations across time and space, in virtue of the duality of structure’ (Giddens 1989 pp. 256, p. 376). 4 On state performance, institutional setup and societal agency in a global context As a first step in order to develop a theoretical framework for identifying key external and internal factors impacting on state performance in Southeast Asia it is important to probe into different modes of ‘reading’ the global economy. This constitutes the background for how to ‘think’ the state in such a context. To facilitate a discussion of how to frame state performance four scenarios are outlined in the following. 1. Deand/or re-coupling from the global economy: Real Possibility or Intellectual Exercise? The first scenario takes its point of departure in the intellectual roots behind the notion of decoupling. The most important one is to be found in the so-called Dependency School that dominated the political economic discourses during the 1960s, 1970s and early 1980s. Its basic premise was that the world was divided into a centre and peripheral political and economic power structure, also identified as a First World and Third World dichotomy. The theoretical foundation behind this bifocal world view was mainly based on neo-Marxist approaches formulated by scholars such as Frank (1978), Banaji (1977), Amir (1974), Emmanuel (1972) and Wallerstein (1979). According to this school of thought the political and economic processes governing this world view had their origin in a Western initiated colonial and imperialist past that manifested itself in a global centre–periphery structure in which the centre, the West, monopolised and controlled global capital accumulation fuelled by resource extraction in the periphery, mainly, according to this discourse, from Latin America and Africa. 5 The link to the current discourse on decoupling was provided by Frank, who maintained that so-called Third World countries in the periphery should de-link from the First World, that is, the centre, for their economic development, as these links were harmful for the periphery. With fewer linkages to the centre, Third World countries could concentrate on domestic development and import substitution, all guided by a developmental state based on a revolutionary socialist ideology (Frank 1978). This theoretical macro perspective was later replaced by theories of globalisation in which multinational companies were the main players and nation–states acted as economic facilitators for domestic industrial internationalisation processes, developments that in particular have been discussed within international business theory by Porter (1990), Dunning and Lundan (2009), Shenkar (2004) and Rugman and Verbeke (2004), just to mention a few scholars in this rich school of thought. Up until 2008, observers found supportive evidence for budding notions of decoupling, especially in Asian emerging markets. As such, Asian economies were perceived to be resistant to the contractions in the American and European economies due to their strong and constantly growing domestic markets, large currency reserves and prudent macroeconomic policies, partly based on experiences learnt during the 1997 financial crisis, and partly based on perceived modes of doing business compared to their Western counterparts. 2 During 2008 and 2009 cracks in the notion of decoupling began to emerge. The meltdown on Wall Street in 2008 sent shockwaves through the entire global financial system, not least in the Asian markets. 2 For a more detailed discussion in this connection, see Gesteland (2005) and Nisbett et al. (2001). 6 Contrary to what those who believed in decoupling expected, the losses were even greater outside the USA, with the worst experienced in emerging markets and developed economies alike such as Germany and Japan. 3 Even though China was relatively hard hit by the global economic contraction that followed the financial meltdown, it managed to engineer a decent rebound (together with India and a group of larger emerging economies in Asia), whereas the USA, Europe and Japan still remain on the verge of recession. In the first half of 2011 it seemed as if the global economy was approaching the second bottom of a seemingly ‘W–shaped’ (also called ‘double dip’) economic crisis. Taking into account the many fiscal stimulus packages introduced by states in 2009 and 2010 to stabilise national economies around the globe, it seems at least for the time being that those in Asian economies have had the greatest impact on national economies, thus rejuvenating an otherwise rather battered discourse on regional or national modes of decoupling. However, the main question remains whether the current growth of the Asian economies as well as the many initiatives to various kind of regionalisation are signs of a budding decoupling from the global economy, and in particular, from Western economies via the differing free trade agreements including the latest initiative coming from China, the Asian Infrastructure Investment Bank. A critical point when analysing these developments from a decoupling perspective is the relationship between decoupling and the underlying process of internationalisation of individual national economies. Even though a given national economy has been stimulated and facilitated by the state, this does not mean that the economy is becoming detached from the global economy. 3 Conrad de Aenlle, ‘Decoupling: Theory vs. Reality’, The New York Times, 7 February 2008. 13 This means that the role and involvement of the state in the economy is relatively high. The literature on the state in these kinds of markets refers to the state as either an interventionist state or a developmental state that to a great extent is involved in the economy and thus also in overall national industrial development (see for example Hutchinson 2009 and Beh 2007). Although variations of the developmental type of state can also be found in developed markets, it is mainly related to transitional and/or emerging markets, where market structures are relatively weak and unregulated thus producing vulnerable industries that are easy prey for global competition. These kinds of markets can be found in former Eastern Europe and Russia, Latin America, Africa, India and most of Asia except Japan, South Korea, Taiwan, Hong Kong and Singapore. The final category of markets in this context is the so-called ‘bottom of the pyramid’ (BOP) type of markets. They constitute the ‘valleys’, when employing Florida’s typology. They can be characterised by an absence of formal institutions, that is, of very few or no formal rules and regulations to guide either local or international companies doing business there. Here, informal rules can be understood as mainly socially sanctioned norms of behaviour that are embedded in cultural and religious practices as well as in local value systems. These markets are found mainly in rural areas, urban slums and shanty towns. People living in BOP markets have few assets, little or no education, are outside of conventional distribution, credit and communication networks, and they subsist on less than US$4 a day (Peng 2009: 6). BOP markets are scattered throughout the world, mostly in countries outside the West, for example, in parts of Latin America, Africa, India, China and Southeast Asia. 14 One of the interesting things about BOP markets is that they have the potential to develop into emerging markets should the government invest in infrastructure, thus preparing the ground for companies other than MNCs to tap into these markets. The companies behind this kind of development are often successful pioneers, who first established themselves in these difficult markets. Two such pioneers are Unilever Hindustan, which operates successfully in the Indian BOP market 12 and the Danish company Fan Milk International A/S that operates in several African countries. 13 4. Towards a Glocalised Economy The fourth and final scenario is represented by Roland Robertson, who is credited with popularising the term, ‘glocalisation’ that describes the effects of local conditions on global impacts on local conditionalities (Robertson 1995: 25-44). Ferguson and Mansbach further elaborate on the concept saying that the notion of glocalisation signifies the existence of complex ‘parallel, irreversible and mutually interdependent processes by which globalisation-deepens-localisation-deepens-globalisation and so on’ (Ferguson and Mansbach 2012: 138). The global and the local are thus inextricably and irreversibly bound together through a dynamic relationship with huge flows of resources moving forwards and backwards between the two. Neither the global nor the local can exists without the other. 14 12 For a pertinent case study in this connection see 'Realities of Emerging Markets: Some Lessons from Unilever's Strategy for Lifebuoy & Sunsilk in India'. (http://www.icmrindia.org/casestudies/catalogue/Marketing1/MKTA008.htm ) | Case Studies Collection) (2008). 13 http://www.fanmilk.com/index.php?id=85. Accessed on Sept. 17, 2013. 14 For a case study on glocalisation, see Jain et al. 2012. 15 The key issue here is what has been termed the global–local nexus, or to use a more popular phrase, ‘think globally, act locally’. The different types of markets, whether spiky or flat, whether you can decouple from the global economy or not, are all governed by the global–local nexus, that is, the global impact on the local and vice versa. As it is the interface between the two that determines the success rate at either the global or the local level, we must take a closer look at this interface to understand what it consists of as well as identify the drivers behind the nexus. Basically, it is this interface that constitutes the complex reality ‘out there’ that we have to deal with in our everyday life. As glocalisation not only deals with global and local economic matters but encompasses all aspects of the local in the global, it is important to look at the main players in this context. They can be organised in a triangular matrix. The individual points in this matrix consist of 1) global political and economic developments, 2) the role of the state, and 3) civil society. By analysing the relationships among these three main players it becomes possible to identify the drivers behind glocalisation. When employing such an approach, the intricate interdependency between a given region (in this particular case, Southeast Asia), particular nations (Myanmar, Vietnam and Singapore) and specific localities within each of these nations clearly comes forth. The following discussion zooms in on the performance of the state by employing the notion of glocalisation. This perspective amounts to a holistic approach of analysing state performance in the triangle, as we recognise that the three other scenarios’ of how to ‘read’ the global economy; 16 the possibility of deor recouple from it, whether it is spiky or flat or whether a qualitative market differentiation of it is possible—only address two of the three corners in the triangle, namely the global political and economic developments and the role of the state nationally as well as internationally. On the basis of this we will begin our discussion by looking closer at the way in which the state performs in relation to the different corners in the triangle so as to identify how different sets of external and internal constraints either confines or enlarge the ‘room’ in which the state is capable of performing. Closing in on the external and internal factors affecting state performance In identifying the external factors affecting state performance a point of departure is taken in the global economy divided into the three main types of markets as discussed in relation to IB theory and how that relate to state performance. In the context of this article this means that developed markets are represented by Singapore, transitional and emerging markets are represented by Vietnam, and a combination of emerging and ‘bottom of the pyramid’ (BOP) markets are represented by Myanmar. As the individual type of market puts certain constrains on state performance in the three case countries it is expected that we will be able to excavate the boundaries within which the state in these three country specific types of markets is capable of operating. Arguably, the different characteristics and types of market thus produce the main signifiers for identifying the external constraints that conditions the outer boundaries for the ‘room’ in which states are to perform. 17 In order to identify the internal factors affecting state performance a point of departure is taken in the role of the state as well as in the respective civil society. To initiate this discussion an institution-based approach of the three case studies is employed. It focuses on the dynamic interaction between the formal and informal societal institutions and between the societal institutions and human agency emanating from socio-political forces within the civil society. According to this strategy making on behalf of agents are the outcome of changing preferences governing the relationship between institutions and agents. Institutions are thus not to be perceived as static sets of structures issuing specific sets of rules after which agents are to react. Rather, we are talking about a delineation of the dynamic relationship between societal agency and the institutional setup. Applying the triangular approach to Myanmar, Vietnam and Singapore Presumption I According to a 2013 OECD report the economic outlook for Southeast Asia remains robust over the medium term secured by a steady rise in domestic demand. In particular, real GDP growth in the region will remain robust in the medium term, growing at a pace which is comparable to the pre-global financial crisis period. Growth in domestic demand, particularly private consumption and investment, will be the main driver of growth in most countries as well as current account surpluses will remain relatively stable as shares of GDP in the region. 18 Growth will be less reliant on net exports than in the past. In the near term, while downside risks to growth remain in the form of financial volatility and capital flows, Southeast Asian economies will weather these as the underlying fundamentals remain resilient (OECD 2013). 15 Despite these positive forecasts the Southeast Asian economies face important policy challenges in realising their medium-term growth potential. Capital mobility is a key component of international finance and the management of risks arising from fluctuating capital inflows will continue to be a key challenge. The scope for using capital controls to deal with surges in capital inflow will gradually become more limited as the Southeast Asian countries further liberalise their capital accounts. More importantly, implementation of structural policy reforms in areas such as financial and product market regulation will be the key to maximising the long-term benefits of capital flows and minimising their associated risks. In addition, to sustain robust real economic growth in the region, structural policy changes will be needed to narrow development gaps and enhance regional integration. These regional integration efforts have reached a critical stage and their expected progress over the next several years is a positive factor in the favourable medium-term outlook for Southeast Asia (ibid 2013). In the following three case studies, covering Myanmar, Vietnam and Singapore, will briefly be discussed in relation to the international political developments and how they impact on the state ability to perform within each case country. 16 15 Economic outlook for Southeast Asia, China and India 2014: Beyond the Middle-Income Trap. OECD 2013. 16 The following data on each case country is taken from country reports, Economist Intelligence Units Limited 2014. 19 Myanmar - an emerging/BOP market: an external view The current government will continue to pursue a policy of re-engagement with the West. Many Western countries, including the US, have suspended most of their sanctions against Myanmar and the EU lifted almost all sanctions in April 2013. However, Myanmar’s relations with Western governments, Islamic countries and international organisations will remain under strain because of the administration’s poor handling of sectarian violence. The US renewed its remaining sanctions against Myanmar in May 2014, citing ongoing human rights abuses and conflict. The conduct and result of the 2015 general election will have a major impact on Myanmar's relations with the West. A free and fair election preceded by constitutional liberalisation would accelerate Western engagement. Conversely, the US and EU have already hinted that failure to allow Aung San Suu Kyi to become president following the poll would undermine its legitimacy. Western governments have also cited progress towards ethnic reconciliation as a key requirement of closer ties. Improving overall ties with the US could, however, create strains in the government's relations with China—the strongest backer of the military junta that ruled Myanmar until 2010. Ties with China will also be complicated by the greater political openness in Myanmar, which has led to popular protests against Chinese-invested mining and energy projects. Although China will remain an important trade and investment partner, Myanmar will continue to build closer ties with Japan and India in an effort to reduce its reliance on China. 20 Vietnam - an emerging/transitional market: an external view Vietnam will make further strides in strengthening its ties with the West. A series of high-level exchanges has bolstered US-Vietnamese diplomatic relations, while military ties are also strengthening. There are strong indications that the US will lift its ban on arms sales to Vietnam within the next couple of years. The economic relationship between the two will also continue to develop, especially if, as The Economist Intelligence Unit expects, both sign the TransPacific Partnership (TPP), an inter-regional free-trade agreement, during the forecast period. China’s decision in May 2014 to drill for fossil fuels in waters claimed by Vietnam, and violent anti-China riots that followed in the latter, have brought bilateral relations to their lowest point since China’s invasion of northern Vietnam in 1979. Bilateral relations between the two will be characterised by growing distrust in the coming years. Increasingly strained relations with China probably mean that Vietnam continues to pursue closer ties with the US, including broader military co-operation. Along with the Philippines, Vietnam will furthermore continue to spearhead efforts by ASEAN to push for a legally binding code of conduct for the South China Sea. Singapore - a near developed market: an external view Relations with Malaysia have warmed in recent years, partly owing to the substantial opportunities for economic co-operation in the Iskandar development zone in the southern Malaysian state Johor. Greater connectivity will promote economic integration, bringing together Singapore’s investment and capital and Malaysia’s land, cheap labour and other natural resources. 21 Singapore will maintain its role at the forefront of efforts to improve cooperation and integration among the ten members of ASEAN. The city state’s diplomatic initiatives with China are partly motivated by the lure of greater Chinese investment. More broadly, Singapore is keen to foster closer economic ties between China and ASEAN. However, the government will remain mindful that regional tensions resulting from territorial disputes in the South China Sea could hurt Singapore's trade dependent economy. This will ensure that the country takes an active diplomatic role to emphasise the need for calm, while maintaining its neutral foreign policy stance. Singapore’s policymakers will continue to keep a close eye on economic developments in the EU and US. Singapore is among the countries in South-east Asia that are most vulnerable to low levels of demand in Western economies. Nevertheless, closer trade relations with China and Malaysia in recent years would provide some buffer in the event of a sharp slowdown in the West. Sub-conclusion on Presumption I As mentioned earlier when identifying the external factors affecting state performance a point of departure has been taken in two of the three corners of the triangular matrix, namely the global economy divided into the three main types of markets as discussed in IB theory, and the role of the state in each of these markets. On the basis of this the expectation in the previous section was that we would be able to excavate the main signifiers for identifying the external constraints that conditions the ‘room’ in which states are to perform. 22 As has been shown in the discussion of the external constraints on state performance in Myanmar, Vietnam and Singapore all three countries are integrated into the global economy although the actual way in which this is done for the individual case country varies considerably. Myanmar, in trying to restructure its institutional setup and fragmented economic infrastructure, is pursuing a reengagement with the West in order to safeguard its reform programme, but by doing this it strains the relation with its old partner China. As a consequence the state gets entangled in an international power play between the West, China, Japan and India that complicates its ability to navigate its international friends and foes. As China, although important for Myanmar as it is, is gradually being cornered by the three other actors in this power game this forces the Myanmamese state to pursue additional measures to further processes of democratisation and economic liberalisation beyond what it had originally in mind if it is to maintain it good relation with them. The Myanmarmese state thus has to balance carefully between the various opportunities and constraints emanating from the international community as well as to come up with a solution to maintaining national political and ethnic coherence in order to be able to stay in power. In a sense the external boundaries of the room in which the state is to manoeuvre is in this case relatively narrow. Vietnam is also court up in an international power play. It is entangled in a close collaboration with the US and the ASEAN countries in order to bolster growing negative relations with China 29 Here the key issues have been the capability of states to (re-) direct and/or (re-) design a complex inter-ethnic and dynamic societal landscape towards its own interests. The outcome of this discussion have been that the state is forces by shifting local circumstances to engage in a constant dialogue with agents from within the civil society and their perception of the whether the overall institutional set-up is conducive to the various agendas and discourses found within civil society. Arguably, the main argument here has been that it is in the outcome of the dialogue between the state and agents from within civil society that the size of the room for state manoeuvring has been carved out thus indicating whether it is increasing or decreasing. That depends on the outcome of this dialogue. As has been shown in the above it is not only the state that sets the agenda for how the three cases evolve. Even though the state is a powerful player indeed it still has to negotiate its room for manoeuvring with the stakeholders within the national hinterland. The state in Myanmar cannot establish an institutional setup in order to bolster its perception of a conducive institutional setup without consulting the political opposition as well as the different ethnic and religious groups that put together make up the actors in the national hinterland. Actually, its room of manoeuvring is curtailed by those actors and to increase it, the state has to include them in the overall nation making process. 30 If not the democratisation process and thus national coherence is at stake. In the case of Vietnam, due to the authoritative nature of the state and not having the same external pressure for initiating a democratisation process as in the case of Myanmar the state has nonetheless to be careful about exercising its power as there seems to be a growing awareness within civil society that people power ultimately have the capability to rain in state initiatives and thus the extend of state performance. That would ultimately limit the size of the room in which the state has to perform. Finally, Singapore is still capable due to its total political control over civil society to stir the city state clear of major negative civil reaction towards this control mode. Tensions within civil society, however, are on the rise partly because of the authoritative nature of the state thus signalling that citizens is mainly conceived of as passive agents, and partly because of the state’s immigration policy. Because of a budding public pressure for more public intervention and engagement in state policies as well as a pressure for nurturing the specific status of being a Singaporean citizen the state has to move carefully on these issues thereby unavoidably limiting the size of its room of manoeuvring in this regard. On Identifying Key External and Internal Factors Affecting State Performance in Southeast Asia: Some Concluding Remarks After now having tentatively outlined the factors that constitute the background for defining the external boundaries of the ‘room’ as well as the internal size of it in which the state in Myanmar, Vietnam and Singapore has to act let us now revert to the overall theoretical framework for this mode of analysing state performance. 31 The point of departure for employing this framework has been the notion of glocalisation. As glocalisation not only deals with economic matters connecting the global and national but encompasses all aspects of the local in the national and thus also in the global, it is important to look at the main players in this context, which have been grouped together in a triangular matrix. As have been discussed above the individual points in the matrix consist of 1) global political and economic developments, 2) the role of the state in an international cum national context as well as 3) the civil society within the individual national hinterland. By analysing the relationships between these three main players it becomes possible to identify the drivers behind processes of glocalisation and thus address both the boundaries as well as the size of the ‘room’ in which states are confined to perform, nationally as well as internationally. This perspective amounts to a holistic approach of analysing state performance, as we recognise that the three other modes of thinking the global economy—the potentiality of deor recouple from it, whether it is spiky or flat or whether a qualitative market differentiation of it is productive—only address two of the three corners in the triangle, that is, the global political and economic developments and the role of the state nationally and internationally. On the basis of this we began our discussion by looking closer at the way in which the state performs in relation to the different corners in the triangle so as to be able to identify how sets of external and internal constraints either confines or enlarge the ‘room’ in which the state is capable of performing. Two main presumptions have been formulated as analytical points of departures. First, every nation state constitutes a part of the international community but not every nation state has the same impact and international reach. 32 The scope of this depends on the economic and political capabilities that the individual state is capable of mustering. The relationship between nation states is thus asymmetrical. This was clearly illustrated in the discussion of the external factors that affect state performance in our three case countries thus identifying the outer boundaries of the room in which the individual state is capable of performing. Second, as a state depends on institutional stability for its basic functioning it has to adapt to and at the same time manipulate a given institutional set-up to perform in an optimal manner, - a setup that is partly conditioned by the type of market in which it is embedded. This presumption attempts to identify the size of the room in which it is to perform. The actual size of that room dependent on its capability to (re-) direct and/or (re-)design a multiple inter-ethnic and dynamic societal landscape towards its own interests, a landscape that is heavily influenced by agents from within civil society and how their perception of the overall institutional set-up is constructed. This means that state performance and the functionality of the institutional setup are in a constant dialogue with societal agents, who have the capability to change or at least to impact on the functionality of the institutional room for state manoeuvring. This was also clearly illustrated in the discussion of the internal factors affecting state performance in our three case countries. Interestingly, the latter discussion negates the perception of the institutional frameworks as having a capability to dictate pre-defined social and political paths for agents within the institutional setup. Accordingly, institutional frameworks may constrain but also offer new opportunities for agents as they allow for new modes of learning what may go beyond the possibilities originally recognised by agents. 33 This creates tensions between the state and the institutional set-up in which it is embedded, as the institutional set-up is in a constant state of flux. It is this schism that allows us to identify the size of the room for state manoeuvring. Arguably, this article thus maintains that the state is sandwiched in terms of manoeuvring between external and internal factors. Even though this approach has only been applied to Myanmar, Vietnam and Singapore it has the capability of being employed more generally to Southeast Asian nations. This, however, depends of more thorough empirical studies of the individual state than has been presented here. Michael Jakobsen May 2015 References Ahlstrom, David and Garry D. 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China and India 2005-3 June: Peter Wad - Global Challenges and Local Responses: Trade Unions in the Korean and Malaysian Auto Industries 2005-4 November: Lenore Lyons - Making Citizen Babies for Papa: Feminist Responses to Reproductive Policy in Singapore 2006: 2006-5 April: Juliette Koning - On Being “Chinese Overseas”: the Case of Chinese Indonesian Entrepreneurs 2006-6 April: Mads Holst Jensen - Serve the People! Corporate Social Responsibility (CSR) in China 2006-7 April: Edmund Terence Gomez - Malaysian Investments in China: Transnationalism and the ‘Chineseness’ of Enterprise Development 2006-8 April: Kate Hannan - China’s Trade Relations with the US and the EU WTO Membership, Free Markets (?), Agricultural Subsidies and Clothing, Textile and Footwear Quotas 2006-9 May: CanSeng Ooi - Tales From Two Countries: The Place Branding of Denmark and Singapore 2006-10 May: Gordon C. K. Cheung - Identity: In Searching the Meaning of Chineseness in Greater China 2006-11 May: Heidi Dahles - ‘Chineseness’ as a Competitive Disadvantage, Singapore Chinese business strategies after failing in China 2006-12 June: Émile KokKheng Yeoh - Development Policy, Demographic Diversity and Interregional Disparities in China 2006-13 June: Johannes Dragsbaek Schmidt - China’s "soft power" re-emergence in Southeast Asia 2006-14 September: Michael Jacobsen - Beyond Chinese Capitalism: ReConceptualising Notions of Chinese-ness in a Southeast Asian Business cum Societal Context 2006-15 October: Ng Beoy Kui - The Economic Rise of China: Its Threats and Opportunities from the Perspective of Southeast Asia 2007: 2007-16 February: Michael Jacobsen - Navigating between Disaggregating Nation States and Entrenching Processes of Globalisation: Reconceptualising the Chinese Diaspora in Southeast Asia 2007-17 April: Émile Kok-Kheng Yeoh, Shuat-Mei Ooi - China-ASEAN Free Trade Area: Implications for Sino-Malaysian Economic Relations 2007-18 May: John Ravenhill, Yang Jiang - China’s Move to Preferential Trading: An Extension of Chinese Network Power? 2007-19 May: Peter J. Peverelli - Port of Rotterdam in Chinese Eyes 2007-20 June: Chengxin Pan - What is Chinese about Chinese Business? Implications for U.S. Responses to China’s Rise 2007-21 September: Charles S. Costello III - The Irony of the Crane: Labour Issues in the Construction Industry in the New China 2007-22 October: Evelyn Devadason - Malaysia-China Network Trade: A Note on Product Upgrading 2007-23 October: LooSee Beh - Administrative Reform: Issues of Ethics and Governance in Malaysia and China 2007-24 November: Zhao Hong - ChinaU.S. Oil Rivalry in Africa 2008: 2008-25 January: Émile Kok-Kheng Yeoh - Ethnoregional Disparities, Fiscal Decentralization and Political Transition: The case of China 2008-26 February: Ng Beoy Kui - The Economic Emergence of China: Strategic Policy Implications for Southeast Asia 2008-27 September: Verner Worm - Chinese Personality: Center in a Network