The Thai textile industry's future seemed bleak in the 1950s when local investments in mechanized spinning collapsed in the face of subsidized cotton imports from Pakistan. But over the next decades, the industry grew (Tables 6.1, 6.2), and by the mid-1980s, a fairly complete textile “complex” had developed (Figure 6.1). The industry's export value also grew from roughly $636,000 in 1981 to over $4 billion in 1991, with garments gradually dominating the industry's exports (Figure 6.2). By the year 2000, Thailand was ranked as the world's ninth largest apparel exporter. The industry also became a key part of the Thai economy: it was the largest export earner by the mid-1980s and the second largest exporter in 2000 (Figure 6.3); it was also the source of 4.5% of total Thai GDP in 2003 employing over 20% of the manufacturing workforce.

But textile's share of Thai manufactured exports fell from around one-third in the mid-1980s to 14% in 1997 and 11% in 2000–2002. Thailand's share of world garment exports fell from 3.2% in 1995 to 2% in 1998. The industry's export growth rates fell from 26% in 1989 to 7.2% in 1995, actually declining by 14% in 1996. These declines reflected an overall fall in competitiveness. Textile exports subsequently rebounded (Figure 6.2), but the country's share of global textile trade continued declining to 1.8% in 2004, and the recovery was largely a function of exchange rate shifts and market diversification, not upgrading.

In 1995, Business Week identified Thailand as “Asia's New Car Capital,” and Thai leaders began describing their country as the “Detroit of Asia.” Thai automobile production had risen from around 100,000 units per year since the mid-1980s to a million units in 2005, despite a slump following the 1997 crisis (Figure 7.1). Exports, especially of the 1-ton pickup trucks for which Thailand became the second largest market in the world and a major production site for Japanese carmakers, figured as a key part of this growth (Figure 7.2). Those exports were based in part on well-developed automotive clusters housing large numbers of global producers (Figures 7.3 and 7.4). Their growth made the industry an important part of the Thai economy: by 2005 the industry accounted for 8% of the workforce and 15% of GDP, and it was the country's second largest source of export revenues.

The Thai automotive industry is, then, a clear example of successful structural change. Indonesia's auto industrialization efforts and large population (216 million vs. Thailand's 63 million in 2006) also had drawn foreign producers, but it was Thailand, not Indonesia, that became “a major base for vehicle assemblers from advanced industrial economies.” But Thailand's automotive record has been weaker than South Korea's (Figures 7.5 and 7.6). As of 2006, Korea was East Asia's only mass exporter of passenger vehicles, ranking fourth in the world in vehicle production and exporting half of its output.

The sugar industry exemplifies both the impressive diversification and the modest upgrading characteristic of the broader Thai economy. In the mid-nineteenth century, the Thai sugar industry was robust and promising: taxes on the industry constituted the largest source of cash revenue for the government, and British colonial officials predicted that Thailand would become a major sugar exporter. However, competition from colonial plantations elsewhere in Southeast Asia largely destroyed the Thai sugar industry, and by 1950 it was unable to produce enough sugar to meet domestic demand. The classic postwar study of the Thai economy concluded “there was no prospect of exporting sugar from Thailand.”

Yet the industry revived and thrived. Sugar production rose from 35,000 tons in 1953–1954 to an annual average of 5.3 million tons from 1995 to 2000. Sugar exports rose as well, from under 2,000 tons in 1961 to over 5 million in 2002 making Thailand one of the world's three largest exporters along with Australia and Brazil. Between 1993 and 1999, sugar brought in more net foreign exchange for the Thai economy than any agricultural product except rice. With 46 sugar mills and over 100,000 farms, the industry employs over 1 million people.

Comparative advantage only partially explains this turnaround. While Thailand has soil and weather conditions well suited to growing sugarcane, so do the Philippines and Brazil.

This book has addressed the institutional and political bases of two key growth transitions: structural change – the move from an economy based on a small number of traditional sectors to a more diversified structure of multiple, nontraditional activities; and upgrading – the efficient production of higher value added goods based on local inputs. The first transition is difficult: the identification of and mobilization of resources for risky new activities pose significant coordination and information challenges. My principal focus, however, has been on the even more challenging obstacles of upgrading: Why have some countries that succeeded in diversifying their economies had a much more difficult time at upgrading?

Although this set of questions has received little attention from scholars and policy makers, it lies at the heart of differences between the East Asian NICs and the “little tigers” of Southeast Asia. I have addressed these questions through comparative analyses of one “little tiger” – Thailand – a country that has transitioned from low-income to middle-income status within just a few decades and has continued to grow on the basis of impressive diversification. Yet Thailand faces “a real challenge of sustaining its growth and transitioning into a higher income country …” With more intense global competition, Thailand needs to improve its productivity and competitiveness “if it … (is) … to avoid being stuck in a middle-income trap in which many Latin America (sic) countries have been in for several decades.”

In December 1991, seventy years of communist rule in the Soviet Union came to an abrupt end. The center could not hold, things fell apart, and it was not clear what new beast was slouching towards Bethlehem to be born. As the Communist Party ceded executive functions to newly emerging state institutions, regional elites within the Russian Federation, the largest of the fifteen Soviet republics, suddenly found key roles available to them in the active building of a new Russian federal state. The future seemed to be wide open, and several regions seized the opportunity to make political and economic demands on the center in the form of movements for greater autonomy and sovereignty.

Yet not all regions of the Russian Federation sought greater autonomy, and this diversity of outcomes poses important questions which the scholarly literature has, for the most part, neglected. Put most generally, why did some regions come to believe that greater autonomy or full sovereignty was the best way to fulfill regional political and economic interests, while others did not? The experience of Russia's 89 regions in the early 1990s presents a puzzling pattern of variation in autonomy and sovereignty movements. The apparent role of economic factors in autonomy and sovereignty movements is particularly intriguing. There was remarkable heterogeneity in expressed economic interests, even though many regions bore striking similarities in their structural economic conditions, institutional configuration, and political history.

Social and institutional contexts affect the development and mediation of local understandings of the economy, as well as the transformation of those understandings into political and economic interests. The perestroika era, and in particular the interplay of orthodox and heterodox attempts at reinterpretation, which eventually destroyed the Soviet doxa, opened the conceptual space for new understandings of the economy and for regional relations in the Federation. That heterogeneous understandings of the economy existed and that they were connected to movements for greater sovereignty has been demonstrated in Chapters 5 and 6. In Sverdlovsk in particular, there was a great deal of negativity in understandings of the economy, and these negative interpretations of economic conditions were linked to the arguments regarding the formation of a Urals Republic. But, in order to complete the story of the formation of economic and political interests and the economic basis of movements for greater sovereignty – that is, to understand the transformation of economic understandings into political interests – we must return to the specific institutional context of the first Russian Republic, 1991–3, outlined in Chapter 4, and consider how the events and institutional configuration of that period affected the construction of political and economic interests in greater sovereignty.

There was no set of fixed economic interests (either corresponding or not corresponding to objective accounts), which, when presented with an institutional opportunity, resulted in the movement for the Urals Republic.

This book has been about the development of economic interests and movements for greater sovereignty. Using my analytic framework of imagined economies, I have examined the experience of Russian regional autonomy movements in the early 1990s and have argued that regional economic interests are intersubjective, contingent, and institutionally specific, and likewise, that the economic basis of the sovereignty movement in Sverdlovsk was a function of local understandings of the economy and particular institutional contexts.

Two last points on the role of institutional context need to be made to conclude and extend this analysis. First, I will discuss how attention to institutional context and social understandings, in particular the orthodox and heterodox interplay during perestroika, help us to understand both the timing of nationalist movements in the USSR and the end of the Soviet system. Second, I will briefly outline how the changing institutional context helps explain how regional economic demands were transformed in the post-1993 period. Finally, I will consider some implications of the imagined economies framework for further research in political economy, the constructivist paradigm, and studies of nationalism.

Timing of Nationalist Movements and the End of the Soviet System

One of the most intriguing questions of Russian and Soviet politics is why the USSR collapsed. And what explains its timing in the late 1980s rather than earlier?

How are regional movements for greater sovereignty related to objective economic conditions? The findings in Chapter 1 suggested that the relationship is not simply reflective; that is, Russian regions with comparable economic conditions did not have similar levels of activism toward greater sovereignty. And, analysis of specific cases shows that many regional movements for greater sovereignty were motivated by economic demands. We therefore face the question of how similar economic conditions could produce different economic interests.

In this chapter, I outline and support the case for an imagined economies framework through a three-part analysis of the role of economic factors in the nationalism literature, by discussing in turn objectivist approaches to the economy, orthodox critiques of objectivism, and heterodox constructivist approaches to the economy. In the analysis of these approaches to the economy, I discuss economic-based theories of nationalism consistent with each approach. In the end, I combine insights from constructivist political economy – cognitive science, economic sociology, historical institutionalism, and social theory – to arrive at the imagined economies framework, which I argue productively expands the nationalism literature.

Objectivism

An analysis of objectivism begins with a particular model of cognition because cognition addresses the issue of how human beings, including economic actors, understand their surroundings. The classic view of cognition is of rule-based manipulation of symbols. In this view, thought is abstract and unconnected to the particularity of bodies, minds, or souls.

The findings of Chapter 5 compel us to ask, how then are regional understandings of the economy related to movements for greater sovereignty? I argue that content analysis of Sverdlovsk newspaper articles related to the sovereignty movement will demonstrate that the movement for a Urals Republic was driven by concerns over inequality, both economic and constitutional. In other words, the movement was based on regional actors' belief that Sverdlovsk Oblast was treated unfairly in the Federation by the existing institutional structure, and that greater economic and political autonomy in the form of upgraded political status – to republic – was the solution to the inequality and adverse economic circumstances facing Sverdlovsk.

The analysis of regional actors' arguments for and against the movement for a Urals Republic also provides evidence that economic and constitutional inequality were not merely concepts strategically invented by regional elites in Sverdlovsk. By analyzing the arguments made by Sverdlovsk actors against the movement for a Urals Republics, I show that these anti-Urals Republic arguments did not dispute the claims of economic and constitutional inequality but instead focused mainly on the threat to the unity and continued existence of the Russian Federation and on claims of the illegality of the sovereignty movement.

Finally, by contrasting the arguments presented by Sverdlovsk and non-Sverdlovsk actors regarding the causes of the movement for a Urals Republic, the content analysis in this chapter also provides evidence of a particularly regional understanding of the economy, in the sense that Sverdlovsk actors share particular beliefs; for example, the issue of inequality is salient among Sverdlovsk actors only.

Now let us turn our attention directly to the two regions that are the specific focus of this study, Samara and Sverdlovsk Oblasts, in order to investigate the relationship between “objective” economic conditions and regional understandings of the economy. Local economic discourse is one way of accessing regional understandings of the economy during the 1990–3 period, and regionally produced newspapers and publications offer an invaluable trove of local discourse. Using quantitative and qualitative content analysis of 579 regional articles, I document interpretations in Samara and Sverdlovsk in four economic issues areas: fiscal policy, production, prices, and trade; and I compare those understandings with objective accounts. This systematic analysis demonstrates that differences in regional understandings of the economy are not predicted well by objective accounts of economic conditions. In particular, differences between Samara and Sverdlovsk in regional assessments of the benefits of particular economic events in the region are far greater than would be expected given the objective economic similarity of the two regions. Moreover, as I will discuss later in greater detail, while Samara and Sverdlovsk are quite similar in terms of economic conditions, there was little regional activism in Samara (activism score of 0 out of 9, see Chapter 1), while there was a great deal of activism in Sverdlovsk (activism score of 8).

In order to situate the comparison of economic understandings in the two regions, I first briefly outline historical, geographic, and political conditions in the regions to demonstrate that there are no overarching, non-economic differences that might compromise the suitability of the economic comparison.