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Promoting Stakeholder Capitalism and Civic Engagement in Southeast Asia

ISSUE 2020
No 2
Release 30 January 2020
By Dr. Chheang Vannarith

Countries and societies in Southeast Asia are searching for development models that are more inclusive, sustainable and resilient given the fact that the existing development model is not sustainable, evidenced by the widening socio-economic inequality, environmental degradation, and the prevalence of social injustice in some societies in the region.

One of the root causes of maldevelopment is the implementation of “shareholder capitalism”, in which independent private corporations can pool capital from many shareholders with limited liability, and the priority is given to the shareholders rather than to the stakeholders and the whole society.

Therefore, it is imperative that the current economic system and development model require a paradigm shift. There is a need to structurally reform capitalism from purely “capital and profit” driven to “society and people” driven. Across the region, some qualifiers to economic growth have been introduced and integrated into various concepts of development, such as “inclusive growth”, “sustainable development”, and “people-centred development”.

A better alternative to the current development model is “stakeholder capitalism”, which refers to a system in which corporations aim to serve the interests of their stakeholders including customers, suppliers, employees, local communities and shareholders. It is important for public policy makers and leaders of the private sector to introduce and implement stakeholder capitalism together with the revision of the purposes of their organisations towards people- centric.

The Davos Manifesto 2020 suggests key values and purposes for companies, including the respect for human dignity and human rights; the alignment of value with customers and suppliers; the contribution to the well-being of local communities; the realisation of environmental, social and good governance objectives; and the improvement of the state of the world.

As for civic engagement, it refers to the process through which members of a society engage with individual and collective actions aimed at influencing public processes. It is the cornerstone of stakeholder capitalism and a means towards building more inclusive, sustainable and resilient societies. Civic engagement is a critical tool to realise a people-centric development model, since it makes both the public and private sectors more accountable to the society and the environment.

Civic engagement in shaping the agenda on climate change is a case in point, illustrating the impact of individual and collective efforts of the citizens on the agenda. A 16-year-old Swedish climate change activist Greta Thunberg has empowered and inspired young people across the globe to fight against climate crisis. Particularly, the green movement in Europe has gained significant political space and power in shaping climate policy direction.

In Southeast Asia, however, civic engagement has been constrained by some political systems as well as the general lack of knowledge of the importance of civic engagement. Some youth organisations in the region have been politicised or become part of the youth wing of a political party. Therefore, more policy dialogues and engagements are required at both the national and regional levels to promote the roles of civic engagement in realising a people-oriented and people-centred ASEAN community.

It is argued here that civic engagement is vital to realising a “just society” and a “sustainable society”. The former refers to a society that respects human dignity, human rights and social justice. The latter refers to a society that cares about the environment, ecosystems, and future generations. ASEAN leaders should make greater efforts and invest more resources in strengthening and empowering civic engagement to realise their common vision and commitment to building an inclusive, sustainable and resilient ASEAN.

Some of the ASEAN’s regional projects should include the mapping of regional issues, the identifying of key stakeholders, and the developing of strategies to mobilise resources. There is also a need to promote a value-driven leadership and partnership building across the sectoral bodies of ASEAN. Trust building, cross-sector partnership, and multi-stakeholder dialogues are constant processes that must be continuously enriched. To build trust, we need common moral aspirations and ethics, and common interests and identity.

It is important for ASEAN to promote stakeholder capitalism and enhance civic engagement in order to realise a truly people-centred regional community. Some of the policy interventions should put people first in the policy formulation and implementation in both the public and private sectors. They should identify local issues and needs (especially through applying anthropological research approaches), develop innovative solutions, connect local knowledge, and promote local ownership.

Leaders of civil society in Southeast Asia, especially organisations working with the grassroots, need to spread stories and further share best practices on civic engagement. Connecting stakeholders, connecting knowledge and connecting action are vital to generating a greater impact. Leaders of civil society must be more creative, innovative and engaged with public processes and space in order to make a difference.

The 100 Model Villages Project which is being studied and developed by the Asian Vision Institute (AVI) can showcase successful village development models based largely on local knowledge, initiatives and ownership. The Project’s findings suggest that key intervention strategies consider the following: listening to local people, analysing local needs and issues from a holistic approach, developing capacity building programmes for local stakeholders, building public-private-people partnership (PPPP), and sharing knowledge between and among local communities.

The views expressed are the author’s own and do not reflect the views of the Asian Vision Institute.