Why Asians aren’t rioting — yet

It is easy to overplay the role of inequality in the recent violence in the UK, but the stark income gap in much of emerging Asia is still a cause for concern.
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Riot police arrive in front of a burning building and burnt out car in south London on August 8 (AFP)
<div style="text-align: left;"> Riot police arrive in front of a burning building and burnt out car in south London on August 8 (AFP) </div>

The looting and violence that spread across Britain last week undoubtedly had many causes. David Cameron, the prime minister, tried to explain it away as an outburst of criminality, while his critics have blamed it on everything from rising inequality to incompetent policing and even summer boredom.

It was probably all of those things and more. The trouble started in north London when police shot and killed a suspected drug dealer during an arrest, which eventually led to an outbreak of looting and vandalism after residents in one of the poorest parts of London took to the streets to express their outrage. Copycats in other parts of London and elsewhere in the country soon joined in, smashing up shops and vehicles in a senseless act of mass violence.

No single cause explains the social breakdown, but of all the suspects, inequality certainly played an important role in fanning the flames. According to figures from the work and pensions department, the poorest 10% of households in Britain were the only group to suffer a loss in real income (of around 12%) between 1999 and 2009, while the richest 10% enjoyed a 37% rise in real income — far more than any other group.

But if inequality really promotes rioting, why aren’t Asian cities burning? There is huge income inequality in both Hong Kong and Singapore, for example, yet social disorder of the type seen in the UK last week is almost unheard of in both cities.

However, Hong Kong and Singapore are unique in the world — rich, middle class cities that are not democratic. They are also densely populated and tiny, which makes them easy to police. The People’s Liberation Army maintains a prominent presence in the middle of Hong Kong’s Central district, inherited from the British, which serves as a not-so-subtle reminder of where power ultimately lies. In Singapore, any political dissent is quickly nipped in the bud through tough justice.

The opportunities on offer also make a big difference. Britons might be richer overall, but it is much easier in Hong Kong, for example, to move up the income ladder — and people tend to work harder when they believe their efforts will be rewarded.

China has so far managed to keep the lid on its own social collapse thanks to continued rising incomes (albeit from a very low base), but it is fighting a constant battle to suppress disorder as income inequality has sky-rocketed. After three decades of liberalisation, China’s richest are now in the top tier of the world’s wealthy, while the country’s poorest people are still close to the very bottom. Such inequality causes obvious tensions.

Yet the reverse situation might help to explain Japan’s ability to withstand two decades of apparent economic stagnation without significant social disquiet. Spreading the wealth around more evenly seems to have minimised tensions between the haves and the have-nots, though plenty of other factors also contribute to Japan’s harmonious society. Some reports even suggest that the country could do with a bit more inequality, in the form of more low-paid immigrant workers to make up for its baby shortage.

Even so, Asia’s emerging economies might do well to pay heed to the lesson of Japan’s development. Achieving consistent economic growth is certainly an important goal, but not if it comes at the expense of a stable and peaceful society.

In much of Southeast Asia, such equitable growth seems a distant hope. According to a 2009 UN study of inequality around the world, the top 10% of earners in Malaysia make 22 times more than the bottom 10%, which is higher even than China. In the Philippines, the top 10% earn 15 times more, which puts it between the US and the UK (comfortably atop the developed world), while Thailand is on par with Russia at a ratio of 13 times.

Japan’s top earners get paid just four times more than those in the bottom income bracket. However, as long as the rising tide of economic growth is at least lifting all boats, even stark inequalities can be tolerated — though at the cost of extreme vulnerability to falling real incomes.

Asians are not yet rioting, but the threat of social disorder remains a very real one as the global economy veers into recession.

¬ Haymarket Media Limited. All rights reserved.
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