The Sex Sector – The Economic and Social Bases of Prostitution in Southeast Asia

Marilyn Waring (Associate Professor Department of Social Policy and Social Work, Massey University, New Zealand)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 1 March 2000




Waring, M. (2000), "The Sex Sector – The Economic and Social Bases of Prostitution in Southeast Asia", International Journal of Social Economics, Vol. 27 No. 3, pp. 244-255.



Emerald Group Publishing Limited

Copyright © 2000, MCB UP Limited

The Sex Sector is a cross‐cutting, cross‐cultural analysis of one of the world’s largest growth industries, prostitution. It is primarily an economics text. It deals with major issues of basic human rights, especially those of children, and with employment, working conditions, gender discrimination and exploitation, inside the economic framework. The pity is that it is more likely to be read by activists in those areas, than to find itself as an alternate text in a mainstream economics class on global growth industries, for this would be where it would be of the most use.

Lin reports that the economic liberalisation has resulted in Asia’s sex industry becoming more internationalised. Through case studies of Indonesia, Malaysia, Thailand, and the Philippines, an overview of the industry in Southeast Asia, and a special section on child prostitution, the book investigates how the industry functions.

It has a highly organised and sophisticated structure, with powerful vested interests, which frequently have major links to governments. Governments like to deny the size of the industry when confronted with the social issues, and embrace wholeheartedly the income streams available from its services. The various players – owners, pimps, managers, parents who trade children, entertainment industry staff and segments of the tourism industry, and the prostitutes themselves reveal an industry where several millions earn their living in Southeast Asian communities.

In the first chapter Lin Lean Lim, who is an ILO researcher and employment expert, writes an overview of the economic and social bases of prostitution in Southeast Asia. She describes the industry’s response to the “changing tastes and sophistication of the customers”, with a brief recent history in respect of each of the countries in the case studies which follow.

While gauging the size and significance of the sector faces the same challenges as economic investigations of any underground or illegal activities, the weight of evidence from official statistics, university studies, investigations in the health sector, and surveys and reports from NGOs paint a picture that, while imprecise, is still revealing in its magnitude. Estimates in Thailand are that prostitution contributes between 15 per cent and 18 per cent of the GDP. In the Philippines, the numbers of those working as prostitutes are 300,000 women and 75,000 children. In both Thailand and the Philippines prostitution is illegal under the criminal law.

In Indonesia, estimates of the numbers of prostitutes range up to half a million, with an estimated financial turnover on an annual basis of $3.3 billion. In Malaysia, there are more than 140,000 women in prostitution, with between 8,000 and 10,000 in Kuala Lumpur. In Muslim Indonesia and Malaysia, prostitution is not illegal under the criminal law, but both prostitution and extramarital relations are condemned by Islamic law, the Shariah.

Prostitution is an important source of foreign exchange earnings and of remittances, both from overseas, and from urban to rural areas. Corruption of officialdom is rife throughout the industry. While the focus remains on the economic indicators of the sector, it is inevitable that the directly related policy issues and concerns are examined. The first chapter also includes an overview of the differing social mores and religious affiliations of the countries in the case studies, and discussion of questions of human rights, working conditions, demographic data, health and criminal aspects, legislation, and social programmes.

The study was funded by the Canada‐Asean Women’s Initiative’s Fund, and co‐ordinated by the Institute of Population and Social Research of Mahodol University, in Thailand. The fieldwork was conducted by national consultants in Indonesia, Malaysia, the Philippines and Thailand in 1992/1993. The methods included a standards questionnaire survey administered to women working in the sector, with small surveys of specific sub‐sectors in each country. Unstructured interviews were conducted with owners and managers of the sex establishments, police, and other government and non‐government officials with links to the sector. Interviews were conducted mainly by academics or students in each country, with the exception of Malaysia, where some interviews were conducted by government social workers.

The contributors to the chapter on prostitution in Indonesia trace its origins from the feudal period of the Javanese kingdoms to its commercialisation during the Japanese occupation from 1941‐1945. The structural transformation of the Indonesian economy beginning in the 1970s, first with displacement from agriculture, and then with the wave of new policies in the 1990s, has seen a rapid expansion of commercialised sex. Concentrations of sex workers are found near military bases, timber and mining camps, universities, and particularly near railway stations and roadside rest stops for long‐distance truck drivers. The formal sectors do not pay adequate wages. An added “bonus” for the sex sector is the use of sexual services in legitimate commercial enterprises.

The regional case studies which are described in this chapter illustrate the highly‐stratified nature of the sex industry. In Surabaya, “working conditions in the sex sector were considerably better than those enjoyed by most of the Indonesian labour force at a comparable level” The Bandung study focused on sex establishments in a city environment, Indramayu was a source area for sex workers, and Bataan illustrated the growth of prostitution alongside the development of a new industrial and tourist area.

Perhaps because of the involvement of government employees in the research work, one of the relative differences of the chapter on Malaysia is its discussion of the official health, medical, legislative and social development responses to the sex sector. Following a description of the early economic sexual transactions that were part of the regular and complex trade route, there is an excellent analysis of the economics of the sex sector. Thereafter, the focus is on Malaysian government responses via the Ministries of Social Welfare and Public Health, with some attention given to the work of key NGOs. In my own experience, this is not unusual for any multi‐lateral study which seeks to use Malaysia as a case study. In cross‐country research for the FAO, I have found that Malaysia is the only country that always insists on an official finger in the pie, and so I always approach their data with a sense that they have been tampered with to portray the government’s view, and put them in the best possible light. While this may be an unfortunate bias on my part, the repetition of my own experiences in the case of this research has done nothing to assuage my general reservations.

By comparison, the chapter on the Philippines is full of references to independent scholars and NGO materials. This aspect of US occupation had always been the subject of documentation, particularly focused on the US military bases. This also paved the way for an overtly organised and extremely profitable sex tourism, especially for Japanese men. Air carriers, hotel companies and tour operators still flourish in a vibrant marketplace which has become more covert, but no less profitable, as it moves out of the major urban areas and offers younger and younger boys and girls on the market.

The section reporting the survey conducted by researchers in metropolitan Manila is particularly strong. This report also highlights, with explicit reporting, the nefarious involvement of politicians, and the success of vigorously active NGOs, in the sector. The inter‐connectedness between macroeconomic policies and employment opportunities, the drug trade, the presence of military bases, the export of the “goods” of the sex sector, are all explored by the authors of this chapter. This chapter could stand alone as an economic case study.

If the scope and significance to the national economy would be the reason for choosing a case study, however, then we would not go past the chapter on Thailand. The authors write:

Currently, the sex industry in Thailand is highly visible, economically successful, internally differentiated and illegal. Ironically, since the 1960s the main policy issue has been how to legally reduce the size of the industry while, in fact, this period has seen the fastest growth in the industry, often under the indirect patronage of the government. The pattern of economic development (including the expansion of the tourist industry) and gender relations in Thai society have interacted to create the conditions for a flourishing sex industry. A complex set of interrelated changes associated with economic development and gender roles has operated to provide an increasing supply of women for the sex sector (p. 131).

By this point in Lin Lean Lim’s book, I can see it as a text for teaching anything from structural adjustment policies and their effects on the labour market, foreign exchange and labour migration and currency remittances, the hidden economy and the “statistical discrepancy”, a whole study in indirect costs, a great discussion on public and private goods, and, of course, the question of slavery. Slavery, despite its being a question of fundamental human rights, is also, fundamentally, an economic subject around ownership, labour, and commercial exploitation.

Whatever the civil libertarians and others may wish to debate, outside the economic context, about the legality or otherwise of prostitution, and the esoteric distinctions between voluntary and enforced prostitution, there is no place for such academic debate about the forced labour and contemporary slavery of child prostitution. This is the subject of the penultimate chapter. Forced labour and contemporary slavery are economic issues. Yet, I have the uneasy experience of a lifetime, that most of the mainstream economists I know would not want to deal with the subject. Forgetting that theirs is only a social science, and labouring under the pretence that their work is clinically detached from any case studies that might invite some analysis of how the current economic paradigms might promote and support such exploitative practices, they might think that this text is better suited to sociology or social policy or development studies.

Indeed, most of the policy considerations outlined by the author in the final chapter are of the social policy variety. But underpinning the pattern of continued expansion of the sex sector in each country have been the choices made of the patterns of development and the types of macroeconomic policies adopted. Further policies emphasising export‐orientation and industrialisation, while encouraging rapid urban development, continue to contribute to the neglect of rural areas, reduced agricultural employment, and increased gaps between rich and poor. All these characteristics fuel the growth of the sector.

This book is a well‐researched and rigorous study of an underground economic area, that makes an invaluable contribution to our knowledge of The Sex Sector, and its “contribution” to growth and wellbeing. I challenge academics to use it as a teaching resource and an industry study, to venture into more difficult case study material, and to reflect on the adequacy of economic models to deal with such large economic sectors when they raise such moral questions.

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