Development Strategies, Identities and Conflict in Asia

By Natalia Mirovitskaya and William Ascher

Development strategies in Asian countries that are meant to increase peace and economic stability are often linked to inter-group conflict. Professors Natalia Mirovitskaya of Duke University and William Ascher of Claremont McKenna advise that policymakers need greater awareness of how development initiatives affect group identities. They discuss the categories of development strategies that are especially relevant for conflict-sensitive development.

Asia has experienced all the variations and consequences of armed violence – from the devastation of international and civil wars to brutal repressions by militarized regimes; from long-lasting insurgencies and separatist struggles to explosions of religious and communal violence and terrorism. Ethnolinguistic and religious diversity, the mosaic of regional groups, clans and other competing economic interests create a potential for acrimonious intergroup divisions in almost all Asian countries. Yet some Asian nations have been surprisingly stable, while others, earlier touted as pillars of peaceful growth, have foundered badly in both respects. We argue that economic development strategies, through being embedded within a complex matrix of social and political conditions, have often contributed to such different outcomes1. There are multiple links between development strategies and the likelihood of inter-group conflict or cooperation. Policymakers and development practitioners, whether in government, international organizations, or non-governmental organizations, require greater awareness of how development initiatives may affect group identities, influence multiple disparities among and within various groups, change levels of resentment towards the government and other groups, increase or decrease stereotyping, and enable or inhibit provocateurs in creating “conflict opportunity structures.”

The lack of consensus on what development strategies are best in particular contexts, along with excessive and increasing intergroup disparities in most of Asian countries, add to the perceptions that strategies are chosen to favour particular groups rather than the overall good of a nation. The discourse and practice of neoliberalism is particularly illuminating. The economic liberalization advocated by international financial organizations is defended on the grounds that in the long run, greatly reducing state intervention in the economy would increase both efficiency and equity. In fact, few could dispute that the more liberal economies across Asia have had the greatest success in aggregate economic growth. Yet its perceived consequences for income distribution, employment, and economic vulnerability provoke violent opposition both from groups directly affected by reforms and from others often reacting to the corruption associated with privatization of government assets. Meanwhile, increasing attention has focused on the non-orthodox development approaches of China and India, closer to the strategies of the Asian Tigers: a strong and multifaceted state role, ranging from state-owned enterprises to oversight of private companies within strategic industries; export-led growth based on evolving comparative advantages, manipulation of supply, prices, and access to inputs; policy flexibility through market-oriented and nonmarket policy mechanisms; some compensation for development losers; and mechanisms to suppress opposition to reforms. While neither China nor India can be touted as epitomes of societal peace, equity, or stability, these non-orthodox prescriptions have brought hundreds of millions of people out of abject poverty.

The broad categories of development strategies that are especially relevant for conflict-sensitive development are:

• explicit redistribution that targets assets, future earnings and other socio-economic opportunities of particular groups;

macroeconomic policy reforms, spanning fiscal, monetary, and pricing policies, and restructuring banking, labour markets, and the state sector;

development-related population relocation and other forms of demographic engineering;

regional development initiatives;

natural resource policies, affecting both the nature and extent of resource extraction and the disposition of resource revenues;

sectoral promotion, favouring particular types of industrialization, agriculture, physical infrastructure, or social services.

Our country case studies highlight numerous risks for these categories of development initiatives and each has generated its own set of policy recommendations.


Explicit redistribution strategies, ranging from asset confiscation and direct cash transfers to affirmative action programs, are usually designed to address structural factors of maldevelopment and can play an important role in equalizing group outcomes and opportunities. However, obviously they can arouse opposition among those who believe that redistribution comes at their expense. Evidence suggests that carefully designed and effectively implemented affirmative action policies do reduce intergroup inequalities. In Malaysia and India, such programs helped many members of historically disadvantaged groups climb out of poverty and improve their socio-economic prospects. At the same time, these programs run the risk of making group differences even more rigid as preferential treatment becomes self-perpetuating and groups remain pitted against each other, as in India where the caste system persists against the aspirations of India’s independence leaders. In granting the Sinhalese majority greater access to higher education and government jobs, Sri Lanka’s affirmative action has become a major rationale for Tamil separatism. Overt university-admission quotas have been a blatant aspect of the program, but the Sinhalese language requirement for government employment, rationalized as a component of nation building, has been equally provocative. The redistributive strategies may bring particularly explosive results when the government is closely allied with a minority ethnic or religious group. Alawites in Syria and Sunni in Bahrain have benefited from government favouritism in economic opportunities, but the reactions of disadvantaged majorities have resulted in confrontations ranging from protests to open civil war.


Macroeconomic policy reforms have strong long-term potential to reduce economic inefficiencies and rent-seeking advantages of the wealthy and powerful. However their design and implementation have rarely been straightforward or stable over time. They have been particularly contentious when introduced as part of trade pacts (some domestic groups lose in exchange for trade concessions that help others), or when they are part of “structural adjustment” initiatives that include significant austerity measures. The conditions required of governments to qualify for structural adjustment loans from international financial institutions have long provided opposition a cause for violent mobilization. However, the hardships of structural adjustment on the poorest (and often potentially disruptive) segments of the population can be mitigated. The cash transfers initiated by the Indonesian government in the early 2000s cushioned the impact of fuel-price rises on consumers, while the budget savings permitted greater healthcare and education spending targeted to the poor. However, in Syria, a seemingly strong transfer program failed to mitigate the antagonism toward a 2008 fuel subsidy reduction because of slow implementation, inter-agency wrangling, and politicized allocations.


Population relocation strategies often lead to the most explosive outcomes of any development initiatives. Conflict possibilities are multiple, as resettlement areas inevitably become more complex in the wake of development-related displacement. Languages proliferate, requiring contentious policy decisions on what the language of instruction and government affairs should be; migrants’ religious and cultural norms may challenge existing practices; new economic relationships emerge, and access to resources and government services can become competitive and politicized. For longtime residents and newcomers alike, development-related displacement and resettlement is fundamentally disruptive, often with unexpected, chaotic results. Clashes over property rights, political control, and cultural preservation ignited violence in India’s eastern states (the “Naxalite insurrection”), Indonesia’s Outer Islands, and southern Thailand. When development initiatives challenge centuries-old intra-group patterns, such as the Baloch crossing the Durand Line that artificially separates Pakistan from Afghanistan, resistance to the state may emerge in the form of separatist movements.

The most explosive current conflicts do not reflect the resentment against governments for neglecting the least developed areas within countries, but rather the clashes that emerge from efforts to develop those areas.

Regional development involves targeting particular areas within a country for various economic, political or strategic reasons. Investing in development projects in poorer regions is supposed to increase national integration. However, it also creates potentials for violence. The surprising finding from many Asian countries is that the most explosive current conflicts do not reflect the resentment against governments for neglecting the least developed areas within countries, but rather the clashes that emerge from efforts to develop those areas. In Turkey, the colossal development project in Southeastern Anatolia (CAP) eventually increased interdependence between the Kurdish and the Turkish areas, but it also gave Kurdish nationalists the opportunity and the constituency for ethnic mobilization. In Russia, investing in economic development of the North Caucasus as a bulwark against violent insurgency has had a mixed record. Violence increased in Chechnya – the largest recipient of federal economic aid in the region. In fact, in all North Caucasus republics, there has been a positive correlation between increased federal investment and violence, although there are differences in the character and dynamics of violence at the local level depending on the insurgents’ connection with the community.


Promotion of natural-resource extraction often requires bringing new firms and infrastructure into the extraction areas, pitting large-scale extractors against artisanal extractors, and corporations against residents over environmental degradation. Lacking a noncontroversial formula to allocate government royalties across regions, and with local people demanding compensation for environmental degradation, conflict over the revenues is often fierce, and force is commonly used to capture resource wealth. The persistence of state enterprises in the extraction of oil, hard minerals, and timber sets up confrontations between local residents and the government, and indirectly against the regions seen as benefiting from the disposition of resource revenues. The majority Arab population of Iran’s Khuzestan province resent the channelling of the region’s oil wealth to other parts of Iran, yet fear their loss of political strength as development programs move Persians into the province. However, some resource-sharing formulae have been successful, as with the Malaysian strategy of allowing the states of Sabah and Sarawak to retain timber revenues while the central government controls the oil revenues.  


Favouring particular sectors, through both government spending and preferential treatments such as pricing and protectionism, unfortunately had been captured in many countries by the myth that industrialization is equivalent to modernization and economic growth. The bias against agriculture has led to rural immiseration and urban over-crowding, in turn prompting some of the resettlement programs. This bias remains in many Asian countries, as does the neglect of rural education and healthcare. For cash transfers conditioned on parents keeping their children in school and obtaining adequate healthcare, the lack of quality services compromises the gains in human capital that can make conditional cash transfers attractive to society as a whole and can overcome taxpayer resistance. Government provision of basic public services, such as education, health, and infrastructure is critically important for societal stability. However, several cases demonstrate that the delivery of such services, their structure and perceptions of fairness sometimes have surprisingly negative impacts on intergroup relations.


Implications of these findings for policymakers in Asia

An epicentre of new economic growth, Asia faces major challenges associated with rapid socio-economic transformation: demographic shifts and new societal aspirations, new technologies, climate change and other environmental stresses, and drastic changes in economic structures and societal institutions. Under these circumstances, considerations of conflict-sensitive development become even more critical. We must emphasize, however, that these considerations are about the dynamic interaction of diverse contexts, rather than a set of one-size-fits-all “best practices” or universal principles governing development and conflict.

Still, some patterns have been common enough to warrant particular consideration in formulating development policies. Clearly, governments must be concerned about large gaps between the wealthy and the poor, about restricted social mobility, social exclusion and inability to voice dissent that solidify perceptions of unjust treatment, and about circumstances of economic desperation triggering aggressive confrontations over jobs, natural resources, or other assets and opportunities. The potential for violent outcomes is particularly high when socioeconomic and political disparities among groups overlap with ethnic or religious cleavages. The levers for enhancing the chances of peaceful development include diversifying economic roles held by particular ethnic or religious groups, to reduce stereotyping and promote other measures to strengthen intergroup relations. A commitment to inclusive growth and fairer distribution, along with government accountability to all social groups, are the most solid recipes for conflict-sensitive development.


About the Authors

Professor Natalia Mirovitskaya has been on the faculty at Duke University since 1995. Her professional focus is on political economy of development and peacebuilding. Professor Mirovitskaya earned her Ph.D. at the Russian Academy of Sciences (Economics). She has also been a consultant with the World Bank and other international development organizations. Recently, Mirovitskaya and William Ascher have become co-editors of a new book series “Politics, Economics and Inclusive Development” launched by Palgrave MacMillan Publishers, intending to guide policymakers, development professionals, and activists committed to conflict-sensitive development.

William Ascher, PhD, is the Donald C. McKenna Professor of Government and Economics at Claremont McKenna College, where he also chairs the international relations program and directs the Roberts Environmental Center. As the director of the Pacific Basin Research Center of Soka University of America, he has been leading, along with Dr. Natalia Mirovitskaya of Duke University, the multi-year project “Economic Development Strategies to Avert Collective Violence”. His research, which focuses largely on Southeast Asia and Latin America, ranges from development policy and sustainability to the political economy of the public policy process. He has been a consultant with the U.S. Environmental Protection Agency and the World Bank, among others.


1.This article is an excerpt from chapters 1, 2 and 10 in Development Strategies, Identities, and Conflict in Asia (edited by William Ascher and Natalia Mirovitskaya, Palgrave MacMillan 2013). The book is part of the research project on Economic Development Strategies to Avert Collective Violence. Other volumes include Economic Roots of Conflict and Cooperation in Africa (2013) and Economic Development Strategies and the Evolution of Violence in Latin America (2012), also edited by Ascher and Mirovitskaya and published by Palgrave Macmillan.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.