Southern & Southeastern Asia

The region represents rich geo-political, linguistic, and ethnic diversity, and varied sociocultural and religious practices. Economies included in this report have varied forms of governments, such as republic (Indonesia, Myanmar, Nepal, Pakistan, the Philippines, Singapore, and Vietnam), federal republic (India), and absolute monarchy (Thailand).

The Economist Intelligence Unit’s Democracy Index (2017), which scores economies based on five categories—electoral process and pluralism, civil liberties, the functioning of government, political participation, and political culture—categorizes India, Indonesia, the Philippines, and Singapore as flawed democracies; Nepal, Pakistan, and Thailand as hybrid regimes; and Myanmar and Vietnam as authoritarian regimes.

Economically, the South Asian sub-region is growing at a faster rate with a predicted GDP growth of 7 percent in 2017 and 7.2 percent in 2018. The Southeast Asian sub-region’s GDP is also predicted to grow by 4.8 percent in 2017 and 5 percent in 2018 (Asian Development Outlook, 2017). However, the countries in the region are at different levels and stages of economic development.

According to the World Bank (2016), Singapore and Thailand are upper middle income countries; India, Indonesia, Myanmar, Pakistan, the Philippines, and Vietnam are lower middle income countries; and Nepal is a low income country (World Bank, 2016). The region has the second and fourth most populous countries in the globe, with India (1.32 billion) and Indonesia (261.12 millions) accounting for nearly one-fourth of the world’s population. 

The region is also religiously diverse. Hinduism, the third-largest religion in the world after Christianity and Islam, is the most represented religion in India and Nepal. Christianity is practiced in the Philippines, while Islam is the most represented religion in Indonesia and Pakistan. Another dominant religion in this region is Buddhism, especially in Myanmar, Singapore, and Thailand.

Educational attainment levels are different depending on the country. Data from the UN Human Development Index reveals that the percentage of population (ages 25 and older) with at least some secondary education between 2005 and 2015 is highest in Singapore (78.6 percent), Vietnam (71.7 percent), and the Philippines (71.6 percent).

Almost half of the population has at least secondary education in India (48.7 percent), Indonesia (47.3 percent), and Thailand (43.3 percent), while in Pakistan (35.4 percent) and Nepal (32.0 percent) only one-third of the population reached a secondary level of education. Myanmar has the lowest (23.8 percent) proportion of population with the completion of secondary education.

The region has undergone political conflicts, ethnic violence, and terrorism and has witnessed the emergence of rights-based movements in past decades. Pakistan has suffered from terrorist attacks, and the spread of religious extremism, which has heavily influenced its political discourse and administrative policies.

Nepal has progressed into a constitutional democracy after years of violent conflict between the government forces and the rebel groups. Similarly, Myanmar is currently in a democratic transition after decades under oppressive military rule. While the economic liberalization, civil, and political reforms are taking place under the newly-elected democratic government, Myanmar’s government has received criticism for the treatment given to Rohingya Muslims in 2017. According to UN Refugee Agency Report, more than 420,000 people fled Myanmar in 2017, worsening the Rohingya refugee crisis in the South Asian region (UN Refugee Agency News, 2017).

Countries in this region are also particularly vulnerable to natural disasters due to their geographical locations in a high-risk natural disaster area with close proximity to the Pacific Ocean, Indian Ocean, and the Himalayan Mountains. The numerous natural disasters faced by these countries in recent decades have impacted the socio-economic and political developments in the region and have increased regional and international cooperation and assistance.

The devastating flood in India, Nepal, and Bangladesh in 2017, the earthquake in Nepal in 2015, and the recurrent cyclones and floods in Myanmar between 2015 and 2017 have influenced relevant public policies. The presence of international aid agencies and nonprofit groups has also increased along with philanthropic organizations and nonprofit groups that provide disaster relief as well as long-term recovery support.

The enabling conditions for the philanthropic environment are at their best in Singapore and the Philippines, and moderate in India, Indonesia, Pakistan, and Thailand, whereas in the remaining regional economies, the situation is not encouraging.

The nearly ideal environment in Singapore is attested to by other sources, as well. For example, the Doing Good Index published by the Centre for Asian Philanthropy and Society has placed Singapore in the highest category. Indicators show that the government is supportive and encouraging toward philanthropic organizations, policies are well defined and diligently followed, tax exemptions are generous, and the culture is accommodating.

In the case of the Philippines, the environment has improved when compared with 2015 results. However, there are some restrictions and requirements that leave the Philippines short of providing the same environment as Singapore. For example, foundations face a minimum capital requirement as a precondition for formation, philanthropic organizations have to register with the Bureau of Internal Revenue and, for that purpose, they have to get a permit from the local government, and the Securities and Exchange Commission issues circulars periodically, thereby requiring organizations to keep up with the changes.

These and many other formalities leave many philanthropic organizations, especially the smaller ones, struggling to comply with the law.

Economies with a rather moderate enabling philanthropic environment are those that are doing very well in some areas, but performing badly on many fronts. For example, India, Pakistan, Indonesia, and Thailand have quite liberal policies regarding the formation of organizations, but there are restrictions in certain areas.

With regard to tax exemptions, all four countries have more or less the same environment. While India and Pakistan perform equally well in allowing tax benefits for donors and receivers, Thailand’s tax policies for receiving charitable donations are quite hampering.

Indonesia applies a completely different policy of tax benefit for donors from the rest of the countries in the region. The tax law does not provide tax credits for individuals, but corporate donors receive 100 percent of tax credits.

Sending cross-border donations is one area that seems to be quite restrictive in many of the economies. India not only links the outflow with approval of the Central Board of Direct Taxes, but also conditions donations to match the interests of India as a country. In Pakistan, though the process and policies are clear, sending cross-border donations is a rarely observed practice due to resource scarcity.

Finally, there are countries that are doing poorly on most measures of philanthropic environment. The restrictive environment in Myanmar is explained by the fact that the country has been under the control of an army that is not usually supportive of civic liberties.

According to the country expert, Myanmar remained under sanctions (financially) for two decades, which severely affected cross-border transactions. But with the new fairly democratic government in place, things have started to improve.

Vietnam’s performance in terms of philanthropic freedom is surprising. There are increasing signs of collaborations and consultations between philanthropic organizations and the government, but the impact of this mutual understanding is not seen in other areas, i.e., formation and operation of organizations are restricted, and tax incentives are not encouraging. More upsetting is the deterioration of the philanthropic environment compared with the previous year studied: 2015.

Nepal has shown some improvement recently, but has lagged behind in many areas. Unregistered POs are considered illegal; there is no timeframe for the registration process to be completed, which might lead to indefinite delays by the offices involved; tax incentives for individuals and corporate donors are negligible; sending cross-border donations is not allowed; and receiving donations is permitted only with prior approval. Though the government recognizes POs as agents of social change and policy documents are positive, as well, there is an underlying tension between the two sectors.

Lastly, it appears that the sociocultural environment is very positive for philanthropic freedom in almost all countries. Most of them have a very rich culture and history of charitable giving, driven mostly by religious factors. Myanmar, which otherwise presents a gloomy picture, ranks even higher than Singapore in terms of sociocultural environment for philanthropy. In fact, for the third year in a row, Myanmar topped the Charities Aid Foundation’s World Giving Index, which ranks countries in terms of charitable donations.