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International Relations

and Diplomacy

Volume 2, Number 10, October 2014 (Serial Number 13)

Contents

American Foreign Policy and Economy

Fraud and Deceit, or a Failure of American Political and Social Sciences: Towards a

Theory About the Impact of Banking on the Rise and Fall of Civilizations 639

Richard W. Chadwick

US Aid to Pakistan and Its Implications for India 655

Aslam Khan

Hong Kong Education Policy

Hong Kong Civic Education Policy From 1984 to 2014: An Historical Comparative Analysis 665

Hung Chung Fun Steven

The Development of Economic Regime and Local Governance

A Summary of the Developments Regarding the Economic Regime Implemented in

Developed and Developing Countries 680

Özlen Hiç Birol

Devolution of Sta. Ana Davao Port: Then and Now 691

Saidamin P. Bagolong, Neil John T. Audan, Angelica Faye G. Cameguing, Sunshine B. Cordero

International Relations and Diplomacy, ISSN 2328-2134

October 2014, Vol. 2, No. 10, 639-654

Fraud and Deceit, or a Failure of American Political and

Social Sciences: Towards a Theory About the Impact of

Banking on the Rise and Fall of Civilizations

Richard W. Chadwick

University of Hawaii, Hawaii, USA

Many scholars have documented and analyzed the widespread fraud and deceit associated with government failures

worldwide, comparing historical and recent policies leading up to the currently unstable global financial system.

Most of the attention to detail, however, has been focused on the actions and failures of corporations, corporate

leaders, and political and financial regulatory institutions, with little attention to generalizing political and

social-psychological theories that might explain not only current but historical failures, and also prepare the way for

formulating alternative futures in a manner that has some substantial likelihood of significantly impacting élites

who are held responsible for such systemic effects. This paper offers some suggestions for such theory construction,

exploring literature on grand theories of the rise and fall of empires, war and financial cycles, and

social-psychological theories of political decision making, and considers some implications for the literature on

growth and decline of civilizations and their worldviews, and in this context just what alternative futures might be

likely and how to choose. I also explores the possibility that the social sciences are close to an understanding of

civilization dynamics—close but not yet there. A framework is suggested which may be useful for continuing this

research to the point where alternative futures can be constructed that have significance for the future of our

globalized world order. In particular the works of Jared Diamond, Carroll Quigley, Niall Ferguson, Chalmers

Johnson, and Paul Kennedy, are compared for their macro-historical theories suggesting an evolutionary dynamic

in the life span of civilizations, the works of Johnson and Kwak and others for their research into the causes of

recurrent financial instability threatening the stability of regimes and whole societies, and various theories of

individual and group decision making (Leon Festinger, Harold Lasswell, Abraham Maslow, Richardson, and others)

which may explain the social-psychological processes linking these two phenomena. Further, regarding why such

comprehensive theory tends not to be addressed in the social and policy sciences, two stumbling blocks are

discussed: (1) the absence of any “standard theory” in political and social science, the absence of which motivates

academic struggles analogous to those characterized as security dilemmas in international relations; and (2)

students and practitioners of politics often speak past one another and get embroiled in needless conflicts because of

the latent structures of their dominant paradigms, specifically misunderstandings among the practitioners of

political science, political philosophy, and political practitioners.

Keywords: civilizations, banking, fraud, systems, decision-making

Richard W. Chadwick, professor, Political Science Department, University of Hawaii.

DAVID PUBLISHING

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FRAUD AND DECEIT, OR A FAILURE OF AMERICAN POLITICAL AND SOCIAL SCIENCES

640

Introduction

This essay began with the intention of developing a metatheoretical understanding of financial crises

which we are currently experiencing, “meta” theoretical because there are many explanations and historical

analyses of banking system failures, developed over centuries which conclude that there is a wave phenomenon

at work (Kondratiev waves immediately come to mind for instance and variations such as debt deflation and

credit cycles). War cycles theories (Richardson, application of Kondratiev waves) are similarly situated. The

basic hypothesis is that the political-economic breakdowns that occur are due to collective memory loss where

profits (or ambition or grievances, or paradoxically fear and distrust in the case of war) increase our willingness

to take risks known in the past to be quite dangerous.

As persuasive as these theories are, given their grounding in empirical research, the question remains, why

are our individual and collective memories so vulnerable to the enticements of immediate gratification?

Similarly, why react to perceptions of short term threats or vulnerabilities in a manner known at least in

principle to be long term dangerous (see Anatol Rapoport on the prisoner‟s dilemma and Richardson on

armaments decisions for instance). Bernard, Aleksandr, Palley, and Semmler (2013) had a review of these and

other models researching such dynamics.

The same type of problem is well known in Hardin‟s famous “tragedy of the commons” wherein

individual well being over the short term overrides collective well being in the longer term due to resulting

degradation of environmental resources. Worse, the perpetuation of such long term disastrous collective

behavior results in societies, in their struggle for survival, migrating and/or dominating other societies to

acquire the necessities of their survival, giving rise to colonization, empire building, genocide, and so on. Those

who are successful at this have their cultural habits reinforced; those that are not, doom their culture if not all of

their culture‟s human carriers who are often assimilated into other cultures. In either case the short term vs.

long term bias in decision making is reinforced.

It was with these explanations and problems in mind that I has proceeded to attempt an integration of

several streams of thought that broadened the question. There is a large literature on the rise and fall of

civilizations and great powers. Are the explanations for such change—cycles in the rise and fall of whole

societies and civilizations—just modified forms of the same line of thinking, just adapted to be more inclusive

of entire societies? If so, are there institutional “fixes” to the short term, small scale bias, or are we confronting

a limitation embedded in our genes and the conditions on our planet that activate them? And if that is so, is any

solution possible—perhaps at a minimum preserving the knowledge of the problem in a cultural subsystem that

after a disaster has an opportunity to readjust the society? And do such subcultures already exist?

Talcott Parsons’ Theory of Social Change

If I recalls Parsons‟ The Social System correctly, a nested process of social change is hypothesized that

begins with individuals‟ discontent. Taking advantage of Festinger‟s (1957) concept of cognitive dissonance

and Maslow‟s (1943, 1954, 1971) theory of basic needs, Parsons‟ (1964) process of social change can be

interpreted and explained in four steps. It begins with the assumption that individuals are in social positions,

with roles (responsibilities, functional expectations, duties or obligations) and statuses (social resources

enabling them to influence others):

(1) If individuals perceive themselves not to be fulfilling their obligations, they attempt to operate more


641

efficiently and/or increase their available resources. In short, they believe that they need to fix themselves.

Inadequacies in meeting their survival and security needs for instance, are interpreted as personal failure for

which the remedy is personal improvement.

(2) If this process of individual adjustment fails to some significant degree, individuals search for change

in their social and organization network(s), thus putting pressure on others for organizational change. In short

their problems are no longer perceived to be of their making but of their social network and organizations with

which they are associated, or relations between their organization(s) and others. For example, a regulatory

agency is preventing their company from making a profit, hence hurting their, interests. They need to fix

organizations, not themselves.

(3) If efforts at organizational change fail to result in a satisfactory achievement of whatever is being

sought, the problem then is diagnosed as institutional, that is, in the standards or rules by which society permits

the creation and legitimation of organizations of particular types, including those responsible for maintaining

such standards and rules. For instance, changing the laws governing regulation and financing of regulators

might be advocated.

(4) If institutional changes are effected but do not solve the problem, if I understand Parsons‟ view

correctly, is to question the fundamental values that are perceived to be at play, affecting goals as well as means

and outcomes. For instance, individuals having formed or participated in organizations that were successful in

changing laws now find that their efforts were in vain, and resort to demands for order to be restored at the

sacrifice of freedom and traditional legal procedures (or vice versa, demand more freedom and less interference

from inefficient or corrupt government agencies). In either case, we are now in the realm of value change.

Now, as useful as this explanation is as to why different types of strategies and explanations are prevalent

in a society (from individual self-worth, to organizational politics, to institutional ossification, to value

transformations), it leaves open the question of why, specifically, problems like financial and political crises

occur with some periodicity (Kondratiev), why there seem to be no permanent solutions, why they emerge with

fair regularity from societies‟ own internal dynamics as well as foreign relations, and why when solutions are

found and implemented, they do not endure.

Let‟s review the current situation as an exemplar of this problematique (problem-complex) to see if there

are any clues to answers to these questions.

Description and Analysis of the Current Ongoing Financial Meltdown

Characterizing the financial meltdown and bailouts of 2007-2009, William Black (2005) applied a

normative framework to define and explain the situation, thus:

Fraud is deceit. And the essence of fraud is, “I create trust in you, and then I betray that trust, and get you to give me

something of value”. And as a result, there's no more effective acid against trust than fraud, especially fraud by top elites,

and that‟s what we have. (Black, 2005)

In a follow-up interview in 2010, he theorized the source of fraud thus:

A criminogenic environment... spreads fraud. And there are two key elements. One... If you don‟t regulate, you create

a criminogenic environment because you can get away with the frauds. The second is compensation. And that has two

elements. One is the executive compensation that... creates the perverse incentives. But the second is for these

professionals and for the lower level employees, to give the bonuses. And it creates what we call a Gresham‟s dynamic.

And that just means cheaters prosper. And when cheaters prosper, markets become perverse and they drive honesty out of


642

the market. (Black, 2005)

Applying this model to the present Great Recession, the researchers would expect to find a process

roughly following these steps:

First, the process would be initiated by intentionally creating a criminogenic environment, in particular by

the Federal Reserve and bankers‟ successful lobbying efforts to remove legislation and regulation that required

them to regulate and limit what they could do. This occurred.

Then following these successful efforts at deregulation, some in the financial industries, putatively the six

major conglomerates discussed by Johnson and Kwak (2011), would (and presumably did) knowingly structure

and promote fraudulent practices since eliminating regulation eliminated the fear of getting caught. Cohan‟s

research on how Goldman Sachs avoided the 2007 crash of the mortgage market supports both Johnson and

Kwak‟s analysis and Black‟s criminogenic environment thesis (Cohan, 2011, Ch. 23).

Fraudulent practices then entice a significant proportion of the general population into entering into

mortgage deals that were known by the bankers involved, to predictably fail.

The bankers involved in the above practices then enticed insurance, retirement and other investment

institutions to invest their funds in financial instruments derivative of these mortgages (“ninja loans” as they

were known as in the industry, meaning no income verification, no job verification, and no asset verification,

aka “liars loans”).

Compounding the process, to insure that the derivatives market would attract more conservative investors,

the derivatives were in effect insured through the creation of “credit default swaps”. This Ponzi-like process

continues until the mortgage market collapses.

At each step in this process, fees were charged to clients for administration and the opportunity to make

these investments. The Gresham‟s dynamic was now complete. The sales at every stage appear to be legal sales,

thus insuring that the tens of thousands of sellers were free of any obligations other than paying their taxes. All

related markets had become perverse however; honesty had been driven out, for while it was known to the FBI

analysts of the housing market that a “bubble” was being built through highly profitable “ninja” loans, no one

sale was obviously fraudulent. As Black observed, when rating agencies like Fitch finally began to inspect the

mortgages on which the derivatives were based, they found nearly all to be fraudulent.

This process was not participated in by the entire financial and investment industry of course. As Black

notes, another researcher, Larry White, observed that perhaps 90% of bankers did not participate in this fraud,

and adhered to ethics the breach of which would most likely not entail legal actions. Thus the question arises,

what prevented the majority of individuals and firms in this business from participating? Further, why was this

dynamic allowed to start up and continue until the catastrophic failure of the global financial system was

imminent? Further, why was the imminent catastrophe managed with a massive bailout rather than with a

restructuring of the banking system and reform of the regulatory role of government? And why, after the

bailout of the banking and auto industries, were those involved not prosecuted? Black cites his own case at the

end of the Reagan administration by way of contrast where as a regulator himself, he and his team put more

than a thousand bankers in jail following the savings and load scandal.

Johnson and Kwak (2011) answered these questions straightforwardly: Lobbying efforts by the banking

industry, including the Federal Reserve, were successful in removing the legislation that mandated separation

of commercial and investment banking, and regulatory oversight by agencies including the Federal Reserve


643

itself. Four factors were important contributors to their success: massive funding for election campaigns,

patterns of rotation into and out of Congress by legislators that create lucrative career paths, a shared ideology,

and a community of interests among élites.

Short-term, Small-scale Systems Unfairly Burdened?

Reading over Black‟s account, Gretchen Morgenson‟s (2012), and many others‟, the general impression

one gets is of a political system in constant struggle against the enticements of private interests pursuing their

goals at the expense of society‟s well-being as a whole. This narrative, however, seems to assume that political

systems are designed by individuals mindful of society‟s collective well being, and are put in place to protect

society from individual interests overwhelming the common good through decision making that ignores the

long term needs of society to maximize the short term interests of politically active elites. Others, however, take

a very different, even diametrically opposed view. For instance, Lasswell (1930) characterized politicians at the

core as people who displace their private motives onto public objects (policies, regulations, laws),

“rationalized” in the public interest. To make a rather blunt analogy, it would seem that the purpose of a

political shepherd is to assure that the master (and only the master) gets to fleece the sheep—a far cry from the

high ideals of our Founding Fathers.

There is a complementary ethic at work here as well. Somewhat offhandedly, Lasswell (1935a) noted a

facet of American ideology that is missing in the ethical failure narrative:

Americans still have a sporting attitude toward economic activity and feel contemptuous of anyone who whines when

he loses. There is a fundamental admiration for the “big shots”…. Americans have the enterpriser's attitude toward money

and not the peasant‟s attitude; money is a scoring device and not a hoard in a sock. The expansion of personality possible

in the new world generates a respect for unlimited possibilities and bigness.... (pp. 166-167)

This orientation suggests a broad tolerance of and indeed admiration for cutthroat competition. The

“failure” of the American system to be fair is less important, from this viewpoint, than that it reward

competition, and reward it handsomely.

A contrary view by Peter Corning (2011) who saw “a daunting political obstacle...to the principle of

fairness and social justice” from the 30% of the population “who will fiercely defend the existing system, and

their self-interest” (p. 190). The subtext here is of course the 30% minority dominating the outcome affecting

the 70%, a populist appeal. But where in the world has political action been differently weighted? And is it true

that the “existing system” is inherently antithetical to the interests of the majority? Or that the majority do not

occasionally fight just as “fiercely”? Also, Corning (2011) noted that American individualism is not without

altruism in practice, nor is there a gross disrespect for law and order (recall Black‟s observation that 90% of

bankers did not participate in fraud); but there is no gainsaying the existence of “six gun justice”, and our

heroes—from the romanticized view of Billy the Kid and Robin Hood to the fictional James Bond and

Superman, and most recently Ironman; all show a “healthy” disrespect for legal formalities yet are strong

supporters of social justice in one sense or another. As in American sports, the losers presumably have the

opportunity to reenter the competition. The intent is to have a society that assures its members that competition,

while rough, offers opportunities to learn from mistakes, not just an unmarked grave.

I do not wish to turn this essay into a roundabout explanation of (or apology for) American exceptionalism,

but at this point simply to note that financial fraud and other cycles which result in loss of capital and life (as

with war cycles), are not easily explained by recourse to normative dissonance—juxtaposing one value against


644

another or one institutional arrangement vs. another. Yet this is often the conclusion reached, namely a failure

of ethics, that causes the fall of civilizations. But in a spirit of critical thinking let me assert the opposite, defend

that position, then respond to the defense. Can the researchers find in the societal evolution (“rise and fall” of

civilizations) literature the theme that inadequate ethics are to blame for the fall? Here is a sample of the

literature.

Paul Kennedy (1987) generally viewed the growth of civilizations as due to economic advantage, which in

turn creates a military advantage. Similarly when the economic advantage declines, so does the military. The

problem is exacerbated by economic competitors and the rise in the number of obligations to protect the far

reaches of its empire, impelling the great power to expend ever greater resources in proportion to its economy,

obligations that were incurred during the period of expansion (pp. 22-23). In the present system, the USA is

also faced with the additional problem of nuclear annihilation (p. 515).

Chalmers Johnson‟s (2004) writing almost two decades later echoed this view of the cause of decline,

noting the bellicosity of the USA response to the 9/11 attack on the World Trade Center and the explicit goal to

“dominate the world through absolute military superiority” (p. 285). He projected this as another example of

over-extension which he expects will increasingly centralize power and military authority in the presidency and

eventually bankrupt the country (Ch. 10 passim). And he sited other long time observers of world politics like

Stanley Hoffman who characterizes American Mideast policies such as the invasion of Afghanistan and Iraq as

“„breathtakingly unrealistic‟, „morally reckless‟, and „eerily reminiscent of the disastrously wishful thinking of

the Vietnam War‟” (p. 287).

Jared Diamond divides his studies of the rise and fall of societies into two books. In the first one Diamond

(1999) attributed the spread and domination of one society against others as due to the introduction and use of

new technologies that create surplus energy and military advantages (weaponry, logistics) and to the relative

deficit in these among societies with which the dominant society comes in contact. Diamond‟s (2005) sequel

describes a number of factors which have led societies to collapse: environmental damage, climate change,

hostile neighbors, loss of support from friendly neighbors, and its political, economic, and social institutions

and values which contribute to what decisions are arrived at in addressing the other four problem areas. In

particular, those societies that do “not” solve their problems with a very long term perspective as to what is best

for the common good tend to collapse.

Quigley (1961) wrote that he built on Toynbee‟s five “stages”1 in the rise and fall of civilizations (p. 418)

by adding two more (p. 146 lists the seven), to specify processes that initiate societies and bring about

transitions between them, and why societies succeed or fail to respond to the challenges presented at each stage.

Although he specifies six “levels” of “development” (i.e., change within each level) and a “morphology”

(interactions between levels)—the levels being intellectual, religious, social, economic, political, and

military—the core dynamic driving the rise and fall of societies is at its core technological and economic, in

particular the rate of investment in “instruments of expansion”—meaning adaptations that create surplus of

capital. As with Diamond, Quigley (1961) attributed “the cause of surplus” to technological innovations, but

goes further in focusing on the will of a society to invest in the use of new technologies, which he refers to as

have an “incentive to invent” and to invest in the use of “instruments of invention” for productive purposes

(p. 132). In the middle stage of civilization (stage 4), both the incentive to invent and to invest atrophy for two 1 Perhaps “phase changes” rather than “stages” would be a more appropriate term, since Quigley and other recognize the after

gradual, incremental nature of the dynamics involved in moving from one to another state.


645

reasons, the processes that produced innovations become institutionalized, meaning bureaucratized and

regulated, slowing down the rate of expansion, and the élite with surplus capital squander it in dissolute and

competitive practices such as class warfare, and “irrationality, pessimism, superstitions and otherworldliness”

takes over (pp. 150-152). It is worth quoting at some length his understanding of the historical period in

civilizations as they near the end of stage four:

The masses of people (who have no vested interest in the existing institution of expansion) engage in imperialist wars

because it seems the only way to overcome the slowing down of expansion. Unable to get ahead by other means (such as

economic means), they seek to get ahead by political action, above all by taking wealth from their political neighbors. At

the same time they turn to irrationality to compensate for the growing insecurity of life, for the chronic economic

depression, for the growing bitterness and dangers of class struggles, for the growing social disruption and insecurity from

imperialist wars. This is generally a period of gambling, use of narcotics or intoxicants, obsession with sex (frequently as

perversion), increasing crime, growing numbers of neurotics and psychotics, growing obsession with death and the

Hearafter. (Quigley, 1961, p. 152)

Quigley (1961) listed six human basic needs (group security, interpersonal power relations, material

wealth, companionship, psychological certainty, and understanding) (p. 101), only one, material wealth, is used

for investing in “instruments of expansion”, and seems to be the driver in the evolution of civilizations. One

wonders just why no mention is made of developing a surplus of security, interpersonal power relations,

companionship, psychological certainty and understanding, which could be the values in which to invest to

continue expansion.

Niall Ferguson (2004) proposed three deficits which challenge the durability of what some have called the

USA‟s unipolar moment (Ferguson cites Tony Blair somewhat less pointedly: “All predominant power seems

for a time invincible, but in fact it is transient”) (p. 302): an economic deficit, a manpower deficit, and an

attention deficit (p. 290), meaning the growing debt, the number of military personnel in relation to the number

of countries with which the USA is in conflict, and the apparent inability of the American government to

sustain a foreign policy over multiple election cycles. The rise to empire in the classical sense is attributed to

the events that precipitated our direct participation in the World Wars: the 1915 sinking of the Lusitania by a

German U-boat, and the 1941 attack by Japan on Pearl Harbor (p. 61).

Now, I began this review with a speculation that historians generally conclude that societies decline from

dominance due to a failure of ethics. While each of the cited historians offer more complicated explanations,

note that Kennedy's observation that declining empires sinking more into debt in order to finance military

hegemony, is a rather long-term unethical policy. Chalmers Johnson‟s observation that the enunciated Bush

policy post 9/11 to dominate the world militarily (and inevitably unsuccessfully) was (using Hoffman's

language) “breathtakingly unrealistic”, thus would seem to qualify as a lapse of ethics. Diamond‟s dire

warnings regarding environmental degradation hurting the survivability of our society should qualify as

unethical. The turning point on the path to decline for Quigley is when at his stage four in a society‟s evolution,

a society that is used to experiencing “expansion” (improvement in meeting the basic needs of its members)

begins to stagnate due to the institutionalization of “instruments of invention” and investment, leading to

various forms of corrupt practices, again unethical. And in Ferguson‟s analysis, while debt and manpower

shortages are not inherently unethical, and a form of institutionalized attention deficit disorder can be

characterized as more a social disease than a breach of ethics, the combined and separate effects of these

situations would certainly be unethical, especially if those making decisions know the harm they do to their


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society and societies with which they interact. Bremmer (2006) made a similar argument for nations relatively

high on the “J curve” of power that adopt “gated communities” policies as they gradually decline) (p. 276).

So, it seems that a case can be made for at least the presence of a lapse in ethics to be found in the fall of

civilizations. But in order to say more than that, at a minimum one would have to ask the questioning of logic:

is such a lapse a necessary condition for collapse? Or a sufficient condition? Or is it a “terminal statistic”? That

is, is it a consequence of a failing society. Or something in between, a contributor, “explaining a significant

amount of variance” in the fall of civilizations? As the title of this paper suggests, are fraud and deceit

sufficient explanation for financial crises, or are they somewhere else in the analytical mix, perhaps as

intervening or intermediate variables in a much more complicated systems dynamic involving surplus energy,

power distributions, and bureaucratic misperceptions? Reinhart and Rogoff (2009) for instance, looked at 66

countries over eight centuries of banking history, find definite patterns in the growth and decline of ethical

systems which seem to reduce to self-delusion through accounting practices that hide true debt and increasingly

take advantage of the short-term benefits of borrowing while ignoring long term costs, practices that end in

economic collapse.

The Need for a Vision Informed by Philosophy, Science and Practice

When one examines the professional behavior of students of politics themselves, one sees in their work

dysfunctionalities similar to those suggested in the decline of civilizations: scientists manipulating their data

and statistical tests, and developing theories that are nearly tautologies; philosophers ignoring or critiquing one

another from the viewpoint of their own political purposes or passion for a cultural change; and practitioners

simply pursuing private interests through public objects rationalized in the public interest. Ricci (1984) went to

great lengths to document and analyze the cacophonous state of the disciplines falling under the general

umbrella of political studies, concluding for instance that the political “science” practitioners have distanced

themselves increasingly from the normative political “philosophers” because, more or less by mutual agreement,

“Science cannot deal with this realm of intangibles decisively” (p. 296).

I suspect there is more to the problem than simply paradigmatic differences, specifically that as a small

society of autonomous actors, it shares many of the same types of problems as states do in our anarchic world

order. I will now proceed to develop this theme, applying various social science theories, including balance of

power for instance, to the problem. I conclude with Ricci that there is a failure, a “tragedy” as he puts it, of

students of politics to address the burning normative issues of the day (such as the current financial meltdown),

but not simply because adequate systematic knowledge has not been developed within political science, nor

because of the inapplicability of some of the better political philosophy dealing with ethics, but rather because

there is a “blindness of involvement” as Tom Shelling would say, among the practitioners. They have become

ensnared by their own paradigms to the extent that they are unable to communicate their observations and

reasoning to one another without inadvertently questions assumptions that others not only take for granted but

must take for granted to do their work. Where this leads is the subject, unfortunately, of another paper, but the

basic concepts can be sketched here.

A Political Psychology Dynamic: Implications for Students, Practitioners and Critics

Consider the creative and competitive fields of political science, political philosophy and applied politics,

each with their “critical thinkers” finding fault in every move and nuance in these contested realms (e.g.,

“science is merely power disguised as knowledge”) (Carlsnaes, Thomas, & Simmons, 2012, p. 135). Why is it


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that political studies within and across these fields appear so Balkanized, so factionalized as to resemble in

ideological if not militarized ways a post-Tito Yugoslavia, or if trends persist, a post-American Iraq and

Afghanistan?

Realists would say that conflicts tend to become militarized because in the absence of hegemonic power in

an anarchic world, the fear of the use of such power at a minimum promotes defensive arms races in a

perpetually failing effort to relieve mutual insecurity, and at a maximum preemptive (or “preventive”) attack.

From Thucydides‟ observations through Richardson‟s (1960) armaments models, to Rapoport‟s prisoner‟s

dilemma, to Mearshimer‟s offensive realism, the induced fear and anxiety of not having the assurance of a

trusted, hegemonic authority on the international scene has been seen as inducing a tragic, violent

destabilization of international politics.

“Power potential”, however, has two components, capabilities and intentions (Cline, 1975). The above

realist accounts generally rationalize fears of other nations‟ military power with “worst case scenarios”, as if

the defensive overreactions were inevitable because of the persuasive, logical necessity of minimizing possible

losses. Yet it is also commonly understood that the creation and maintenance of military capabilities for the

survival and security values attached to such capabilities, is very much a function of the creation and sustained

use of political symbols. Symbolic social constructs such as class or caste, race, religion, ethnicity, gender,

nationality, party, political beliefs and ideology, historical experience, and so on, are regularly used in

rationalizing (in Lasswell‟s sense) political competition in the struggle for power and hegemony to insure

security at all levels of political action from the global to the very local.2 Thus the absence of an overarching

symbolic construct, a widely accepted “standard model” of the political system and its relations to the social

system, invites the creation of one. A political belief system that appears empirically valid, emotionally

compelling, and philosophically reasonable is thus a necessary (but not sufficient) component of political power.3

Similarly, the creation and use of political symbols being a major source of political influence, the absence

of a dominant (hegemonic) theory, a standard model, in political studies creates an equivalent competition for

security in the realm of political symbols and unifying philosophy. Just as change in differences in relative

political-military power were significant in Thucydides‟ understanding of the motives of the Athenians and

Spartans because of the fear of assimilation by force, so it is with students of politics whether of the

philosophical, praxis, or science persuasion. The competition for status in and across these fields is similar

because in whatever pursuit, human basic needs are the same.

Operationally, grants, government contracts and university tenure serve our fields of political study to

support the search for a “standard model” just as major powers‟ military aid and client-state-like treaties,

agreements and covert support do in the formerly colonized nations. Thus our quests for theory, whether

grounded in historical reflections and tested with data, concocted in the crucible of hard knocks in applied

politics, or crafted in the debates within cultural élites, are tied deeply to the manufacture and manipulation of 2 The very local level is handily illustrated with Saul Alinsky‟s work: “No matter what, every action carries its rationalization”

(Alinsky, 1971, p. 108). 3 Alinsky (1971) offhandedly referred to power per se as “organized energy” and noted that “it is the very essence, the dynamo of

life” (p. 51). Dahl‟s more analytical and academic definition achieves a greater degree of precision (the ability of A to get B to do

y by doing x) but lacks usefulness beyond simply paralleling the general concept of causation. Alinsky‟s appeals (perhaps

unknowingly?) to our understanding of negative entropy, of rearranging the social universe for some unique purpose in life. I

think this conception of power suits Lasswell‟s discussion of the creation and use of political symbols better than his own as

simply coercive influence. For a broader treatment of the concept of power see Rummel, “Definition of power”, Ch. 19.1.

Retrieved from https://www.hawaii.edu/powerkills/TCH.CHAP19.HTM

https://www.hawaii.edu/powerkills/TCH.CHAP19.HTM


648

the personal insecurities of political scientists, and for that matter the personal insecurities of all involved in

ideological struggles.

Harold Lasswell, one of the earliest systems theorists, devoted a major part of his illustrious career to

exploring the linkages between politics and people‟s personal insecurities, including those of professional

political scientists, in his classic work, World Politics and Personal Insecurity. A contemporary of Freud, Jung,

and Adler and a student of psychoanalysis himself, Lasswell put at the core of his theorizing two critically

important observations—hypotheses if you will, but they are complex ones—first the definition of a politician,

one who projects his private motives onto public objects, rationalized in the public interest.4 Second, politics is

all about élite-mass relations; élite are those who get the most of whatever there is to have. The “have” was

originally characterized as three values, deference, income, and safety5

in both earlier work in 1930 and later

works notable with Kaplan (1950), an eight dimensional geometry was constructed consisting of eight values

the distributions of which were controlled politically, “politically” meaning through influential manipulation of

symbols, violence, goods and practices (Lasswell, 1935b, Ch. 2, Ch. 3, Ch. 4, Ch. 5). The eight values he

stipulated were in two categories of four each: deference values and welfare values. The deference values:

power, affection, respect, and rectitude. The welfare values: wealth, well-being, skill, and enlightenment.

Figure 1 below the large triangle depicting Goal, Drift, and Actual states (GDA) sketches the relationship

between stress and the cognitive dissonance experienced from three sources: frustration (e.g., gaps between

Maslowian basic needs and reality), alienation (difference between one‟s basic needs and opportunities to attain

those needs), and disempowerment (social and material pressures preventing the satisfaction of basic needs).

Stress, in turn, is a primary motivator in Easton‟s model of political decision making (wherein politicians weigh

what must be done to satisfy demands against what support will be gained or lost), and in political stability

(including feedback from policies) (Easton, 1953). Students of politics, like all humans, feel such stress and

impacts on decision making within their realm. Since all organized human activity can be analyzed in terms of

these three general characteristics (perceptions of goals, trends or drift states, and actual conditions) the model

applies as well to students as to practitioners of politics.

The GDA model enables a calculation of stress which when expressed politically becomes an inverse

measure of social justice, depicted to the lower right of the figure. The sense of social justice relates to both

political stability (the less the sense of social justice the more likely it is to be expressed in a manner to

destabilize politics) and repression (the more repression the greater the sense of social injustice). Since

repression induces fear, it also acts to stabilize politics because of fear of retribution. Note that a

“Machivellian” cycle, pS→R→F→pS, is created as well as a “democratic” cycle, pS→R→SJ→pS, one

increasing stability through repression, the other decreasing stability through repression. “Repression” means

attributing a decline in ability to meet basic needs due to government policies. Thus the banking fraud and

deceit, being attributed to the government policies of removing restrictions on bankers manipulation of

mortgages, is interpreted as repression, for instance. Cover-ups such as fabricating conflicts, suborning media,

4 Lasswell‟s oft referenced formula is rarely reproduced. It was: p} d} r = P, meaning “The symbol p represents private motives, d

displacement on to public objects, r rationalization in terms of public interest; P signifies the political man. The d and the r are

mainly derived from the contact of the personality with secondary group symbols” (Lasswell, 1935b, 31n). Here he cites his

original writing in Psychopathology and Politics (1930), pp. 261-263, for further discussion. 5 Lasswell (1935b), Ch. 1. The brackets refer to “transformation”.


649

under-financing investigations and ignoring elite collusion, exacerbate the problem. Whether a government

ultimately falls under such circumstances depends on the reaction to fear vs. injustice. Under such

circumstances political equilibrium becomes less and less stable, meaning heightened sensitivity to government

foul-ups. Regarding “social justice”, Lasswell‟s checklist of eight values provides a useful inventory of

variables to construct a measure of social stress (see Figure 1).

Goal states and Homeostatic Processes: Basic Needs

(Maslow, Corning re social justice, Ch.5

Drift

states (vision, trends)

Actual states

(“reality”)

-Disempowerment (~1/|D-A| relative to goals, i.e. ,=1-F/A)

Political dynamics:

Fear

Political stability

Repression Social justice

(SJ ←1/stress)

+

+

+

-

M

David Easton—political decision making

Demands

Supports

Political environment

(Δstress,as defined above)

D

DSL

Alien

atio

n -

A

Frustration –

F

DecisionMaking

Policy

Leon Festinger—motivation: cognitive dissonance.

Dissonance-generating gaps (graphed above) create stress.

Stress sources: Frustration ← gaps between goals and

(perceived) actual states; Alienation ← gaps between goals and

“drift” states, (perceived) trends; and Disempowerment ←

decreasing gaps between trends and acitual states, relative to

distance from goal states.

Harold Lasswell—politics: control of who gets what,

when, how. “What”—8 dimensions of values, each contributing

to a sense of social justice through stress reduction.

“Deference values”: emotional bases for compliant or non-

compliant relations: Power (coercive influence, fear of loss);

Affection (love-hate dimension); Respect (cultural

expectations); and Rectitude (moral influence).

“Welfare values” attributes: Wealth (income, property,

investments); Well-being (mental, physical health); Skill

(physical, communication abilities); and Enlightenment

(wisdom, knowledge).

Stress“bucket”(build-up

of frustration, alienation and

disempowerment)

Figure 1. A stress model of political stability and decision making: Frustration, alienation, and disempowerment → stress →

social justice decline → political demands → policy change.


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Richardson dynamics: multiple actors evaluating each others potential for

assimilation or as threats (control theory), assessing relative power

potential (cf. Cline s model) implicit fear of dissolution

Easton dynamics: politicians evaluating demands and

supports, e.g. re-election calculus

Individual psychology, decision making:

beliefs, traditions, experience, reason (Wesley

Quadralateral; Campbell et al.‟s “funnel of causality”)

Sociobiology: dissonance dynamics (Festinger, Maslow)

Means assessment (Lasswell → Saaty)

Ultimate concerns (Maslow, Tillich)

Figure 2. Contextualizing banking system dynamics: Longer term, larger scale, human and social dimensions

determinative of crises.

Figure 2 is a variation on the standard “levels of analysis” concept first proposed by J. David Singer and,

separately, Kenneth Waltz. What is interesting to me is that the theories noted at each level have existed for

some time but have not been integrated or interpreted in this manner to my knowledge. At the first level, the

individual level, the researchers have Maslow‟s characterization of basic human needs (not much different from

Quigley‟s independent efforts mentioned earlier). Lasswell‟s eight-dimensional value checklist stands in

relation to Maslow‟s basic needs as means do to ends, respectively (note that Maslow‟s belongingness and

Lasswell‟s affection appear similar and indeed they are; however, Lasswell‟s affection may be thought of as a

love-hate dimension motivating one to exhibit deference to another (or not) depending on the emotional affinity,

whereas Maslow‟s belongingness or love refers to a drive or passion, a need for a sense of identity in

community). Explaining individual dynamics is the stress model of Figure 1.

At the second level we have the usual organizational politics with decision makers communications in

terms of their demands and support content, and generating effects through policy implementation. Here,

models focused on duration and repetition of decision tasks such as Rapoport‟s “prisoner‟s dilemma”, Coplin,

O‟Leary, and Vasquez‟s (1976) “interest aggregation model”, and Saaty‟s (2001) more generalized “analytic

hierarchy process” are useful because they enable research into the systems dynamics of political decision

making. The most relevant outcome of decision implementation is the impact on social stress levels. If the


651

consequences of banking fraud cover-ups are to exacerbate stress for instance, instability is likely to increase.

Recalling the discussion of Talcott Parsons‟ four levels of social change, under these circumstances popular

opinion my shift first from people blaming themselves for being so naive as to thinking bankers were on their

side when they participated in “ninja” loans, to blaming the organizations (banks) for their fraudulent behavior,

to past Congresses and Presidents for changing the “rules of the game” (legislation reducing bank regulations

and minimizing the capacity of government agencies to investigate fraud)—which seems to be about where we

are today (recall the Black interview by Moyers)—to questioning fundamental values around which a society or

even civilization is organized—such as was the case in the American revolution, the Bolshevik revolution, the

Roosevelt New Deal, China‟s Maoist revolution, and the end of the Soviet Union, and the ongoing Arab Spring

and IS fundamentalist revolt, and to a lesser extent the protest movement in Hong Kong.

Theory → models

of the possible

Pol

itic

al s

cien

ce

Data → models

of the “real”

Culture → models

of the desirable

Political philosophy

Figure 3. Political theory, political data, political culture: Semantic spaces within which are created models of the possible,

real and desirable, respectively.

At the third level we have systemic effects, usually unknown to participants but affecting them through

changes in their political environments as described at the first and second levels. These models—especially

Richardson‟s conflict dynamics model—describe dynamics that are usually not known to most participants in

conflict situations, because they describe cumulative consequences over time of multiple decisions, and involve

time periods that can be decades long. Such models require information built up by level one and two research.

Richardson (1960), in explaining how a simple arms race could lead to stable equilibria, unstable equilibria, or

no equilibria, depending on the relative levels of fear and fatigue coefficients, went much further, for instance,

the “fear” coefficient was conceived theoretically as a balance between conflict and cooperation between each

pair of states in his model. He suggested that while conflict might be indicated by military spending,

cooperation might be indicated by mutually profitable trade and related agreements. Similar research continues

today in examining the implications of the “democratic peace” and “capitalist peace” hypotheses (the latter by


652

Eric Gartzke). Unfortunately, research in this area is generally unavailable and what is, is rather sketchy.

Figure 3 is a condensation of a more elaborated model of paradigms prevalent in political studies and

practice. As mentioned earlier, the practices of science, philosophy and applied politics are quite different but

in a psychological sense the goal of all three is the same, to reduce cognitive dissonance. For the philosopher,

models of what is possible conflict in their assertions with what is desirable (or equivalently, vice versa). For

the political scientist, attention is drawn to inconsistencies between expectation and realities generated by

theory predictions and data collection and analysis. And for the politician or practitioner of politics more

generally, the gap between what is desired (e.g., election, campaign contribution, territorial acquisition or

preservation, and so on) and reality generates the dissonance.

Why these three paradigms are often represented as in conflict or competition, why one is consider by its

practitioners to be superior to the others, stems from the fact that each is looking for answers to questions which

in the process of their formulation make assumptions which practitioners of the other paradigms habitually call

into question. Thus there is always a certain amount of tension to be expected. A practitioner for instance may

need answers about what sorts of weapons a competitor has and what their motivations are (searching for

psychological certainty, one of Quigley‟s hypothesized “basic needs”). A philosopher might ask why are

weapons so important when the competitor‟s “worldview” may be of great importance. A political scientist

might well question what the practitioner considers to be “armament” noting differences between primarily

offensive vs. defensive weapons, and further, have several estimates of what is possessed, each depending on a

number of different assumptions about the quality of the data.

Students and practitioners of politics have generally failed to understand that the paradigms within which

they do the bulk of their work are quite different in the assumptions they make, the operational codes within

which they operate, and the value of their output for each other. A philosopher may well recommend a policy

based on the compatibility of certain theories with particular values (such as a policy that assumes a particular

country will never go to war with you as long as it remains maturely democratic), while the political decision

maker, looking at that same country‟s bloody history of colonization, who give very little credence to the

policy.

Conclusion

Fraud and deceit may well accurately describe the problems that beset the financial industry short term, as

well as be major factors in the unethical redistribution of wealth in societies. And policy analysts looking to

improving future prospects for a more equitable distribution of wealth and by more normative means may well

make promising recommendations. But until a theory is developed that both explains why and how such

deceptive practices occur “with some degree of periodicity”, and offer a process that is politically tractable for

removing a significant degree of fraud and deceit from the market place, it is not likely that we will see much

change in the pattern. And in an era of globalization and internet banking, this could prove to be a very

dangerous theoretical deficit. Because political philosophers, practitioners, and scientists operate with very

different goals and rationales for their work, they find it difficult to value each others‟ work, and the absence of

a “standard theory” to explain political-economic-military behavior only exacerbates the problems of personal

insecurity that they face. An approach to developing such a standard model involving the theories of social


653

psychologists, political and social scientists, especially in decision sciences and systems dynamics, was

proposed. This approach uses the traditional three levels of analysis common in international relations theories,

and aims to integrate basic needs and values models into a larger scale and longer term framework that can

readily be researched in existing institutional frameworks (foundations, government and corporate contracts,

and universities dependent on financing from such). Yet the need is great if we are to avoid the errors of our

forebears which lead to short political life-spans, thinking in terms too small and short term, too limited by their

home society‟s belief systems, to recognize the larger contexts in which they operate. It is hoped that such

collaborative multidisciplinary research projects can be undertaken. A hint of what they might at least in part

look like can be seen in Barry Hughes‟ International Futures simulation at the Pardee Center at the University

of Denver (http://pardee.du.edu/), in Tom Saaty‟s (2001) decision making modeling efforts

(http://www.superdecisions.com/) and in the many specialized global modeling data bases now in existence,

dealing with everything from climate change to values studies, alternative futures and so on. Without such

progress, it does not seem likely that our current civilization will survive for long.

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http://www.superdecisions.com/


October 2014, Vol. 2, No. 10, 655-664

US Aid to Pakistan and Its Implications for India

Aslam Khan

Yobe State University, Damaturu, Nigeria

Establishment, existence and achievements of a state depend upon political culture, which are civic, liberal and

representative mostly available in Western politics. Political culture is generally manifested through the actions,

policy programs and operational aspects of the government, oppositions, political parties, pressure groups and the

public. Over the years, there has been a continued turbulence in institutionalizing democratic political culture

around our borders in which Pakistan figures more prominently mainly due to the ongoing military operations in its

western region supplemented by suicidal attacks and explosions in metropolitan areas. This tragic turbulence cannot

be isolated from the emerging incidents, violence and bloodshed in Afghanistan. Present situation of Pakistan is

witnessing that, the United States of America is trying everything to save Pakistan from being failed and collapse.

The American War on terror is badly dependent on Pakistan and for securing her interest, The US has created the

Coalition Support Funds (CSF) as a mechanism to reimburse Pakistan for the support in “global war on terror”.

Since Pakistan has turbulent borders with India, it is therefore unavoidable for India to assess and estimate some of

the crucial events and incidents beyond the borders in the larger interest of national interest and peace in South Asia.

The aim of the proposed research is to explore existing realities regarding US military aid to Pakistan and its

implications for Indo-US Relations. The US dependency on Pakistan, the misuse of American aid, which is clearly

directed against India, the new strategy of Obama administration to fight Taliban especially Pakistan based

Tahrik-e-Taliban and Al-Qaeda are the important factors to be highlighted. Attempt will be made to find out major

reasons of these phenomena and their impact on the regional dynamics. The American and Pakistan’s response

towards the Indian concern will also be taken into account.

Keywords: political culture, American War on terror, coalition support funds and Al-Qaeda

Introduction

The 9/11 tragedy has not only exposed the might of terror outfits but it has also created the opportunities

and challenges for the regional powers in South Asia. It was an opportunity for India, on the one hand and the

challenge to Pakistan, on the other hand. For a long time, India was dealing with this challenge and offered an

unconditional support to the United States to dismantle the global threat of terrorism. India, on the one hand,

was looking forward to become the most preferable ally in the Global War on Terror. But, on the other hand,

the US’s decision to select Pakistan as an ally was taken after deep assessment. They discuss the policy taking

into account the local factors, currents, undercurrents and crosscurrents which may affect and influence the

foreign policy formulation of US. The decision of the then President Bush changed the course of action in

South Asia especially the Pakistan’s politics and put Pakistan in a state of dilemma when he offered choice for

Pakistan to chose one of the following—either with us or with the terrorists. Though, Pakistan joined the US

Aslam Khan, Ph.D., Department of Political Science, Yobe State University.

DAVID PUBLISHING

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US AID TO PAKISTAN AND ITS IMPLICATIONS FOR INDIA

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war on terror which brought several Pakistani groups in conflict with the administration. Pakistan took U turn

on its Afghanistan policy and was forced to leave its longstanding search for the strategic depth in Afghanistan.

Due to this, Pakistan is paying a heavy price and turning in the category of a failing state. Moreover, America’s

Afghan-Pak policy is totally dependent on Pakistan. America and West will not allow Pakistan to collapse on

this crucial juncture when the US is trying to dismantle the terrorist establishments. The current crisis is a

matter of concern not only for Pakistan, but also for the region and the international community at large.

History of US Aid Program to Pakistan Before 9/11

The US aid to Pakistan has the history of fluctuations and was purely circumstantial. Pakistan got the

opportunity of US funding by the signing of Mutual Defence Assistance Agreement of May 19, 1954 that

helped Pakistan to get US aid of $3.2 billion (US Department of State 1954). But the hostilities between

Pakistan and India in 1965 & 1971 halted the aid program for Pakistan. But US continued to provide the

economic aid for both India and Pakistan. Later on, Pakistan’s plan to develop enriching uranium in 1979

resulted in the suspension of all type of aid (except food aid) by the then President Carter. But, at the same time,

Soviet invasion of Afghanistan compelled US to change the gear, US administration carefully assessed the need

of Pakistan and Pakistan became a major player and a strategic ground for converting US support to anti-Soviet

forces in Afghanistan. As a result, US assistance to Pakistan took a long jump and Pakistan got $3.1 billion as

economic aid and $2.19 billion as military aid from 1980 to 1990 (Korb, 2007). The Afghan war lords got all

kind of support (military, weaponry, and economic) from Pakistan. But, US was equally concerned with the

nuclear ambitions of Pakistan. As a result US Congress passed the Pressler Amendment to the Foreign

Assistance Act (Rizvi, 2005), which led to the sanctions after sanction for Pakistan (p. 103). This amendment

conditioned with the certification of the President of the United States that Pakistan did not possessed a nuclear

weapon for the periods in which aid was granted. But in 1990, President George W. Bush refused to certify that

Pakistan is not having nuclear weapon technology, so most of the aid package to Pakistan was cut off (Rubinoff,

2001).

The United States blocked the delivery of major military equipments such as 28 F-16 jets that Pakistan had

already purchased. During this period, Pakistan only got the aid in the form of food and counter-narcotics.

Again, the nuclear test of 1998 and General Musharraf’s coup in 1999 resulted in the suspension of aid

programme. So, the pattern of US aid to Pakistan clearly indicates that American support to Pakistan was

always opportunistic and circumstantial.

US Aid and Global War on Terrorism (GWOT)

The scenario of 9/11 made a drastic change in the politics of subcontinent as well as the politics of United

States. America held Osama Bin Laden, the Al-Qaeda chief responsible for the attack on its territory.

Osama’s stay in Afghanistan and Taliban’s refusal to handing him over to US resulted in “Operation Enduring

Freedom”, a Global War on Terrorism (GWOT). To fight the GWOT and for the operation enduring freedom in

Afghanistan, the United States created the Coalition Support Funds (CSF), as a mechanism to reimburse

Pakistan to fight the American war against Taliban in Afghanistan. The aid provided by America has been

bifurcated, 60% in the head as CSF, 15% as security assistance, 15% toward budget support or direct cash

transfers to the Pakistan. This amount is supposed to provide macroeconomic stability and the other 10% has

been used specifically for development and humanitarian assistance. Pakistan has received more than $10.6


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billion disbursed by the CSF, a full 81% of CSF funds (Korb, 2007). Since 9/11 terror attacks, Pakistan has

received more than $18 billion in reimbursement and assistance from the USA, about 2/3 of which is for the

security purpose. The US Government Accountability Office (GAO) said in its latest report that foreign

assistance is vital to help the government of Pakistan to overcome the political, economic, and security

challenges that threaten its long-term stability (Korb, 2007). The report further said, Pakistan has been a key US

ally in America’s “war on terror” launched after the September, 2011 terror attacks in the USA. The report also

mentioned that Taliban, Al Qaeda, and other terror networks have used parts of Pakistan to plan and launch

attacks on Afghan, USA and NATO security forces in Afghanistan, as well as on Pakistani citizens and security

forces of Pakistan (Korb, 2007).

The report also said that enhancing the effectiveness of civilian aid to Pakistan is one of the US

government’s top foreign policy and national security priorities. The GAO said in reports and testimonies since

2008, it has identified the need to improve planning, monitoring, documentation and oversight of US assistance

to Pakistan. For example, in previous reports the researchers have noted the need to increase oversight and

accountability for Pakistan’s reimbursement claims for Coalition Support Funds and to improve planning,

performance, and monitoring documentation of US development assistance to Pakistan’s Federally

Administered Tribal Areas (FATA) (Korb, 2007).

Chairman of the Joint Chiefs of Staff Admiral Mike Mullen stressed that a key component of US

partnership with Pakistan was to help the military’s counter-terror and counter-insurgency operations. The

series of offensive operations undertaken by the Pakistani military in the tribal areas expanded dramatically in

2009. The US aid to Pakistan is aimed at strengthening the military’s capability to combat terrorism, besides

providing development assistance to the country. He further said, “because we are so heavily depend on

Pakistan as a supply route supporting our efforts in Afghanistan, Coalition Support Funds remain critical to

reimbursing the Pakistanis for their assistance” (Deccan Herald, February 18, 2011, p. 11)

Non-military assistance to Pakistan has increased considerably to Pakistan under the Obama

Administration, which is mainly attributable to the Kerry-Lugar-Berman bill which grants $7.5 billion to

Pakistan in five years beginning 2009 (The Times of India, February 23, 2010). In the year 2011, Obama has

proposed to the Congress to give $1.322 billion to Pakistan (The Times of India, February 23, 2010). But, the

restrictions of Kerry-Lugar-Berman bill, which prohibits fund from being used for nuclear proliferation, to

support terrorist groups, or to pay for attacks in neighboring countries. It also puts a new prominence on the

bottom line, reserving the right to cut off aid if Pakistan fails to crack down on militants. These restrictions

have created a disappointment and a split between the military and the civilian government in Pakistan, which

maintain an uneasy relationship following nearly a decade of military rule under General Musharraf. Military

leaders were equally worried of being sidelined by the increased US emphasis on development and

accountability, claimed the bill threatens Pakistan’s sovereignty. The opposition senators advised complete

rejection of Kerry-Lugar Bill saw it to target the Pakistan’s nuclear arsenals (Ali, 2009). PML (Q) President,

Chaudhry Shujat Hussain viewed that the “Kerry-Lugar Bill meant to plunder the assets of Pakistan”

(Chaudhry, 2009). PML-N leader, Raja Zafarul Haq claimed that most of the sections of the Bill were against

the national interests of Pakistan. He further said “the monitoring of the Pakistan’s army and court will pose a

serious threat to national integrity” (Malik, 2009). The main conclusion drawn in Pakistan was that under

Indian pressure, such conditions were imposed. But, the supporters of the bill termed the restrictions as no more

stern than previous ones, and accused Pakistani military leaders of manufacturing a crisis to undermine the


658

civilian government.

After much hue and cry over Kerry-Lugar Bill, US took a hard stand as the then US Secretary of State

Hillary Clinton forced to comment that “so many people in Pakistan think we are not helping at all and that is

incredibly frustrating to us” (The Nation, October 30, 2009). She further said, “the aid is being given to

Pakistan for stability and economic development and Pakistan could reject it if it wanted so” ( Pak Tribune,

October 29, 2009). John Kerry, the architect of the Bill said, “we should not play to cheap galleries here. If you

don’t want the money, say so. We are not forcing you to take it” (One India News, 2009). Richard Holbrook,

US President’s special envoy for Pakistan and Afghanistan commented that “those who oppose the

Kerry-Lugar Bill are the ones who either oppose the Pakistani government or support the Taliban” (Abraham,

2009). The bitterness of comments further extended as Hillary Clinton on her visit to Pakistan commented that,

Our best information is that Al-Qaeda leadership is somewhere in Pakistan. It is in the interest of Pakistan as well as

our own interest that we capture or kill Al-Qaeda leadership because that will give a very serious blow to terrorist

everywhere. (Syed, 2009)

Trust vs Mistrust

The pattern of aid program to Pakistan clearly shows that the vast majority of US assistance goes to the

Pakistani military establishment. But Pakistan’s tribal region still remains a safe haven for Al Qaeda and

Taliban forces resulting in cross-border attacks on US and coalition troops in Afghanistan. The frequencies of

attacks are increasing day by day. The simple reason behind it was as several American military officials have

already said, that much of the US money hasn’t reached frontline Pakistani units and has instead been diverted

to finance weapons systems designed to counter India, not Al Qaeda or the Taliban. The current situation in

Pakistan represents a difficult challenge. President Barack Obama’s top commander in Afghanistan General

Stanley McChristal had told him that without more troops the United States could lose the war that Obama has

described as the nation’s foremost military priority. He further said “Resources will not win this war, but

under-resourcing could lose it” (CBSnews, 2009). Moreover, Pakistan continued creating activities along the

Indian border to divert India’s concern regarding the diversion of American military aid. The confession of

General Musharraf (rtd.) that “Pakistan had been diverting American military aid to use it against India has

justified the Indian concerns” (The Hindu, September 13, 2009).

These concerns notwithstanding, the extent of US aid to Pakistan and the importance of Pakistan in the US

strategic framework but the problem is, whether this aid advancing towards the goals of regional priority or

objectives. If, the researchers see through the prism of these objectives then they can easily find out that the

intensity of attacks are increasing day by day, Al Qaeda and Taliban are strongly executing their command and

control and have reconstituted their training camps. Moreover, Talibanization is getting momentum all

throughout the Pakistan, as they have been advancing control in the Northwest Frontier Province and the

country is witnessing instability, violence and suicide attacks as a result. The Pakistani establishment has

committed an overwhelming portion of security aid to weaponry, for example, instead of Pakistan spending the

bulk of US assistance to counter-terrorism measures for Pakistani military and Para-military forces, the huge

amount of foreign military financing has been used to purchase of major weapons such as F16 fighters and

other aircrafts, anti-ship and anti-missile systems. In the Year 2006, Gen. Musharraf signed an arms deal with

the US for $3.5 billion, making Pakistan the largest recipient of US arms in the world in that year (Korb, 2007).

It has nothing to take with the counter-terrorism operations but was geared primarily against India.


659

Despite American aid to Pakistan, there is a heavy domestic opposition of US policies. As Secretary of

State, Hillary Clinton clearly pointed out that the two million Pakistanis forced out of their homes by

intensified fighting in and around the Swat Valley and announced $110 million for additional humanitarian aid

(Korb, 2007). This aid is not certainly the remedy of displacement. A survey conduct by the New America

Foundation and Terror Free Tomorrow suggests that in Drone Attacks more than 50% civilian have been killed.

The Obama’s Drone Policy is in heavy criticism and Obama is viewed unfavourably by 83% of Federally

Administered Tribal Area (FATA) residents according to poll (Bergen, Doherty & Ballen, 2010). Public

opinion in Pakistan, specially in FATA more than 87% peoples opposed the American militarism to fight

Al-Qaeda and the Taliban in their region. Nearly 70% of FATA locals favor the Pakistani Army to deal with

the Taliban and Al-Qaeda in the tribal region (Bergen, Doherty & Ballen, 2010). The passion of anger and

disagreement to the American military is running very high. Opinion suggests that the residents of FATA have

the soft corner with Pakistan Army rather than American Forces. Sixty percent justifies suicide attacks against

coalition forces, while only 10% justifies against Pakistani forces (Bergen, Doherty & Ballen, 2010).

The government of Pakistan is also witnessing the heavy opposition of Drone Attacks from other political

parties. The Jung reported that, “all parties had reached consensus by December 28, 2010, about ending the

drone strikes altogether” (Ahmad, 2011). Whether it was Professor Khursheed Ahmad, senior leader of

Jamaat-e-Islami (JI), Haji Adeel, senior leader of the Awami National Party (ANP), spokesman for the Jamiat

Ulema-e-Islam-Fazalur Rahman Group (JUI-F) Maulana Amjad, senior Pakistan Muslim

League-Quaid-e-Azam Group (PML-Q) leader Mushahid Hussain Syed, Pakistan Muslim League-Nawaz

(PML-N) senior leader Pervaiz Rashid or the Pakistan Tehreek-e-Insaf (PTI) chief and cricketer turned

politician Imran Khan, everyone said that they wanted the end of drone strikes, but without much success

(Ahmad, 2011). Imran Khan has also moved to Supreme Court and filed a petition under article 184(3) to

declare the drone attacks as unconstitutional. Under this article, “the apex court can take action to protect the

fundamental rights of citizens” (Ahmad, 2011).

Political analyst like Hassan Askari Rizvi expressed that, 80% of the criticism against the drones comes

from the religious right wing which is directly under attack by the USA which has also led the country’s

anti-India and anti-US sentiments since partition (Ahmad, 2011). Samiullah Khan, PPP’s General Secretary,

Punjab said, “We are not hiding from the people the fact that drone attacks are taking place. We are negotiating

on acquiring the drone technology and taking action ourselves. The drone attacks by the US have prompted

extremism in Pakistan” (Ahmad, 2011). Senior leader of the Awami National Party (ANP), Haji Adeel

expressed, “No one should be allowed to enter the Pakistani border without the consent of the Pakistani

government. May it be Taliban, al-Qaeda, safe heavens for terrorists or US drones, we are against all of them

and very vocal about it” (Ahmad, 2011). Ahsan Iqbal, Information Secretary, PML-N said,

Drone attacks are the boon of the former puppet regimes and the resentment keeps growing. There are reasons behind

misinformation against the US. For one thing, the US aligned itself with Musharraf’s dictatorial regime, prompting the

idea that the US would have thrown Pakistan back into the Stone Age if it wasn’t for him. The US should respect

Pakistan’s sovereignty. The government should be transparent and not offend its 170 million people with such actions

(Ahmad, 2011)

Balancing Indo-Pak Hostility

Due to the US War on Terror and US engagement in the affairs of South Asian theatre played a proactive


660

role in the normalization of deteriorating Pakistan-India relations. It has now become the centre of global

attention in the global media and the central battle ground where the global war was either to be lost or won.

The war on terror has improved the regional stability in the form of mini missing tension between the nuclear

archrivals, India and Pakistan. This has been fully proved during the 2002 militancy standoff. Following the

December 13 attacks on Indian parliament, Mumbai terror attack of 26/11 caused the war hysteria up. There

was an unprecedented mobilization of armed forces on a large scale. The armed forces stood eyeball to eyeball

for several days, on both sides of the borders. Even nuclear threats were exchanged. An outbreak of war was

believed to be certain. Then the American military presence entered as a stabilizing factor. America perceived

that a war between India and Pakistan will certainly threaten, and upset its campaign against terror. Its war on

terror could only be saved by avoiding the outbreak of a regional conflict. So America initiated a whole-hearted

effort to defuse the situation. The tension came down. Those who believe that it was American diplomatic

activism which prevented an outbreak of war and nuclear holocaust believe that the USA’s presence in the

region is a factor for regional peace and stability.

India’s Concern Regarding Aid Diversion

Since Pakistan has turbulent borders with India, it is therefore unavoidable for India to assess and estimate

some of the crucial events and incidents beyond the borders in the larger interest of national interest and peace

in South Asia. India has constantly pointed out that much of military hardware of Pakistan’s military purchase

was never suited to anti-terrorism operations. America has paid more than $200 million to Pakistan for air

defence radar but Pakistan has no threat of air attack. Pakistan is modifying the weapon’s technology that has

nothing to do with counter terrorism. Pentagon has also exposed that even the pouring aid to Pakistan by Bush

after 9/11 to fight Al-Qaeda was used to develop offensive capabilities against India. This was all time high

between 2002-2009 (Dubey, 2009). Pakistan’s search of parity with India in terms of conventional weaponry

with the help of US aid directly effects Indian interests.

India’s relations with the United States is all time high. Pakistan is a strategic ally of US since its creation.

So, the every policy guideline to South Asia and especially for Pakistan is deeply manufactured through the

prism of balancing both the allies. After announcing the $2.29 billion military aid to Pakistan, US had clearly

mentioned that its ties with Islamabad do not come at the expense of India and vice-versa. State Department

spokesman, Crowley said in response to India’s concern regarding aid, “This is a subject (India’s concern about

US military assistance to Pakistan) that comes up in all our discussions with high level Indian officials. It

comes up in all of our discussions with high-level Pakistani officials”. He further said,

We continue to provide the same message to both countries. This is not a zero-sum proposition. Our assistance to

Pakistan does not come at the expense of India, and our relationship with India does not come at the expense of Pakistan.

(The Nation, October 24, 2010)

India’s Defence Minister, A K Antony in his meetings with US Secretary of State Hillary Clinton and

Defence Secretary Robert Gates had expressed his concerns that US military aid to Pakistan normally ends up

being used against India. He clearly mentioned, “We feel that even though the US is giving arms to Pakistan to

fight terrorism, our practical experience is (that) it is always being misused. They are diverting a portion of it

against India” (The Hindu, September 27, 2010).

Kashmir is still a bone of contention between India and Pakistan. Sensitization of this issue has resulted in


661

war and war hysteria several times. Pakistan has sought US intervention in resolving Kashmir issue but US has

refused to intervene in highly sensitive issue and stressed on dialogue by terming it a bilateral issue. On

Kashmir, Crowley said,

We recognize the importance of Kashmir to both India and Pakistan. We absolutely want to see tensions eased and

ultimately a resolution to the situation in Kashmir. We believe needs to come through additional dialogue between

Pakistan and India. We have not been asked by both countries to play a particular role. This is the reason why, for a

number of reasons we continue to encourage further dialogue between India and Pakistan. (Hindustan Times, March 3,

2010)

Crowley described both India and Pakistan as US allies and said his country will continue to encourage

both countries in their efforts to achieve peace and stability in the region (Hindustan Times, March 3, 2010).

In January, 2011, US and Pakistan signed two agreements to provide Pakistan with $66 million for

completion of the Gomal and Satpara dam projects (VOA, 2011). The agreements are a sign of the US

government’s commitment to helping Pakistan improve its infrastructure, said Acting Special Representative

for Afghanistan and Pakistan Frank Ruggiero: “Last year’s devastating floods demonstrated the need for flood

control infrastructure. These two multipurpose dams will control flood waters, provide electricity, and store

water for irrigation and household use for downstream villages” (VOA, 2011). But, the Satpara multipurpose

dam project will be built in the disputed territory, Gilgit, Balistan (Pakistan Occupied Kashmir). It shows a

nuanced shift in US policy on Kashmir. The US stand on Kashmir and aid program may effect and influence

the foreign policy formulation of US and Indian Interests. The United States must ensure that funding given to

Pakistan is utilized for the right purposes. Pakistan’s military must be under the guidance of an outcome-driven

approach based on mutual strategic interests. After-the-fact compensations with failed and limited oversight are

clearly not in American interest.

Pakistan is also deeply concerned about Indian influence in Afghanistan. This influence had been growing

rapidly in the last few years. Pakistan also alleged India regarding support to insurgency in Baluchistan

province and India directly blames Pakistan for terrorism and instability in Jammu and Kashmir. Pakistan had

officially complained about blatant interference in the Balochistan Province to the United States. But, The

United States smartly ignored Pakistan’s pleas as it did not wish to jeopardize its new friendship with India. If

the researchers see from the realistic prism, they find the fundamental difference of the national interest

US-Pakistan vis-à-vis India. This makes the future of relationship very hard and problematic. Pakistan is deeply

concerned with the growing power and status of India. It was also very apprehensive of the new strategic

relationship that the United States had established with India. The United States and India had also signed a

landmark civil nuclear agreement which had given India a new decency as a nuclear power. Now, Pakistan also

wants a similar kind of deal with the United States as given to India. But United States didn’t imply such kind

of agreement, because US is very much concerned about the A. Q. Khan Network and nuclear proliferation.

According to a report in the New York Times on March 26, 2010, it had been alleged that Pakistan had a history

of selling nuclear technology to Iran, North Korea and Libya. It was reported in Dawn on March 27, 2010 that

the United States had asked Pakistan to initiate steps that would “restore the confidence of the international

community in its nuclear program”. Pakistan had agreed to do so. So, this kind of treatment is also creating

mistrust in the minds of Pakistani establishment. It is clear that, more closely the India-America comes; the

more distance and suspicion will emerge in US-Pakistan relations.

Pakistan’s latest shoot in nuclear weapons as estimated 60 to 110 is unlikely to shift the balance of power


662

vis a vis India. But the Indian concern is how Pakistan made it convenient in the period of great economic

hardship? It is clearly the misuse of US aid that helping Pakistan to pose a threat to the neighbors and the

region at large. Pakistan should focus more on the most immediate threats like unstable future and domestic

turmoil. Heavily reliant on foreign aid, Pakistan faces severe economic problems as well as an armed, extremist

insurgency. The tension with India and increased nuclear arsenals are unlikely to help the Pakistani government

solve either of these internal problems or the external environment.

Conclusion

The present scenario suggests that US-Pakistan relations are now very complex. Both are fighting in the

same battlefield and with a common enemy but the way, the war on terror is being fought has very serious

divergence and is fuelling public bitterness against the United States and this in term is badly affecting

Pakistan’s capacity to fight terrorism. Pakistan’s cry for respect of sovereignty and the increasing drone attacks

on civilians pouring anti Americanism which has touched the highest peak since the US-Pakistan relations. In

this situation, vital interests of both the countries could suffer dire consequences unless effective damage

control measures are adopted. The US aid should focus mainly to the root causes of emerging threat of

extremism and should support democratic forces, civil society and socio-economic development. The past

experience of the democratic regimes in Pakistan is not so good. So, there is a strong need to strengthen

democratic institutions.

The traditional association of United States and Pakistani intelligence agencies have also shattered in the

present time that needs to be substantially retrieved and healed. US Secretary of State Hillary Clinton’s recent

observations on Pakistan analyzed reinforcing the emerging trend of US-Pakistan relations skating on thin ice

are the recent public remarks on Pakistan. She is reported to have observed that Pakistan faces major

instabilities at home and that Pakistan should stop fomenting anti-American sentiments and that shocking and

unjustified and will not resolve Pakistan’s problems. More pointedly, Secretary of State Clinton stated that US

relations with Pakistan have plummeted to their lowest point in recent years (Kapila, 2011). In the light of this

statement, one can easily analyze that something is seriously gone wrong in US-Pakistan relations. In the three

“A” theory of Pakistan, the army has been and will remain major force in the stability of Pakistan. Any

condition imposed in this sector could result in frustration. The United States needs to maintain its goodwill in

military to military contacts, even while threatening a withdrawal of some aid from the army if it refuses to give

more priority to counter-terrorism operations.

The United States should also focus on the regional players like China and India and should try to engage

them as much as possible. China also has a very deep influence in the politics of Pakistan. India also wants to

spread her influence in Afghanistan. So, in these circumstances, US should be more careful in assessing these

currents. It is also important to point out that US and Pakistan are allies in global war on terror and on the other

hand Pakistani terror outfits has no hesitation to target Indian Territory. The civil institution and government of

Pakistan are not very effective. The law and order situation in whole Pakistan is worsening. Some part of

military and intelligentsia have the soft corners for Taliban. As a result politico-military developments in

Pakistan with the help of US aid could pose a danger to regional stability.

Pakistan, which has already witnessed the betrayal of United States in the aftermath of Soviet Withdrawal

from Afghanistan, is in no mood of repeating the same chapter. In this war, Pakistan played a very significant

role. It was only Pakistan’s assistance to the Afghan Mujahedeen which had ultimately defeated the Soviet


663

Union in Afghanistan. The United States very conveniently left the region when the war was won. Now the

Pakistani establishment has lots of worries in the mind about US-India strategic partnership, and what it may

mean for them when the war on Al-Qaeda and Taliban will over, United States will no longer need Pakistan.

But, United States had promised not to commit the same mistake again in Afghanistan and had promised not to

abandon the country. The United States had also assured Pakistan that it is now a strategic priority. The United

States Secretary of State Hillary Clinton had noted, in a very recent testimony in the United States Senate, that:

“In Pakistan, our efforts are vital for America’s success in Afghanistan, but also to our own American security.

We have made it a strategic priority to strengthen our partnership with the Pakistani people”. She also said that

the situation had changed considerably since last year and had credited Pakistan for measures against militants

in Swat, South Waziristan, and other parts of the country (Dawn, March 27, 2010). Such type of mistrust is no

more beneficial for the future of global war on terrorism.

Lastly, Pakistan’s weak civilian government, turbulent domestic situation has resulted in the form of

economic hardship; violence between various ethnic sectarian and political groups threatens to escalate. The

Obama administration believe that an increase in US aid to Pakistan can solve the problem. But the situation is

deteriorating day by day. The present scenario suggests that both US and Pakistan should try to regain the

mutual trust and respect the sentiments of each other that still looks difficult. A stable and friendly Pakistan is

the need of the hour not for the US alone but for a region at large. In the wake of withdrawal of the Coalition

Forces from Afghanistan, the chances are so high that Taliban and Al-Qaeda can influence the power structure

in both Pakistan and Afghanistan. In view of this, the exit strategy needs to be carefully examined.

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October 2014, Vol. 2, No. 10, 665-679

Hong Kong Civic Education Policy From 1984 to 2014: An

Historical Comparative Analysis

Hung Chung Fun Steven

Hong Kong Institute of Education, Hong Kong, China

This paper aims to the analysis of civic education policy of the two governments of Hong Kong, the British Colony

before 1997 and the Chinese Special Administrative Region after 1997. Hong Kong people own questionable

identities, neither British citizens nor Chinese subjects. Basically, the decolonization showed that the policy of

domestication was implemented during the transition period of Hong Kong where the government patronized and

empowered the Hong Kong people through enhancing human rights and developing political democratization. After

handing over of sovereignty, the education policy made the contents of civic education more patriotic, cultural

hegemonic and national ideological. The intentions were quite obviously presented in policy documents and

responded in the historical contexts. The historical comparison intends to get the expandable interpretation of the

scenario of education policy in this period of Hong Kong.

Keywords: de-colonization, civic education, historical comparison

Introduction: The Statement of the Problem

If historical factors help to analyze policy proposal, initiation and implementation of civic education in

Hong Kong, comparison can help to analysis the changes before and after the handover of sovereignty from

Britain to China. From 1984 to 2014, these 30 years include the transition period of the British decolonization

and the governing under “one country two systems” formula by the People’s Republic of China. That is the

Chinese post-colonial or, more seriously, the new stage of re-colonization. It is interesting to understand

citizenship building and its education policy adopted by comparing these two kinds of governmental

administration. This policy analysis describes and explains the Hong Kong Government’s preparations and

intentions for their future citizens or masters.

Hong Kong’s Cantonese speaking majority originate from Guangdong province. Many of them fled to

escape from mainland China. Hong Kong can function under the common law framework. Hong Kong people

can never acquire autonomy and they are, no more, the ruled. What the governments intended to educate pupils

always show the way and the trend that the states or officials wanted to govern their subjects or citizens. The

understanding of governmentality describes the intention of policy practice making required citizens through

education.

The textual concerns give the document presentation to be put on understanding. The other contextual

concerns let the civic education policy be laid in historical situation for more plentiful explanation of policy

analysis. This article can help to compare the civic education policy of Hong Kong in the transfer of power.

Hung Chung Fun Steven, Ph.D., Department of Social Sciences, Hong Kong Institute of Education.

DAVID PUBLISHING

D

HONG KONG CIVIC EDUCATION POLICY FROM 1984 TO 2014

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The 30 years of history of policy initiation and implementation reveal the governmental intention which is

hegemonic, ideological and nationalist, sometimes, rational or irrational. If policy reflects the social and

political orientation and re-orientation of Hong Kong citizens, this analysis wants to understand the reality of

the two governments’ educational project of engineering and re-engineering student minds. This study is

related to the understanding of preparation and implementation of “one country, two systems”. The socialist

state allows both communist and capitalist systems to ran in which the society is organized and pupils are

educated.

Concepts of Citizenship and Education of Hong Kong

As Marshall provided his concepts of citizenship that civic education would be followed this basis for the

provision of welfare derives. Civil, political and economic rights are the basic concepts of citizenship and they

are institutionalized to our daily lives. However, the expert commentaries are expandable to more ideas. The

general noticeable concepts of citizenship can be extended to agree with multiculturalism and globalism, and

not to be sexual, gender, cultural, religious and racial discrimination.

If citizenship is merely and simply bounded to the rights and duties of citizens to each other as members of

a political entity and to the government, the two governments are the British Hong Kong and the Special

Administrative Region of the People’s Republic of China. The government of the British should indicate and

carry on its process of decolonization in which case citizenship is patronized and enhanced. The Chinese can

follow this concept as community building of Hong Kong but, on the contrary, the re-colonization process of

citizenship education can be re-organized to more cultural conservative, hegemonic, nationalistic and patriotic.

Identity is the problem of Hong Kong’s governance. We have to explain the dual nature of Hong Kong

identification. Hong Kong’s identity can be localism and Chinese identity can be nationalized. Hong Kong

people can identify themselves as Hongkongers as well as Chinese. The British Hongkongers is not common

but the Chinese Hong Kong is acceptable in Hong Kong historical context. If so, the policy balance of these

dual natures should be noted.

Method: Historical Comparative Analysis

Historical comparison is helpful for expanding insight into diverse social issues. These methods offer such

important insight into perplexing and pertinent social phenomena. Decolonization, rationalization,

nationalization, ideology and patriotism are processes that need to be analyzed in order to explain the dynamics

of Hong Kong’s governance under two types of governments. Civic education policy making is the process that

created it. It generally analyzes common structural and institutional factors shaping our society. As a

consequence, civic educations that affect pupils hold prominent stand points in comparative historical analysis.

Historical comparative methods explore the characteristics and causes of Hong Kong civic education

policy. The researcher classifies three key stages of comparisons in Hong Kong history of civic education

policy implementation. Each stage can represent the important initiation or turning point of the civic education

policy.

The history of the society and the education system is reinforced by changing and transforming

conceptions of the contribution of civic education to the national interest. Two different forms of dual

identifications with regional Hong Kong and Chinese ethnicity are forged among Hong Kong residents. The

related subject contents are expressed in education documents, acts and reports in Hong Kong. Where


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understandings have emerged, they are usually clouded by hegemonic or ideological controversy. The analysis

is going to uncover the real situations. With referencing to research questions and to historical comparative

analysis, the researchers intent to understand and explain what and why civic education to be initiated and

implemented in Hong Kong.

Contents of Study

The civic education policy of Hong Kong underwent continuous changes. It was because that the policy

makers intended to implement their soul engineering projects at different context. In order to have clearer

understanding and interpretation of this issues, the paper extents to a historical comparative analysis. The areas

of study cover with comparison between the transition period from 1984 to June 1997 and the after handover

period from July 1997 to June 2014. Each period has a noticeable stage which contains a document of civic

education policy issue at that moment. The transformation of civic education policy, of course, can be easily

observable.

Initiation of New Civic Education on Political Changes

Two special times were that Hong Kong was introduced political reform with parliamentary elections and

the Sino-Joint declaration was presented in 1984 and the finalized education reform after handing over

re-organized the Basic Education Curriculum in 2001. There were two documents for civic education issue in

1985 and 2002 respectively. These new generated policies indicated that the two governments want to initiate

new projects of civic or citizenship education.

The Curriculum Development Committee of the Hong Kong Education Department issued the guidelines

on civic education in schools in August 1985. There was no consultation process but an official document was

produced under public pressure and criticism. After handing over of Hong Kong’s sovereignty, the new

government embarked on serious education reforms. The Basic Education Curriculum was publicized after

these controversies and debates. One of the series of 15 booklets in the Basic Education Curriculum Guide was

Moral and Civic Education which was issued in 2002. At that moment, education reforms were praised to the

skies. Moral and Civic Education was set as one of the four major educational concerns.

Generally speaking, the curriculum before 1985 in Hong Kong was a-national. Studying China in modern

context was not chosen to be the learning areas of any subject. It was a milestone for civic education in Hong

Kong. The notion should be put on the subject contents of new initiated civic education which were not adopted

previously. Civic education in 1985 showed that modern China was the first time introduced into schooling

curriculum in Hong Kong. More dimensions on Hong Kong studies were introduced. The prominent concepts

such as rights, freedom and responsibilities were emphasized, but these important concepts of citizenship

education did not ever exist in the curriculum of Hong Kong’s schooling. Table 1 shows the details of the

contents introduced in the areas of Hong Kong and China at different levels of school education.

There directly addressed the prominence of national and political education in Hong Kong context. After

the Sino-British Joint Declaration was signed, Hong Kong would be handed over to China and Chinese

elements were the inevitable composition. However, through comparing the suggested contents, the contents of

Hong Kong were more than those of China obviously. Citizenship education was actually initiated into

educational curriculum in Hong Kong in 1985. The subject suggested contents were obviously based on Hong

Kong. The current political issues, especially after the Sino-British Joint Declaration confirmed, were address.


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Moreover, it outlined the basic understanding of China. Citizenship education was given as the relationship

between Hong Kong citizens and the government, their rights and responsibilities. These were the key and

major concerns before the handover.

Table 1

The Contents of Hong Kong and China in Civic Education in the 1985 Guidelines

Hong Kong China

Senior Primary

Basic knowledge of Hong Kong’s physical environment, its people, its historical

and economic development.

The government: a. the function of a government, the work of the Hong Kong

government, the government and the people.

The citizen: rights, freedom and responsibilities.

Senior Primary

A basic understanding of the growth and

development of China, China’s physical

environment and human activities, its

cultures, Hong Kong’s link with china and

the region.

Junior Secondary

Introduction to Hong Kong with basic knowledge of its history, its geographical

setting, its people, its industrial, commercial, financial and cultural development.

How Hong Kong is governed: a brief description of the administration of Hong

Kong, the importance of law and order to community, the government and the

people.

Rights and responsibilities of a citizen: an understanding of certain basic rights,

freedom and responsibilities of a citizen.

Junior Secondary

A basic understanding of the history of

China, its geographical setting and cultural

heritage.

Awareness of China’s recent political and

economic development.

An understanding of Hong Kong’s cultural,

political and economic link with China.

Senior Secondary

The Hong Kong government: functions and policy making, need for rules and

regulations, types of rules in society.

The government and the people: representative system under liberal democratic,

consultation with people, major official channels for the redress of grievances,

informal influences on policy making.

Greater understanding of the rights and responsibilities of a citizen.

Greater understanding of current issues related to the political, economic, social

and cultural development in Hong Kong.

Senior Secondary

Greater understanding of the cultural

heritage of China and its latest economic

developments

Greater understanding of Hong Kong’s link

with China and her role in maintaining

stability and prosperity in Hong Kong

Sixth-form

An analysis of how Hong Kong is governed.

Development of representative government and local administration in Hong Kong

Modes of participation in Hong Kong’s political affairs

Major issues in public policy areas in Hong Kong, e.g. housing, law and order,

education, medical and health, social welfare, transport.

The future of Hong Kong as set out in the Sino-British Joint Declaration.

Sixth-form

Basic knowledge of the government and

politics of the People’s Republic of China.

After the handover, the goals of the school curriculum were re-set. The Curriculum Development Institute

issued the report of China Elements in the School Curriculum: Curriculum Examination Report in 1998. It was

expressed that students should be able to recognize their roles and responsibilities as members in the family, the

society and the nation and show concern for their well-being, and understand their national identity and be

committed to contributing to the nation and society (Curriculum Development Council, 2000, p. 18). The

hidden agenda was that national identity should be put on the first priority in our education system. It was

predictable that, following the handover of sovereignty, civic education should be laid stress on building

nationalism and patriotism.

The issued Moral and Civic Education booklet in 2002 set five priority values and attitudes which were

perseverance, respect for others, responsibility, national identity and commitment. These values were set

without any consultation and assumed to prepare students to meet the challenges of the 21st Century (Education

and Manpower Branch, 2002, p. 2). Of course, the researchers might doubt why such values were helpful for

the challenges. It was said that the values which were fostered and interconnected should help students to

become informed and responsible citizens committed to the well-being of their fellow humans (Education and


669

Manpower Branch 2002, p. 2). However, the researchers could not explain how these values could help

students to become such citizens. They actually adopted nationalist, patriotic and traditional Chinese values and

made these be explainable. The core modern rational values were excluded such as the rule of law, democracy

and human rights education not being included in generating curriculum content for the reform of basic

education system. More actually, the priority of the priorities was national identity. The return of Hong Kong to

China since 1997 called for a deeper understanding of the history and culture of China. The document

expressed that there was a need to strengthen the sense of national identity among students (Education and

Manpower Branch, 2002, p. 3). It was imperative to enhance pupils’ interest in and concern for the

development of China through involving them in different learning experiences and life-wide learning. More

opportunities must be provided for pupils to develop a sense of belonging to China (Education and Manpower

Branch 2002, p. 3). It could be nurtured through developing in students an understanding and appreciation of

the achievements of China (Education and Manpower Branch, 2002, p. 15). The national flag-raising ceremony

were recognized as real life learning experiences at the Tiananmen Square by visiting to the mainland or at the

Golden Bauhinia Square in Hong Kong which could provide the opportunities to develop their nation identity

(Education and Manpower Branch, 2002, p. 16, p. 27, p. 30, p. 34). But it is not to educate, it is only ritualism

or hegemonic to indoctrinate or imperceptible to influence. It is not a rational way of education in order to

nurture our future and responsible citizens. The continuous studies by surveys find that students hate to identify

themselves as Chinese. Ritualism cannot be effectual.

In addition to citizenship education building, a new kind of socialist and collective citizenship might be

required by fostering Hong Kong’s students a national identity which might resemble a pan-Chinese identity, but

Hong Kong’s students still strongly identify themselves as Hongkongers which are proved by many surveys.

Middle Evaluation of Civic Education by Chinese Official Institutions

When the day of the handover came near, the Chinese government organized the Preliminary Working

Committee1 of Preparing the Hong Kong Special Administrative Region in 1995. The organization was obviously

formed for the Chinese government to take over Hong Kong. The Cultural Sub-group2 drafted the basic principle

of civic education for the Hong Kong Special Administrative Region. It showed how the importance of civic

education would be for the future of Hong Kong. Nationalism and patriotism education was undervalued in

Hong Kong. Following the resumption of sovereignty, the Report in 1998 concluded that the major aims of

civic education were to mould pupil to have state national consciousness, social responsibility, respect and

obedience of law, equipped with moral ethic concepts and characters. They pointed out that civic education should

establish social order, settle national people, and nurture state and society required talents (Preliminary Working

Committee of the Preparatory Committee for the Hong Kong Special Administrative Region, 1995, p. 189)

About the implementation of civic education, the committee suggested that the Hong Kong Special

Administrative Region should lay stress on the following contents in the priority order: State concept and

national consciousness; introducing the Basic Law; Chinese history and geography; Chinese cultural traditions

and ethic morality; democratic education; nurturing individual ideal and sentiment; environmental education;

1 The organization consisted of 57 members, of which 30 came from Hong Kong. The chairman was QIAN Qi-chen who served

as Chinese foreign minister. The six vice-chairmen consisted of four Mainland officials and two Hong Kong vice-chairmen were

Fok Ying-tung Henry and Ann Tse-kai. Other Hong Kong members included those were the targets of the united front, such as Li

Kwok-po David, Li Ka-shing, Lo Tak-shing and Tam Wai-chu Maria. 2 The chairman was WU Wai-yung Raymond and he was a member of the Hong Kong Basic law Drafting Committee.


670

and international horizon.

However, it was set prominently that state concept and national consciousness were the first priorities of civic

education for the coming Special Administrative Region. Concepts of the state would be introduced with the

combination of learning Chinese geography and history, sense of belonging and glory as being a Chinese, national

consciousness and social responsibility of the state people, civic rights and obligations, and knowledge of modern

China (Preliminary Working Committee of the Preparatory Committee for the Hong Kong Special Administrative

Region, 1995, p. 195). About the future implementation of civic education in the Hong Kong Special Administrative

Region, it was suggested the mode of making steady progress incrementally [shun syujianjin, 循序漸進]. Taking a

mild mode to nurture state concept and national consciousness could prevent from flourishing moodiness of

narrow minded statism, nationalism and racialism (Preliminary Working Committee of the Preparatory

Committee for the Hong Kong Special Administrative Region, 1995, p. 197). It was not required to give up all

pre-1997 content of civic education. The part of moral and social education could be retained and enhanced

(Preliminary Working Committee of the Preparatory Committee for the Hong Kong Special Administrative

Region, 1995, p. 198). The opinion was nationalistic and patriotic education. The intention of the direction was

to educate Hong Kong citizens to be concerned with human rights and democratic citizenship education.

The State Chairman of the People’s Republic of China, HU Jin-tao, visited Hong Kong for the 10th

Anniversary of the Establishment of the Hong Kong Special Administrative Region in 2007. Accidentally, he

placed the emphasis on national education for the Hong Kong young people. He obviously intervened Hong

Kong internal affairs which was promised by the Sino-British Joint Declaration that Hong Kong could enjoy a

high degree of autonomy except for foreign and defense affairs. After this effect, the Central Policy Unit3 of

the Hong Kong Government formed the Task Group on National Education of the Commission on Strategic

Development in September 2007. One of the terms of references was to propose strategies and plans and to

improve or adjust current directions, policies and measures for guaranteeing the effectiveness of promoting

national education in Hong Kong (The Secretary of the Commission on Strategic Development, 2008a, p. 2).

The head of Central Policy Unit, professor Lau Siukai, acted as the convener of the Task Group, revealing the

prominent importance of this Task Group. Many very important persons acted as non-official members of the

committee, such as, Chan Cho-chak John4, Cheng Hoi-chuenVincent

5, Cheng Kar-shun Henry

6, Cheung

Chi-kong7, Leung Oisie Elsie

8, Shih Wing-ching

9, and Tsang Yok-sing Jasper

10.

3 The Central Policy Unit (CPU) came into being in 1989 and has retained its structure after 1997. Its major function is to provide

advice on policy matters to the Chief Executive (CE), the Chief Secretary for Administration (CS) and the Financial Secretary

(FS). 4 Chan Chochak John was formerly the British Hong Kong government official and he held many key positions including:

Private Secretary to Governor Murray MacLehose, Deputy Secretary, Director of Information services, Deputy chief Secretary,

Secretary for Trade and Industry and Secretary for Education and Manpower. 5 Cheng Hoichuen Vincent was the first Chinese Executive Director of the Hong Kong and Shanghai Banking Corporation

Holdings and the first Chinese Chairman of the Hong Kong and Shanghai Banking Corporation Limited, 6 Cheng Karshun Henry is a Hong Kong entrepreneur and billionaire. He is the elder son of Cheng Yutung and the Chairman of

the New World Development. 7 Chueng Chikong is the executive director of the One Country Two systems Research Institute and non-official member of the

Executive Council. 8 Leung Oisie Elsie was the Secretary for Justice of Hong Kong from 1997 to 2005. She is now the deputy director of the Hong

Kong special Administrative Region’s Basic Law Committee under the Standing Committee of the National People’s Congress of

the People’s Republic of China. 9 Shih Wingching established Centaline Property agency Limited in 1978, which is now one of the largest property agencies in

Hong Kong and china.


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One month later, Donald Tsang, the Chief Executive, expressed his policy speech which was the first time

that it contained the individual national education section. This section had five paragraphs in the whole

document containing only 130 paragraphs. He stated that the government should make every effort to promote

national education (Tsang, 2007, para. 118). With the attachment of great importance in promoting national

education among Hong Kong young people, it could be expected that they could grow to love China and Hong

Kong, aspire to win honor and make contributions for the country, and have a strong sense of pride as nationals

of the People’s Republic of China (Tsang, 2007, para. 118). He noted that the promotion of national education

would be an undertaking of the whole community (Tsang, 2007, para. 119). In schooling, this could be done

through classroom teaching, teacher education, extracurricular activities and exchanges with young people from

the Mainland (Tsang, 2007, para. 119). More weight to the elements of national education in the existing

curricula and the new senior secondary curriculum framework11

would be given. It was to help school pupils

acquire a clearer understanding of the country and stronger sense of national identity (Tsang, 2007, para. 120).

Moreover, the Hong Kong government encouraged more schools to form flag guard teams and to stage more

national flag-raising ceremonies, and subsidize more Mainland study trips and exchange programmes for

youths (Tsang, 2007, para. 120).

The Task Group on National Education of the Commission on Strategic Development conducted the third

meeting on April 14, 2008. The strategy on promoting national education was finalized. The national education

that they defined was focused on the nation and the establishment of education for state concept and

remembrance. Trough national education, it can make each national comply with state law, take care of state

interest and undertake state destiny (The Secretary of the Commission on Strategic Development, 2008b, p. 1).

Their understanding of national identity was expressed by:

National identity is a kind of the process of mass identification, related to how to establish a kind of consciousness of

we-ness of the group belonging to same one country. Speaking in Hong Kong, it means that we are the Chinese and the

each other are close related and fellow citizens. (translated in Chinese, the Secretary of the Commission on Strategic

Development, 2008b, p. 6)

The researchers can only conclude that these two organizations were constituted by the pro-China

governmental officials or elites. The ideas are one-sided domination. Public intellectuals were not included for

the generation or consultation of the knowledge content and aim of civic education. If the researchers can note

that the power and knowledge relationship, the statement is not the expression itself, but the rules which make

an expression discursively meaningful. It is the question of discursive formation. The Moral and Civic

Education Section of the Education Bureau issued the revised version of civic education, and it was to collect a

hundred rivers, enrich young seedlings with moral rain: new revised moral and civic education framework (in

Chinese only, which is 匯聚百川流．德雨育青苗：新修訂德育及公民教育課程架構) in April 2008. The

policy paper did not consult the public. It was only issued as an administrative process. The policy researchers

generally did not take note of this policy. Teachers were made known in March 2009 through conducting a

conference. It suggested that life events exemplars should be used as learning contexts to enable pupils to

realize positive values. Schools should help to enhance pupils’ understanding of China and national identity as

10

Tsang Yoksing Jasper is the second and current President of the Legislative Council of Hong Kong. 11

The new academic structure of the 3-3-4Scheme was adopted for senior secondary education and higher education In Hong

Kong and began staring in 2009 where the British education system of 3-2-2-3 education structure was abolished.


672

the prominent task of Education Bureau to strengthen the promotion of national education.

Unsuccessful Attempts of the Policy Preparation for the Future Citizens

Two polices documents were issued for consultation and finalized as policies on Civic or National

Education in 1996 and 2012 respectively. These two documents were the documents for citizenship education

which was ever existing in the most comprehensive forms. The explanation was in details through different

perspectives and dimensions with the concept of co-centric ideas. The core was the self, and then it extended to

interpersonal, society, nation and global world. However, these did not target to the necessities of our society.

On the contrary, these indicated that two different policies for generating and making contents of knowledge

serving for two different governances. The following is the table to compare their aims of civic or national

education.

Table 2

Comparing the Aims of Education for Civics in 1996 and Nationals in 2012

Aims of Civic Education in 1996 Aims of Moral and National Education in 2012

To enable student to understand how the

individual, as a citizen, relates to the

family, the neighboring community, the

regional community, the national

community and the world, and to develop

in them positive attitudes and values

conducive to the development of a sense

of belonging to China.

Hong Kong and China so that they are

ready to contribute to the betterment of

the society, the state and the world.

To help students understand the

characteristics of Hong Kong society and

importance of democracy, liberty,

equality, human rights and rule of law,

and to employ these concepts in daily life.

To develop in students critical thinking

dispositions and problem-solving skills

that would allow them to analyze social

and political issues objectively and to

arrive at a rational appraisal of these

issues.

Development of moral qualities: to preserve Chinese virtues, including benevolence,

righteousness, courtesy and wisdom; to foster universal values, including peace,

benevolence, justice, freedom, democracy, human rights, responsibility, respect for

others, etc..

Development of a positive and optimistic attitude: to follow the direction of “Know

oneself, Find one’s niche in Hong Kong. Levering on the Mainland, engaging

ourselves globally” and put the desirable qualities into practice; to be willing to care

about one’s family and to serve society; to be will to act in the interests of the country

and people of the world; and to develop a positive and meaningful life attitude.

Self-recognition: to enhance recognition of oneself and understanding of one’s roles,

responsibilities, right and obligations in family, society, the country and the world

Judging in a caring and reasonable manner: to develop the skills of independent and

critical thinking from multiple perspectives, and the ability to discern the meaning and

values embedded in relevant life events in an objective and rational way, and making

caring and reasonable judgement.

Recognition of identity: to build identities in different domains; to care for family,

society, the country and the world; to become informed and responsible family

members, citizens, nationals and global citizens.

Practice: to develop desirable habits of making rational and responsible decisions with

an enthusiastic attitude in various domains, and to be committed to loving out them.

The first observation was that the curriculum adopted diversified mode which our society should accept

diversity and not discriminate the disadvantaged. This communitarian approaches should be generally selected

to develop and strengthen our pupils good sense of belonging of our society. Their contrasts were comparable.

The expectation in the 1996 guideline was to strengthen knowledge of citizenship, human rights, political

democracy, liberty and the rule of law. Such kind of knowledge was classified as international standard of

human beings. On the contrary, the 2012 guideline introduced more traditional, cultural and conservative

Chinese values. This was something like the revival of Confucian classical values which were adopted as

ideological and hegemonic educational strategy for education. Pupils were taught and intended to be more

patriotic, nationalized and identified to be Chinese. These cannot hide the real situations of these policies in

2012 after the handover of 15 years’ sovereignty. The aims of education can be set more high-sounding in a


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dignified manner. That is to say, the documents sounded very pompous and self-congratulatory. We should not

overlook the issues and revisiting the issues in more details required.

As the day came near for the handover of Hong Kong’s sovereignty, Guidelines on Civic Education in

Schools was issued in April 1996. The first sentence of the document was:

Foreword: As Hong Kong prepares to be the Special Administrative Region of the People’s Republic of

China in 1997 and meets the challenges of 21st century, the schools in Hong Kong have the mission to equip

our young people with the attitudes, values, beliefs and competence which help them become contributing

citizens to society, the country and the world.

The differences of ideas are comparable to that of Moral And National Education Curriculum in 2012. At

the Policy Address 2010-2011, Tsang expressed to review the curriculum framework for moral and civic

education and to develop an independent subject “moral and national education” (Tsang, 2010, para. 161). The

original planning wanted this subject to be implemented in the 2013-2014 school year (Tsang 2010, para.161),

not to be 2012. The Hong Kong government issued the document of the Moral and National Education

Curriculum and consulted the public in May 2011. The Moral and National Education Curriculum was

immediately and strongly criticized as the brain-washing education by the public but the officials always denied.

However, it should be observable that the national identity education was put on the first priority on education.

The first sentence of the consultation document was:

Foreword: Cultivating students’ moral and national qualities has always been the main objective of school

education. After the return of Hong Kong to China, promoting national education and increasing students’

understanding of their country and national identity have become the common goals of primary and secondary

schools in Hong Kong.

The slightly changed statement was re-occurred in the curriculum guide recommend for use in schools in

May 2012 which statement was:

Preamble: Cultivating students’ moral and national qualities has always been one of the main objectives of

school education in Hong Kong. Since the return of sovereignty, promoting national education and enhancing

students understanding of their country and national identity have become a common goal of primary and

secondary schools.

It can be concluded that national identity was always put on the most important position. It could be

observable that the curriculum in 1996 set citizenship education prominently and the guideline in 2012 made

national identity be the first priority of teaching national education. Human rights and political education were

further marginalized in school curriculum in 2012. Moreover, it indicated seriously that after handing over the

sovereignty for 15 years, education of national identity was so unsuccessful that mental project of education

should re-state it again and again. The adoption of concepts and values could be compared. Table 3 gave social

and individual concepts and values adopted in 1996.

As a matter of fact, to promote a more political democratization and enhance greater citizen participation

in Hong Kong society in 1996, civic education was adopted to promote democracy, human rights, civil and

universal or global citizenship. On the other hand, recently generated values were set priorities that were listed

in the websites of moral and civic education (see Table 4). The government played a more active role in

creating a unified national identity after the handover. More values could be classified as collectivism. Social

order, collective recognition and national identity were the task to make the required society for the governance

of the Hong Kong Special Administrative Region. The themes were the promotion of traditional Chinese values,


674

the avoidance of confrontation and obeying social orders or public interests, a focus on the obligations and

responsibilities, not on human rights, of individual towards China and the Hong Kong’s society collectively.

Pupils were generally told to be morally correct and to obey societal values.

Table 3

Concepts and Values Recommended by the Guidelines in 1996

Universal Core Concepts and Values: Individual

Sanctity of Life

Truth

Aesthetics

Human dignity

Rationality

Creativity

Courage

Liberty

Affectivity

Individuality

Universal Core Concepts and Values: Social

Equality

Benevolence

Freedom

Common Good

Mutuality

Justice

Betterment of Human Kind

Sustaining Concepts and Values: Individual

Self Reflection

Self Regulation

Self Cultivation

Principled Morality

Well-being

Self Determination

Openness

Sustaining Concepts and Values: Social

Plurality

Due Process of Law

Common will

Patriotism

Tolerance

Equal Opportunities

Culture & civilization Heritage

Human Rights & Responsibilities

Table 4

Priority Values Adopted by Moral and Civic Education Unit of Education Bureau12

Perseverance

National Identity

Democracy

Participation

To be considerate

Love and Care

Optimistic

Confidence

Co-operation

Respect for others

Commitment

Human Rights

Social Justice

Self-discipline

Service

Rationality

Rightfulness

Appreciation

Responsibility

Critical Thinking

Integrity

Sustainability

Simplicity

Positive

Cherish

Creativity

Flexible and adaptable to change

Concepts and values for civic education were adopted which were individualistic and social collective

separately in 1996. The ideas of individualism were suppressed and reduced after 1997. More types of values

were selected to serve for collectivism and social order in 2012.The focus was on strengthening the promotion of

collective social order and homogenized communist values. The other point caused attention was the distinct

Hong Kong local culture which was ever very important and prominent in Hong Kong. The one excellent example

was the Hong Kong cultural industry where there were numerous of products such as songs, films and cartoons.

These were Hong Kong collective memories and indicated localism of Hong Kong identity which was hardly

replaceable or duplicated. So, to understand this policy, the researchers can compare the subject contents further.

The following are the details of comparing Hong Kong studies of two guidelines. The areas of study provided in

1996 were much reduced in 2012 at different stages of schooling on one hand. The Hong Kong based teaching

and learning in 1996 was reduced by education serving for the government on the other hand. Civic society in

Hong Kong was intended to be reduced in size. Localism was disappeared in curriculum knowledge. Hong Kong

12

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studies were hijacked by the contents of study catering the necessities of China’s governance.

About the contents of China studies, these can be classified as knowing China before the handover and

national education after the changing of sovereignty. It can be summarized that the individualistic values

suggested in 1996 against collectivist values in 2013. Civic education should have its historical and institutional

footing. The basic citizenship education should include more discussion on political citizenship, power

relationship between Hong Kong and the People’s Republic of China and the process of power delegation and

empowerment provided by the Basic Law. Schools should deal with politics and education for civil rights and

responsibilities. The researchers should not dichotomize nationalism and colonialism. The following

comparisons were the other areas of China studies in 1996 and 2012 respectively.

Table 5

Comparing Hong Kong’s Contents of the 1996 Civic Education Guideline and the 2012 National Education

Guideline

1996 guidelines 2012 curriculum guideline

Junior Primary

(1) Hong Kong as a SAR of PRC, e.g. HKSAR flag, HKSAR

emblem;

(2) Festivities and customs in Hong Kong;

(3) Contributions of the people who provide public and community

services;

(4) Children’s rights and related ordinances, e.g. UN Convention of

the Rights of the Child.

Key stage 1

(1) Establish a loving and living campus and learn actively;

(2) Respect others and be able to demonstrate appropriate

etiquette on different occasions;

(3) Understand the Basic Law and the spirit of One Country,

Two Systems, respect the regional emblem of Hong Kong

and the HKSAR Establishment Day.

1996 guidelines 2012 guideline

Senior Primary

(1) The Hong Kong society: history, culture, population etc.;

(2) Hong Kong-China relationships: (a) sovereignty; (b) HKSAR and the Basic Law

(3) Rights and responsibilities of Hong Kong people;

(4) The Hong Kong government: (a) structure and organization; (b) functions and roles.

(5) Welfare and services: (a) governmental, e.g. the Urban Council and the Regional

Council; (b) nongovernmental and voluntary agencies, e.g. Hospital Authority, Tung

Wah Groups, Caritas;

(6) Representative government and election.

(7) Communications between the government and the people;

(8) Affiliations and groupings in society;

(9) Law and order;

(10) Current social issues.

Key stage 2

(1) Be willing to take the responsibilities

as a student, serve schoolmates and the

school with a sense of belonging to the

school and establish good

teacher-student relationships;

(2) Speak cautiously, practice

self-discipline and get along well with

others in a rational and respectful manner;

(3) assume responsibilities towards

society, e.g. taking good care of public

property, obeying rules and abiding by

laws


Junior Secondary

(1) The Hong Kong society: history, economy, geography and population;

(2) The Hong Kong citizens: (a) origins and identity; (b) responsibilities and rights; and (c)

Hong Kong spirit;

(3) Development of the political system: (a) sovereignty and legitimacy: sovereignty before

and after 1997, HKSAR and the Basic Law; (b) structure and organization of the

government: the HKSAR legal system, the Hong Kong civil service; (c) checks and balances:

separation of powers, e.g. legislative, executive and judiciary, prevention of power abuse,

e.g. COMAC, ICAC, the mass media etc.; (d) electoral system: the tripartite system:

legislative, urban and region, and district; and (e) communication between the government

and the people: official or unofficial channels;

(4) Means and modes of social and political participation;

(5) Contemporary and current issues;

(6) Issues in relation to a just society: (a) individual rights and responsibilities; (b)

democracy and election; (c) rule of law and justice, d. freedom and limitations; (e) equality

and discrimination; and (f) concepts of charters, e.g. youth charter, patient’s charter.

Key stage 3

(1) Discuss various social issues in

a rational and practical manner and

show concern for the long-term

betterment of Hong Kong;

(2) Learn to cope with peer

pressure from any inappropriate

behavior;

(3) Understand the importance of

the Basic Law in maintaining the

prosperity and stability of Hong

Kong, thereby recognizing the

essence of Rule of Law and

Human Rights as foundation for

the development of Hong Kong.


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Senior Secondary

(1) the Hong Kong society: (a) culture and tradition; and (b) contemporary and current

issues;

(2) Political authority and legitimacy: (a) Hong Kong as British 1842-1997; and (b) Hong

Kong as SAR of PRC from 1997;

(3) Central-local government relationship beyond 1997: one country, two systems;

(4) Constitutional document and legal system: (a) Letters of Patent and the Royal

Instructions; (b) the Basic Law; and (c) the Hong Kong legal system and Common law;

(5) Social and political participation of Hong Kong citizens: (a) awareness of social and

political issues; (b) means and modes of participation; and (c) contributions of public

opinions: the consultation mechanism, others, e.g. demonstration, press and mass media,

etc.;

(6) Elements of a just society, e.g. human rights, democracy, rule of law, freedom, justice,

equality;

(7) Means of realizing a just society: (a) constitution and the legal system: limited

government, protection of human rights and minority rights, e.g. Hong Kong Bill of Rights,

children rights, judiciary and law enforcement; (b) democratic structure: separation of

powers, checks and balances, elections; and (c) freedom of speech.

Key stage 4

(1) Develop an acute sense and

discern the values embedded in

social issues;

(2) Undertake civic responsibilities,

maintain a balance between

individual and public interests by

adopting a macro perspective and be

willing to strive for the betterment of

Hong Kong;

(3) Actively develop and adopt

proper attitudes required for working

in society, such as punctuality,

honesty, sense of responsibility, as

well as those required for

maintaining harmonious

relationships with colleagues.

Source: Curriculum Development Council, 1996; Curriculum Development Council, 2012.

Table 6

Compare Chinese National Elements of the Civic Education Guidelines at Different Stages of Schooling in

1996 and 2012

1996 guidelines 2012 curriculum guide

Junior Primary

(1) Chinese nationhood: e.g.

representative symbols of China:

national anthem, national emblem,

national flag, etc.;

(2) Important cities and places in china;

(3) Chinese festivities and customs;

(4) Children’s life and activities in

china, e.g. Young Pioneers, Children’s

Palace.

Key stage 1

(1) Enhance the sense of belonging towards the country through understanding its

landscape, natural resources and antiquities.

(2) Learn about the country’s contemporary development, and develop a sense of

self-reflection and national identity.

(3) Foster a sense of belonging towards one’s country, ancestral home and place of

residence through tracing traditional Chinese customs and one’s/peers’ native and

ancestral home.

(4) Realize the importance of continuation and inheritance through learning the admire

qualities and virtues of outstanding personalities from various fields in the country.

1996 guidelines 2012 guide

Senior Primary

(1) Chinese nationhood: (a) geography and

population; (b) multi-ethnicity and languages,

(c) culture and art; (d) major historical

figures;

(2) Administrative regional divisions of

China, e.g. provinces, cities, counties, etc.;

(3) Important national festivals of China, e.g.

National day, May 1 Labor Day;

(4) Ways of life of people in china, e.g. rural

and urban ways of life;

(5) current issues of China.

Key stage 2

(1) Develop an awareness of and concern for nature and environmental

conservation through caring about the use of natural resources and environmental

conservation in the country;.

(2) Learn about the close relationship between the country and Hong Kong in

their development, understand the difficulties in the course of collaboration,

explore the solutions, and develop a common sense of belonging;

(3) Capture the essence of Chinese culture, and put the virtues learnt into practice

in daily life;

(4) Acquire a better understanding of the situations of the country from a

historical perspective, experience and process of exploration and advancement,

thereby understanding the directions for improvement, broadening horizons and

affirming national identity.


Junior Secondary

(1) Chinese nationhood: (a) major contemporary historical events

and the founding of PRC; (b) highlights of traditions: origins and

development of Chinese nation, thoughts and religions, e.g.

Confucianism, Taoism and Buddhism, culture and art, major

achievements and inventions;

(2) Major contemporary and current social and political social and

Key stage 3

(1) Understand the country’s efforts and achievements made

in natural resources conservation, reflect on the constraints

and challenges involved, and show concern for the way

forward for the country’s sustainable development;

(2) Show concern for the relationship between the Mainland

and Hong Kong, realize the constraints in the country’s


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political issues in china, e.g. modernization issues, etc.;

(3)The government institutions in China: (a) structure of the state

government; (b) levels of the government;

(4) concepts of government: (a) authority and legitimacy:

sovereignty, the government and the governed, e.g. consent of the

governed, social contract, rights and responsibilities, etc.,

separation and balance of powers, checks and balances; (b)

constitution and the legal system, c. different types of

representative government and electoral system; (d) social and

political participation of public: means and modes of participation,

contribution of public opinions.

development and its directions for improvement through

understanding the government organizations and the

country’s key projects;

(3) Learn to appreciate Chinese literature and art, and

understand the charm and spirit embedded therein to

enhance national qualities;

(4) Understand from a historical perspective the

development of the country and features of multiculturalism,

learn about the present with reference to past experience,

and be committed to taking on one’s responsibilities as a

citizen of the country.


Senior Secondary

(1) Chinese nationhood: (a) ideology; (b) political system;

(c) economic system;

(2) Political authority and legitimacy: (a) Chinese

Constitution; (b) the government institutions in china: the

bureaucracy and the Cadre system; (c) democratic

centralism; (d) State and the Chinese Communist Party:

functions and role of the Party, structure of the Party; and

(e) social and political participation and recruitment:

means and modes of participation, e.g. Chinese People’s

Consultative Conference, communication system;

(3) Chinese citizenship: (a) citizen identity; (b) national

pride, nationalism and patriotism; and (c) responsibilities

and rights;

(4) Concepts of nation and state: (a) political ideologies,

political systems; (b) economic systems; and (c) nation

and state;

(5) Concepts of government: (a) the government

bureaucracy; (b) accountability and redress system; and

(c) public policy making;

(6) concepts of citizenship: (a) rights : individual,

political and economic etc.; and (b) responsibilities:

individual, civic, etc..

Key stage 4

(1) Understand one’s responsibilities for the sustainable development

of the country, and enhance the awareness of protecting natural

resources through exploring the relationship between the use of

resources and development of the country, as well as examining

existing issues, difficulties and solutions;

(2) Understanding the impact on people’s livelihood brought about by

the development of the country in contemporary politics, economy,

diplomatic relations and technology, as well as the exemplification of

values such as democracy, rule of law and human rights so as to

comprehend the close connection between the country and the world

and be willing to strive for the betterment of the country and its

people;

(3) Explore traditional thinking and beliefs that shed light on a

positive lifestyle and enrich the very essence of life, and exemplify the

wisdom and virtues of such thinking and beliefs in contemporary

living;

(4) Examine significant events in Chinese history form a macro

perspective and make comparisons with major world events,

understand, from an objective standpoint, internal hardships and

external challenges encountered in the course of reform and

opening-up, and realize the adversities, struggles, difficulties,

development and accomplishments within.

The discursive processes were similar. More localized contents of Hong Kong were adopted in the 1996

guideline but the local contents were reduced in the 2012 guideline. On the contrary, the contents of China were

much more increased in the 2012 guideline of Moral and National Education. There was taken for granted

understanding of the nature if these kind of traditional Chinese culture and ideological Confucian values were

required for students’ understanding. While the western citizenship education emphasized teaching in the values

guiding the relation of the state and individual, the Hong Kong Special Administrative Region’s government laid

stress on interpersonal, social and moral values. The teaching was relied on education with loyalty to the People’s

Republic of China. The sense of national identity was based upon a sense of traditional culture, Confucian

morality and ideological values which were classified as correct attitude and moral responsibilities.

Even with the differences of these two documents in many areas, the outcome of these two documents was

the same. The 1996 civic education guideline was ignored by the coming Special Administrative Region’s

government. The established government after 1997 preformed a series of education reforms and followed with

the revision of basic education curriculum, so that, the old curriculum was forgotten and initiated new themes of

education for national identity and patriotic education. Moral and national education originally was the second

Chief Executive’s last education. After finished all official procedure and ready for implementation, it caused our

society protesting against its implementation. As the third Chief Executive carried on his new term of governance,


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a series of political crisis occurred and the curriculum had no choice but shelved on 8 October 2012.

Conclusion

Hong Kong has undergone momentous events and changes during this period of 30 years. In accordance with

the One Country, two systems formula agreed, the socialist system would not be practiced in Hong Kong and

Hong Kong could kept on its capitalist system operating. After the transfer of power to China, Hong Kong faced a

serious of political problems. Comparatively speaking, the scenario was differently appeared before and after the

handover. The political conflicts were accelerated with the discontents of implementation of “one country, two

systems” policy in Hong Kong. It was questionable how the government is ran and that it can maintain high

degree of autonomy. As the intervention of local governance is increased by the communist government,

people doubt whether Hong Kong can retain its political, economic, social and judicial systems and unique way

of life. The freedom of assembly is restricted by the Public Order Ordinance and covert surveillance is the other

concern. The tensions are increased by the more radical democratization and social movement.

To an obviously description of introducing citizenship education in Hong Kong during this 30 years, the

processes of decolonization and re-colonization are comparable and noticeable. In the political transition period

of Hong Kong, the decolonizing strategy was adopted which the power was kept at the authorities’ hand until

the last moment. The patronizing and empowering policy was given to Hong Kong people with the so called

limited or handicapped political democratization and this political system was not accepted by the Chinese

authority and banned. After the handover of sovereignty, the re-colonization process was not taken immediately

and it was obviously radicalized recently. However, any intentions of moulding Hong Kong citizens were not

successful. The society of Hong Kong did not obey the policy’s intention but politicalized institutions activated

people with more in depth participation in politics. The governance was nothing but more challenged.

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October 2014, Vol. 2, No. 10, 680-690

A Summary of the Developments Regarding the Economic

Regime Implemented in Developed and Developing Countries

Özlen Hiç Birol

Istanbul University, Istanbul, Turkey

Since the developments regarding the economic regime in developed countries follow a different path as opposed to

those in developing countries, in this article, these two groups of countries will be examined separately. Priority

will be given to investigate the economic regime in developed countries due to historical and theoretical reasons.

Today, both in developed and developing countries the economic activities basically are taken up by the private

sector, nevertheless the government contributes to these activities through intervention, guidance, protectionism,

and investment. Still the level of government intervention, protection and public investments in developed countries

appears to be at the minimum. The role of government in developing countries, however, seems to be more

significant. The gravity of the government’s role depends on the degree of development for the countries concerned.

In the countries where the level of development is low, the role of government increases, in other words, the

improvement in development decreases the role government.

Keywords: economic regime, developed and developing countries, government intervention

Outlines of the Economic Regime

What is meant by the economic regime or the economic system is to identify whether fundamental

economic and social activities such as production, allocation of resources, and distribution of income are

conducted by the government or the private sector and to what extent. One of the major subjects of the

economic regime has to do with the issues of foreign trade and economic relations, and the existence of market

economy or government restrictions and protectionism.

As it is well understood by the definition given above, there are two extremes in this topic. First one

requires that all economic and social activities are conducted by the private sector through price and market

mechanism and profit maximization principle based on the free interaction. In this economic regime, private

ownership is essential. Considering their own interests, the owners of land and capital decide which goods to

produce and how much to produce, which type of technologies they will use, and how much labor they will

employ according to the market conditions, supply and demand, and prices and wages. It is claimed that in the

end, the optimal point, in other words, full employment equilibrium and at the same time, balance of payments

are reached automatically. Under these circumstances, the government should only carry on its classical

functions such as external and internal security, the judiciary and health and education. Although this economic

regime, first introduced in the 18th century, is called the “liberal economic regime” as a result of the inspiration

from the Marxist publications, it has come to be named as “capitalism”.

Özlen Hiç Birol, associate professor, Economics in English Department, Istanbul University.

DAVID PUBLISHING

D

A SUMMARY OF THE DEVELOPMENTS REGARDING THE ECONOMIC REGIME

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The second extreme or the opposite end of the spectrum would refer to all economic and social activities

that are carried out by government. K. Marx and Marxists call this economic system as “socialism”, but the

term generally used and accepted is “communism”. In the communist system, the ownership of the land and

capital which are the main factors of production is in the hands of the government. The government conducts

all economic and social activities by means of central planning.

At this stage, it is necessary to touch upon the interaction between these different economic regimes with

the political regime. The political regime which is commensurate with the liberal economic regime seems to be

democracy which upholds individual freedom up to the maximum level. Although in autocracies, private sector

also plays an important role in economic activities as it was the case with Hitler and Nationalist Socialism,

Mussolini and Fascism, the private sector has to be compliant with government’s restraints and directions.

Similarly, in the countries where democratic regime is not fully implemented, there again private sector is

subjected to various pressures coming from the government. Moreover, the communist regime essentially

emerged as a dictatorship regime; government ownership and central planning which government conducting

all economic and social activities cannot exist side by side with any multi-party system or true “democratic”

political system.

At the very outset it should be stated that, these two extreme regimes are not practically enforced. The

implementation of private sector conducting all economic activities had began in the developed countries, yet

since they had caused various problems government started to take part in many economic and social activities

by means of macroeconomic and social interventions, and government aids. At present this economic regime is

identified as “mixed economy” in many standard economics books. Here the main point is to emphasize the

existence of both the private and the public sector together. Still the term of “mixed economy” would not give

away the fact whether the role of government or private enterprise is more important, and it can sometimes

even be misleading. That is why both international economic institutions and economics literature mostly make

use of the term of “market economy”.

The alternative to it as a second extreme or the opposite end of the spectrum which is government

conducting all activities disappeared in practice since the collapse of the Union of Soviet Socialist Republics

(USSR) and China’s transformation into a mixed economy with private enterprise. All these developments will

be dealt more thoroughly in the following sections.

Evolution of the Economic Regime in the Developed Countries

The Birth of Liberal Economic Regime

Before the advent of the science of economics, throughout the 16th-18th centuries, European countries, in

other words, the developed countries at that time, implemented a very heavy interventionist and protectionist

economic regime which was dubbed by Adam Smith as “Mercantilism”. In Mercantilism each county was

cutting down on its imports as much as possible whereas promoting its exports. But these countries could not

issue the gold which was entering the country as the result of their foreign trade surpluses into the market as

money; the gold was accumulating in the vaults of the Central Bank. The countries believed that this was the

only way their countries’ wealth would increase. Eventually, Mercantilism was restraining the volume of

foreign trade among developed countries on one hand, and on the other hand it was reducing their rate of

growth. Additionally, Mercantilism led these countries to colonialism (imperialism). The rational behind

possessing a colony was to have cheap raw material and to be able to sell their goods at high prices.


682

However, the “industrial revolution” brought about significant changes in these countries. With the

invention of steam engine, boat and train transportation expanded to a great extent, factories emerged as a result

of mechanization of the weaving looms. According to Arnold Toynbee, the industrial revolution evolved

through 1760-1840; first started in England and then it spread throughout other European countries. The

industrial revolution created rather a large group of entrepreneurs. The most significant of all is the fact that

these entrepreneurs started to realize that heavy interventionism and protectionism of the government, in fact,

were restraining their economic activities and decreasing their profits. In his work written in 1776, Adam Smith

identified this important development. When he was establishing the science of economics, he claimed that

through the liberal economic system he developed, the government taking off his hands from all the economic

activities would result in the most optimal economic and social outcome for the whole society. Adam Smith

assumes that in all markets including the labor market, perfect competition prevails. In an economy under these

conditions, the “invisible hand”, that is the price mechanism, will solve all economic problems at an optimum

point for the whole society. Full employment equilibrium will be reached automatically, and the balance of

payments will restore itself so that the trade balance will be reached automatically via the automatic gold

standard theorem (Hiç, 1994). In this case, any intervention or protection coming from government would

disrupt the equilibrium, and the welfare of the society would decrease. In perfectly competitive markets, the

profits of the firms would fall down to under their “normal” levels. However, if monopolies arise, the

government should abolish the monopoly. The government should not intervene on wages. However, if labor

union (labor monopoly) emerges, the government should intervene again; the monopolist rises the wage of the

unions would prevent the economy from reaching the full employment equilibrium automatically. Free foreign

trade based on Adam Smith’s absolute advantage theory has gained validity and universality through David

Ricardo’s (1817) comparative advantage theory; this theory is still valid in our times.

The classical model based on Adam Smith developed further by the following classical economist Alfred

Marshall in 1890 (Hiç, 1994; Paya, 1997; Ackley, 1961; Branson, 1989). In this article, though, there is no need

to go into the details of the classical system, as for a collective information about classical economists (Hiç,

1974, pp. 1-9).

We can safely assume Adam Smith as the starting point of the science of economics and the

implementation of economic policies based on this science. As mentioned before, Smith’s system is called

“liberal economic regime” or laissez-faire. The very same economic regime had been named by Marx and

Marxist writers as “capitalism” or “wild capitalism”.

In practice, the implementation of “Laissez-faire” has caused two main problems. Firstly, through its

implementation in the early years, the conditions of the workers got worsened, that is the “labor problem” or

“social problem”. Secondly, economies did not grow at the full employment equilibrium, on the contrary, there

had been continuous cyclical fluctuations, and the problem of unemployment in the depression period remained

unsolved.

The Birth of the Communist System

In 1848, Karl Marx, with F.G. Engels introduced the second extreme regime with their work the

“Communist Manifesto”. During the first period these serious labor problems and cyclical fluctuations,

depression and unemployment were encountered by the European countries. Marx, later on, developed his

thoughts in Das Kapital (1867, Vol. 1; 1885, Vol. 2; 1884, Vol. 3 after his death).


683

According to Marx, the capitalist system was dynamic but it would give rise to exploitation of workers,

monopolies and increased poverty of the workers; the business cycles stem from the nature of the capitalist

system, and they are inevitable. Marx argued that the governments in the capitalist system had become the

powns (true owners) of the capitalists and could not prevent this doom; on the contrary, the problem will

become more serious. In fact, he derided all efforts such as establishing a social security system or

wage-legislation. Marx also argued against the religion thought which was there only to calm down and make

the workers accept their poor plight.

Marx prophesized that the capitalist system would eventually be destroyed after a severe depression by a

“bloody” revolution of workers who had nothing to lose but their chains. After capitalism is destroyed, Marx

noted that the production of factors would be owned by the government or the community, free enterprise

system would stop and the government would take up all economic activities including investment and

production and would implement central planning. According to Marx, in such a system, exploitation of

workers and business cycles would be eliminated, and we should have a prosperity, equality, true democracy

and full-employment.

The Communist Manifesto had been adopted by all labor unions of the European countries, especially by

the German labor unions. However, the de facto developments had taken place very differently from Marx’s

arguments.

De Facto Developments, Evolution of Laissez-faire or Liberal System into the Market

Economy

Contrary to Marx’s arguments, the governments of developed countries did not stay indifferent to

problems of workers. Affected by the views of intellectuals on one hand and the voting potential of the workers

in democracies on the other hand, as well as for humane reasons, almost all governments prioritized the issue of

betterment of the conditions of the workers. In these early periods, the workers were given the fundamental

rights such as prevention of child labor, limits of the working hours, provision of work safety by regulating

working conditions, determination of the minimum wage. Even one more step further, the social security

system was institutionalized and at the same time, the labor unions were granted the right to go on strike, the

employer was given the right for lockout as opposed to the right to go on strike. By doing this, social objectives

were first introduced in the liberal economic regime (laissez-faire) as public policy for the first time, meaning

“rightist” standpoint heading towards “center-right”. Thus, the conditions of the workers had started getting

better.

The business cycles, however, could not be prevented until the Great Depression of 1929-1934. After the

Great Depression, Keynes introduced his macroeconomic system through his work (1936) showing that the

automatic full-employment equilibrium in the classical system was not a true assumption and that the economy

will settle at a less-than-full-employment equilibrium if the government does not increase the level of aggregate

demand. According to Keynes’ macroeconomic system, in order to ensure the full-employment equilibrium and

to prevent unemployment, the total expenditures should be increased up to the level which will bring about full

employment; so the government would implement monetary policy (money, credit, interest rate) and fiscal

policy (government expenditures, taxes). The central banks in charge of determining the amount of money and

credit as well the interest rates, later on, have been made independent from governments; obviously, it is always

possible for the central bank to consult with the government. The same macro policies would be implemented


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in the opposite direction to prevent inflationist periods (Hiç, 1994).

Keynes’ ideas and policy recommendations were embraced by all European countries and implemented

during the World War II (to decrease inflation) and after the war (to prevent the business cycles). The

government interventions in the economy on a macro level (through monetary and fiscal policies) to avoid

cyclical fluctuations and to ensure a full-employment has become an inseparable part of the economic regime.

After the World War II (1939-1945), the world had split into two parts as the Western World and the

Communist Bloc. Since the European governments made again use of trade restrictions and protectionism

before the World War I (1914-1915), in order to prevent this tendency, the liberalization of the free foreign

trade was initialized through GATT (General Agreement on Tariffs and Trade) signed in 1947. The World

Bank established in 1944 (with its first period name and function, International Bank for Reconstruction and

Development (IBRD)) as well as the IMF provided the implementation of the market economy in the Western

World including the developing countries. Instead of liberal economy or laissez-faire, the economic regime

comprising of social and Keynesian macroeconomic interventions has started to be called as “market

economy”.

In the 1970s, stagflation aroused as a result of the increase in oil prices by the Organization of Petroleum

Exporting Countries (OPEC), consequently, conservatism in the general public in the US and in Europe

increased, and the views against the Keynesian system, namely, Monetarism and Neo-Classical School became

widespread. Nevertheless, the implementation of these policies (especially during R. Reagan in the United

States through 1980-1988 and M. Thatcher in Britain through 1979-1988) did not bring about positive results,

and on the contrary, unemployment increased. Upon this development, Keynesian macroeconomic system was

inclined in the academic circles in the 1980s. Alongside with the main Keynesian macroeconomic system,

Post-Keynesian and New-Keynesian schools gained some momentum. The 1990s had seen the return to

Keynesian macroeconomic policy implementations (Birol, 2001).

The global financial crisis and recession started in September 2008 in the United States, then spread to the

whole world with serious dimensions (Hiç, 2010a), and resulted in very important outcomes in terms of

macroeconomic policies and the market economy. Firstly, especially Reagan in the United States and Thatcher

in Britain decreased the size of the government control over the financial sector, and this decrease in oversight

was an important factor in the break out of the financial crisis. When the crisis arose, the financial sector was

put under severe government control. Thus, the control of the financial sector was accepted as a requirement of

the market economy; secondly, alongside with the financial aid by government against the global crisis,

intensive Keynesian macroeconomic policies such as decreasing the interest rates (monetary policy), changes in

public investment programs and taxing system (fiscal policy) were implemented. Thus, the requirement for

Keynesian macroeconomic policy implementation was confirmed; and thirdly, international cooperation was

sought through G-20 instead of G-7, nevertheless, in the essence, market economy and globalization process

which started in the 1990s were not abandoned (Hiç, 2010a).

The fundamental element in market economy is the private sector; investment and production are

delivered by private enterprise. Government, though, invests only in social and productive infra-structure fields;

private investment is also allowed in these same areas. The sectorial and regional distribution of income is

merely intervened on an exceptional basis. Government interventions are made on the grounds of Keynesian

recommendations as well as social objectives and they are limited only for those areas. Foreign trade is

liberalized, restrictions on quotas are eliminated, and customs duties are at their minimum levels. The trade


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balance is reached by the exchange rates determined in foreign exchange market. Beside the free foreign trade,

the entry of foreign private capital is also free. In the process of globalization, international flow of the financial

funds plays the most significant role.

The market economy with its guidelines given above is being implemented in the freest fashion in the

countries such as United States, Britain, Canada, and Germany. Moreover, in France, government control is

traditionally and relatively more intense.

Heading Towards Social Democracy in Developed Countries

Marx’s Communist Manifesto of 1848 had been published by the German labor unions, and especially in

Germany, labor unions in all European countries embraced communism. Yet, the labor unions noticed the fact

that the governments were dealing with social issues and the conditions of workers were getting better. They

also realized that they played an efficient role in these improvements, and eventually they moved away from

communism and headed towards democratic socialism or, in short, towards socialism.

When the Marxist-Leninist communist revolution broken out in Russia in 1917/1918, the majority of the

labor unions in the European countries left communism completely adopting democratic left movement. Only

the minority groups had to be faithful to the communist system, and they supported communist parties.

Following the communist revolution, the USSR founded “Comintern” (an international association of

communist parties) in 1919, however, this organization was abolished in 1942. After the World War II, the

USSR established Cominform (Communist Information Bureau), and this organization was also disbanded in

1956.

After the World War II, the democratic leftist parties in Europe came together and founded the “Socialist

International” in 1951. The Socialist International accepted democracy and market economy as their principle.

Within this framework, the promotion of democracy, human rights and equal opportunities were targeted and

acknowledged. The Socialist International supported NATO, opposed the USSR and was pro-disarmament. The

British Labor Party, the French Socialist Party and the German Democratic Party took part in the Socialist

International as democratic leftist parties.

The development in the field of social policy starting from the World War II until today has improved

relatively compared to the past. Those improvements including minority rights, women’s rights, freedom of the

media, freedom of justice, unemployment insurance, health services and tax system taking into account the

income distribution are among the fields where social democrats succeeded.

In relatively recent times, the democratic leftist parties headed towards the center-left. The British Labor

Party and Tony Blair were the pioneers in this inclination. Today, the conditions of the workers in Europe and

certainly in the United States have improved; many of them own their houses and cars, and they go to different

countries on holiday.

The fundamental reason for the democracy functioning relatively well in the European countries seems to

be the high level of education and the long standing democracy experience. As a result of this fact, the

central-right and center-left (social democrat) parties share the majority of the votes whereas the liberals stand

in between and in the middle. Both communist parties and anti-workers, racist, radical rightist parties generally

compose the minority. Moreover, the voters may vote differently depending on the time and conditions. In this

way, the central-left presents a powerful alternative, and in many occasions, come into power and govern

competently. The fact that the general principle of the central-right and the central-left happens to be


686

democracy and the market economy plays an essential role in this outcome, because the difference between

these two parties does not lie in the economic or political regime change, rather in their priorities and focus on

the social targets. It should be kept in mind, however, that the economic growth and the employment as the

social objectives are their common and most important targets that they seek to accomplish.

The Expansion and the Collapse of Communism

According to Marx, to bring about a revolution by the working class and the establishment of socialism

(communism) would only be happening in the “mature” industrialized countries, like in England and in

Germany. Yet, his expectation never materialized. Later on, the Marxist writers tried to explain this delay. For

instance, Rosa Luxemburg (1912) claimed that European countries turned to imperialism, and exploiting the

colonies alleviated temporarily the exploitation of the workers (Hiç, 1974, pp. 44-79).

Contrary to Marx’s assumptions, in Tsarist Russia which was relatively less developed in terms of

industrialization compared to the European countries at that time, in 1917 a minor militant group, but not the

working class, staged a communist revolution taking advantage of the economic and political gap created by

the World War II; and thus, Lenin established communism (bolshevism). The second wave of communism had

been created, again not as a result of the revolution by the working class, but as an outcome of 1945 Yalta

Conference attended by Churchill, Roosevelt and Stalin right after the World War II. In the conference,

Northeastern and Balkan countries were left under the influence of the USSR, and eventually the USSR had

brought communist dictatorship to these countries. The third important wave was that China is becoming a

communist country. After a long standing struggle with chiang kai-shek and Japan, Mao Zedong founded

People’s Republic of China in 1949. Additionally, after serious internal and external problems and wars, North

Korea, Cuba and two Indochina countries Vietnam and Laos chose the communist regime.

After the World War II, the USSR prioritized to bring communism to the developing countries as part of

its expansionist policy, making use of her finances and propaganda towards this goal. Stalin, most probably,

saw the fact that, virtually, there was no likelihood for the expansion of communism in the developed Western

countries. Developing countries, though, were not yet industrialized, and many of them had a feudal structure.

There were new departments established in universities to study and research on how these countries could

become communist step by step. As a matter of fact, Şevket Süreyya Aydemir, the leader of cadre movement

during Atatürk period, had studied this subject at Moscow University. This propaganda of the USSR, in general,

had not been successful, and no country had chosen communism just because of such propagandas. On the

other hand, the NEP (The New Economic Policy) implemented during Stalin era, based on the closed economy,

import-substitution, development strategy relying on public investments and central planning created an

opinion that these elements were the reasons why the USSR achieved a very high growth rate; hence the NEP

was taken as an example by many developing countries. Essentially, although the low level of development in

these countries could not be compared to the one in the USSR, these countries generally required an economic

regime featuring these strategies. Following this perspective, in India, even a Marxist model (mahalanobis

model) was put into practice; nevertheless, since it failed, it was abolished in a year’s time.

In time, it was realized that the central planning depending solely on public ownership and public

enterprise brings about a restriction on the growth rate and technological progress, and public enterprise lacks

the dynamism of that of the private enterprise. Eventually, the Soviet system, namely the communism, let alone

to provide prosperity for the workers, it transformed into an oppression and police state. The communist regime


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caused setback to the development and industrialization of Russia and the countries part of the USSR states.

The burden of the countries within the USSR on the Russian budget accompanied by the intensive military

spending to compete with the United States incurred serious economic problems.

In the years when the communications facilities were limited, the Soviet propaganda was emphasizing

freely that the conditions of the workers in Europe were very bad. However, in the following years, as the

communications technologies have improved and the difficulty of restricting communications has become a

reality, the people in Russia and in other member countries realized that the welfare of the working class in the

European countries were much higher contrary what the propaganda was asserting; and that gave rise to

discontent. In the end, let alone the claims of the USSR and Krushchev to excel over the United States, even the

glasnost efforts of Gorbachev did not prove fruitful. In 1990, the Berlin wall fell, and the East Germany broke

its ties with Russia and acceded to the West Germany. In 1991 the USSR disintegrated and communism

collapsed. Russia and all the now independent countries have chosen democracy and the market economy.

Majority of the Northeastern European and Balkan countries have been accepted as a member of the EU

(Karluk, 2007). The others, though, have established the Commonwealth of Independent States with Russia,

and all of them have forsaken communism. Both in Russia and in these countries, problems in the application

of democracy and market economy pose a distinct challenge, yet none of them seem to be likely to return again

to communism.

With the collapse of the USSR, there are only five communist countries left in the world: China, Cuba,

North Korea, Vietnam, and Laos. However, a very significant development in China did occur though. After

the death of Mao in 1976 and during the 80s, under the guidance of DENG Xiao-ping, rather than following

merely the doctrine, China opted for pragmatic economic policy. Being accepted as a member of the World

Trade Organization in 2001, Chinese economic policy not only encouraged the private enterprise but started to

encourage foreign private investment flow radically as well. At the same time, with this economic strategy

based on the foreign private capital, China has occupied an important place in the globalization process of the

90s. Eventually, with its very high growth rate secured for a long time, in terms of the level of gross national

product, she has reached the second position just right after the United States; but the per capita income level is

still lagging behind. Today, what China implements as an economic regime is not a central planning which is

peculiar to the communist system; the new regime which is open the external world could be considered as a

mixed economy model based on encouragement of the private enterprise and private foreign capital. Thus, in

practice, there are only four countries left that implement the actual central planning, and therefore they can be

called communist countries: Cuba, North Korea, Vietnam and Laos. Cuba and Vietnam could leave

communism if appropriate external and domestic opportunities arise, and eventually they may forsake the

central planning in terms of economic regime, despite the fact that they may maintain their dictatorship

structure. In short, from the point of the economic regime, communism and central planning which represent

the second extreme have been dwarfed with no possibility of revival, getting close to the zero point. On the

other hand, global economic and political problems are still handful, and new challenges are in the waiting.

Evolution of the Economic Regime in the Developing Countries

As to the problem of development and economic regime in the developing countries, this issue could be

traced back to the aftermath of the World War II. The IMF and the World Bank set up after of the war had

advocated the market economy as the economic regime for the developing countries in the Western world.


688

Nevertheless, in the early stages of their development process, in the developing countries there were not

enough private enterprises and private investment, and generally speaking, this led to very heavy

interventionism, protectionism and public investment based, closed and import-substituted industrialization; the

governments intervening the sectorial and regional distribution of income. In fact, the great majority of the

economists and economic advisors of the developed countries during those years, actually advocated

government interventionism and public investments due to lack of competitiveness in the markets of this

countries and the existing price mechanism’s not being a good indicator in terms of their productivity (Hiç,

2001; Toye, 1993).

As their development progressed, the intensity of the public investments, government interventions and

protectionism has decreased gradually as a result of this development. Therefore, developing countries have

proceeded in the opposite direction compared to the developed countries. Developed countries had started with

laissez-faire, and then, they allowed government interventions to a certain degree. Developing countries,

though, have started with statism, after the private sector and the market economy expanded over time, the role

of the government diminished; meaning that the developing countries also headed for the market economy;

however, they cannot be considered implementing the market economy yet. On the other hand, for these

developing countries we can safely state that they prioritize the encouragement of the private enterprise and

foreign private capital, and they are open to outward-oriented industrialization, and implement a mixed

economic regime with a strong private sector.

As their development progressed, the intensity of the public investments, government interventions and

protectionism has decreased gradually as a result of this development. Therefore, developing countries have

proceeded in the opposite direction compared to the developed countries. Developed countries had started with

laissez-faire, and then, they allowed government interventions to a certain degree. Developing countries,

though, have started with statism, after the private sector and the market economy expanded over time, the role

of the government diminished; meaning that the developing countries also headed for the market economy;

however, they cannot be considered implementing the market economy yet. On the other hand, for these

developing countries we can safely state that they prioritize the encouragement of the private enterprise and

foreign private capital, and they are open to outward-oriented industrialization, and implement a mixed

economic regime with a strong private sector.

In the first stages of their development, developing countries used to employ a closed economy and fixed

exchange rate system. However, the governments were increasing their expenditures in order to raise the

growth rate and to address the social issues; the necessary finances were provided by the central bank which

was not independent from the government. This rise in inflation caused by the increase in the volume of money

because the exchange rates were fixed was giving rise to an increase in the volume of imports and decrease in

the volume of exports, even though they were trying to restrict imports via high rates of customs and import

quotas and encourage exports via export incentives. Eventually, the deficits in their balance of payments were

forcing these countries to apply to the IMF. On the other hand, the IMF was stipulating devaluation and

stability measures, namely, to eliminate their budget deficits, and additionally, instead of public investments, to

encourage the private sector and the flow of foreign private capital. The developing country complied with

these recommendations in accordance with the stand-by agreement, after a while, was again pursuing the wrong

development strategies, and eventually it had to end up applying to the IMF one more time.

From the very outset, as an exception, Hong Kong, Singapore, Taiwan and South Korea succeeded


689

implementing a development strategy based on the open economy, encouragement of private sector and foreign

private capital flow and as export-oriented industrialization. Still, these countries had different traits compared

to other developing countries. On the one hand, Hong Kong, for instance, was an international trade center and

Singapore was an international finance center, they were both city-states. Taiwan and South Korea on the other

hand, were appropriate places in terms of political objectives and from the economic point of view, thus, they

benefited greatly from the flow of intensive American capital. American companies have been importing goods

that they manufactured in Taiwan and South Korea at very low prices. None of the other developing and newly

industrializing country, including Turkey, was never subject to such intense foreign capital flow to this extent.

Nevertheless, the economic regime implemented in these countries cannot be defined as a pure “market

economy” because of the practice of intensive government interventions and protectionism (Toye, 1993).

In the 1970s, many development economists draw the attention to the shortcomings of the closed economy

implemented generally in the developing countries, and they advocated development strategies based on open

economy and export-oriented industrialization (Hiç, 2001; Toye, 1993).

In fact, many developing countries which were applying the closed economy model were increasing their

public investments and consumption expenditures; they could not collect taxes, eventually ending up with high

rates inflation. In some Latin American countries the inflation rate reached over 1000%. Due to the fixed

exchange policy, the demand for imports was increasing while the exports were falling, and despite of the

IMF’s aid, the deficit in the balance of payments was reducing the growth rate for a long time, resulting in

economic frustration in terms of growth and social welfare. Many governments of developing countries that

became aware of the situation tried to maintain the same principles even after the “stand-by” agreements with

the IMF throughout the 1970s. That is to say, they tried to minimize the budget deficit and encourage the

private sector and foreign capital flow, and they returned to the market exchange rate system by forsaking the

fixed exchange rate system. Since the market exchange rate system will enable the balance of payments

equilibrium, it facilitated the liberalization of imports. Moreover, because the existing state economic

enterprises were not profitable and productive, privatization programs were carried out within the framework of

the IMF’s recommendations. Following a series of unsuccessful and inadequate devaluations in the 1970s,

Turkey, through 24 January austerity measures, has accomplished a very successful economic policy change in

this direction (Hiç, 1980; 2008, pp. 82-83). After 1983, serious economic measures were taken in many areas

including the implementation of open economy, liberalization of imports, adopting market exchange rate

regime, providing incentives for foreign private capital (Hiç, 2008, pp. 21-129). The last significant revision

was successfully implemented during the 1999 and 2001 economic crises (Hiç, 2008, pp. 191-198;

Yeni Türkiye, 2001).

Conclusion

As it was explained before, the economic regime applied in the developing countries cannot be

characterized as “market economy”. Since the level of development in these countries are lower compared to

the developed countries, the need of the level of government interventions, protections and public investments

is higher. For this reason, as we mentioned earlier, what is implemented in these countries is not the market

economy but a “mixed economy” heading for the market economy which is based on the encouragement of the

private sector and foreign private capital. Moreover, democracies of these countries have some difficulties not

allowing the market economy to function properly and effectively, and partisanship, nepotism and level of


690

corruption as well as off-the-record sector are much higher than the developed countries. The whole issue here

is to have fewer problems in time as the level of education and economic development rises.

In Latin America, though, a limited number of countries such as Venezuela, Argentina and Bolivia have

turned into dictatorship and heavy socialist statism because of many failures. These countries make up a very

narrow island on the world map.

Moreover, many countries, including Turkey, have entered the globalization process started in the 1990s.

China, India and Brazil have taken much advantage from the globalization by conducting pragmatic and

successful economic policies, eventually positioning themselves as economically very powerful BRIC (Brazil,

Russia, India and China) countries along side with the developed countries. Despite the negative impact of the

2008 economic crisis, Turkey has recovered very rapidly and today she is among the “emerging markets” group

(Hiç, 2010b). In conclusion, in spite of the 2008 global economic crisis, heading for the market economy and

globalization in general will go on in the majority of the developing countries.

References

Ackley, G. (1961). Macroeconomic theory. Macmillan New York: Co..

Birol, Ö. H. (2001). Modern macroeconomic schools: A comparison and evaluation essay in terms of consistency and validity

Published doctoral dissertation. Istanbul University, Department of Economics, Istanbul.

Branson, W. (1989). Macroeconomic theory and policy (2nd ed.). New Jersey: Prentice-Hall Inc..

Hiç, M. (1974). Capitalism, socialism, mixed economy and Turkey (2nd ed.). Istanbul: Sermet Printing.

Hiç, M. (1980). The analysis of the Turkish economy. İstanbul: İstanbul University Publishing.

Hiç, M. (1994). Monetary theory and policy. Istanbul: Filiz Bookstore.

Hiç, M. (2001, fall). Development Economics from the 50s to our Times. Istanbul University. Journal of Faculty of Economics,

51(2).

Hiç, M. (2008). A survey of Turkey’s economy and politics. Create-Space, Amazon Co.

Hiç, M. (2010a). Global economic crisis and Turkey. Istanbul: Beykent University.

Hiç, M. (2010b). Major current economic and political problems facing Eurasian Countries. Keynote Speech: International

Conference on Eurasian Economics 2010, Beykent University.

Karluk, R. (2007). The EU and Turkey (9th ed.). Beta Printing and Distribution Inc., Istanbul.

Luxemburg, R. (1912). Die Akkumulation des Kapitals. English edition was first published in 1913 and republished by Routledge

& Kegan Paul in 1951.

Paya, M. (1997). Macroeconomics. İstanbul: Filiz Bookstore.

Toye, J. (1993). Dilemmas of development (2nd ed.). Blackwell: Oxford UK and Cambridge ABD.

Yeni Türkiye. (2001). Special issue on economic crisis, September-October (Issue 41) and November-December (Issue. 42).

Ankara.


October 2014, Vol. 2, No. 10, 691-696

Devolution of Sta. Ana Davao Port: Then and Now

Saidamin P. Bagolong, Neil John T. Audan

, Angelica Faye G. Cameguing

, Sunshine B. Cordero

The University of Mindanao, Davao City, Philippines

Better seaport operation is one of the indicators that a city is achieving its goals towards progress and development.

The Sta. Ana Davao Port for example is one of the many seaports in Region XI that caters to thousands of

passengers going from one terminal to another and from one island to another. In this study, it will revisit the status

of Sta. Davao Port from the time when it was devolved from the national government under Philippine Ports

Authority (PPA) to local government of Davao City. The devolution was in accordance with the Memorandum of

Agreement by two parties, which clearly stipulates the full-control of operation of the local government of Davao

City with an end view of bringing more investors, tourist hubs and other business related concerns. This study

utilized descriptive-evaluative method using interview guide question as a qualitative approach in gathering data.

The participants were the former employees of the PPA and the current management of Sta. Ana Davao Port under

the local government. Data gathered were analyzed using Nvivo software for qualitative research and content

analysis to obtain factual information direct from the participants. It was found out that most of the employees

agreed that the office needs improvement in terms of physical, financial and human aspects. For several years, the

passengers of both local and foreign shipping lines were complaining on its limited berthing capacities, saturated

container yards and even worse the collapse of the berthing area which resulted to the delay of transactions in the

operation of the vessels. In spite of employees claimed that prior to devolution of Sta. Ana Davao Port to the local

government of Davao City, the operation was well-managed and maintained, thereby resulted to passengers’

satisfaction. Thus, the researchers aimed to provide an action plan as basis by the management of the Sta. Davao

Port to achieve its vision, missions and goals.

Keywords: port operation, Sta. Ana Davao Port, devolution, public administration, local government, Davao,

Philippines

Introduction

Infrastructure services play a significant role in trade costs by reducing distribution margins, lowering

prices, and raising consumer welfare. They also lower transaction costs, add value, and increase profitability for

exporters while expanding linkages to global distribution networks. Infrastructure is a significant determinant

of both export levels and the likelihood of exporting (Francois & Manchin, 2007).

However, the country’s inefficient maritime transport has effectively acted as barrier to domestic and

international trade integration. It has stymied countryside development because of the high cost of transporting

people and goods and has stunted efforts to improve productivity and the competitiveness of exports and

Saidamin P. Bagolong, DPA, College of Arts and Sciences Education, The University of Mindanao.

Neil John T. Audan, bachelor, College of Arts and Sciences Education, The University of Mindanao.

Angelica Faye G. Cameguing, bachelor, College of Arts and Sciences Education, The University of Mindanao.

Sunshine B. Cordero, bachelor, College of Arts and Sciences Education, The University of Mindanao.

DAVID PUBLISHING

D

DEVOLUTION OF STA. ANA DAVAO PORT: THEN AND NOW

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tourism. Inefficiencies in maritime transport intensify transaction costs resulting in higher goods prices and the

erosion of the competitiveness of exports. Poor development in the operation of port may become—if not acted

upon—a barrier to domestic and international trade integration. It has stymied countryside development

because the port infrastructure is old and needs immediate rehabilitation. If only the government has ability or

willing to invest on expensive port development projects or equipment, the port operation would be beneficial

to trade, transport and tourism, and ultimately to national competitiveness (Limao & Venables, 2001).

The inefficiencies stem from (1) inadequate port and vessel capacities; (2) ineffective ports management

and administration; and (3) constraints arising from anti-competitive policies and regulation. Port efficiency, a

major determinant of shipping costs, is affected by government regulation in a non-linear way, that is to say,

increasing at some level of intervention and decreasing in excess of regulation (Clark, Micco, & Dollar, 2004).

The lack of competition in the shipping industry undermines incentives to minimize costs which could be

simply passed on to the consumers of the service (Llanto, Basilio, E., & Basilio, L., 2007).

Privatization in the port operation sector has rendered the industry as an appropriate empirical ground for

addressing the interface between transport and economic geographies which is evidently observed in the Asian

port systems and business networks (Bird, et. al., 2006). In fact, study on port conducted by Tongzon and Heng

(2005) emphasized that the participation of private sector in the port industry to some extent can improve port

operation efficiency, which will in turn increase port competitiveness. Another important determinant of port

competitiveness is the adaptability to the customers’ demand. All these provide some policy implication and

guidance for port authorities and port operators in formulating effective strategies to improve their

competitiveness vis-à-vis rivals.

For this reason, this study adhered to revisit the Sta. Ana Davao port and its challenges in the current

development and trends of the port industry. This somehow will discuss the range of devolution adapted by the

Philippine Ports Authority (PPA) as a guarantee to develop it as a global port.

Objectives of the Study

The purpose of the study is to determine the challenges experienced by the employees of Sta. Ana Davao

Port before and after it was devolved from PPA to local government of Davao City.

Materials and Methods

The study utilized descriptive–evaluative research using qualitative method. The research participants

were from Philippine Port Authority and Sta. Ana Davao Port. The participants were chosen based on their

positions held in the ladder of its operation; they were the Head of Technical Services Division (PPA),

Marketing Officer (PPA), Division Manager (PPA), Officer In-Charge (SADP) and the Assessment Officers

(SADP). In analyzing the data, the researchers utilized Nvivo—using software to cluster and categorize the data

through themes and sub-themes.

Theoretical Lens

This study was anchored on the work of Ludwig von Bertallanfy’s System Theory which focuses on the

transdisciplinary study of the abstract organization of phenomena, independent of their substance, type, or

spatial or temporal scale of existence (Heylighen & Joslyn, 1992). Further, Anderson, Carter, & Lowe (1999)

as cited by Friedman and Allen (2010) stated that a systems theory is a way of elaborating increasingly


693

complex systems by means of a continuum that encompasses the person in environment. This also enables us to

understand the components and dynamics of client systems in order to interpret problems and develop balanced

intervention strategies, with the goal of enhancing the ―goodness of fit‖ between individuals and their

environments. In this paper, the Sta. Ana Davao Port is an industry of knowledge management. A model to

manage the knowledge assets in an organization is proposed based on systems theory, which examines the role

of the systems in an organization and how the system has unique responsibilities for managing knowledge in an

organization. Thus, the need to know their point of entry into a client’s management knowledge systems as well

as the need to be very aware that how they manage their own knowledge capital is relevant (Delahaye, 2002).

Moreover, this study also supports model on port governance which has been developed to fit the largest

ports, and tend to simplify the devolution process as one involving the transfer of jurisdiction from the State to

the private sector. The devolution of smaller ports have been largely ignored because of the transfer from the

upper levels of government to lower tiers of public administration. Hence, the existing models of port

governance are incomplete and the role of public administration in port governance is greater, albeit in a

different form, than claimed in the existing literature (Debrie, Gouvernal, & Slack, 2007).

Results and Discussion

The presentation and analysis of data gathered regarding the status of Sta. Ana Davao Port before and after

it was devolved from PPA to the local government of Davao was categorized based on the objectives posed

earlier.

The operation of the Sta. Ana Davao Port was managed by the PPA but because of the program of the

government to devolve some of its agencies, the Sta. Ana Davao Port operation is now transferred to the local

government of Davao City by virtue of Memorandum of Agreement (MOA)1 signed on June 23, 2000. The

PPA as a government-owned and controlled corporation is vested with the statutory duty to implement

integrated program for the planning, development, financing and operation of ports for the entire country

pursuant of the Presidential Decree 857, as amended, otherwise as the revised charter of the PPA.

The MOA allows the city government of Davao to manage, operate, maintain and develop commercial and

tourism activities within 25 years but the ownership of the port remains to be under the national government.

The PPA as the main developer, operator, and regulator of the port serves as the main agency of the Sta.

Ana Davao Port. They can issue permit to construct and operate the port and set and collect port charges such

as wharf fees and dues, berthing/usage fees, and terminal handling costs. Section 4 of the MOA authorizes the

city government of Davao to a management fee equivalent to 90% of the total collection from wharfage, port

dues, dockage fee and usage fee. The remaining 10% of the said port charges shall be remitted to PPA

accordingly. Fifty percent of the 10% government share of the gross income is derived from the existing lease

contracts while the remaining 50% is intended for future improvements and developments of the port starting

from the 11th year to the 25th year. Thus, the city government of Davao is granted a 10-year grace period from

the start of business operation wherein the PPA shall not have a share in its net profit (section 5 of the MOA).

They also approve to increase in cargo handling rates and receive 10% and 20% from cargo handling

revenues on domestic and foreign cargo, respectively. Also, responsible for awarding contracts to private

1 Memorandum of Agreement for the Administration of Sta. Ana Davao Port davao City. Signed by the Philippine Ports

Authority and the City Government of Davao, June 23, 2000.


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terminal and cargo handling.

To determine the status of Sta. Ana Port Operation, the researchers administered three different questions:

First, to find out how the physical, financial and human operations were managed, second, to identify the

different challenges faced by the local government of Davao City as well as the issues and concerns of the

employees in their personal apprehension and to the port as a whole, and third, the effects concerning the

outcomes of the port operation. The operation was classified into two: the operation of the port when it was still

under the management of the PPA and the operation of the port when it is under the management of the local

government of Davao.

The Physical, Financial and Human Resources Operation

Thirteen years ago, the operation of the Sta. Ana Davao Port was managed by the PPA, because of the

MOA, the local government of Davao City took over the operation which provides that 10% shares of their

income will be given to the PPA.

In identifying the common practices of the Sta. Ana Port Operation, the researchers found out that

collection of port dues and charges from the vessels docking at port and from the cargoes discharged and load

on board the vessels, the collection of terminal fees from the vehicles going inside the port, the collection of

arrester’s share from the existing cargo handling operator doing business inside the port as well the safety and

security of the passengers are well-observed. In addition, procedure on the collection of fees has no difference

with how the local government managed it.

In terms of the structural arrangement, the PPA is headed by a terminal supervisor with few staffs, the

operation officer, cashier, statistician and a utility. But, when it was devolved, terminal supervisor was replaced

with a head engineer, who oversees the entire operation with only the cashier and utility around.

In terms of financial resources, the PPA respondents relied on their remuneration received as a

Government-owned and Controlled Corporation (GOCC) but does not receive support from the local

government, while, the Sta. Ana Davao Port is dependent on the support from the local government in all

aspects, from salaries of the port employees to their operating expenditures.

Apart from these, the most challenging experiences of both offices in terms of income, was taken from the

money they received from their clients. Money and other dues received were remitted at the local government

for transparency and accountability purpose.

Concerning with the human resources, both the Sta. Ana and PPA are equipped with professional and

technical employees as they undergo various seminars and trainings. These are given both by the Central Office

and local agencies. They believed that this will help become more effective and efficient employees to serve the

public better.

Challenges of the Local Government

It can be observed that both parties have different views based on how the port was managed.

Respondents mentioned during the interview that the local government’s management on the operation of the

Sta. Ana Davao Port is not as good as it was handled by the PPA.

It can be observed that the facilities, like the birthing areas, waiting lounge and the comfort rooms, need to

be renovated. Another challenge for the local government of Davao is during high tide which resulted to

disruption of work because water from the sea overflows in the office along with the human waste from the

squatters’ area. Proper sanitation causes the passengers not to stay long in the waiting lounge because of the


695

rubbish placed everywhere. Also, it was observed that some of the employees were not able to receive their

salaries on time despite of the remittance given to the city. Time schedule is also a challenge for the city on

how to properly manage the operation since employees may be assigned on a shift basis. And the last challenge

is the resistance to private investors by the local government because of the limited number of years to operate

the port as stipulated in the MOA. The resistance will hamper the investors not to invest because the local

government believes that if the agreement lapses, the national government will again operate the Sta. Davao

Port.

Table 1

Themes and Core Ideas on the Physical, Financial and Human Resources Operation

Major Theme Frequency of Response Core Ideas

Physical Resource

General

General

General

Collecting of Port Dues (PPA and Sta. Ana)

Treated as a Terminal Port headed by a terminal supervisor (PPA)

Managed by the Local Government, and headed by a Head Engineer (Sta. Ana)

Financial Resource General

General

Autonomous (PPA)

Supported by the Local Government (Sta. Ana)

Human Resource General Seminars are being conducted both PPA and Sta. Ana

Challenges

General

General

Variant

Variant

Facilities Improvement (Sta. Ana)

High Tide (Sta. Ana)

Delay of Salary (Sta. Ana)

Time Schedule (PPA)

Effects to the Operation General

General

To have bigger vessel, is to have bigger income (Sta. Ana)

Totality of Port (PPA)

Effects to the Sta. Ana Port Operation

Findings show that the Sta. Ana Davao Port as an income generating office deserved to have better

facilities in order to attract the passengers and investors. Respondents believed that if these facilities will be

repaired, development will also be observed. The income generated from the operation shall be allotted to

development of infrastructure so that the port can accommodate bigger vessels. If this happens, income will

also increase.

The PPA believed that the totality of the operation of the port plays a vital role in the development of the

city. If it will not be maintained, it will have an effect in the income especially that many of the passengers

opted to use the barge and the small boat as their transportation going to other island.

Conclusion

The PPA and the Sta. Ana Davao Port presently have the same/common practices. The issues and

concerns as identified by the Sta. Ana Davao Port employees are the presence of the informal settlers, delayed

salaries and the facilities improvement of the port.

The Philippine Port Authority only encountered problem on the time schedule of the employees since it

operates 24/7. Effects of the operation are the totality of the port since it generates income. A poor service leads

to low income.

Upon analysis of the information gathered and interpreted from the respondents between the common

practices and issues/concerns on port operation before and after the turned-over to the local government of

Davao City from the Philippine Port Authority, the researchers found that the Sta. Ana Davao Port needs a lot

of improvement and development in terms of its physical, financial and human resource operations.


696

For more than 13 years prior to devolution, the researchers found that the only improvement the local

government has made is the construction on the elevation of the entrance gate to their office. But still, the

advancement of Sta. Ana Davao Port as an eco-tourism hub has never realized. The MOA undertaken by the

local government remained to be undone and still work on progress. Thus, the researchers can conclude that

devolution as a government strategy to transfer its power and responsibilities to other entity for supposed

development was not taken seriously hence, development and progress remained to be unrealized.

Thus, port devolution may be good in some way depending on how the government runs the operation of

the port. Ghashat and Cullinane (2013) suggested that successful port devolution depends upon adopting an

approach appropriate to achieving the objectives of the policy. The selection of an appropriate governance

structure, as well as stakeholders’ satisfaction, also makes an important contribution to the success of a port

devolution policy. The findings showed that better operation of the port lies on how it is properly managed. In

the case of Sta. Ana Davao Port, the local government shall see that the MOA shall be followed regardless on

the period it shall be operated. After all, the port’s development is also the development of the city.

Transparency, accountability and stakeholders’ involvement must also be considered. No other people will

benefit this port other than the people of the city.

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International Relations and Diplomacy ISSUE 10, October, 2014

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