14

ISSUE

INFORMALITY
INFORMAL MOBILITY IS HERE TO STAY
INFORMAL ECONOMY AND INNOVATION
THE LEADERLESS ORGANIZATION AND TWO EDGED
APPLICATIONS
INTERVIEW WITH DR. ATM NURUL AMIN
18 CITY INNOVATIONS TOWARDS BANGKOK 2030
 2 3
EDITORIAL BY
DR. APIWAT RATANAWARAHA
Department of Urban
DR. APIWAT RATANAWARAHA and Regional Planning,
Department of Urban Chulalongkorn University
and Regional Planning,
Chulalongkorn University
IDEA
Informal transport is a basic service indispensible to
urban lives in most developing countries in Southeast
Informality as a concept first emerged in the 1960s among Western social Asia. It provides relatively demand-responsive services
scientists who adopted the formal-informal dualistic framework to understand urban migra- to city residents who have no private vehicles and live or
tion and labor markets in developing countries. The International Labor Organization (ILO) work where public transport is inadequate. The informal
picked up and popularized the idea of the informal sector, and many international donors transport sector also creates jobs for low-skilled workers,
and governments followed suit. They implemented a plethora of initiatives aiming to formal- many of whom are rural immigrants. In modern cities
ize the informals, who were deemed unorganized, self-employed, and poor. Then came such as Singapore, informal modes are no longer seen
Hernado De Soto, who celebrated the informal sector as being dynamic, competitive, and on the streets, as governments have formalized them
entrepreneurial. Informal activities to him are rational responses to the states excessive completely. But in other cities, notably Bangkok, Manila
controls, providing people with the other path to development. and Jakarta, informal transport not only survives but
thrives. Their existence will remain partly unofficial
A few decades have passed, and we still see informal activities everywhere in partly official, with some legal status but only limited
Southeast Asian cities, partly because the rural-urban migration as the catalyst for informality institutional and state support. Despite its status, informal
is still occurring. Of course, real world phenomena evolve faster than academic concepts that transport is here to stay for a while.
try to explain them. Informal activities are changing rapidly due to the dynamic nature of
the economy, polity, and society. Increasing globalization of information, goods and services,
and technological advancementespecially in information and communicationare making
the informal sector even more dynamic and volatile than ever. Informality remains a key SCENARIOS
issue with serious implications for development and poverty.
This issue of TRENDNOVATION SOUTHEAST attempts to spot some recent signals
Informality continues to thrive
of informality in Southeast Asia. The first article traces the emerging trends and issues in the As cities keep growing and expanding to the suburbs,
informal transport sector. Mobility has direct implications for human security and growth; never could enough roads be built to meet the burgeon-
without adequate and affordable means of travel, people have limited access to employ- ing travel demand, and public transport has become
ment and other sources of livelihood. As the state often fails to provide such basic services, increasingly critical. However, due to limited fiscal and
informal transport, such as motorcycle taxis, jeepneys, vans, and minibuses, gladly fill in the organizational capacity in transport planning, coupled
void. with political maneuvering by interest groups, most rail
transit projects have been delayed. When these services
The second article features an array of innovative solutions in the informal sector finally come in operation, too often they are not mass
in Southeast Asia. By learning about these innovations, we see their entrepreneurial spirit, but class transits because the fares are too high for
dynamism, and a great potential for development and poverty alleviation. So far policies
on informality have rightly aimed at building social protection and safety nets for informal
the poor. Bus services are often inadequate, and public
bus agencies tend to be debt-ridden. The Bangkok Mass
workers, but perhaps we also need to look beyond that and do more to enhance their in- Transit Authority, for instance, has a debt worth of about
novative capabilities. 25 billion USD as of 2011. It is small wonder that they
cannot improve the service quality or area coverage.
The third article takes a different view on informality, focusing on leaderless That leaves a large void for informal transport services
organizations that could potentially change the way in which business and development initia- to accommodate travel demand, particularly for those
tives are undertaken in Southeast Asia. This type of informal organization is increasingly who cannot afford private automobiles. In Manila, para-
observed in various sectors, ranging from terrorism to Open Source software development. transits account for 76 percent of total public transport
trips, while the figure in Jakarta is about 34 percent. 1
TrendNovation this month interviews Dr. ATM Nurul Amin, Professor of the Depart-
ment of Environmental Science and Management of North South University (NSU), Dhaka, Informal transport modes in Southeast Asia range from
Bangladesh. An expert on the urban informal sector in the region, he shares his views on non-motorized traditional paratransits, such as pedicabs,
the informal sector in Southeast Asia, particularly from the decent-work perspective adopted to motorized ones, such as minibuses, vans, and motor-
by the ILO. cycle taxis. The types of services fall within the range
between fixed routes-fixed stops, fixed routes-flexible
Our Infographic of the month features partial results from a regional research stops, and flexible routes-flexible stops. The services are
project entitled Towards Innovative, Liveable, and Prosperous Asian Megacities. City mostly run by small-scale, independent operators, who
Innovations towards Bangkok 2030 highlight 18 expectable and desirable innovations that may or may not own the vehicles. In some cases where
correspond to three scenarios for Bangkok in the year 2030, namely, Green City, Google relatively large capital investment is required, such as
City, and Gray City. for minibuses, drivers are often hired by the vehicle
Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation. Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
Informal mobility
is here to stay
KEYWORDS:
Informal transport; paratransit;
economic and social regulations;
social protection; entrepreneurship
owners. In other cases involving smaller vehicles, such
as motorcycle taxis, drivers are usually independent
owner-operators. Unlike in other informal sectors, such
as street vending, this informal sector is male dominant.
It is rare to see female motorcycle, van, and minibus
drivers. The number of female drivers may increase in
the future, but probably not by much.
Cities are expected to grow and expand in Southeast
Asia, and as it is not likely that mass rail and bus tran-
sits can keep up with the increasing demand, informal
transits will continue to grow, so long as the authorities
let them.
Chart 1: Selected Southeast Asia Percentages of
Rural Population and Employment in Agricultural Sector
(1987 2009)
A polio flower girl at a congested intersection in Bangkok
- Copyright @PACEyes
The love-hate relationship lingers
Informal transport modes have been prevalent in South-
east Asian cities for many decades, and their history
is rife with tensions with transport authorities. On the
one hand, slower non-motorized modes of transport are
now banned in many cities because they are deemed
unsuitable for congested city roads, not to mention
perpetuating an image of backwardness that modern
planners want to cast aside. Cycle rickshaws are now
operated mostly as tourist attractions in restricted areas.
Motorized modes, on the other hand, have rapidly
increased their presence and importance in every single
major city in the region.
Public transport authorities have always been uneasy
about informal transport, so they attempt to formalize
the services through economic and social regulations.
Economic regulations include restrictions on entry and
exit and price control, so public welfare is not diminished
by natural monopolies and market structures with limited
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
 4 5
or excessive competition. But in reality governments
have little say as to when and where informal operators
can provide services or how much they can charge their
passengers. Even when they do, the reasons are not
typically out of concern for the publics welfare. Rather,
they are afraid that informal minibuses will compete
against existing bus services.
Social regulations, on the other hand, aim to assure
the quality of service, especially safety, reliability, and
comfort, and the labor conditions. Reckless van drivers,
motorcycle taxis without helmets for passengers, dirty
seats, cramped space, and fatal accidents are only a
few of the reasons that cry out for government regula-
tion. As such, some aspects of informal transport are
now regulated, such as vehicle and service registration,
while other economic aspects, such as pricing, are left
for the operators and the market to determine.
Despite the urge to over-regulate informal transport,
transport planners have gradually come to terms with
the flexibility, capacity, and responsiveness of informal
transport in meeting travel demand. Nonetheless, most
governments have not yet incorporated informal trans-
port in their medium- and long-term transport planning.
There are also limited data and research studies on
informal transport in Southeast Asian cities, which are
necessary for devising appropriate transport policies.
As in any informal activity, corruption and cronyism
abound in the informal transport sector. Protection fees
are often paid to local policemen or public officials, who
can bend some rules for those who pay. Often times,
operators have to rely on local mafia, or they themselves
may be local mafia. This is one of the key reasons why
the formalization and legalization of informal transport
services is a tempting solution. Consequently, several
cities have been moving in that direction.
Complementarity and competition
Most megacities in Southeast Asia are currently plan-
ning and building more mass rail transit systems. Such
infrastructure investment will change the cities urban
structures drastically. The question arises as to how
this will affect informal mobility. The answer depends
on whether the governments will install draconian
measures to regulate informal transport, how quickly
they will expand rail transits and improve bus services,
and how much cheaper private vehicles will become.
Van services in Bangkok have already lured passengers
away from traditional buses, which have been slow to
adjust to rapidly changing and rising travel demand.
New van routes to transit terminals have been added
quickly to accommodate the demand of rail users.
Yet, automobile sales have only been increasing in
all these countries. If these trends continue, we can
expect a scenario in which informal transport services
will continue to grow alongside an increasing number
of private cars being driven and a decreasing number
of trips being taken on buses. Feeder services, such as
motorcycle taxis, will continue to transport people to
bus stops and rail stations.
Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
Watch out for those secondary cities
Although transport problems continue to plague
megacities, it is secondary cities that will need closer
attention in the future. These cities, such as Chiang Mai
in Thailand, Bandung in Indonesia, and Cebu City in the
Philippines, are all experiencing rapid urban growth.
Suburbanization is occurring in a similar fashion to that
of megacities. The current public transport services are
inadequate, but they are receiving even less attention
than those in megacities. The rich and the middle class
in these cities buy cars; the rest either use motorcycles or
rely on paratransits. Population density is even lower in
these cities, which makes it even more difficult for public
transport to achieve economies of scale. Informal modes
of transport have so far filled the gap, but as these
cities continue to grow, public transport with greater
capacity will become a necessity. Transport planning
that integrates informal transport and bus services will
sooner than later become necessary.
IMPLICATIONS
Social protection and political
representation are direly needed
Social protection is generally lacking for informal
transport workers. Even though informal operators are
somewhat connected to powerful people, their collective
political power is limited. Realizing they cannot simply
wait for the government to take action, some groups
of workers have formed associations to collectively
campaign for better social protection. An example is
KASAMPADYAK, an association of 2,000 padyak
drivers in Navotas, Metro Manila. The members now
have access to social protection schemes, such as free
PhilHealth and other social benefits, from the Navotas
local government. A modest amount of mutual aid is
also allocated to every member as financial support
for various needs.2
Similarly, the Thai Association of Motorcycle Taxi Driv-
ers has been established to promote social welfare and
basic labor rights. So far, only a small fraction of the
more than 100,000 motorcycle taxi drivers in Bangkok
have joined the group. However, the association has
already co-operated with the Bangkok Metropolitan
Administration and insurance companies in a campaign
to offer accident insurance at low cost for motorcycle
taxi drivers and their families. Ironically, they have also
held a small public demonstration demanding that the
city disallow some drivers who have not registered with
the city to operate in overlapping routes.
Entrepreneurship and the potential
for impact investment
Entrepreneurship and the potential for impact investment
Informal sectors are often associated with cheap, out-
dated and low-tech technologies. Although that remains
true in Southeast Asia, it does not mean the spirit of
entrepreneurship and the strive for improvement do
not exist. There are now signs that indicate increasing DRIVERS & INHIBITORS
potential for adoption of new technologies. For instance,
van service operators in Bangkok are using cell phones
to inform others of traffic congestion and co-ordinate As domestic urban migration continues, and public
their schedules. GPS navigation systems are being transport networks and services remain lagging
considered for monitoring and scheduling purposes. In behind, informal transport services will continue
Jakarta, Go-Jek, a motorcycle taxi start-up, is offering to increase.
a variety of transport services, including transporting The cost of car ownership is expected to come
passengers, courier service and shopping and delivery down in most Southeast Asian countries, but a
services. Launched in February 2011, the company now large number of urban residents will still be un-
employs seven full-time employees and has partnered able to afford cars and have to rely on informal
with more than 200 ojek drivers at 80 pick-up points services.
across Jakarta.3 Suburban sprawl without provision for public
transportation will only increase informal provi-
Chart 1: Selected Southeast Asia Percentages of sion of transport services.
Rural Population and Employment in Agricultural Sector Informal transport is a cushion from economic
(1987 2009)
shocks. Like in other informal sectors, the number
of informal workers goes down when the economy
booms, and goes up when the economy busts.
Without supportive government measures, spe-
cifically in finance, technology, and security (i.e.,
protection from extortion), the informal transport
sector will not realize its tremendous potential.
A polio flower girl at a congested intersection in Bangkok
- Copyright @PACEyes
REFERENCES
1 Godard, X. (2006). Coping with paratransit in developing cities: a scheme
EARLY INDICATORS of complementarity with institutional transport, Gothenberg, Sweden, Paper
presented at Future Urban Transport Conference, Volvo Foundation for the
Future of Urban Transport, April 2006.
This sector needs more attention from policy makers, 2 Lao, R. (2009). The rights of urban informal workers and access to social
aid donors, and investors. Despite the fact that informal protection: The Philippine experience. In United Nations Economic and Social
Commissions for Asia and the Pacific (UN-ESCAP). Social Protection in Asian
transport innovations could potentially affect the liveli- Cities. Bangkok: UN-ESCAP.
hoods and quality of life of a large number of people,
3 See www.go-jek.com for more information on its services.
technology and innovation policies in Southeast Asia
do not consider informal mobility to be as important as
nanotechnology or other advanced fields. The potential
for creating, implementing, and diffusing innovations
that really matter has not yet been realized. There is
also a great potential in terms of improving urban sus-
tainability. Because of the large market and potential ABOUT THE AUTHOR
for economic and social returns, impact investment
and social enterprises in this sector are sorely needed.
The informal transport business has mostly relied on Apiwat Ratanawaraha is an Assistant Professor
personal savings and informal sources to finance their at the Department of Urban and Regional Planning,
capital assets, primarily because the operators have Chulalongkorn University in Bangkok, Thailand, where
limited access to formal credits. There is certainly ample
room for microfinance initiatives here. he teaches infrastructure planning and finance, urban
management, and economic development. His cur-
rent research includes projects on city innovations in
Southeast Asian megacities, infrastructure justice, and
inequality in access to basic services in Thailand. He
has been a Visiting Assistant Professor at the Depart-
ment of Urban Studies and Planning at MIT, teaching
infrastructure finance and energy security. He was a
Doctoral Fellow at the Belfer Center for Science and
International Affairs, Kennedy School of Government,
Harvard University, conducting research on infrastruc-
ture, technological development and innovation policy.
A polio flower girl at a congested intersection in Bangkok
- Copyright @PACEyes
Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
 6 7
BY
DR. PUN-ARJ CHAIRATANA
Managing Director,
Noviscape Consulting Group
IDEA
Since the introduction of the dual sector model
concept in the early 1950s, the traditional sector has
been marginalized by the capitalist sector through a
grand scale of industrialization and modern trade.1 For
decades, a general perception on key characteristics of
this small people economy can be briefly described as
the economy that utilizes simple technology, is limited
in capital, has no fixed business location, exists with
quasi-legality or lack of registration, and employs little
record keeping. It has a high proportion of unrecog-
nized and unprotected people with an income scarcity
situation that could not easily be moved into a formal
economy, yet they still mobilize themselves into an
informal economy. They actively engage in a highly
flexible and loosely structured economy as informal
entrepreneurs and have learned their business lessons
from the success and failure of the global economy.
In this article, we explore signals for change in this
unrecorded and unregulated economy and trends in
innovation from an ongoing socio-economic transforma-
tion and globalization of lifestyle and business in the
region, particularly in the formalization of the economy
and paradigm shift in the business model.
SCENARIOS
Formality of the informal economy:
A more intensive symbiotic relationship
It seems to be a mission impossible to have full formality
of the informal sector. Partly, this is because of the in-
creasing complexity in business transactions, interdepen-
dency and the changing role from being only business
of the poor and criminal to an alternative social safety
net when the global economy goes wrong. Leading
economies in Southeast Asia have tried to formalize
this sector for sometime.
In the coming decade, the governments in Southeast
Asia will increasingly add more measures and regula-
tions to the informal economy in order to integrate
taxable activities into a gross domestic product (GDP)
1 The Dual Sector Model concept that aims to explain how developing economy moves from an agricultural base to a manufacturing led economy was developed by Sir Arthur Lewis, a Nobel
laureate in economics from Saint Lucia.
2 ASEAN5 comprises of Indonesia, Malaysia, the Philippines, Singapore, and Thailand. CMLV countries comprise of Cambodia, Myanmar, Laos, and Vietnam.
KEYWORDS:
Formality; collaborative consumption;
informal enterprise; modern trade
calculation. There will be more intense competition and
interaction among regional agricultural and tourism
micro-SMEs from ASEAN5 and CMLV countries2 in or-
der to survive when the ASEAN Free Trade Agreement
(AFTA) and ASEAN Economic Community (AEC) have
become fully functional in January 2015. A transforma-
tional process, supporting schemes, and standardization
of labor and job markets will be among the priority
issues for the national governments in Southeast Asia
in order to reduce poverty and promote integration.
On the bright side, enterprises-alike regimes, e.g. street
vendors, together with micro-small and medium-sized
enterprises (m-SMEs), and temporal self-help business
groups would benefit from some supporting schemes,
and a single market, while social and governmental
protection and a public governance standard will be
leveraged. Still, there will be no guarantee that all vul-
nerable individuals may receive such benefits as it will
take a long time to include a majority of unregistered
labor into the system. The existing informal economic
regime will evolve to accommodate those unfortunate
laggards. The duality nature of the above economies
will be into an intensive symbiosis relationship between
the formal and informal economy through an accelera-
tion of the shift on the regional market and leveraging
of the domestic economy. The Southeast Asia informal
economy will be more diverse, more specialized and
involve more tacit knowledge, while limitations on ac-
cess to funding will still exist, and issues on rights and job
security for informal workers will become more complex,
especially in service-oriented activities in tourism and
the care provider economy.
An informal collaborative consumption:
From ownership to accessibility
It is not so surprising that there are many emerging
concepts dedicated to the formal economy, e.g. creative
economy, social economy, green economy, knowledge
economy, sharing economy, etc. All of these embrace
a dimension of poor people being taken into account.
By default, the public sector in the region utilizes such
a framework as a paradigm platform to expand a EARLY INDICATORS
protection and benefit regimes to its citizen.
Still, a mainstream economic transaction that underlines Increasing of labor mobility in rural areas or less
the architecture of business is mismatched with the developed neighboring countries in Southeast
current evolution of this economy. Rights and owner- Asia could accelerate the process of de-ruraliza-
tion through establishment of industrial estates and
ships are among the key issues of poverty reduction in a transformation of peasants into factory workers,
developing and less developed economies, while ac- particularly in Cambodia, Laos, and Vietnam.
cessibility to information and services have been coined
by a group of IT geeks and the young generation in There are around 43 border crossings in Thailand.
developed countries. The increase of border trade around the lower
Sub-Mekong basin would expand the size of the
In Southeast Asia, land ownership and access to knowl- informal market value along the Myanmar-Laos,
edge and information are among the key issues which Laos-Thailand, and Cambodia-Thailand borders.
can derail a better living quality standard and the rights
of small farmers and peasants from the development
Currently, some of the informal enterprises
already transformed into community enterprises,
track. There will be a high tendency that a diffusion of which have been promoted and supported by
the concept of sharing and accessibility of information the national and local governments in order to
and content will be transformed and extended into the leverage the business capacity of villages, and
bottom of Pyramid economy, particularly on ideas or entrepreneurial capability of villagers through the
solutions dealing with the utilization of public space development of domestic economy and the stan-
and land, co-creation of social business among local dardization of small-scale production. More sta-
tistics have been collected through one product,
authority, and the poor.
one village initiatives (particularly in Indonesia,
Malaysia, the Philippines, and Thailand).
The informal collaborative consumption or a learning
economy version of the informal sector would pop up Collaboration among various groups of vulner-
from a redistribution accessibility to economic spaces able people has been increased partly because
(both in the city for street vendors and the rural area for of threats from modern trade and lack of public
micro-SMES and agriculture), and healthcare services, services offering. For example, an expansion of
a collaborative lifestyle (sharing and exchanging time, international retail and wholesale giants in Thai-
land has accelerated the pace of m-SMEs with
space, and skills), and an expansion of existing product
limited financial resource to shift their business
and service systems into local and smaller units. model and transaction to survive through creative
marketing and networking with the local consumer.
IMPLICATIONS
Process innovation:
It will be a Long March for the national govern-
ments to formalize unregistered labor into the
existing system in order to legitimize their right
to various public benefits, especially for unskilled
and migrated laborers. Instead of focusing on ac-
celerating the process and offering incentives to
formalize the labor, the customization of services
or social supports on education and healthcare
through social enterprises and NGOs can be
accelerated to allow the inclusiveness of those
schemes.
Paradigm innovation:
There are quite a few ideas from the proposed
concept of economy that could be applied to the
informal economy. Among these, there is col-
laborative consumption, which is an economic
model based on sharing, swapping, bartering,
trading or renting access to products in lieu of
A blind lottery vendor at the corner of a business district in Bangkok
- Copyright @PACEyes ownership; only formalizing the sector may not
Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
 8 The Leaderless
be enough to leverage a livelihood for the poor.
Instead, legitimizing the right for social exploita- DRIVERS/INHIBITORS
tion and access to public resources would benefit
a people empowerment regime, particularly in
farming machinery for sharing a waste land, for
holistic garbage trading, and for street vendors.
The formal sector cannot generate enough jobs
or employment for the majority of the population.
High transaction costs price some SMEs out of the
Business model innovation: formal sector.
A fully operational and functional ASEAN Eco-
Modern trade, especially retail & wholesale,
nomic Community and Free Trade Agreement in
the supermarket, and the department store, has
2015.
already dominated the domestic consumption
Criminalizing street vendors in major Southeast
market, and enjoys semi-monopoly status. It looks
Asian cities
very difficult for the small individual to compete
with them. Looking a bit on the bright side, the
globalization of trade and lifestyle can be seen
as a bridge between the formal and informal
sectors, and there is always room for the creative
REFERENCES
and social entrepreneur to take advantage of the
existing business model of this sector and learn Asia Monitor Resource Center (2011). Constituting political collective
from many success and failure cases from both bargaining power of informal workers Informal workers
organizing in South East Asia region (Occasional Paper).
local and international entrepreneurs. Small en- Retrieved from http://www.amrc.org.hk/node/1148
trepreneurs and m-SMEs could find a niche area Finnegan, G. and Singh, A. (2004). Role of the Informal Sector in Coping tional organizational style such as in the hierarchical or
and an opportunity from a shift in the consuming with Economic Crisis in Thailand and Zambia. SEED Working
Paper No. 42. International Labour Organization. Retrieved
lifestyle among baby-boomers and their depen- from http://www.ilo.org/wcmsp5/groups/public/---ed_emp/-- responded by providing the organizations ideology,
dents. -emp_ent/documents/publication/wcms_093979.pdf
Maligalig, D. S. & Guerrero, M. F. (2008, June 6). How can we measure
the informal sector? The Philippine Statistical Association, Inc. mid-year
conference. Retrieved from http://www.adb.org/Statistics/reta_
files/6430/How-Can-We-Measure-the-Informal-Sector.pdf
Rogers, R. & Botsman, R. (2010). Whats mine is yours: The rise of
collaborative consumption: Harper Business Press.
Rossouw G. W. (2011, January 11). Innovation in the Informal Sector.
Retrieved from http://ezinearticles.com/?Innovation-in-the-Informal-
Sector&id=5772570
Vandenberg, P. (2009). Micro, Small, and Medium Enterprises and the
Global Economic Crisis: Impacts and Policy Responses. International
Labour Organization.
ABOUT THE AUTHOR
Dr. Pun-Arj Chairatana
is the Managing Director of
NOVISCAPE CONSULTING
GROUP and the Principal Investigator of
TRENDNOVATION SOUTHEAST NEWSLET-
TER. He has been involved with various re-
gional scenario buildings and future exercises
since 2000. As a policymaker, he was Director
of the Policy Entrepreneur and Foreign Affairs
Department at Public Policy Development Of-
fice (PPDO), the Office of Cabinet Secretariat.
He has a background in economics for tech-
nological change, innovation management,
health and nuclear physics. His expertise is
in the areas of strategic foresight, technol-
ogy and innovation management, public
policy, trend analysis and political economy.
A street food vendor in Bangkoks central business district
- Copyright @PACEyes
Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
9
Organization
and Two Edged
Applications
The first anticoup protest by network of student and activist in front of
BY
Siam Paragon, Thailand. September 22, 2006. Photo by Kan Yuenyong
KAN YUENYONG
Founder, Siam Intelligence Unit KEYWORDS:
leaderless organization; self-organizing; sweet spot;
community; Network; Wikipedia; Open Source.
IDEA
Each organization requires a specific style of leader,
but the role of the leader may vary. In the conven-
centralized organization, the inspirational leader who
and the leader who responded by giving operational
direction would have been the same person. 3 In con- Conventional organization
trast, in the leaderless organization (decentralized,
cellular) the two leaders will be different people, and
most of the time the operational leader acts on his or
her own but tries to correspond to the ideology from
the inspirational leader. In this sense, ideology is like
the glue for all decentralized units. Leaderless organization
Figure 1: Leadership in the leaderless organization and
However, a prominent remark was made by Justin S. conventional organization
Hsu and Brian C. Low in their Naval Post Graduate
School thesis, in which they asserted that the effective- As long as the inspired leader continues to exist, even
ness of the leaderless organization depends on the if the operational leader in each cell is decapitated, a
contexts of the state or the society. Also, the 2006 new cell will emerge and continue its operation. The
bestselling book by Ori Brafman and Rod A. Beck-
strom proposed a similar concept and challenged the
analogy is the regeneration of a starfishs organs that
have been cut off or destroyed (Figure 1). Whereas, in
reader to rethink leadership styles and organizational the conventional organization the organization would
structures; leaderless may not be the appropriate be defunct if the leader was eliminated. This implication
terminology. The key question regarding Southeast was realized in the survival of Apache when attacking
Asia is if a separatist organization using this concept Spanish troops, and the survival of P2P players in the
can thrive in the Southeast Asian context. A more chal- music industry.
lenging question is whether the concept can be applied
to an organization to form positive results, such as A Cruel Leaderless
disaster relief and the pooling of resources to
help poor people. Organization: The Blade
Indonesias Jemaah Islamiyah (JI) should not be viewed
SCENARIOS as a leaderless organization; it has a hierarchical mili-
tary style structure, which is trying to establish a pan
regional caliphate in Southeast Asia. JI is comprised
Whether we like it or not, the leaderless organization of regional units or mantiqis, as follows:
concept is widely popular nowadays; to understand its
reality is vital for not only handling the security side, but
also helping enlarge an opportunity to make a flexible Mantiqi 1: Singapore, Malaysia (excluding Sabah)
and efficient pooling of resources to cover any emer- and the Southern Thailand
gency moment. At the moment, the real leaderless Mantiqi 2: Indonesia (excluding Sulawesi and Kali-
movement is yet to be seen in Southeast Asia, due to a mantan)
different context we will discuss in more detail below. But Mantiqi 3: Sabah, Sulawesi, Kalimantan, and the
the dynamic and a closer view of the global-sociological Southern Philippines
factor generated by technology cannot be overlooked. Mantiqi 4: Australia and Papua New Guinea
3 In the book The Starfish and the Spider: The unstoppable power of leaderless organizations, the inspired leader is called the catalyst, while the operational leader if referred to as the
champion.
 10
JIs leader Abu Bakar Baasyir was found to have acted
as a spiritual and operational leader. JI made some
impact on Indonesia; at least the secular state finally
adopted some Sharia law. The Naval Post Gradu-
ate Schools thesis stated that JI, as a conventional
organization, had some success more than its ally Al
Qaeda because of the context of the state. Indonesia
can be considered as a shallow and narrow state,
when measured in term of depth (ability to exercise
power simultaneously across many aspects of life), and
breadth (ability to exercise power simultaneously
across territory).
According to Hsu and Low the quantitative indicator
differentiating between the shallow and deep state
involves the ability to collect taxes (taxes by GDP):
less tax will be considered as indicating a shallow state,
while more tax will be considered as a state with depth.
In comparison, the indicator on breadth is police force
per people: less police will be considered a narrow
state, more police will be considered a broad state. Thus
the conventional organization works well in a shallow
and narrow state like Indonesia, while in Southern
Thailand the insurgency would be considered more of
a leaderless organization, because of its breadth and
depth characteristics when compared with Southeast
Asia standards.
Figure 2: Breadth indicator: Police per 100,000 people
Figure 3: Depth indicator: Tax by GDP (%)
Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
Figure 4: South East Asia states characteristics
The author collected all related data from countries in
Southeast Asia (see sources on reference) and summed
them up into the state breadth and depth matrix (see
Figure 4), and then categorized each respective country.
In Thailand, leaderless organizations such as Yellow
shirts and Red Shirts are equipped with different
ideology and can be considered as effective to some
degree. Although, in the current political contest they
ally themselves with conventional organizations such as
with some factions in the establishment, the Royal Thai
Army and the Democrat party in the Yellow shirt case,
and the Thai Rak Thai / People Power / Phuea Thai
party in the Red shirt case. However, they both have
and will continue to act independently from their allies.
The movements have influence on the country reform
process both in anti-corruption and democratic reform.
This characteristic also can be applied in Malaysias
Bersih 2.0 and its ally, the opposition coalition, Pakatan
Rakyat (PR). They both have influence on the ruler co-
alition parties, Barisan Nasional (BN), to accept some
form of election reform. Nevertheless, there have been
criticisms of both the Thailand and Malaysia cases that
an allying strategy of these organizations with opposi-
tion political factions cannot provide enough political
legitimacy to the movements.
A Peaceful Leaderless
organization: The Olive
We can also apply the leaderless organization concept
to the social movement with social and governance
projects. Many Open Source software projects, such
as Linux, Apache and Mozilla, can be considered as
examples of the decentralization movement. Other
non-software projects such as Wikipedia and Creative
Commons have applied the same model. Bessen (2005)
pointed out that when compared with the commercial
software ecosystem, commercial firms will continue to
choose to join with Open Source software projects for
greater benefits.
Open Source software can help lower total ownership
costs and thus play a significant role in decreasing the
digital divide for low income people, as we can see
by the use of Open Source software in cheap Tablet
or Notebook projects. Localization (l9n) and interna-
tionalization (i18n) of open source software projects in
various countries - most notably in Thailand, Laos, and
Vietnam - can be counted as a sample of the movement,
11
although its effectiveness is yet to be reviewed.
Volunteer management in disaster relief can also be
considered as one kind of leaderless organization
DRIVERS & INHIBITORS
management. If we borrow a concept from the Naval
Post Graduate Schools thesis, the leaderless organiza- Drivers:
tion should work well in depth and breadth countries,
such as in Thailand and Malaysia. The volunteer effort Internet and Social Media will help ease com-
munication among citizens, thus easily form and
cooperated well during the 2004 Tsunami, and various
drive leaderless organization.
other flooding incidents in Thailand. Other countries in Strong scenarios such as political conflicts, natural
Southeast Asia should rely on their own official mecha- disasters and trade monopolies will lead to the
nisms, or external assistance, like during Cyclone Nargis creation of the inspired leader, thus an originator
in Burma during 2008. An informal group of people of a leaderless organization.
for managing or pooling resources to help improve The number of participants will generate natural
poverty or solving problems in remote areas can also operational leaders which will create further
multiple cells.
be an effective approach. However, the communication
and information exchange center between each of the Public support will definitely define the leaderless
organizations fate.
volunteer units should be well equipped.
EARLY INDICATORS Inhibitors:
There has been a lot more attention and a much higher Shallow and narrow environments in society will
expectation for the movement called the leaderless not properly foster the leaderless organization.
organization.
There has been the emergence of a self-organizing
movement called Occupy Wall Street in 2011. The
REFERENCES
movement in similar form also spread to different Bessens, J. (2005). Open source software: Free provision of complex
cities throughout the US, as well as in Canada, public goods. Boston University School of Law and Research on
Innovation, USA.
Italy and Japan. There is also an on-going discus- Brafman, O., & Beckstrom, R. A. (2008). The starfish and the spider:
sion about how to organize similar movements in The unstoppable power of leaderless organizations. Portfolio
Singapore among Facebook users. Trade, USA.
The Arab spring, without clear leadership, has Hsu, J. S., and Low, B. C. (2010). The leaderless social movement
proven it could topple most governments in the organization: Unstoppable power or last ditch effort? Naval Post
MENA (Middle East and North Africa). Graduate School, USA.
McCants, W. (2011). Al Qaedas Challenge: The Jihadists war with
Islamist democrats. Foreign Affairs, 90(5), 20-32.
IMPLICATIONS Van Wendel de Joode, R., de Brijn, J. A., van Ecten, M. J. G., Schmidt,
A. H. J., Bonenkamp, B. J, and van Tongeren, P. E. (2003). Protect
ing the Virtual Commons: Self-Organizing Open Source and Free
The leaderless organization is a concept or managerial Software Communities and Innovative Intellectual Property
tool. Its a two-edged sword, because it can be used in Regimes. Cambridge University Press, UK.
Wikipedia. List of countries by size of police forces. Retrieved from
negative way as a platform for a terrorist network on http://en.wikipedia.org/wiki/List_of_countries_by_size_of_po-
the one hand. On the creative side, it can be used as lice_forces
a platform for collective effort for creating software or Wikipedia. List of countries by tax revenue as percentage of GDP.
Retrieved from http://en.wikipedia.org/wiki/List_of_countries_by_
networking for volunteers for disaster relief. Suggestions tax_revenue_as_percentage_of_GDP
for policy developers are as follows:
On the leaderless terrorist network, try to engage
with the inspired leader and its ideology. While,
in the case of the operational leader there is the
ABOUT THE AUTHOR
Kan Yuenyong is a co-founder
need for more intelligence work to identify and
deal with him/her. and executive director of Siam Intel-
On the creative social leaderless project, avoid ligence Unit (SIU) http://www.siu.
the free rider effect. Increase the level of com- co.th, an alternative think tank and research service
munication to win more public support. on various social, environment, business and economic
issues. He is now studying in the advanced certificate
R. van Wendal de Joode et al. (2003) suggested course on Promotion of Peaceful Society (class 3)
that government should allow and support both at King Prajadhipoks Institute. He was selected by
traditional market mechanisms and Open Source The Friedrich Naumann Foundation to represent
schemes. Thailand in seminars on Strategic Planning and New
Government can apply the leaderless organiza- Public Management in 2009, held at the Interna-
tion concept for decentralization or participatory tional Academy for Leadership, Germany. He formerly
governance on public projects. It can help cut worked at Internet Thailand Public Company Limited.
public expense and support for direct democracy.
Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
 12 13

INTERVIEW
it started to grow with financial-economic collapse
in 1997. This happened because many jobless Thais
had to move back to the informal sector for earning
an income to live. This is what we now generalize
as the informal sectors transitional role between (a)
gration of the informal economy in Asian cities do
exist. Indeed policies on the informal sector, vis--vis
urban planning, have started to change in recent years
from outright hostility to benign neglect and eventu-
ally towards support and promotion. These changes
reflect a new understanding of urban environmental

BY
W I T H low level and higher level of development and (b)
economic recession and recovery. Let me also add
problems and developmental issues. Policies, programs
and projects are still, however, somewhat remote from
DR. APIWAT RATANAWARAHA that more marginal and low-productivity occupations the majority of the workers. The inadequate attention
Department of Urban grow during low level of development and economic of physical planners, to the content of urban growth
and Regional Planning,
Chulalongkorn University Dr. ATM Nurul Amin recession. This phenomenon is known as involution-
ary growth in the informal economy since it serves
as a last resort to live. In contrast, the composition
stimulated by economic and market forces, is part of
the problem in this respect.

Q What are the emerging trends in the
informal sector in Southeast Asia?
A Southeast Asia consists of countries at different lev-
els of economic development. The informal economy
tends to shrink as the overall economy grows. But
when recession takes place, it grows again as has
been observed in Thailand. It works as a shelter,
cushion of shock. This trend will perhaps continue in
the future too. To be sure let me explain.
In the cities of Southeast Asian countries, some of
which experienced rapid economic growth during
the mid-1980s to the mid-1990s, many of the precari-
communities, govern-
ments, trade unions and
NGOs are underway to eliminate children from such
work. There is an indication that despite poverty, parents
do want their children to go to school.
In some countries, such as Laos and Vietnam, the
informal economy grew as these countries opened
their markets. Many informal enterprises are dynamic,
flexible, entrepreneurial, and are able to explore the
new market. They play market enhancing roles. The
relationship between formal and informal economy is
often close. The formal economy enterprises subcontract
to the informal economy to create flexibility in their
enterprise operations.
Q What are the roles of the state in
of the informal economy during economic upturn
is marked by growth of dynamic enterprises as a
response to stronger subcontracting linkages with
the formal economy.
International mobility of workers (international
migrants) will also affect the future of the informal
economy. Although labor is not as mobile as capital,
people can still move. Many such migrants work in
the informal economy. This is another reason for the
continuation of informal economy even at a relatively
higher level of development of a country.
Media coverage of harassment of the informal economy
dealing with such future scenarios?
Extortion and corruption is another problem. Workers
in the informal economy are often subject to extortion by
powerful people. In order to deal with this, the workers
need to be better organized in the form of association
or professional groups so that their collective power
may counter balance the mafia power. The state may
have to play role in supporting the effort to organize
the informal groups. Secondly, the law enforcement
has to be in place. Thirdly, political patronization of
local touts (influential guys) will have to be stopped,
particularly by the ruling partys local level leaders.
workers by law-enforcing agencies or local touts helps
to create an overall conducive environment.

ous jobs had started to disappear. This has clearly
been the case in Bangkok, as typified by fewer
salengs who go to the residential areas to buy
recoverable wastes and by the near disappearance
of samlor drivers whose work has largely been
replaced by tuktuk drivers, soi motor bike services
and taxis. To a lesser extent, such change began to
take place in Jakarta as well, but before this trend
could reach its logical end, economic collapse and
political turmoil set in. This is now leading to the
restoration, if not to an increase, of various forms
of precarious work in the informal sector.
Womens presence in the informal sector appears
to be higher in Southeast and East Asia than in
South Asia. However, the difference may not be as
large as it appears because many informal sector
surveys do not include domestic workers and piece-
rate homeworkers who are mainly women and who
may be hidden in the South Asian countries for
cultural reasons.
The work of children in the informal sector is a major
concern. The presence of children in the labor force of
the East and Southeast Asian countries is very limited.
In contrast, it is widespread in the South Asian coun-
tries. This suggests an association between level of
economic development and work of children. Again,
the most disconcerting fact is that children tend to
work in low-paying and hazardous occupations such
as waste-picking, domestic work, apprentice and
casual labor. Many efforts of UN agencies, donor
Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
A
Q What do you see as the future
scenarios of the informal sector
in Southeast Asia?
A The most optimistic hope on the informal
sector has been that it plays a transitional
role between low level and higher level of
development. In other words, with economic develop-
ment, the size of the informal sector declines. It was
hoped that more and more jobs will be created with a
momentum of job growth in the urban-industrial sector.
Thus, the job-seeking individuals in the labor force left
out for working in the informal economy will be fewer.
Evidence does show such an
inverse relationship between the level of economic
development and the size of the informal economy.
But such decline has not often last long. We observe
that the informal economy size does not only vary
with level of development but also with economic ups
and downs. For example, my study on the Indonesia
informal economy in the early 1990s showed that
during economic recession the informal economy size
increased in Indonesia. It seems to have been the case
because job availability in the formal economy declined,
whereas, we also recorded data showing that the size
again started to decline with economic recovery. This
pattern we observed even more strongly in Thailand.
For example, because of economic boom during 1987-
1996, the size of the informal economy in Thailand
declined significantly but
First, the state needs to change its attitude and
perception toward the informals. They need to
become more accommodating instead of being
hostile. Yogyakarta in Indonesia has got example
of accommodating the informal economy.
Capacity building is very important. Some informal
activities are concentrated in specific areas, so the
state can target them and provide capacity-building
programs.
Integration of informal economy into urban plan-
ning and management: right now the informal
economy is not integrated into urban planning and
management. This has to change.
No need of informal economy workers is of ABOUT DR. ATM NURUL AMIN
greater importance than space (on average they
occupy 2-3m2 area per each activity as reported Dr. ATM Nurul Amin, Professor of the Department
by a Jakarta survey). Yet this need has received the of Environmental Science and Management of North
least policy attention. All cities experience severe South University (NSU), Dhaka, Bangladesh, is cur-
problems in managing the informal sector because rently the Dean of NSUs School of Engineering and
of their unauthorized locations. The most common
Applied Sciences. Prof. Amin was a faculty member
policy responses have been harassment or outright
eviction. Some cities have adopted relocation poli- of Asian Institute of Technology (AIT), Bangkok,
cies without taking into account the importance of the Thailand, during 1987-2008. His specializations
work-shelter nexus and the need to locate their work and research interests include urban informal sector
in a place conveniently accessible by customers. and urban environmental management. One of his
recent publications is The Informal Sector in Asia:
Although relocation policies largely fail, some
Public Policy and Actions toward Decent Work.
examples of successful accommodation and inte
Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reflect the official positions of Noviscape Consulting Group ot the Rockefeller Foundation.
Copyright Trendsoutheast 2009 - 2011. All Rights Reserved.
14
15
 Dr. Pun-Arj Chairatana
Dr. Apiwat Ratanawaraha
Kan Yuenyong
Co- Principal Investigator

Dr. Donald Arthur Johnson

Editor

Preeda Chaiyanajit
Project Co-ordinator

Passapong Boonlueng
Graphic Designer

Regional Horizon / Environment - Scanning (HS/ES)

and trend monitoring for issues relevant to people.
life, and regional transformation across the
Sotheast Asian region.

Dr. Pun-Arj Chairatana

Dr. Apiwat Ratanawaraha
Kan Yuenyong
Dr. ATM Nurul Amin
Author/Information Specialist

Trendnovation Southeast
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