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29 Dec, 2023

- Troubled Waters Ahead for Philippine-Vietnam Strategic Partnership on the South China Sea

- Same Moon, Different Dates for Hari Raya (Again!)

Commentaries / 2023 Top 10 / Misinformation / Philippine / South China Sea / Vietnam

Troubled Waters Ahead for Philippine-Vietnam Strategic Partnership on the South China Sea

Vietnam and the Philippines have formed a strategic partnership in the South China Sea. By reinforcing their respective claims to the area, however, they are vulnerable to a wedge strategy by third parties such as China.

Phan Xuan Dung   2:00PM, 29 Dec, 2023

Protesters wave flags and hold placards in front of the Chinese Consulate in Makati, Metro Manila on July 12, 2023. (Photo: JAM STA ROSA / AFP)

Editor’s Note: This article is the most viewed commentary on Fulcrum in 2023. It was first published on 24 August 2023.

Vietnam and the Philippines are working on a strategic partnership on the South China Sea to avoid maritime spats and put up a united front against China. As Hanoi and Manila enforce their respective claims in the maritime area, this leaves them vulnerable to a wedge strategy, allegedly by China or parties aligned with Beijing.

On 13 August, Philippine President Ferdinand Marcos Jr. told Hoang Huy Chung, Vietnam’s outgoing ambassador to Manila, that the Philippines had begun talks with Vietnam on a maritime agreement which would make it easier for the two ASEAN states to face common challenges in the South China Sea. Marcos stressed that such a pact would “bring an element of stability to the problems we are now seeing in the South China Sea”. This is likely a reference to the recent incident involving a Chinese coast guard vessel firing a water cannon at a Philippine supply boat.

In May, Marcos had conveyed to Vietnamese Prime Minister Pham Minh Chinh the need for the two governments to agree to avert conflicts in contested waters. There have been several incidents of the Philippine Coast Guard arresting and pursuing Vietnamese vessels in the disputed Spratly Islands for illegal fishing. A deadly clash occurred in 2017 when a Filipino Coast Guard ship opened fire on a Vietnamese fishing boat. A maritime agreement on rules of engagement and maritime law enforcement is crucial for the two South China Sea claimants to better manage maritime disputes and incidents.

Philippine-Vietnam bilateral negotiations on a maritime agreement align with their growing strategic partnership on the South China Sea, driven by shared concerns over China’s grey-zone tactics. At the 10th meeting of the Philippine-Vietnam Joint Permanent Working Group on Maritime and Ocean Concerns in May, the two sides expressed serious concerns over unilateral activities that undermine peace and stability in the region — a subtle reproach of China’s conduct. In early August, when the Philippines’ Secretary for Foreign Affairs Enrique Manalo visited Vietnam, both countries agreed to strengthen information sharing and coordination to tackle maritime challenges and combat illegal fishing.

However, troubled waters lie ahead for the burgeoning de facto partnership.

In response to China’s maritime assertiveness, both the Philippines and Vietnam appear to be reinforcing existing claims. Their efforts, however, may inadvertently stoke diplomatic tensions and nationalist sentiments.

In May 2023, Vietnam protested that the Philippines was violating its sovereign rights by placing navigational buoys in five areas in the Spratlys. Meanwhile, in the Philippines, nationalist and Beijing-friendly voices have increasingly depicted Vietnam’s reclamation and militarisation efforts as a serious threat to the country.

Moreover, third parties such as China could exploit Philippine-Vietnam maritime disputes and tensions to drive a wedge between the two countries.

A possible instance of such a wedge strategy unfolded in late July. It began with the publication of two articles on Vietnam’s militarisation of the South China Sea by the generally pro-China Manila Times. The first article, published on 16 July with the title “Vietnam beefs up militarisation in WPS”, mentioned a leaked document by Vietnam Ministry of Defence (MOD) indicating that Vietnam hired a private company to fortify contested features in the Spratly Islands (WPS refers to the West Philippine Sea, which is Manila’s official name for parts of the South China Sea in the country’s Exclusive Economic Zone). The second article, published on 27 July, details Vietnam’s alleged militarisation plan.

South China Sea and Vietnamese experts scrutinised the leaked document obtained by the Manila Times and have raised doubts over its credibility due to the inaccurate and inconsistent use of Vietnamese official formats and language. Among other issues, the document was not classified despite being a highly sensitive militarisation plan and it has basic grammatical errors that would not be overlooked in an MOD document. The experts further noted that the Manila Times inaccurately portrayed Vietnam’s reclamation of the South China Sea as a recent secret plan. In reality, such activities have been ongoing and acknowledged by Vietnam for some time.

Further evidence of this wedge strategy was provided in a recent article by the Philippine Daily Inquirer. It reports that prominent Philippine maritime security experts were contacted by suspicious individuals, who urged them to write about Vietnam’s alleged militarisation of the South China Sea. The experts suspected that this was a Chinese attempt to drive a wedge between the Philippines and Vietnam. The article also mentions that several Philippine reporters received suspicious emails claiming access to classified information on Vietnam’s island-building plans in the Spratly Islands. Notably, one of the email senders sought “to put pressure on the Vietnamese government through the media to stop its island-building activities.”

China or China-sponsored groups are likely behind this attempt to undermine Vietnam-Philippine growing strategic partnership on the South China Sea. Influencing international public opinion is part of China’s official ‘three warfares’ — seeking to influence public opinion as well as psychological and legal warfare — against other South China Sea claimants.

All these events suggest that in July, a public opinion warfare campaign was deployed to pit the Philippine public against Vietnam, aiming to sow discord between the two countries. If true, this campaign has yielded some effects.

On 1 August, shortly after the Manila Times articles were published, a group of Filipinos tore up a Vietnamese national flag in front of the Vietnamese embassy in Manila to protest the alleged militarisation. In response, Vietnam requested the Philippines “to strictly handle the case” and prevent such behaviour from reoccurring. Hanoi also suggested that similar incidents “could affect the development of the strategic partnership between the two countries”.

China or China-sponsored groups are likely behind this attempt to undermine Vietnam-Philippine growing strategic partnership on the South China Sea. Influencing international public opinion is part of China’s official ‘three warfares’ (san zhong zhanfa) — seeking to influence public opinion as well as psychological and legal warfare — against other South China Sea claimants. It is in China’s interest to keep ASEAN countries divided on the South China Sea, thereby preventing them from forming a united front against Beijing.

Given this context, Hanoi and Manila must remain vigilant and study any potential wedge strategy that may be employed against them. As strategic partners, the two should also devise coordinated responses to counter these tactics before bilateral ties endure significant damage.

Commentaries / 2023 Top 10 / Indonesia / Islam / Malaysia / Singapore

Same Moon, Different Dates for Hari Raya (Again!)

Some countries in Southeast Asia might end up celebrating Hari Raya on different dates, but this should not detract them from the higher goals of Ramadhan.

Norshahril Saat   10:00AM, 29 Dec, 2023

Singapore President Halimah Yacob at the launch of the Wisma Geylang Serai Hari Raya Light-up on March 17, 2023. (photo: Ngau Kai Yan / MCI posted by Halimah Yacob / Facebook)

Editor’s Note: This article is the 2nd most viewed commentary on Fulcrum in 2023. It was first published on 18 April 2023.

The month of Ramadhan, which falls on the ninth month in the Islamic lunar calendar, is coming to an end. Muslims around the world are preparing for Eidulfitri, which the Malays commonly refer to as Hari Raya (the big day) or what Indonesians would term as Lebaran (the end of fasting). Ramadhan is the month when Muslims perform obligatory fasting, with many not missing the chance to reap blessings and seek salvation from the Divine. Hari Raya, or the first day of the month of Syawal, signals the end of Ramadhan.

While Ramadhan is generally a peaceful affair in Southeast Asia, deciding which day Eidulfitri falls on can cause some controversy. This frequently happens in Indonesia, especially between the followers of the traditionalist Islamic organisation Nahdlatul Ulama (NU), its modernist rivals Muhammadiyah, and other Sufi groups. There were instances where NU and Muhammadiyah followers celebrated Hari Raya on different days — usually one day apart — resulting in unpleasant exchanges between the two groups. Indonesians have observed Lebaran on different days from what was determined by the government. However, apart from Indonesia, ASEAN countries with significant Muslim populations generally celebrate Hari Raya on the same day. 2022 was an exception: Singapore celebrated Hari Raya a day later than Brunei, Indonesia and Malaysia, which caused some uproar among local Malay/ Muslims. The last time Singapore and Malaysia celebrated the big day on different days was in 1971.

How can the same moon lead to two divergent conclusions for Hari Raya? This boils down to the standards applied by different religious authorities. For a country like Singapore, moon sighting is a challenge. As a result, it relies on mathematical calculations. Islam does not consider Singapore’s method sacrilegious. Without going through very technical concepts, the differences in determining Hari Raya lie in different mathematical formulae applied to moon sightings. Some religious authorities adopt the traditional moon sighting method, others purely on mathematical calculations, and most a combination of both. But applying mathematical formulas alone does not solve differences, as the formulas get re-evaluated from time to time and rely on the selective opinions of savants of the past. It is not cast in stone.

This year, determining Hari Raya across the region can potentially be contentious again. In Singapore, 22 April has been marked as this year’s Hari Raya and a public holiday. While the religious authorities in Brunei, Malaysia, and Indonesia have not made any declarations, Muhammadiyah has already decided that Hari Raya falls on 21 April. In his declaration, Muhammadiyah Chairman Haedar Nashir reminded his followers to appreciate and respect the diversity of opinions. Speculation is rife in Malaysia that Muslims may also celebrate Hari Raya a day earlier than Singapore, though the JAKIM authority was quick to dismiss it as misinformation. JAKIM urged Malaysians to trust the process. The Islamic Religious Council of Singapore (Muis) has undertaken a preemptive public communications exercise by reminding local Muslims that countries do not need to follow other countries on deciding when is Hari Raya.

The lack of standardisation for Hari Raya in a region that is closely bounded by geography and societal ties can have deep religious and secular implications. Muslims are forbidden from fasting on the first day of Hari Raya (1st Syawal), since the original intent of Eidulfitri is to celebrate the successful completion of fasting in Ramadhan. Praying at the mosque on the morning of Syawal is only recommended, but since fasting on 1 Syawal is a sin, agreeing on when the exact day is a serious issue and can be perplexing for many. From a secular perspective, the changing of the date of public holidays may be equally confusing or even problematic. Countries that rely on moon sightings must be flexible enough to change the public holiday at the last minute. This happened in Singapore in 1971, when the Mufti declared no moon was sighted above the horizon, and that Hari Raya would fall a day later than Malaysia. Since the public holiday was already declared for the previous day, Singaporean Muslims had to go back to work on Hari Raya as it was a working day. If the Hari Raya date is set in advance, families can begin preparations for the celebrations and plan their vacation leave in advance.

The lack of standardisation for Hari Raya in a region that is closely bounded by geography and societal ties can have deep religious and secular implications.

There are lessons to be gleaned despite having divergent views on the date of Hari Raya. In a way, the Indonesians have come to terms that these differences arise from time to time; and NU and Muhammadiyah followers have learned to live and let live. Ultimately, it is up to Muslims to decide. Each Southeast Asian state has an official religious authority that decides on the dates for important festivals. The majority of citizens respect the decisions and follow the authority. Those who disagree normally do so, but in a civil and private manner. No religious police can haul them up in prison for celebrating Hari Raya a day earlier or later. However, they must not instigate and spread hatred to those who disagree with their personal preference. They must also respect the state’s declaration of public holidays, which also applies to non-Muslims.

Despite differences about the date, Muslims should reflect on the higher objective of Ramadhan and Eidulfitri: to spare a thought for the needy, cultivating humility, fostering of brotherhood, and developing strong family ties. All the Muslim faithful must be respectful when articulating differences and be accountable to the Divine. Being religious is also about being good citizens of a secular state and respecting the rights of those with different viewpoints.

28 Dec, 2023

- “Red Card” for the President? Vietnam’s Biggest Political Drama in Decades

- On the Horns of Anwar’s Twin Dilemmas

Commentaries / 2023 Top 10 / Corruption / Vietnam / Vietnamese Politics

“Red Card” for the President? Vietnam’s Biggest Political Drama in Decades

Vietnam President Nguyen Xuan Phuc might be removed from his position. If online speculation is true, Phuc will become the first Vietnamese president to be ousted while still in office.

Le Hong Hiep   2:00PM, 28 Dec, 2023

Then Prime Minister of Vietnam Nguyen Xuan Phuc (L) and his wife Tran Thi Nguyet Thu arrive at the Indian Air Force Station Palam in New Delhi on January 24, 2018 ahead of the ASEAN summit. (Photo: MONEY SHARMA / AFP)

Editor’s Note: This article is the 3rd most viewed commentary on Fulcrum in 2023. It was first published on 17 January 2023.

On the evening of 13 January 2023, Vietnamese President Nguyen Xuan Phuc was seen present at My Dinh Stadium in Hanoi cheering the Vietnamese national football team in the first leg of the ASEAN Football Federation Championship final against Thailand. Despite his cheerful appearance, Phuc is facing a critical turnaround in his political career. During a secret meeting on the same day, the Politburo of the Communist Party of Vietnam (CPV) quietly voted to oust him from his position as president.

While no official news has been released about the decision, social media posts from well-informed Facebookers have hinted at the decision. For example, in a post shared on the morning of 14 January, Le Nguyen Huong Tra, who has a track record of leaking credible information about high-level personnel changes in the CPV, used the metaphor of the red card to hint at the Politburo’s decision to remove Phuc. She wrote that “[in a match] with tensions and dramas until the last minutes, the star from Quang Nam FC was given a red card. He is about to be sent off, spelling the end of his career as a professional footballer”. Phuc hails from Quang Nam Province. If proven to be true, the decision will be unprecedented as Phuc will become the first Vietnamese president to be ousted while in office.

It remains unclear what led to this decision. Online rumours indicate that Phuc’s spouse is allegedly involved in the Viet A graft scandal, which by last month had led to the prosecution of 102 persons, including high-ranking officials like former Minister of Health Nguyen Thanh Long and former Minister of Science and Technology Chu Ngoc Anh. The scandal also led to the dismissal of former Deputy Prime Minister Vu Duc Dam on 5 January.

The move is the latest example of the CPV’s intensifying anti-corruption campaign led by General Secretary Nguyen Phu Trong, who stated that there is no “no-go zone” in his crusade against corruption. Apart from the Viet A scandal, Trong is overseeing the investigation of several other high-profile graft cases.

The most notable among these is the bribery scandal related to flights repatriating Vietnamese nationals stranded overseas during the Covid-19 pandemic. The scandal has resulted in the prosecution of 40 government officials, senior diplomats and businesspeople. Former Deputy Prime Minister Pham Binh Minh, who was dismissed on 5 January together with Vu Duc Dam, is so far the most senior official implicated in the scandal, but it is expected that more political bigwigs may be implicated. Last week, Mai Tien Dung, the former head of the government office, received a warning from the CPV Secretariat, suggesting that he may be the next to face legal troubles.

Another ongoing high-profile case is related to Advance International Corporation (AIC) and its chairwoman Nguyen Thi Thanh Nhan, who were accused of bid rigging at a public hospital in Dong Nai Province. Last month, Nhan, who is still on the run, was tried in absentia and sentenced to 30 years in prison. Thirty-five other people, including the former party secretary and chairman of Dong Nai, also received long jail terms. Other bid-rigging cases related to AIC at other projects have yet to be prosecuted or go on trial. More senior officials may therefore face punishment soon.

With the anti-corruption drive resulting in major personnel reshuffles in the Vietnamese government over the past two years, there may be a concern that such changes will lead to political instability, ultimately threatening the CPV regime or constraining Vietnam’s economic performance. However, there is little evidence that this is the case. General Secretary Trong remains firmly in charge, and there is no indication that the personnel changes are causing disunity within the party or engendering instability in the political system.

On the contrary, the purge of corrupt leaders may pave the way for cleaner and more capable leaders to rise, helping the Party fight corruption better and improve its governance. As long as the leadership reshuffles do not lead to radical policy changes, their impact on the economy will also be limited. In fact, amidst all these personnel changes, Vietnam still recorded a GDP growth rate of 8 per cent in 2022, the fastest pace in 25 years.

The move is the latest example of the CPV’s intensifying anti-corruption campaign led by General Secretary Nguyen Phu Trong, who stated that there is no “no-go zone” in his crusade against corruption

The key question is, however, who will replace the outgoing leaders, and whether they are cleaner and more capable than their predecessors. In the case of Phuc, a leading candidate may be Minister of Public Security To Lam. Lam seems to have gained Trong’s trust for his loyalty and important role in directing anti-corruption probes. As a second-term Politburo member and head of the powerful Ministry of Public Security, Lam also has a considerable edge over his competitors. Truong Thi Mai, the head of the CPV Central Department of Personnel and Organization, may also be a potential candidate.

However, other senior politicians like National Assembly Chairman Vuong Dinh Hue and Permanent Member of the CPV Secretariat Vo Van Thuong will also gain from Phuc’s departure. They will face less competition at the next party congress in early 2026 when a new national leadership will be elected. They may also seize the opportunity to support a presidential candidate that belongs to or is aligned with their factions. With Phuc’s fall, Hue may emerge as the only viable candidate to replace General Secretary Trong, especially given that Prime Minister Pham Minh Chinh — the other potential candidate — may also face trouble due to his alleged close relationship with Nhan, the chairwoman of AIC.

On 13 January, Phuc witnessed the Vietnamese team score a last-minute goal to secure a 2-2 draw with the Thai team, thereby sustaining hope to win the championship in the return match to be held in Bangkok three days later. For Phuc, however, if he had indeed been given a “red card” by the Politburo, the final whistle for his political career might have been blown. Observers of Vietnamese politics will soon learn when he will officially be removed and who will emerge as the ultimate winners from Vietnam’s biggest political drama in decades.

Commentaries / 2023 Top 10 / Malaysia / Malaysian Elections

On the Horns of Anwar’s Twin Dilemmas

The results of the recent state elections in Malaysia were not unexpected. But the more important thing is Pakatan Harapan’s pursuit of the Malay vote, and what this portends for the coalition going into the next general election.

Khairy Jamaluddin   10:00AM, 28 Dec, 2023

Malaysia’s Prime Minister Anwar Ibrahim (Center R) and his deputy Ahmad Zahid Hamidi (Center L) arrive at the World Trade Centre Kuala Lumpur to watch the state election results in Kuala Lumpur on August 12, 2023. (Photo by Mohd RASFAN / AFP)

Editor’s Note: This article is the 4th most viewed commentary on Fulcrum in 2023. It was first published on 17 August 2023.

Malaysia’s recent state elections have ended in a stalemate, at least on the surface. Prime Minister Anwar Ibrahim’s Pakatan Harapan (PH) coalition retained the states they administered previously with little help from the United Malays National Organization (UMNO), with whom they now partner in the federal government. The opposition Perikatan Nasional (PN) alliance strengthened its grip on states formerly governed by the Islamist Parti Islam SeMalaysia (PAS), one of the component members of PN. But the elections were never about the topline results, which were largely expected. Many analysts had predicted a 3-3 outcome. It is rather in the details that we can discern the trajectory of Malaysian politics over the next four years before the next general election.

The elections were framed by PN as a referendum on Anwar’s eight-month-old administration. The strategy put PH and BN on the defensive, resulting in a slew of policy announcements being made during the campaign. While these policies have merit, especially the prime minister’s Madani economic narrative, they probably came too late for voters to fully understand and digest them. Instead, voters were once again attracted to PN’s effective use of bite-sized videos on popular social media platforms and the emergence of Kedah Menteri Besar, Sanusi Md Nor, who was in equal measure a lightning rod for attacks from PH-BN and a rallying force for PN supporters.

Although PH-BN attempted a counter-offensive strategy by highlighting the relative poverty and poor infrastructure in PAS-led states, this probably did more to antagonise voters in these states rather than convince them. This can be seen by the landslide results in the northern states, especially in Terengganu where there was a total wipeout. Of greater concern to PH-BN are the significant inroads PN made into the states of Penang, Negeri Sembilan and, especially, Selangor. In Selangor — the country’s richest and most urbanised state — PN captured 22 seats in the 56-seat assembly and denied PH the two-thirds majority it previously held.

Despite Anwar’s utmost efforts, however, the most important detail to emerge from the elections is that he lost more ground among Malay voters.

For Anwar, he was desperate to claw back Malay voters after a dismal showing in that demographic during the November 2022 general election. This has led to PN playing up issues of race, religion and royalty (3R) with a clear subtext directed at the prime minister being weak on these issues because he relies on support from non-Malay voters. As a result, Anwar spent the last few months before the state elections burnishing his Malay-Muslim credentials, conferring with Islamic scholars and clerics, criss-crossing the Malay belt states announcing various assistance programmes and even allowing his government to criminalise wearers and sellers of rainbow-coloured watches (a common symbol of the LGBT movement).

Despite Anwar’s utmost efforts, however, the most important detail to emerge from the elections is that he lost more ground among Malay voters. Dr Ong Kian Ming, also a Visiting Senior Fellow at ISEAS, has released provisional data showing the opposite of what Anwar hoped for. In Kedah, Malay support for PN increased from 67 per cent at the last general election to 83 per cent in the state election. Crucially, in Selangor, arguably PH’s most important stronghold, Malay support for PN went up from 49 per cent to 73 per cent. Early analysis suggests that these gains for PN have largely come from Malay voters. These voters, who had backed UMNO previously, transferred their support to the opposition coalition instead of either UMNO or PH.

There are many possible reasons for this. The first is Malay voter rejection of UMNO working with PH which has the Chinese-dominated Democratic Action Party (DAP) as one of its component parties. UMNO has long demonised DAP as being anti-Malay and anti-Islam and is now ironically paying an electoral price for working with the party. Second, UMNO’s president and current deputy prime minister, Zahid Hamidi, continues to repel Malay voters who find PH hypocritical for working with the UMNO chief, who is confronting multiple corruption charges. Third, PN excelled at weaving a narrative that combined economic fears with 3R insecurities to tip Malay support their way.

This brings us to Anwar’s twin dilemmas which will shape Malaysian politics for the next few years. His first dilemma is ideological. Will he stay true to his progressive and reformist platform or will he continue to push back against PN by introducing more conservative policies? His base has reacted to the election results by urging Anwar to stop pandering to the “Malay right” and focus on growing the economy, introducing reforms and championing multiculturalism. But with such a strong rebuke from Malay voters yet again, Anwar could be tempted to play it both ways: continue with ethnocentric overtures and programmes, and at the same time hope the economy improves for ordinary Malaysians.

His second dilemma is political. UMNO, his coalition partner and strategic vehicle that he hoped could put up a fight against PN in the Malay heartland, has failed miserably. Out of 108 seats that UMNO contested, it won 19, a dismal 17.5 per cent success rate making it one of the biggest losers in these state elections. If UMNO fails to reform by, amongst other things, removing its deeply unpopular president, Anwar faces an important strategic decision. He could stick to the current path and head into the next general elections by working with UMNO and even consider recommending a Royal Pardon for former prime minister Najib Razak who retains considerable support within the party. Alternatively, he could effect a parting of ways with UMNO and adopt other options. He could battle for Malay votes by enhancing Parti Keadilan Rakyat’s appeal to the demographic segment or leverage more on coalition partner Parti Amanah Nasional, which scored a surprise victory in one seat in Kelantan.

The last option is to reach out to Muhyiddin Yassin’s Parti Pribumi Bersatu Malaysia, which is a key party in PN. While this option might as yet be unthinkable, stranger things have happened in Malaysian politics before, most recently PH’s unlikely pairing with UMNO. The horns of these dilemmas will certainly weigh on Malaysia’s prime minister and his government in the next few years.

27 Dec, 2023

- China’s Military Exercises in Southeast Asia Belie Lack of Trust

- Anwar’s First Year: Performative and Underperforming

Commentaries / 2023 Top 10 / China / China-Southeast Asia relations / Defence

China’s Military Exercises in Southeast Asia Belie Lack of Trust

The PLA has increased the number of military exercises conducted with its smaller regional neighbours this year. But the scope, frequency and sophistication of the exercises still lag behind those conducted by the United States.

Ian Storey   2:00PM, 27 Dec, 2023

Chinese soldiers attend the Cambodia-China “Golden Dragon 2023” joint military exercise at the Royal Gendarmerie Training Center in Cambodia, March 23, 2023. (Photo by Wu Changwei / XINHUA / Xinhua via AFP)

Editor’s Note: This article is the 5th most viewed commentary on Fulcrum in 2023. It was first published on 8 September 2023.

It has been an exceptionally busy year for China’s People’s Liberation Army (PLA) in Southeast Asia. In the first nine months of 2023, the PLA held 11 military engagements in the region: the highest number ever and more than in any other part of the world this year. But the increased activity belies a lack of trust between China and its smaller neighbours in the region.

Part of the reason for the sharp uptick in China’s defence diplomacy activities in Southeast Asia is that it is making up for time lost during the 2020-2022 Covid-19 pandemic, when PLA troops could not deploy overseas.

But the main reason is that Beijing increasingly views defence engagements with regional states as a means of promoting a China-led security order, one that displaces and eventually excludes the United States. Stripped to its bare bones, that is clearly the goal of President Xi Jinping’s Global Security Initiative.

By conducting military exercises with Southeast Asian countries, China is attempting to show that it can be an alternative provider of regional security goods to the United States.

To that end, since the end of its ‘Zero Covid’ policy in December last year, China has quickly ramped up its defence cooperation with Southeast Asian countries (see Table 1).

Chinese Military Exercises on the Up

Table 1: China’s Defence Cooperation Engagements in Southeast Asia, Jan.-Sept. 2023

Name of Exercise

Countries Involved

Location

Dates

Assets/Personnel

Type of Exercise

Cobra Gold

Nine countries

Rayong Province, Thailand

27 February – 10 March

25 PLA personnel

HADR*

Golden Dragon-2023

China and Cambodia

Kampong Chhnang province and Sihanoukville, Cambodia

23 March – 5 April

China: 257 personnel CNS Jinggangshan Cambodia: 538 personnel

HADR, counter-terrorism

25th Coast Guard Joint Patrol

China and Vietnam

Gulf of Tonkin

11-13 April

China: 1 China Coast Guard vessel   Vietnam: 1 Vietnam Coast Guard vessel

Joint fisheries patrol

Exercise Maritime Cooperation

China and Singapore

Singapore

28 April -1 May

PLA-Navy: CNS Yulin CNS Chibi   Republic of Singapore Navy: RSS Intrepid RSS Punggol

Naval exercise

PLA-Navy Training Vessel Tour

Brunei, Thailand, Vietnam, Philippines

Port visits

15 May -17 June

Qi Jiguang

Goodwill mission

Multilateral Naval Exercise Komodo

30 countries

Makassar, South Sulawesi

5-8 June

CNS Zhanjiang CNS Xuchang

Multilateral maritime security cooperation exercise

34th Joint Naval Patrol

China and Vietnam

Gulf of Tonkin

27 June

CNS Guangyuan CNS Hanzhong   Two Vietnamese naval ships

SAR**

Harmonious Mission-2023

Kiribati, Tonga, Vanuatu, Solomon Islands and Timor Leste

South Pacific/Southeast Asia

3 July-9 September

CNS Peace Ark

Medical mission

Falcon Strike-2023

China and Thailand

Udorn Royal Thai Air Force Base, Udon Thani, Thailand

9-21 July

PLA-Air Force: 1 JH-7A fighter bomber, 1 Shaanxi KJ-500 early warning  aircraft, 6 Chengdu J-10 fighters   Royal Thai Air Force: 5 Gripen fighters, 1 early warning and control aircraft, 3 Dassault/Dornier light attack aircraft

Air force exercise

Joint Strike-2023

China and Thailand

Lop Buri Province, Thailand

16 August – 2 September

N/A

Army exercise

Blue Strike-2023

China and Thailand

Sattahip Naval Base, Thailand

3-10 September

China: 953 personnel CNS Simingshan CNS Anyang CNS Chaohu CNS Chang Chen   Thailand: 1,553 personnel HTMS Chang, HTMS Naresuan, HTMS Angthong HTMS Bhumibol Adulyadej

HADR naval exercise

Source: Various media reports

* Humanitarian and Disaster Relief

** Search and Rescue

But while the increased tempo of China’s defence engagements with Southeast Asia looks impressive, they should be viewed in perspective. In terms of size, frequency and scope, they cannot compare with America’s joint exercises in the region.

China’s drills with Southeast Asian militaries are still mainly bilateral and generally involve just a few hundred military personnel from each side.

China’s exercises in the region are often performative events; they are more symbolic than substantive. They are often highly scripted, with schedules and outcomes planned out in advance. Such events do not approximate real-world operations.

In contrast, America’s exercises with its regional partners are usually much larger and often involve more than just two countries.

For example, this year’s Cobra Gold exercise involved 7,000 troops from seven countries. In August, the annual U.S.-led maritime security exercise SEACAT, in Singapore, was attended by 300 naval and coast guard personnel from 20 countries. The U.S.-Indonesia exercise Super Garuda Shield (currently underway in Indonesia) has been joined by Japan, Australia, Singapore, the United Kingdom and France, bringing total troop numbers to over 5,000.

In April, the annual U.S.-Philippines exercise Balikatan involved 17,600 troops. The exercise was one — albeit the largest — of nearly 500 military engagements due to be held between the U.S. military and the Armed Forces of the Philippines (AFP) this year.

China is, however, taking a leaf out of America’s playbook and is moving towards holding multilateral exercises in Southeast Asia.  Peace and Friendship 2023 is an exercise that will include military personnel from China, Cambodia, Laos, Malaysia, Thailand and Vietnam. It is currently planned for November.

But it is not just the size, frequency and composition of U.S. exercises that is different from China’s drills: it is also the level of sophistication.

China’s exercises in the region are often performative events; they are more symbolic than substantive. They are often highly scripted, with schedules and outcomes planned out in advance. Such events do not approximate real-world operations.

Another crucial difference is that U.S. exercises often prioritise improving the skill-sets of the partner nation’s armed forces with a view to building capacity over time, deepening relationships and enhancing interoperability. The latter involves honing the ability of allies and partners to work together coherently and effectively, both in times of peace and war.

In contrast, China’s exercises with regional states tend to focus on less sensitive or non-controversial areas of military cooperation such as humanitarian and disaster relief (HADR), search and rescue at sea and counter-terrorism.

So what explains the qualitative difference between Chinese and American exercises?

Part of the answer lies in the fact that the U.S. military has been conducting defence engagements with its regional counterparts for decades, during which it has built up habits of cooperation.

But the most important factor is strategic trust, a prerequisite for countries that train together on a regular basis using their most advanced equipment.

America has a number of close allies and partners in Southeast Asia, but with the possible exception of Thailand and Cambodia, China does not.

This is especially true of Southeast Asian countries that have contested territorial and jurisdictional claims with China in the South China Sea, particularly the Philippines and Vietnam, the principal Southeast Asian protagonists in the ongoing maritime drama. The existence of these contentious disputes precludes close defence ties with China.

In fact, the China Coast Guard’s (CCG) recent aggressive actions against Philippine vessels at Second Thomas Shoal appear to have put the kibosh on any future security cooperation between the two countries.

Not only has the Philippine Coast Guard said it will discontinue its hotline to the CCG, but the AFP has stopped sending its personnel to military colleges in China. A proposal by China’s ambassador that the two countries hold a joint exercise has gone down like a lead balloon with the AFP chief General Romeo Brawner.

There is little doubt that the PLA will hold more joint exercises with its Southeast Asian counterparts in the coming years.

But so long as China continues on its present course in the South China Sea, the trust deficit between it and many Southeast Asian countries will be a permanent bar to the more frequent, larger and advanced military drills the U.S. already holds on a regular basis with the armed forces of regional states.

Commentaries / 2023 Top 10 / Malaysia / Malaysian Politics

Anwar’s First Year: Performative and Underperforming

Anwar Ibrahim’s ascent to the country’s highest office last year was accompanied by a surge of expectations in his reformist government. One year on, however, his administration has lost some of its shine.

Khairy Jamaluddin   10:00AM, 27 Dec, 2023

Prime Minister Anwar Ibrahim’s approval rating has fallen to 50 per cent, due largely to Malaysians’ unhappiness over a challenging cost-of-living crunch. (Photo by Anwar Ibrahim / Twitter)

Editor’s Note: This article is the 6th most viewed commentary on Fulcrum in 2023. It was first published on 27 November 2023.

The problem with high expectations is that they are seldom fulfilled. In the case of Anwar Ibrahim, these expectations were long in the running. After all, Anwar spent decades as an understudy, in a prison cell and on the opposition benches. With the 2022 general elections came the dramatic denouement that offered an opportunity to “correct” the many years of a promise denied. When Anwar took oath as Malaysia’s tenth prime minister a year ago, the national anticipation of seeing him finally fulfilling a lifetime’s ambition brought with it high hopes.

And Anwar revelled in the moment. Easily the most gifted politician of his generation and the foremost orator of any, he set a political course that sought a rupture with legacies of the past, introducing a new era of integrity, compassion and innovation. He summoned all his talent to perform at the centre stage of Malaysian politics, at times rendering his entire Cabinet anonymous and irrelevant.

For a while, the solo performance looked promising. Despite his coalition not winning a majority at the general election, Anwar was able to piece together an unlikely “Unity Government” with former foes. More importantly, he has been able to sustain it despite continuous attempts by the opposition to topple him. The rare political stability Malaysia now seems to enjoy after almost five years of tumultuous changes in government is Anwar’s biggest achievement to date.

In response to criticisms that there was no clear economic strategy, Anwar launched the Madani Economic Framework. This was well-received and catalysed the development of sectoral economic roadmaps that excited investors. Most recently, Anwar’s performative one-man routine was elevated globally with such a strident defence of Palestine that his safety was supposedly threatened.

But a year into his premiership, there are signs that people are starting to tire of the virtuoso. Notwithstanding greater clarity in economic management through various long-term plans, Malaysians decry a challenging cost-of-living crunch. While headline inflation continues to moderate, the ringgit is the worst-performing currency in Asia this year after the Japanese yen. The stock market remains anaemic, and GDP growth has moderated due to external factors and the slow pace of internal reforms. New initiatives to boost the income of the poor target only a small sample of Malaysians — this barely moves the needle on a national scale. Citing the economy as their number one concern, Malaysians gave their leader a painful score in a tracking poll recently, dragging Anwar back to pedestrian approval numbers.

(Anwar) has alienated his support base and lost much of the reformist sheen that defined his rise to power. Although political stability has been his biggest achievement in the last year, he remains overly cautious and has used this at times as an excuse for backpedalling on promised reforms.

To be fair to Anwar, much of his predicament is inherited and imposed. Tight fiscal conditions prevent him from rolling out initiatives to ease the financial woes faced by Malaysians. This is due to past profligacy and necessary spending measures during the pandemic. China’s slowdown has affected manufacturing exports, one of Malaysia’s crucial economic engines. The interest rate hikes by the U.S. Federal Reserve have been aggressive, thus creating a widening spread with rates in Malaysia. Bank Negara Malaysia has rightly pursued a more measured tightening of monetary policy. However, this has contributed to downward pressure on the ringgit, which further erodes the people’s purchasing power.

So, while Anwar can fairly claim that his present fortunes, and by extension those of the nation, are due to bad timing and external drivers, this excuse is increasingly wearing thin for various reasons.

To begin with, deflated expectations inevitably come back to hurt populists. In opposition, Anwar and his party promised a slew of goodies, from lower petrol prices to cancelling student loans. These are measures which they now realise cannot be fulfilled.

The maestro has also lost his orchestra. Recently, the Crown Prince of Johor issued a rare rebuke of Anwar, calling on the premier and his team to do more for the betterment of the people. This reminded Anwar that his Cabinet has largely been lacklustre. Initially, the prime minister was given a wide berth to accommodate nominees from across his disparate partners in the Unity Government. One year of underperformance, however, has forced him to admit he needs to shuffle the deck.

Finally, the problem with Anwar might be Anwar himself. So engrossed has he been in his performative premiership that he has forgotten why at least half the country waited half a lifetime for his ascension. In the six state elections in August, Anwar was stung by the inroads made by the opposition coalition dominated by Parti Islam SeMalaysia (PAS). Subsequently, Anwar has spent much of his capital pandering to more conservative sentiments.

As a result, he has alienated his support base and lost much of the reformist sheen that defined his rise to power. Although political stability has been his biggest achievement in the last year, he remains overly cautious and has used this at times as an excuse for backpedalling on promised reforms. In September, the High Court discharged Ahmad Zahid Hamidi, his deputy prime minister, of 47 corruption charges. Zahid is the leader of the United Malays National Organisation, which is a key party in the Unity Government. A massive scandal involving undelivered warships has been swept under the carpet. Despite Anwar’s own demands while in opposition, the prime minister has not given equal constituency funding to Members of Parliament in the opposition. And his coalition’s key promise of separating the roles of prime minister and finance minister to ensure accountability remains unfulfilled as Anwar continues to hold both positions.

Yet, Anwar has time. Political stability means he has four clear years until the next general election. He must quickly arrest the drift and course correct by dropping deadwood in Cabinet, appointing a technically competent second minister of finance to drive tough reforms, focusing on the minutiae of implementation and winning the support of the majority Malay community without trying to be more Islamic than PAS. In short, Malaysia needs less performative leadership, more substantive performance. If he fails, not only will the applause be muted, but there will be no encore.

26 Dec, 2023

- Making Sense of Cambodia’s Reaction to AUKUS

- Anwar Ibrahim’s Visit to Saudi Arabia: Is His Foot in the Door?

Commentaries / 2023 Top 10 / AUKUS / Cambodia

Making Sense of Cambodia’s Reaction to AUKUS

Cambodia’s reaction to the trilateral nuclear-technology sharing deal between Australia, the United Kingdom and the United States can best be described as lukewarm. It would be an oversimplification to say that AUKUS will have no adverse effects on Southeast Asia.

Chansambath Bong   2:00PM, 26 Dec, 2023

Cambodian Prime Minister Hun Sen speaks during a press conference during the EU-ASEAN Summit at the European Council headquarters in Brussels on December 14, 2022. (photo: John Thys / AFP)

Editor’s Note: This article is the 7th most viewed commentary on Fulcrum in 2023. It was first published on 18 April 2023.

On 14 March, United States President Joe Biden, United Kingdom Prime Minister Rishi Sunak, and Australian Prime Minister Antony Albanese provided an update on a trilateral plan to provide the Royal Australian Navy with nuclear-powered submarines. Since then, there has been growing attention paid to how ASEAN nations respond to the deal and whether Canberra’s diplomatic blitz to assuage regional concerns towards the Australia-United Kingdom-United States (AUKUS) agreement has made positive progress.

Among ASEAN states, Indonesia and Malaysia have been the most outspoken, given that the management of their archipelagic waters will directly affect Australia’s AUKUS submarines over the next three decades.

As a small, mainland ASEAN member with modest maritime capabilities, Cambodia has expressed some reservations about AUKUS, but it is not outrightly hostile towards the agreement. In contrast, its response to AUKUS can be considered lukewarm at best. Compared to Indonesia and Malaysia, Cambodia’s public statement on AUKUS has been more restrained, expressing hope that AUKUS “will not fuel unhealthy rivalries.” Likewise, in the 2022 State of Southeast Asia Survey published by the ISEAS-Ishak Yusof Institute, 25.9 per cent of Cambodian respondents viewed AUKUS as a counterbalance to China’s growing military power, while 28.4 per cent said the pact would lead to a regional arms race. The mixed reactions indicate how the Cambodian strategic and foreign policy community has taken a cautious but not hostile approach to AUKUS.

Western journalists and pundits have dismissed Cambodia’s position on AUKUS, based on the premise that its reaction to the trilateral partnership is primarily influenced by its close ties with the principal target of AUKUS, China. But there are three reasons behind Cambodia’s lukewarm position.

First, since AUKUS was first unveiled 18 months ago, the deterioration in U.S.-China relations has continued unabated, with growing tensions over Taiwan and the spat over China’s purported surveillance balloon flying over the continental United States. Sitting at the heart of Southeast Asia, Cambodia has watched with growing unease the possibility of a military conflict between China and the U.S. that spill over to its immediate neighbourhood. If Cold War history is any guide, Cambodia understands that such a conflict would affect its domestic stability and regional stability.

Based on its constitutionally stipulated foreign policy principle of “non-interference”, Cambodia does not necessarily reject Australia’s sovereign decision to arm itself with advanced undersea capabilities under AUKUS. Nevertheless, AUKUS signifies a broader deterioration in stability and growing military tensions across the Indo-Pacific. Moreover, the regional maritime domain surrounding Cambodia and the critical sea routes upon which its trade rely has become increasingly complicated, with its bigger neighbours, Vietnam,  Thailand and other regional powers rushing to procure advanced and lethal maritime capabilities. Cambodia’s relatively nascent navy only compounds its growing unease. Some assert that AUKUS is about “deterrence”, not aggression. However, the fact that Canberra needs to beef up its deterrence underscores a grim reality — the possibility of accidental escalation or military conflict in Cambodia’s immediate neighbourhood.

Second, Cambodia is concerned about how AUKUS would affect the international non-proliferation regime. As a ratifying party to the Nuclear Non-Proliferation Treaty (NPT), the Treaty on the Prohibition of Nuclear Weapons (TPNW) and the Southeast Asia Nuclear Weapon-Free Zone Treaty (SEANFWZ), Cambodia has worked in tandem with the international community to strengthen the non-proliferation regime and prevent the spread of nuclear materials. For instance, it has complied strictly with United Nations sanctions levied against North Korea, with whom it has had traditional ties since the Cold War.

Given Australia’s robust non-proliferation track record and the mature relationship it has fostered with Cambodia over the past 70 years, Cambodia seeks to understand Canberra’s rationale and explanation for AUKUS. Nonetheless, it cannot completely ignore the fact that Australia’s use of the loophole in the NPT that allows “fissile material utilised for non-explosive military use” in naval propulsion to be exempt from International Atomic Energy Agency safeguards. This has set a precedent for other countries to follow. In that same vein, given the escalating tensions in U.S.-China relations, the possibility that Australia will use the NPT loophole to acquire nuclear weapons for its own “deterrence” throughout or after AUKUS’ 30-year timeline is low, but not zero. Cambodia is also mindful that Australia is not a member of the Treaty on the Prohibition of Nuclear Weapons (TPNW), which Cambodia itself ratified in 2021.

Third, Cambodia’s reaction to AUKUS can be explained by what it perceives to be Western hypocrisy and double standards. On the one hand, the U.S. and its allies view AUKUS as a form of deterrence. On the other hand, Cambodia’s modernisation of its naval facility at Ream is seen by the U.S. and its allies as a sign that the country is a Chinese client state and a threat to regional security.

Cambodia’s reaction to AUKUS can be explained by what it perceives to be Western hypocrisy and double standards. On the one hand, the U.S. and its allies view AUKUS as a form of deterrence. On the other hand, Cambodia’s modernisation of its naval facility at Ream is seen by the U.S. and its allies as a sign that the country is a Chinese client state and a threat to regional security.

Here, Cambodian Prime Minister Hun Sen’s comment on AUKUS on 17 March is illuminating. The prime minister said he “understood” that Australia’s AUKUS submarines will be nuclear-powered, not nuclear-armed. But he questioned why the U.S. and its allies do not understand Cambodia’s repeated assertions that there is no exclusive Chinese presence at the naval facility at Ream. The U.S. and its allies view the modernisation of Ream as problematic when Cambodia is using the facility to resolve its logistical and strategic challenges. For years, Cambodia has had to send its patrol boats to neighbouring countries for expensive and time-consuming repairs. With Ream in operation, repairs can be done domestically. In addition, the water level at Ream is too shallow to accommodate larger vessels that can conduct more effective maritime security operations along its 443-kilometre coastline. But AUKUS submarines, which come with a certain degree of proliferation risks, are not seen to be problematic. These questions resonate among many Cambodians, who see a Western double standard at play.

Australia also cannot take as a given that, with  “more than 60 calls” by Canberra to regional states, these states will go along with the proposition that AUKUS has no adverse implications for the region, as what regional analysts Blake Herzinger and Alice Nason argue. This would be an oversimplified assessment of Southeast Asia. Worse, the two analysts dismiss Cambodia’s scepticism of AUKUS as “repetitive” based on their preconception of Phnom Penh’s defence relations with China. They fail to contextualise the origins of Cambodia’s concerns.

To address these concerns, a sustained and robust assurance about AUKUS by Australia, buttressed by strategic dialogues between Australian and ASEAN governments, academics, and think-tank communities, will go a long way to assuage the unease in Cambodia and other ASEAN capitals.

Commentaries / 2023 Top 10 / International Relations / Malaysia / Middle East / Saudi Arabia

Anwar Ibrahim’s Visit to Saudi Arabia: Is His Foot in the Door?

Anwar Ibrahim’s opponents are trying to politicise his recent trip to Mecca but it is not a foregone conclusion that Anwar, and by extension Malaysia, was snubbed.

Mohd Faizal Musa   10:00AM, 26 Dec, 2023

Malaysian Prime Minister Anwar Ibrahim arrives in Jeddah on March 22, 2023. He was received by Jeddah’s governor, Prince Saud bin Abdullah. (Photo: Pejabat Perdana Menteri / Twitter)

Editor’s Note: This article is the 8th most viewed commentary on Fulcrum in 2023. It was first published on 28 March 2023.

For many Malaysian Muslims, the image of their prime minister (PM) emerging from the Kaaba would convince them that he is a legitimate leader. The Kaaba in Mecca, Saudi Arabia, is one of the most sacred sites for Islam and Muslims. However, Prime Minister Anwar Ibrahim’s failure to enter the Kaaba — much less meet the Saudi king and crown prince — during his visit to Saudi Arabia from 22–24 March 2023 may prompt concerns about the politicisation of Islam’s most sacred sites, including how the Saudi ruling family as the self-appointed custodian of Mecca and Medina may contribute to it.

While Anwar was invited by Crown Prince Mohammed bin Salman (MBS) and was scheduled to have an audience with him and King Salman, this meeting did not happen. This led Perikatan Nasional’s (PN) Wan Ahmad Fayhsal to ask Anwar to explain his failure to meet MBS, who is also the Saudi finance minister. Fayhsal further alluded to the possibility that the “failure of (Anwar’s) visit” would give cause for concern about the state of ties between Malaysia and Saudi Arabia.

To counter this narrative, the Prime Minister’s Office explained that the Saudi leaders simply had a change of schedules due to Ramadan and had suggested that Anwar extend his visit so that they could eventually meet.

In contrast, when former PM Muhyiddin Yassin visited the Kingdom in March 2021, he not only met the crown prince but also signed several memoranda of understanding (MOUs). Muhyiddin was greeted by the crown prince upon his arrival in Riyadh and given the rare opportunity to enter the Kaaba when he performed the umrah (minor pilgrimage). He was the first Muslim leader to do so after the COVID-19 pandemic.

The minor brouhaha concerning Anwar’s visit is partly explained by understanding the Malay psyche regarding Islam. Given the Saudi ruling family’s status as custodian of the two sacred cities, they are often perceived as the defender of the Islamic faith. Any formal interaction with them and any image of a Malay leader in front of the Kaaba is therefore bound to evoke Malaysian Malays’ emotions and national pride. By extension, any official visit by a Malaysian Malay politician to the two sacred cities with an invitation to enter the Kaaba and to meet senior Saudi leaders would burnish the former’s credentials as a Muslim leader.

There is no clear evidence, however, that Malaysia-Saudi ties are on the rocks.

Previous Malaysian prime ministers who have enjoyed such recognition include Mahathir Mohamad and Abdullah Ahmad Badawi in 2002 and 2004 respectively and Najib Razak in 2018. For Najib in particular, media images of him entering the Kaaba were used to boost his standing at a time when the 14th General Election was imminent and when his credibility was at stake due to the 1MDB corruption investigations.

Visits to Saudi Arabia are also important for Malaysian leaders to score political points as they negotiate possible haj quota increases for their Muslim citizens. The Saudi Arabian government has approved a Haj quota for Malaysia of 31,600 for 2023, an increase from last year’s 14,306 when some pandemic restrictions were still in place. For 2024, Malaysia aims to raise the quota to 31,950 pilgrims.

However, opportunistic misuse of such visits can backfire. In 2021, PN leader and former trade and industry minister Azmin Ali, who posted a picture of himself mopping the floor of the Grand Mosque in Mecca, was heavily criticised by his political opponents. His act was deemed by some netizens as a political stunt and cheap publicity.

It is difficult to conclude whether Anwar’s first official visit to Saudi Arabia as PM “failed”. Despite not meeting the two top leaders, Anwar held important meetings with the Organisation of Islamic Cooperation (OIC) and the World Muslim League in Mecca. Additionally, he witnessed the signing of several MOUs involving industries and businesses, and met Malaysians residing there.

Anwar reiterated that Saudi Arabia is an important country and that he was open to starting talks on resuming operations of the King Salman Centre for International Peace (KSCIP) in Malaysia. The centre was set up during Najib Razak’s administration with the aim of combatting terrorism but was shut down during Pakatan Harapan’s (PH) administration in 2018. This was reportedly done without consulting the Saudis. In August 2018, UMNO had loudly criticised this decision, warning the PH administration that it could jeopardise Malaysia-Saudi ties. Mohammed Sabu, then defence minister, said that his ministry would eventually take control of the centre. Anwar’s suggestion to resume the KSCIP’s operations could be a bid to address PH’s past “mistake”.

Another possible blunder by the previous PH administration was their organisation of the Kuala Lumpur Summit in 2019 that was widely seen as undermining the Jeddah-based Organisation of Islamic Cooperation. Saudi Arabia was apparently unhappy with the presence of leaders such as Turkish President Recep Tayyip Erdogan, Qatari Emir Sheikh Tamim Hamad Al Thani, and Iranian President Hassan Rouhani, all of whom were fierce critics of the Kingdom.

The current opposition in Malaysia might be taking advantage of PM Anwar’s failure to meet the top Saudi leaders and enter the Kaaba by criticising him for the latest diplomatic blunder. There is no clear evidence, however, that Malaysia-Saudi ties are on the rocks.

22 Dec, 2023

- Is Malaysia’s “Green Wave” More a Tsunami of Discontent?

- Anwar’s First 100 Days: Passing Grade but Stern Tests Ahead

- Collaboration Between Pheu Thai and Move Forward Parties on Their Core Issues Will Determine Thailand’s Future

- A Well-Earned Break … For Now

Commentaries / 2023 Top 10 / Malaysia / Malaysian Politics

Is Malaysia’s “Green Wave” More a Tsunami of Discontent?

In the run-up to elections in six states, Malaysia’s Prime Minister is seeking to improve his coalition’s electability among Malay voters. The crux of the issue is less about a ‘green wave’ sweeping across the country than a wider discontent over the lack of economic direction.

Khairy Jamaluddin   4:00PM, 22 Dec, 2023

PM Anwar Ibrahim at a handover ceremony for low-income housing built by Syarikat Perumahan Negara Berhad, the national housing development company, in Kelantan on 18 June 2023. (Photo: Anwar Ibrahim / Twitter)

Editor’s Note: This article is the 9th most viewed commentary on Fulcrum in 2023. It was first published on 20 June 2023.

With only a few weeks remaining until Malaysia begins another set of elections — this time in six states — the spotlight is now on the highly contested Malay electorate. This segment of voters is of vital importance to the seven-month-old Unity Government. In the general elections, Prime Minister Anwar Ibrahim’s Pakatan Harapan (PH) secured a meagre 11 per cent vote share among Malay voters. He needs to make solid gains on this count during the state polls.

The state polls are being framed as an early referendum on his premiership. But the premier is facing two perils: an almost fatal internal flaw in PH as well as a formidable external threat.

From within his Unity Government, Anwar has to carry with him the liability that is the United Malays National Organisation (UMNO) and its unpopular leader, Zahid Hamidi. UMNO was initially seen as a complement to PH. It was seen as potentially leading the charge into Malay majority strongholds. This now looks less likely, as UMNO continues to struggle to explain to its members why it is part of a government that includes its long-time ideological bogeyman, the Democratic Action Party (DAP). UMNO’s youth leader recently conceded that the party is at the “lowest point” of its history. The party’s annual party congress demonstrated little desire to reform. It focused on justifying the party’s support for Anwar’s government and sought to rally delegates for incarcerated former prime minister Najib Razak to get “justice.”

On the external front, Anwar faces a formidable foe in the form of Perikatan Nasional (PN). The coalition comprises former Prime Minister Muhyiddin Yassin’s Parti Pribumi Bersatu Malaysia (Bersatu) and the Islamist party, Parti Islam SeMalaysia (PAS). In parliamentary debates and political rallies, PN has doubled down on rhetoric focusing on the “3Rs” of race, religion and royalty. A recent case in point is PN’s attack against Anwar’s government for dropping a legal appeal against a 2021 High Court ruling, which had allowed the word “ Allah” to be used in Christian religious publications. PN’s social media narrative is also heavily exploiting unease among Malay voters towards the DAP’s presence in government. Political parties in the Unity Government have failed to counter such narratives (which is ironically the product of years of UMNO’s own vilification of the DAP).

Without betraying his multiracial and progressive base, Anwar has tried to stem Malay discontent by addressing some of the 3R issues head-on. Anwar himself made a statement in Parliament addressing the “Allah” issue, which is traditionally the preserve of the Malay rulers. He has sought an audience with them to seek a final decree on the matter. This is a departure from his position prior to becoming Prime Minister, where he agreed that non-Muslims could use the word.

This palpable Malay anger is amplified by the perceived hypocrisy of the present administration, which talks about eradicating corruption and upholding good governance, but accommodates a tainted UMNO leadership.

Anwar’s administration will bring a bill to strengthen Malaysia’s religious Shariah courts. The law has long been championed by PAS. By passing the bill, it is clear that Anwar does not want to be outflanked by the Islamists.

Are there any indications that Anwar’s tactical moves to reclaim Malay support are working? In an April 2023 nationwide survey in peninsular Malaysia, Anwar’s approval rating across ethnic groups was 62 per cent. It was, however, telling that his approval ratings among Malay respondents fell to 54 per cent. While 62 per cent of Malaysians surveyed said their view of Anwar’s leadership had improved, less than half of Malay respondents agreed. Recent PN rallies in the PH strongholds of Selangor and Negeri Sembilan have seen unprecedented but almost exclusively Malay crowds showing up. PN has hinted that they will be fielding former UMNO bigwigs in the polls.

Referring to PAS’s party colours and indicating a possible rise of a more extremist form of political Islam, some analysts have described these developments in Malaysia as a “Green Wave”. DAP stalwart Lim Kit Siang is casting the state polls as an existential choice for Malaysians. This view could backfire and drive more Malay voters to support PN.

Unlike the rise of PAS in the 1980s and 1990s, PN’s popularity today has more dimensions than merely increased religiosity among Malays. Malays in Malaysia have become more outwardly observant of their religious duties but this does not mean there is a tide of Islamic extremism sweeping through Malaysia. During the last general election, PN won seats beyond PAS’s traditional Malay heartland and extended its gains by winning in some urban centres, which have lower concentrations of Malay voters. The victorious candidates campaigned under a new PN banner and eschewed the green full moon symbol traditionally associated with PAS and political Islam.

What is happening in Malaysia today is less the rise of an extremist “Green Wave” than the expression of genuine discontent in the Malay community that goes beyond the 3R issues. Over the last seven months, there has been a clear lack of economic direction: the Malaysian ringgit continues to weaken and the cost-of-living crisis continues to erode the people’s purchasing power. This palpable Malay anger is amplified by the perceived hypocrisy of the present administration, which talks about eradicating corruption and upholding good governance but accommodates a tainted UMNO leadership. What we may see at the state polls is less a “Green Wave” than a tsunami of discontent.

Commentaries / 2023 Top 10 / Malaysia / Malaysian Politics

Anwar’s First 100 Days: Passing Grade but Stern Tests Ahead

Anwar Ibrahim has managed to even the keel of Malaysia’s new coalition government in its first 100 days. But his fragile coalition government faces sterner tests on the horizon.

Khairy Jamaluddin   1:55PM, 22 Dec, 2023

Malaysia’s Prime Minister Anwar Ibrahim waves as he leaves the lower house of parliament after receiving a vote of confidence, in Kuala Lumpur on December 19, 2022. (Hasnoor Hussain / AFP)

Editor’s Note: This article is the 10th most viewed commentary on Fulcrum in 2023. It was first published on 8 March 2023.

Malaysia’s Prime Minister Anwar Ibrahim has emerged from his first 100 days in greater control of his fragile and hodgepodge government. He has made laudable strides in this period, but has a series of sterner challenges ahead.

One of the most frequent questions I am asked of Malaysia’s new government is, “How long will this government last?”. Such concerns are not unfounded. Malaysia has seen four prime ministers since the watershed 2018 general election that saw the end of Barisan Nasional’s (BN) monopoly over Malaysian politics. Infighting and political intrigue cut short Dr Mahathir Mohamad’s second act in power. Since then, two other prime ministers have come and gone until the general election in November last year.

The election did not yield a clear mandate. Malaysia experienced a hung parliament for the first time. The monarch invited Anwar to form a government after the latter was able to cobble together support from traditional nemesis BN and from the Borneo states of Sarawak and Sabah. And although Anwar mustered sufficient numbers of members of parliament, there was always the assumption that this arrangement could, like Mahathir’s last government, fall quickly.

In this context, the key victory from Anwar’s first 100 days is his success in keeping his government together. All indications point towards this administration being able to go the distance in serving a full parliamentary term. This success has been achieved largely due to Anwar’s personal political nous, especially in assuaging key stakeholders supporting his premiership. He moved to quickly secure the support of Sarawak and Sabah with key cabinet appointments — including a historic deputy premiership for Sarawak — as well as devolving further powers to the Bornean state governments in matters of government procurement approvals and committing to more shared power based on the Malaysia Agreement of 1963.

The less savoury source of support has come from the BN coalition, in particular from its biggest constituent member, the United Malays National Organisation (UMNO). Part of UMNO’s condition for supporting Anwar was the selection of its president, Zahid Hamidi, as a deputy prime minister. Zahid still faces multiple charges of corruption in the courts. Anwar has clearly calculated that he is willing to absorb the negative optics of having a tainted Zahid as his deputy in return for the stability it accords his premiership. And while Anwar has made it clear he will not interfere in any court case, Zahid has enjoyed the protection of Anwar’s key lieutenant, Home Minister Saifuddin Nasution. Earlier this week, the minister overruled a decision made by the registrar of political parties that UMNO had violated its own constitution when it passed a motion at its party congress recently to prevent anyone from challenging Zahid’s position as president in the upcoming party polls.

With his government stable for now, Anwar must start looking at other key challenges confronting him. One is having to face a resurgent, almost exclusively Malay Muslim opposition Perikatan Nasional (PN) coalition with the Parti Islam SeMalaysia (PAS) as the dominant component party. PN made significant gains during the last general election sweeping through not just the traditional northern and eastern Malay-dominated states but extending its parliamentary victories as far as the industrial state of Selangor that sits next to Kuala Lumpur. This, coupled with the fact that some analysts have calculated that Anwar’s Pakatan Harapan (PH) coalition only managed to get less than 15 per cent of the Malay votes, sets up a fierce contest for the support from Malaysia’s biggest ethnic community especially in the upcoming set of state-level elections later this year.

Anwar has been mindful of his Malay support deficit and has spent much of his first 100 days creating a narrative that Malay interests are secured under his administration. He has engaged frequently with Malay intellectuals and Muslim scholars. He makes it a point to perform his congregational Friday prayers in different mosques across the country rather than just in the administrative capital, Putrajaya. He has even started wearing the Malay songkok headdress with lounge suit during foreign visits.

But it is not just optics. Anwar has also managed to convince his coalition partner, the ethnically Chinese-dominant Democratic Action Party (DAP), to take a backseat in government and not be as prominent as they were during Mahathir’s last administration. Part of the reason behind the collapse of Mahathir’s government was the success of racial tropes being used by some in UMNO and PAS against DAP, which has been long used as a chauvinistic bogeyman in the Malay community. This seeded the ground for the erosion of Malay political support for Mahathir.

Anwar has also been mindful of the Malay political ground in rolling out a left-of-centre budget as finance minister two weeks ago. He has introduced taxes on luxury items, a more progressive income tax structure, maintained cash transfers and put off reintroducing a consumption tax, for now.

Despite some glimpses of policy detail in the budget, there is still a lack of clarity in what his overarching vision for Malaysia is, especially in the context of global economic disruption and political uncertainty brought about by the emergence of big power contestation, which has been triggered by, among other things, the war in Ukraine.

While these measures are seen as economically necessary, part of the strategy is surely directed at assisting the Malay community that make the bulk of middle and low-income earners. So what is next for Anwar? Despite some glimpses of policy detail in the budget, there is still a lack of clarity in what his overarching vision for Malaysia is, especially in the context of global economic disruption and political uncertainty brought about by the emergence of big power contestation, which has been triggered by, among other things, the war in Ukraine.

His cabinet is a mixed bag of experienced hands and political neophytes. Some have proven themselves well in the first 100 days. Many have not stood out, remaining on the margins while trying to master steep learning curves. So, if the first 100 days has been about political stability and not making catastrophic gaffes, Anwar gets a good pass.

But the bar must be set higher for the coming months. Emerging from years of political instability, Malaysia needs to offer a new narrative and re-establish itself as one of ASEAN’s premier investment and trading destinations. In addition, the next test for Anwar will be the set of state-level elections in the middle of this year, which will see whether he has made inroads into gaining support from the crucial Malay electoral ground.

Long Reads / Thai Politics / Thailand

Collaboration Between Pheu Thai and Move Forward Parties on Their Core Issues Will Determine Thailand’s Future

Thailand’s Pheu Thai-led coalition government is struggling to amend the Constitution of 2017, or to draft a new replacement for it. Not much progress can be made on that front, however, unless and until the Move Forward Party provides support.

Termsak Chalermpalanupap   1:00PM, 22 Dec, 2023

Newly-elected Pheu Thai Party leader Paetongtarn Shinawatra (centre R), youngest daughter of former Thai prime minister Thaksin Shinawatra, poses for photos with Thailand’s Prime Minister Srettha Thavisin (centre L) and party members at the Pheu Thai Party headquarters in Bangkok on 27 October 2023. Photo by Manan VATSYAYANA/AFP.

INTRODUCTION

Presenting the Thai people with a new and genuinely democratic Constitution seems like a “slam dunk” for the Pheu Thai (PT) party that leads the 11-party coalition government under Prime Minister Srettha Thavisin.

But increasingly, putting into place a new “Constitution of the People” appears to be a more complicated project than previously assumed. More questions have arisen to which the PT has no good quick answers.

This apparent indecisiveness has created suspicions about the PT’s ulterior motives. Is the PT playing safe to protect its fragile coalition, and does it really want a new Constitution to replace the existing one promulgated on 6 April 2017 during the authoritarian rule of coup leader General Prayut Chan-o-cha?

When it became the largest opposition party after the general election in 2019, the PT was adamant that the Constitution of 2017 was “undemocratic”, calling it a despicable “vestige of authoritarianism” that should be replaced by a new Constitution of, by, and for the people. Most other parties tended to agree with the PT. Move Forward Party (MFP), then the second largest in the opposition, went so far as to call for the formation of a wholly-elected national assembly to draft a new Constitution. But their repeated attempts proved unsuccessful.

Most of the appointed 250 senators opposed any move to change the Constitution in any substantial manner. Every constitutional amendment requires the support of a majority of the parliamentarians (more than half of the 500 MPs and 250 senators combined), and the majority vote must include at least one-third of the senators (83 senators).

Eventually, MPs and senators could only agree—in September 2021—to some amendments involving the electoral system and the composition of the 500 elected MPs, changes which do not affect the senators.

SENATORS’ TERM DRAWING TO AN END

The five-year term of the existing 250 senators ends on 11 May 2024. After that the Senate will have a new batch of 200 members chosen from various occupations. But unlike the existing 250 senators, the new senators will not have the right to join MPs in voting for a new prime minister.

Lest we forget, a large majority of the 250 senators were instrumental in blocking MFP leader Pita Limjaroenrat from winning the premiership last July. On 14 July, Pita’s candidacy for the premiership failed to gain the support of a majority of parliamentarians: only 311 MPs and 13 senators voted for him; that was 52 votes short of the minimum majority of 376 votes needed. Subsequently, on 19 July, as many as 210 senators joined 185 MPs in blocking Pita’s renomination for the premiership, and therefore ended his quest for the premiership.

Assuming that the new 200 senators who will succeed the existing 250 senators are more pro-democracy, the Senate will no more be an obstacle standing in the way of any constitutional amendment. Section 256 of the Constitution can then be easily amended to open the door for the establishment of a new constitutional drafting national assembly. The drafting should not take longer than six months since it will be the 21st constitution of the country. Many good provisions in previous Constitutions can be conveniently lifted and pasted into a new draft.

NEW CONSTITUTION OF THE PEOPLE

Undoubtedly there is strong and widespread popular support for a new constitution. The victory of the MFP and the PT, coming first and second respectively in the May 2023 general election, provided clear evidence that a majority of Thai voters wanted changes – including a new Constitution.

A movement organised by iLaw on 13 to 20 August 2023 to collect 50,000 signatures calling for a national referendum on a new Constitution to be drafted by the people – and not by politicians and government experts – ended up with more than 205,000 signatures. On 30 August, the remarkable outcome was submitted to the Election Commission for verification. The PT has also been informed and been requested to follow up on the matter in the Cabinet.

According to the NIDA Poll held in early September, among the top 10 policy priorities of the PT, drafting a new “Constitution of the People” came fifth in popularity. About 78.70% of respondents wanted it. However, 59% of respondents doubted that the PT would be able to deliver it.

The emerging doubt came from the fact that Prime Minister Srettha has hardly made any comment on this issue. On 3 October, he had simply ordered the formation of a national committee to consider ways of organising national referendums on the Constitution. The new entity is headed by Deputy Prime Minister Phumtham Wechayachai, who is also the commerce minister, and a deputy leader of the PT.

Minister Phumtham, who is the PT’s chief ideologue with close ties to former prime minister Thaksin Shinawatra, has set up two subcommittees: one on soliciting public opinions, and another on ways and means of holding national referendums. The former is headed by MP Nikorn Chamnong, a veteran politician of the Chatthai Pattana Party; the latter is headed by Vudhisarn Tanchai, a former secretary-general of the King Pradhipok’s Institute.

Minister Phumtham and Nikorn, who is also spokesman for the national committee, have done most of the talking. Prime Minister Srettha, meanwhile, has concentrated on pushing the implementation of the troubled “digital wallet” programme.

Now as the core opposition party, the MFP holds a trump card to frustrate the PT by blocking constitutional amendments.

HOW MANY NATIONAL REFERENDUMS?

In March 2021, the Constitution Court issued a ruling that Thai voters shall be consulted twice: first, in a national referendum on whether they want a new Constitution; and second, in another national referendum on whether they accept a new draft Constitution when its drafting has been completed.

Now, some constitutional law experts have pointed out that the existing Constitution has no provisions for the establishment of any group to draft a new Constitution. In order to properly empower the proposed elected drafting national assembly to do its crucial job, the Constitution must first be amended to include necessary provisions on this matter. Such a substantial amendment would require approval in yet another national referendum.

Holding up to three national referendums will cost the government nearly 10,000 million baht (US$286 million). This is bad news for the Srettha Administration, which is desperately struggling to pay for the “digital wallet” programme. As things stand now, the programme to hand out 10,000 baht worth of purchasing credit to every Thai adult 16 years and older (whose salary is below 70,000 baht a month and whose bank account contains less than 500,000 baht) will cost about 500 billion baht (US$14.28 billion).

The sub-committee headed by Vudhisarn is consulting the Election Commission on how to reduce the number of national referendums. Perhaps, the first national referendum can be postponed until after the Constitution has been amended to include provisions for the formation of a new national assembly to draft a new Constitution. Then voters can be requested in a national referendum to reaffirm the idea of having a new Constitution, and to approve the constitutional amendments on this matter.

Move Forward Party leader and former prime ministerial candidate Pita Limjaroenrat waves as he addresses a crowd during a rally on Jomtien Beach in Pattaya on July 22, 2023. (Photo by Jack TAYLOR / AFP)

DOUBLE MAJORITY NEEDED

One unforeseen complication in the law on national referendum, which went into effect on 12 September 2021, has been identified in Section 13 of the new law. Here, it is stated that in order to approve anything in a national referendum, more than half of all the eligible voters must participate, and the approval receives the endorsement of more than half of the eligible voters who participate.

Nikorn, head of the sub-committee to solicit public opinions, has sounded the alarm, and voiced his “serious concern” about what he called “double deadlocks”. He believes the national referendum law must be revised to remove the first majority of voter turnout, and to let only the majority of voters who participate decide, regardless of their number. This can pre-empt a boycott of the MFP, whose supporters number more than 14 million.

In the May 2023 general election, Thailand had about 52.19 million voters. Only about 39.51 million showed up to vote, a turnout of about 75.71%. Assuming that the population of Thai voters increases by 2% a year, by next May, there will be about 53.23 million voters. In order to approve anything, at least 26.62 million of them must show up to vote in a national referendum, and the approval must be backed by at least 13.31 million votes.

The first requisite majority of voter turnout will be difficult to achieve because there may not be enough incentives to attract nearly 27 million voters to participate. On 7 August 2016, when General Prayut’s regime held the referendum to endorse its draft constitution, only about 59.40% of 50.07 million voters participated. The draft was endorsed with only about 16.82 million votes, and became the Constitution of 2017.

Moreover, the voter turnout could be too low to pass anything should the MFP mobilise its 14 million supporters to boycott all national referendums. The MFP strongly disagrees with the PT in the latter’s stated preconditions on not “touching” or “revising” Chapter I: General Provisions, and Chapter II: The King.

Because of the above disagreement, the MFP has opted out of sending anyone to join the Phumtham-led national committee. As far as the MFP is concerned, the drafting of a new Constitution should start without any preconditions. MFP leader Chaithawat Tulathon has reiterated that the MFP would not support any partial and conditional amendments to the Constitution.

Nevertheless, the MFP is open to consultation with the Phumtham committee. The reformist party is keen to press for the direct election of independent representatives to form a new Constitution-drafting national assembly. The MFP dislikes the PT’s idea of including unelected “experts” on such an assembly. The MFP says “experts” may join technical sub-committees to advise the elected drafters – but they need not be drafters themselves.

Obviously, there are emerging opportunities for the MFP to negotiate with the PT on a quid pro quo basis. The MFP needs the support of the PT to pass the amnesty bill into law as soon as possible. At the same time, the PT needs support from the MFP in amending the Constitution instead of drafting a new one.

MOVE FORWARD HAS A TRUMP CARD

The MFP won the May general election, winning in 112 of 350 constituencies, and getting 39 of 100 party-list House seats with 14.438 million votes, compared with the PT’s winning in 112 constituencies, getting 29 party-list House seats with 10.962 million votes. Obviously, by virtue of such a clear popular mandate, the MFP – not the PT – should be leading a new government.

Many MFP supporters are upset with what they perceive as a betrayal by the PT for its own political gain. Their grievances are real and plain to see.

Now as the core opposition party, the MFP holds a trump card to frustrate the PT by blocking constitutional amendments.

Under Section 256 of the Constitution, a constitutional amendment needs the support of not only a majority of parliamentarians, and at least one-third of senators in the majority vote; but the majority vote must also include 20% of MPs of parties that do not have ministerial posts, or parliamentary posts (House Speaker, and Deputy House Speakers). Parties in this category are mostly in the opposition, notably the MFP with 148 MPs, Democrat Party with 25 MPs, and Thai Sang Thai with 6 MPs.

Without the cooperation of the MFP, there will be no 20% of the opposition MPs (at least 37 MPs) to endorse any constitutional amendment, as required in Paragraph 6 of the Section 256.

The big hot question now is what will the MFP do with its trump card.

First and foremost, the MFP would want to continue to press for a nation-wide election of independent representatives to form a national assembly and to work on a completely new draft Constitution. It opposes the PT’s idea of trying to amend the existing Constitution without touching the hyper-sensitive Chapters I and II. Provisions in the second chapter concern the revered position and prerogatives of the King, which are also protected under the controversial Section 112 of the Criminal Code, the so-called “lese-majeste law”.

One of the MFP’s election issues concerned amending the Section 112 to reduce its penalties, and to limit to only the Royal Household Bureau the right to file a police report accusing anyone of violating the law. At present, anyone encountering an alleged violation can notify the police. And if convicted, a violator faces a jail term of 3 to 15 years.

Unfortunately, the MFP’s use of the law as an election issue has landed it in hot water. The Constitutional Court has been deliberating on a complaint from one critic who accused the party of undermining the monarchy and attempting to abolish the constitutional monarchy. If found guilty, the MFP will be dissolved and its executive committee members banned from politics for up to 10 years. A ruling on this case is expected by next January.

In the meantime, the MFP is trying to score more political points and turn undecided voters into its supporters. One hot issue in this regard is a general amnesty bill submitted by the MFP to the House of Representatives. The MFP wants a law to absolve all protestors arrested and/or convicted in political gatherings and demonstrations since 2006. The House Speaker has promised to bring up the MFP’s bill for consideration within the next parliamentary session (lasting 120 days), which started on 12 December.

Under its proposed bill, the MFP leaves open the possibility of including for amnesty those who have been charged or jailed under Section 112. They include at least three MPs of the MFP, who were pro-democracy activists before they joined the MFP. But the PT as well as Bhumjaithai, the second largest government party, is still reluctant to let those who have violated the lese-majeste law to go scot-free.

Obviously, there are emerging opportunities for the MFP to negotiate with the PT on a quid pro quo basis. The MFP needs the support of the PT to pass the amnesty bill into law as soon as possible. At the same time, the PT needs support from the MFP in amending the Constitution instead of drafting a new one.

If the two largest parties can work together, then anything can happen once the existing 250 senators leave the Senate on 11 May 2024. After they leave, the selection of a new prime minister will be done entirely by MPs. With reconciliation, and a reunion of the MFP and the PT in a new “pro-democracy” alliance, the formation of a new governing coalition cannot be completely ruled out.

As stated by Thanathorn Juangroongruengkit, founder and leader of the dissolved Future Forward Party, the political future of Thailand depends on the MFP and the PT. He recently admitted that he went to meet Thaksin in Hong Kong in early July while the MFP and the PT were trying to win the premiership for Pita. Thanathorn believes an alliance between these two parties will be best for Thailand’s development and for its return to democracy.

The MFP is a successor party of the Future Forward Party; the latter was dissolved in February 2020. Thanathorn has turned to lead the Progressive Movement, a civil society organisation to promote democracy and the development of local government. Although he has been barred from politics for 10 years, Thanathorn has significant influence over the MFP – very much like Thaksin’s clout over the PT, where his youngest daughter, Paetongtarn, is now party leader.

CONCLUSION

Indeed, Thailand’s political future depends on how far and how much the MFP and the PT can work together on the Constitution issue as well as on the general amnesty bill.

A constructive approach by the MFP can win the party political points, and turn undecided voters into supporters of the reformist party. This will help ensure victory for the MFP in the next general election, which can be held soon after a new Constitution, or an amended Constitution of 2017, enters into force.

A positive breakthrough, even if done through secret wheeling and dealing between the MFP and the PT, will put Thailand back of track towards national reconciliation and democratisation.

This is an adapted version of ISEAS Perspective 2023/99 published on 19 December 2023. The paper and its references can be accessed at this link.

Commentaries / Fulcrum Notice

A Well-Earned Break … For Now

Fulcrum is ending a busy year on a high. Our team will be taking a publishing pause between Christmas Day and the New Year. The Fulcrum team wants to thank all our readers for your steady support this year.

William Choong   9:50AM, 22 Dec, 2023

A marching band performs after a pre-dawn mass ahead of Christmas at a church in Las Pinas, metro Manila on December 16, 2023. (Photo: JAM STA ROSA / AFP)

Dear Fulcrum readers,

There will be a publishing break for Fulcrum between Christmas and the New Year. We will resume publication on 2 January 2024.

The year 2023 is the third full year that Fulcrum has been in the business of publishing commentaries and analyses written by ISEAS researchers and external contributors on Southeast Asia and its wider environment. We have experienced steady growth since the website’s launch in November 2020. In 2023, Fulcrum published just over 300 commentaries – roughly in the same ballpark as in previous years. The website has seen a steady increase in the number of views, from 220,000 in 2021 and 640,000 in 2022 to more than 900,000 in 2023. During the year, ISEAS researchers and external contributors penned their views on a variety of pertinent issues, including the Malaysian state elections, the lingering disputes in the South China Sea, regional reactions to emerging minilaterals such as the Quad and AUKUS, as well as the intricacies of Indonesia’s domestic politics.

True to our remit to cover Southeast Asia and its wider environment, Fulcrum’s readers hailed from the same five countries in 2023 as 2022 (ranked in order of views): Singapore, Malaysia, the Philippines, Indonesia and the United States. We continued to see strong interest from countries such as Vietnam, Australia, the United Kingdom, Japan and Cambodia.

During the year, we also incorporated new content produced by our colleagues at the ASEAN Studies Centre. We started publishing ASEANFocus Plus content in May 2023. The series provides a deep dive into the workings of ASEAN and its development as a regional organisation.

The new records set for our readership and the new content developed would not have been possible without sustained interest from our loyal readers. The Fulcrum team is encouraged by the show of appreciation and thanks from officials, scholars and business people for the insights they derived from reading the content on the website. Long-form writing is not dead, but in an increasingly fast-paced environment punctuated by regional and global crises (the Israel-Hamas war, the war in Ukraine and pandemics, to name a few), we understand and empathise that our readers are looking for analysis written in a relatively short and digestible format.

To give a sense of the breadth and depth of our coverage, we will, in the course of the week to come, republish the top 10 commentaries which attracted the most attention in 2023. We hope this will give a sense of the topics and issue-areas that mattered most to our readers.

The team at Fulcrum wishes all Fulcrum readers a peaceful and reflective Christmas and New Year!

The Editors and the Fulcrum team

Hae Won, Hwee Leng, Hwok Aun, Julia, Lydia, Poh Onn, Sue-Ann, William, Xuan Dung

Some of the members of the Fulcrum team tucking into a cosy get-together lunch in December 2023 at ISEAS. Clockwise from top right: Julia Lau, William Choong, Zhu Kaize, Lydia Wong, Lee Hwok Aun, Cha Hae Won and Lee Poh Onn. (Photo: Lydia Wong)

21 Dec, 2023

- Laos as ASEAN Chair: Flying into Headwinds

- Road to Carbon Zero in Southeast Asia: Spur Innovation and Price Carbon

ASEANFocus / ASEAN / ASEANFocus / Laos

Laos as ASEAN Chair: Flying into Headwinds

Joanne Lin looks at Laos’ priorities as ASEAN Chair next year and examines the challenges that the country will face.

Joanne Lin   2:00PM, 21 Dec, 2023

Laotian Prime Minister Sonexay Siphandone attends an interface meeting with the ASEAN Inter-Parliamentary Assembly (AIPA) at the 42nd ASEAN Summit 2023 in Labuan Bajo, Indonesia. (Photo by ASEAN2023 Host Photographer / Ha / ANADOLU AGENCY / Anadolu via AFP)

Laos is preparing to take up the Chairmanship of ASEAN for the third time in 2024. Unlike its previous experiences as chair in 2004 and 2016, 2024 may prove to be even more demanding as Laos is expected to lead ASEAN through another tumultuous year of challenges.

At the 24th ASEAN Lecture, organised by the ISEAS-Yusof Ishak Institute on 7 December, Deputy Prime Minister and Foreign Minister of Laos, Saleumxay Kommasith was forthright in putting across a long list of multi-dimensional challenges facing ASEAN. This includes strategic competition between the major powers, the situation in Myanmar, the South China Sea, Korean Peninsula, Middle East, and Ukraine, the fragile global economic recovery, climate change and natural disasters. Laos has framed the 2024 theme as “ASEAN: Enhancing Connectivity and Resilience”.

Not unlike previous chairs, Laos has promised to keep ASEAN relevant by enhancing its resilience and promoting its centrality to overcome these challenges. At the handover ceremony of the ASEAN Chairmanship in September 2023, Laos’ Prime Minister Sonexay Siphandone highlighted that Vientiane would focus on further consolidating the ASEAN Community including enhancing connectivity and economic integration, narrowing the development gap, advancing digital transformation, promoting people-to-people-exchanges, climate resilience and health development. These areas are now translated into Laos’ designated priority areas of cooperation as unveiled by Mr Kommasith at the ASEAN Lecture.

In a media interview last month, the Foreign Minister expressed Laos’ determination to turn challenges into opportunities. It is looking forward to hosting close to 400 meetings and bringing a record number of people and tourists into Laos under its “Visit Laos Year 2024”.

More importantly, Laos wants to boost its standing and influence among major powers as it hosts and chairs meetings in all ASEAN-led mechanisms, including the East Asia Summit where the leaders of major powers including the U.S., China, Japan, India, Australia, South Korea, Russia, and New Zealand will be gathered in Vientiane.

As a small and landlocked country in ASEAN, Laos is vested to amplify its interest and broaden its economic options. As such, it has pulled out all the stops to succeed in its Chairmanship — at the least, in the procedural and logistical aspects. It was reported that the Laos National Steering Committee on the Chairmanship has started work on the improvement of roads and airports, budget, meeting venues, communication and internet facilities, tourism destinations, accommodation and other logistics associated with government delegations and foreign journalists. Most ASEAN dialogue partners are also quick to offer their support, such as the provision of logistical equipment such as vehicles and IT systems, capacity building and English language training.

To its credit, Laos has had a fairly decent track record as ASEAN Chair in 2016. The country has demonstrated that it was able to strike a compromise between opposing voices (the U.S., China, Vietnam and the Philippines) on the South China Sea. That was the lesson learned from the failure to issue a joint communique in 2012 during Cambodia’s Chairmanship due to disputes over language to frame the South China Sea disputes. While it is unlikely that the Code of Conduct in the South China Sea (COC) will be adopted during Laos’ Chairmanship, Vientiane would be expected to adopt a neutral position. However, such an overly cautious position may not revive the languished negotiations.

Despite its earlier success, Laos should not rest on its laurels. Although it has put forth a list of priority deliverables, they reflect the country’s risk-averse disposition and preference to focus on the safer aspects of ASEAN Community-building. As there are no specific details on what Laos plans to deliver, it remains to be seen if there will be new concrete initiatives for ASEAN apart from a long list of statements and declarations.

Indonesian President Joko Widodo (L) passes the ASEAN Chairmanship baton to Laos’ Prime Minister Sonexay Siphandone (R) during the closing ceremony of the 43rd ASEAN Summit in Jakarta on 7 September 2023. (Photo: Kusuma Pandu Wijaya / ASEAN Headquarters)

Laos’ inward focus stands in contrast with Indonesia’s outward and bold approaches as evidenced in its push for greater cooperation in the Indo-Pacific. As the Chairmanship is being passed from the biggest and boldest country in Southeast Asia to one of the smallest developing countries in ASEAN, observers are concerned about Laos’ ability to lead ASEAN in navigating through new geopolitical and economic developments. These concerns are valid: if Indonesia did not secure much success, Laos, with a significantly smaller weight, has its work cut out for it. Furthermore, there are doubts as to whether Laos would be a neutral Chair of ASEAN, considering its close ties with China. Some observers noted that debt pressure may result in Laos acting at the behest of its bigger northern neighbour. This might affect Laos’ chairing of key negotiations such as the COC.

To compound matters, the challenges today are unlike 2016. The region will be watching to see how Laos handles regional flashpoints and issues, particularly the Myanmar crisis and the South China Sea. Following Operation 1027, Myanmar is witnessing unprecedented resistance attacks by anti-junta forces which could potentially see the weakening or even collapse of the Myanmar military government. As much as Laos has affirmed that it will continue with a “full and effective implementation of ASEAN’s Five-Point Consensus (5PC)”, the situation in Myanmar may change dramatically to render the 5PC inadequate to address the new situation, especially if the country were to break up. As conservative as Laos is, it will certainly need greater flexibility, adaptability, and creativity to find new solutions to assist Myanmar and its people. Laos will need to lead ASEAN in stepping up humanitarian efforts in affected states and address off-limits issues such as refugees given the widespread displacement of the Myanmar people.

Similarly, as tensions between China and the Philippines worsen in the South China Sea, ASEAN cannot continue to be a bystander. As a land-locked country, it is questionable whether Laos would have the gumption to make a difference on the South China Sea issue and make ASEAN’s relevance count. At least, Laos will be pressured to make progress in the negotiations of the COC regardless of whether such a document may be effective in situations of conflict.

Apart from rising tensions in Myanmar and the South China Sea, North Korea is expected to raise tensions in the region with more intercontinental ballistic missile tests. Middle powers including South Korea and Japan are expected to respond more strongly with greater military actions. The upcoming high-stakes election in Taiwan next month, depending on the outcomes, could further deteriorate the situation in the Taiwan Strait.

Even in the realm of easy wins — the attendance of the United States president at the ASEAN summits in 2024 — Laos looks likely to get the short end of the stick. In 2016, Laos saw the participation of U.S. President Barack Obama — the first American president to visit Laos. It is unlikely that President Joe Biden will attend the summits in October next year given that the presidential elections will be around the corner. Biden skipped the ASEAN summits in Jakarta in September.

Despite all of Laos’ good intentions and desire to be a competent chair, current realities and facts on the ground mean that it would be quite a hill to climb for Vientiane in 2024. The country will have to dig deep.

Editor’s Note:

ASEANFocus+ articles are timely critical insight pieces published by the ASEAN Studies Centre.

Commentaries / Climate Change / Indonesia / Singapore / Southeast Asia / Vietnam

Road to Carbon Zero in Southeast Asia: Spur Innovation and Price Carbon

Southeast Asia needs to take a two-track approach to attain the target of halving carbon emissions.

Vinod Thomas   11:31AM, 21 Dec, 2023

This aerial photo shows the Nam Ou 4 hydropower plant of the Nam Ou River Cascade Hydropower Project in northern Laos’ Phongsaly Province. (Photo by Zhang Jianhua / XINHUA / Xinhua via AFP)

The transition to net zero carbon emissions is among the greatest development challenges for the world. Given the relatively high carbon content of GDP growth in Southeast Asia, the region’s economies need a structural transformation. There is some change underway but in two separate tracks, one set of efforts to innovate and invest in low carbon modalities, while another to price and discourage the carbon content of economic activities. Innovation covers product and process changes, new or adapted from elsewhere, focused on a low-carbon transition. It would pay to bring the two tracks together and vastly raise their ambition to see results before 2030, a target date for halving emissions.

Despite the plummeting cost of solar energy, both approaches face rising fossil fuel deployment, with the fossil fuel share of global energy stuck at well over 80 per cent in Southeast Asia. This is partly due to subsidised dependency on fossil fuels, coupled with their state-dominated market control. Sound economics calls for a heavy tax on fossil fuels in view of their negative “externalities”, and subsidies for renewables for their positive externalities. But worldwide, including Southeast Asia, fossil fuels are subsidised, according to the International Monetary Fund, to the tune of US$7 trillion in 2022. This is equivalent to nearly 7.1 per cent of global GDP.

Starting with this unfavourable condition, what approach might best move the needle on decarbonisation in Southeast Asia? It is worth remembering that major transitions like switching from horse and buggy to the internal combustion engine were long drawn out. Where changes were swift, for example, digital technologies or smartphones, the new modality had a dominant cost advantage, and the prevailing alternative was not subsidised or did not even exist. But the cost and efficiency advantage of renewables over fossil fuels (with their massive subsidies) remains tenuous.

Under the circumstances, a swift energy transition will need all hands on deck. Southeast Asia faces a tough challenge considering that the share of renewables in the energy mix is only 14 per cent. That said, green energy sources have been increasing, for example, Vietnam in solar, Laos in hydropower, Indonesia and the Philippines in geothermal. Even if down the road, Malaysia, through Petronas, is trying to make use of its depleted offshore oilfields to capture and sequester carbon. To cut its 95 per cent dependence on natural gas, Singapore is betting on low-carbon hydrogen for a decarbonised pathway and net zero by 2050.

The time for a carbon tax, so far fully in place only in Singapore in Southeast Asia, has arrived: nearly 70 per cent of respondents say they support a national carbon tax, with those from Vietnam, Indonesia and Philippines giving the strongest backing according to a 2023 survey from ISEAS–Yusof Ishak Institute.

The most transformative and practical clean technologies for Southeast Asia are those focusing on carbon avoidance while making high-volume industrial commodities — electricity, cement, steel, ammonia, and hydrogen — without requiring carbon capture and storage. Solar would top that list. Electrification of transportation and power generation would also be high on the list.  Another low-hanging fruit for Southeast Asia is transforming the food system using alternative forms of protein that reduce land, water, and energy use, protect biodiversity, and reduce carbon emissions These approaches centred on investing in new solutions, if scaled up, can be more cost-effective in driving innovation and structural change. One estimate of likely investment in total clean energy in the region is US$76 billion during 2023-25. Social cost-benefit calculus comes down in favour of stepping up these investments in technology.

Meanwhile, the cost of delaying a carbon transition, according to various studies, is becoming prohibitive.  The upshot with some of the laudable green investment initiatives is the time lag for the market deployment of new technologies. Therefore, proactive investment in product and process innovation and adoption of new technologies will need the full support of pricing and market incentives to get results in time. Investments to prompt innovation are unlikely to take hold fast enough on their own. Without a price imposed on the harm fossil fuels are doing, proactive investment by the government in renewables would run very high risks of inefficiency and waste. The not often recognised role of a carbon tax or a straight regulation is that it motivates innovation in renewables as an alternative.  The time for a carbon tax, so far fully in place only in Singapore in Southeast Asia, has arrived: nearly 70 per cent of respondents say they support a national carbon tax, with those from Vietnam, Indonesia and Philippines giving the strongest backing according to a 2023 survey from ISEAS–Yusof Ishak Institute.

To see results in time, Southeast Asia would want to invest proactively in renewables innovation and match it by pricing carbon.  Carbon pricing can be based on carbon trading as in China and South Korea or on a carbon tax as in Japan and Singapore. If carbon pricing were to take the form of a carbon tax, there is the added advantage that tax revenues can be used to fund innovation in renewables.

So, it would not be an investment in innovation versus a price on carbon. Like the two blades of a pair of scissors, they are complementary, each needing the other to get results. Given Southeast Asia’s high stakes in achieving a carbon transition swiftly, a judicious blend of the two approaches is needed immediately and across the region.

2023/302

20 Dec, 2023

- Malaysia’s Identity Politics Will Perpetuate Exclusivity If Left Unchecked

Commentaries / Malaysia / Malaysian Elections / Malaysian Politics

Malaysia’s Identity Politics Will Perpetuate Exclusivity If Left Unchecked

Perikatan Nasional’s growing popularity among Malaysian Malay voters portends a potential path towards increasing polarisation in society if the sitting government does not do more to engage with right-wing rhetoric and convince all Malaysians to respect diversity.

Syaza Shukri   2:00PM, 20 Dec, 2023

Perikatan Nasional Chairman Muhyiddin Yassin celebrates with other leaders during a news conference after Malaysia’s 15th general election in Shah Alam, Malaysia on 20 November, 2022. (Photo by Mat Zain/NurPhoto)

Some observers contend that the outcome of Malaysia’s 15th General Election (GE15) demonstrated a rising tide towards right-wing conservatism. GE15 saw the Malay-Islamist coalition Perikatan Nasional (PN), especially the Islamist PAS, make numerous electoral gains. PN saw its vote share increase from 30.12% in GE15 to 50.15% in the six state elections (PRN 2023) held in August. In 2023, peninsular Malaysia witnessed five by-elections with PN’s vote share increasing for all constituencies, especially for the Kemaman seat in Terengganu’s by-election on 2 December 2023 (Table 1).

Table 1. Votes, Malaysia’s GE15 and 2023 By-elections

Constituency

Coalition

Votes (Percentage) GE15

Votes (Percentage) By-election

Kemaman

PN

65,714 (58.1%)

64,998 (70%)

PH

8,340 (7.4%)

–

BN

38,535 (34.1%)

27,778 (29.9%)

Pelangai

PN

3,260 (25.7%)

4,375 (37.3%)

PH

2,031 (16%)

–

BN

7,308 (57.7%)

7,324 (62.4%)

Simpang Jeram

PN

6,350 (29.7%)

10,330 (42.2%)

PH

8,749 (40.9%)

13,844 (56.5%)

BN

6,062 (28.4%)

–

Pulai

PN

20,677 (17.6%)

29,642 (37.8%)

PH

64,900 (55.3%)

48,293 (61.6%)

BN

31,726 (27.1%)

–

Kuala Terengganu

PN

63,016 (65.3%)

68,369 (85%)

PH

10,946 (11.3%)

21,103 (15%)

BN

22,109 (22.9%)

–

Source: Author’s compilation from public reports;

Editor’s note: PN vote shares in bold font, winner in shaded rows

Several hypotheses have been proposed for this shift: the general disenchantment with the Malay political establishment represented by the United Malays National Organisation (UMNO), the widespread usage of TikTok to spread misinformation, and low political literacy among the youth. In addition, PN’s sustained use of Islam and identity politics contributed to its outstanding showing. For example, in the Kemaman by-election campaign, Muhyiddin Yassin used religious rhetoric to claim that UMNO members who left the party would be rewarded since their actions were equivalent to the Prophet Muhammad’s hijrah (migration) to Madinah (Medina).

Malaysia has witnessed conservative indoctrination and mobilisation initiatives for several decades. Among the factors for growing conservatism are religious educators’ exposure to stricter interpretations of puritan Salafism that seeks to eliminate so-called heretical developments in Islamic customs, the increasing role of the religious bureaucracy, that is, the Department of Islamic Development (JAKIM), and the influence of Islamist civil society organisations such as Angkatan Belia Islam Malaysia (ABIM). Since previous UMNO administrations were responsible for directing the Islamisation project in the country, PAS was seen as redundant and even extreme for suggesting a further move towards a so-called Islamic state.

The rising tide of political polarisation in Malaysia as evidenced by the by-election results is a pressing concern that demands proactive and concerted efforts from all segments of society.

However, PAS’ participation in the federal government between 2020 and 2022 has enhanced the party’s legitimacy. Decades of conservative indoctrination and mobilisation in Malaysia have paved the way for PAS to claim itself as the voice of the Malay-Muslims, since Islam has become the most important factor for the Malay community’s political behaviour.

In the 2022 election, identity politics helped PN to finish second to Pakatan Harapan (PH) for seats won and votes received. It is not surprising that the coalition continued with this strategy in 2023. During the Pulai and Simpang Jeram campaigns, Bersatu’s Muhyiddin Yassin touched on religious sentiment by alleging that voting for the PH candidate was a sin. With a Merdeka Centre poll showing that Muslim youth consider Islam to be significant in public life, Malays are arguably susceptible to religious rhetoric. Religious symbolism in public becomes a cue for political decision-making. Among the three main Malay-based parties, PAS won 42 seats in GE15 compared to Bersatu’s 31 and UMNO’s 26, showing an obvious shift among the Malays to religion-based political parties.

Even the Anwar Ibrahim-led Unity Government is using a form of identity politics to out-Islamise the opposition. Anwar introduced the Madani framework with a focus on inclusivity. However, by basing Madani on the Islamic concept of Maqasid Al-Shariah, which focuses on achieving broader goals of welfare in Islamic jurisprudence, Anwar too relies on an Islamic identity for acceptance. Yet, unlike PAS’ more direct interpretation of Islamism and religious law, Madani is too abstract for the masses.

If political elites fail to confront the issue, Malaysia is at risk of further polarisation and right-wing populism which will, in turn, restrict the liberties of non-Muslim citizens. Political polarisation affects not only the functioning of government and its institutions but also the everyday lives of Malaysian citizens. To illustrate, a non-Muslim worker who wore a crucifix necklace to work was fired while working at a Chinese Muslim restaurant. Some in the Malay community accused the restaurant of deceiving patrons by allowing that worker to wear a Malay songkok. This has stirred up a discourse on the rights of non-Muslims to employment even though the job had no bearing on the practice of Islam.

A polarised political environment hinders constructive dialogue, stifles compromise, and breeds an “us versus them” mentality, perpetuating mistrust and division. It engenders policy paralysis and weakens government capacity to address pressing national issues. For example, Parliament has spent time debating organising concerts and nurses’ uniforms in sessions meant to focus on the federal budget and health White Paper. The opposition brought the former issues up because they were considered as priorities for their conservative voters.

The rising tide of political polarisation in Malaysia as evidenced by the by-election results is a pressing concern that demands proactive and concerted efforts from all segments of society. While PN has the right to claim democratic victory, PN’s leaders should use their immense responsibility to celebrate Malaysia’s diversity instead of going down the rabbit hole of right-wing populism by equating PH with Israel at a time when emotions are running high with the ongoing Israel-Hamas war. Unfortunately, these comments have divided people along partisan lines, with Amanah, a component party of the government, lodging a police report alleging that those comments are slanderous.

There is a significant likelihood that PN will continue to wrestle with the Unity Government on race and religion. The primary repercussion may not be political realignment but the exacerbating of exclusionary religious and racial attitudes within society.

2023/301

19 Dec, 2023

- The Postings of My Father: Tradeoff Between Privacy and Misinformation

- ASEAN-Japan Relations at 50: Taking a Harder Edge

Commentaries / Online Misinformation / Social Media / Thailand

The Postings of My Father: Tradeoff Between Privacy and Misinformation

End-to-end messaging apps in Thailand present a dilemma to policymakers. The use of encryption raises the level of security but at the same time exposes users to information maladies.

Surachanee Sriyai   1:00PM, 19 Dec, 2023

Attendees await the start of a seminar on how to identify and fight fake news, organised by the Thai Media Fund at Major Cineplex Ratchayothin in Bangkok, Thailand, on March 9, 2021. (Photo: Chanat Katanyu / Bangkok Post via AFP)

In August, the Atlantic Council’s Digital Forensic Research Lab (DFRLab) released a report shedding light on the use of end-to-end encrypted (E2EE) messaging apps in the United States, such as Whatsapp, Telegram, and WeChat. While these apps safeguard users’ privacy, they also provide a breeding ground for information maladies such as misinformation, disinformation and hate speech. In Thailand, DataReportal placed Line, another well-known E2EE application, as the second-most used platform in Thailand with a 90.7 per cent adoption rate among the country’s internet users.

Previously, I have raised concerns about E2EE messaging apps amidst the May 2023 elections in my op-ed, speculating that while the Election Commission of Thailand (ECT) was active in combating dis/ misinformation during the campaigning season, it was very likely that false information was still circulated in a form of encrypted messages. The encrypted nature of these messages presents challenges for tracking and prevention. Studies of elections in the United States — one published in 2019 and another in 2020 — have highlighted the susceptibility of older adults to dis/ misinformation. In Thailand, the same dynamics are believed to apply, but there are no detailed studies of how dis/ misinformation operates in the online domain. To gain anecdotal insights into how information maladies operate on E2EE apps, I monitored my father’s Line chats for a week in November. My father is a retired civil servant in his 60s. While not a representative sample, my father and his friends belong to the elderly demographic and are more conservative in outlook. They are known to be more susceptible to online misinformation (that said, the author is not presupposing that only older adults are susceptible to information maladies).

In the monitored week, my father received around 350 messages, with nearly 40 per cent containing various forms of dis/ misinformation. As shown below, health-related misinformation was prevalent, surpassing political misinformation. Particularly alarming was the rise of religious-based narratives, especially Buddhist supremacist themes and superstitions. This trend echoes concerns raised by scholars about the fragility of interfaith relations between the Buddhist and Muslim communities in Thailand. If left unchecked, such narratives — particularly those relating to religion and race — can have a significant impact on society and even heighten the chance of communal violence and violence extremism.

Note: Figure compiled by the author based on the data collected from father’s Line chats

A significant portion of dis/ misinformation messages in his chats originated from social media platforms, primarily Facebook and TikTok. This cross-sharing highlights how content, even harmful ones, spread in the digital ecosystem. It appears that such content can spill over from public spaces like social media to personal spaces like messaging apps. Moreover, as widely posited in media studies, digital KPIs such as reach and engagement metrics can serve as heuristic cues that boost the perceived credibility and veracity of content; thus, increasing the likelihood of such content being shared. The images below show the screenshots of problematic contents from my father’s chats and how they were shared from TikTok and Facebook to a messaging app like Line.

Note: The first and second images showed anti-Muslim and pro-Buddhism as well as superstitious messages that originated from Facebook posts. The third image is from a TikTok account called “What’s Pheu Thai Party acting/ pretending to do today?” The account frequently posts political dis/ misinformation and conspiracies against the political party.

Lastly, despite the potentially harmful consequences, the ability for content monitoring on E2EE apps is incredibly low even from the platform’s vantage point. This is due to the oft-cited trade-off between privacy and information maladies that underlies these applications. While Line does have content moderation guidelines that prevent the sharing of obscene, offensive, or false content, they are only applied to public accounts known as Openchats or VOOMs. This means that private chats are largely unmonitored and serve as breeding grounds for dis/ misinformation. This has significant implications on the dynamics of information maladies in a country like Thailand, where users prefer to create a group chat by inviting multiple friends and family to join in a private chat. For example, my father is a member of a private chat in which he exchanges messages and daily greetings with 150 school friends. The group exemplifies the “Sawaddee Chao Wan Jan” or “Good Monday morning” online culture widely popular among elderly netizens.

The anecdotal evidence presented underscores the dual nature of E2EE technology. While it secures data privacy, it also increases the likelihood of exposure to harmful content. Moreover, unlike social media, there is barely —if any —possibility for third-party intervention.

According to Line’s Q&A page, a group chat can be as large as 500 members, making it a goldmine for potential practitioners of dis/ misinformation if left unattended. That said, the application reported that it had deleted over 20 million posts for violating its guidelines in FY2022. It is also worth mentioning that it has a user-reporting mechanism that allows users to report harmful content; however, the effectiveness of such mechanisms is debatable. This requires extra legwork on the users’ part and it is unlikely that one would report content that aligns with their existing beliefs or is shared by their family or peers. This is also demonstrated in the work of Tandoc, Lim, and Ling where they studied the reactions of 2,501 Singaporean social media users to fake news. They found that people are unlikely to correct fake news that they came across if they come from their family and friends.

The anecdotal evidence presented underscores the dual nature of E2EE technology. While it secures data privacy, it also increases the likelihood of exposure to harmful content. Moreover, unlike social media, there is barely — if any — possibility for third-party intervention. This raises the need for comprehensive studies on the dynamics of dis/misinformation within messaging apps to comprehend their societal impact fully. This is pertinent, now that Meta has rolled out end-to-end encryption as a default setting on Facebook and Instagram Messenger.

2023/300

Commentaries / ASEAN / Japan

ASEAN-Japan Relations at 50: Taking a Harder Edge

With five decades of cooperation with ASEAN under its belt, Japan has the chance to now play a stronger role as balancer instead of passive price-taker in a region awash with anxiety over great power rivalry.

William Choong | Joanne Lin   9:06AM, 19 Dec, 2023

Leaders of ASEAN-member nations pose for a group photo for the Japan-ASEAN Friendship and Synergy 50th anniversary in Tokyo on December 17,2023. (Photo by David Mareuil / POOL / AFP)

ASEAN and Japan celebrated the 50th anniversary of their diplomatic relations on 17 December in Tokyo. This follows the establishment of the ASEAN-Japan Comprehensive Strategic Partnership at the 26th ASEAN-Japan Summit in September in Jakarta. Fifty years on, Japan’s role has moved from a focus on economics and development into the realm of hard security, especially maritime security.

In its inimitable understated style, Japan prefers to let the facts of its relations with ASEAN members speak for themselves. Japan has a long list of nearly 90 bilateral projects with ASEAN in four key areas under the ASEAN Outlook on the Indo-Pacific (AOIP): maritime and economic cooperation, connectivity, and sustainable development. Japan’s Official Development Finance (ODF) to ASEAN and its member countries has been significant, amounting to US$4 billion annually for 2015-2021.

At the summit, Prime Minister Fumio Kishida announced more exchange programmes, scholarships, and other initiatives to co-create an economic future with ASEAN countries such as the next-generation auto industry. He also defended the most fundamental aspect of Japan’s foreign policy: a free and open Indo-Pacific (FOIP) based on the rule of law.

Looking ahead, the FOIP concept, first introduced by the late Japanese premier Shinzo Abe in 2006, will be the operative term underpinning Japan’s approach to ASEAN and its member states.

In the face of China’s assertive behaviour in hotspots including the South China Sea (SCS), Tokyo has sought to beef up the maritime and military capabilities of Southeast Asian countries. A clear example of this is Japan’s Official Security Assistance (OSA). Tabled in Japan’s National Security Strategy published in December 2022, the OSA would provide materiel, equipment, and assistance for the development of infrastructure to meet the security needs of recipient countries. This would include non-lethal aid in the form of radars and satellite systems.

The shift in emphasis is clear. Previously, Japan packaged the transfer of weapons systems and naval vessels under its Official Development Assistance (ODA) scheme, which is typically used for economic development and strictly limited to civilian agencies. In contrast, OSA seeks to help Southeast Asian states to defend their territories. Japan wants to empower claimant states to defend against China’s aggression in the SCS, which would be in line with its own security interest of balancing China.

Under the OSA scheme, the Philippine Navy will get US$4 million worth of coastal surveillance radars. It has been reported that Malaysia – another SCS claimant – would be another potential recipient.

Japan has been consistent in helping Southeast Asian countries to arm and defend themselves, amid Chinese attempts to encroach on their maritime territories. In 2013, Japan delivered 10 multi-role response patrol vessels to the Philippine Coast Guard (PCG); another two patrol ships were delivered in 2022. Japan has delivered six second-hand fishery patrol vessels to Vietnam, with six more to be transferred by 2025. Japan has also agreed to sell Indonesia eight Mogami-class stealth frigates; the deal was categorised as a “joint development” project to sidestep Tokyo’s arms export ban.

At a time of increasing geopolitical contestation between China and the U.S., Japan is also acting as a linchpin to connect U.S.-led security frameworks such as the Quad (Australia, India, Japan, and the U.S.) with ASEAN.

ASEAN member states are wary of the Quad: there are fears that the grouping would undermine ASEAN centrality and serve to effect the pseudo-containment of China. That said, ASEAN countries are open to working with Japan and other Quad members in flexible plurilateral arrangements provided these activities serve their national interests. This is especially in areas such as maritime domain awareness, climate change, infrastructure, emerging technologies, and supply chains.

The shift in emphasis is clear.

Recent developments attest to the emergence of so-called Quad-lite interactions between Southeast Asian countries and members of the Quad. While these collaborations do not have the Quad brand, they provide a basis for cooperation and interoperability.

As opposed to using navies, the employment of coast guards is deemed less threatening while demonstrating countries’ intent to police their maritime territories and claims. In June, the American and Japanese coast guards conducted maritime drills and joint search and rescue operations with the PCG and helped with a maintenance manual for patrol vessels in August.

Japan has also participated in Quad-lite naval activities involving Southeast Asian countries. In August, navies from Australia, Japan, the Philippines, and the U.S. carried out a joint exercise in the SCS near Manila. Last year, Indonesia conducted the Garuda Shield exercises with Australia, Japan, and the U.S. (Singapore was an observer). Separately, the Talisman Sabre exercises in August involved Australian and American soldiers, with soldiers, marines and aviators from Japan, the Republic of Korea and the UK. Military personnel from the Philippines, Singapore and Thailand attended as observers. Amid growing Sino-U.S. contestation, Southeast Asian countries have repeated ad nauseam that they do not want to choose sides. Instead, Southeast Asian countries will “choose” to uphold their national interests, whether they work with the U.S. (such as on the Indo-Pacific Economic Framework), with China (such as on the Belt and Road Initiative), or with both. This is where Japan could extend the strategic options for these countries in hedging against the uncertainties of great power rivalry while playing a greater balancing role in the region.

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18 Dec, 2023

- Xi Jinping in Hanoi: Courting for a Common Destiny?

- Is the Establishment of a Spiritual Area on the Gadjah Mada Campus Linked to Joko Widodo?

Commentaries / Editor Picks / China / china politics / China-Vietnam Relations / Vietnam / Vietnamese Politics

Xi Jinping in Hanoi: Courting for a Common Destiny?

Chinese President Xi Jinping’s visit to Hanoi presented an opportunity for Beijing to draw Vietnam closer into its sphere of influence, especially since Vietnam has recently upgraded ties with the U.S. and Japan. However, Vietnam’s foreign policy will continue to strike a delicate balance between China and the West.

Nguyen Khac Giang   12:00PM, 18 Dec, 2023

Vietnam’s President Vo Van Thuong (R) and China’s President Xi Jinping shake hands during a meeting at the Presidential Palace in Hanoi on December 13, 2023. China and Vietnam pledged on December 12 to deepen ties during President Xi Jinping’s first visit in six years, as Beijing seeks to counter growing US influence with the communist nation. (Photo by LUONG THAI LINH / POOL / AFP)

On December 12, Chinese President Xi Jinping made his third visit to Hanoi, and his first since 2017. As Vietnam’s “Bamboo diplomacy” in 2023 saw it upgrade ties with China’s global and regional rivals, namely the U.S. and Japan, Beijing wants reassurance from Hanoi that it is not joining the other side of the great power competition to gang up against China.

This occasion also presented an opportunity for Beijing to draw Vietnam closer into its sphere of influence, especially through initiatives like the “Community of Common Destiny” (CCD), Xi Jinping’s pivotal idea to reshape the existing global order. Vietnam was one of the few Southeast Asia countries which resisted inclusion in this initiative — until this visit. In Hanoi,  both sides agreed to build a “China – Vietnam Community with Shared Future” which will open a “New Era” of bilateral cooperation. There is a nuanced change from “Destiny” to “Future,” likely to mitigate potential public backlash in a nation where anti-China sentiment remains prevalent. The signing of a whopping 36 bilateral agreements indicates a successful diplomatic maneuver by President Xi.

Having Vietnam as a signatory to CCD carries strategic significance for China. Despite extensive efforts to bolster its global image, Beijing has struggled to establish a robust network of international partnerships. Beijing feels compelled to set an example in Vietnam on the “new type of international relations” it offers. If it cannot convince neighbouring and ideologically aligned Vietnam, how can it convince others? In an op-ed on the Communist Party of Vietnam (CPV)’s mouthpiece before his visit, President Xi said the participation of Vietnam will attract “many more countries” to join in. This is even more important given China’s recent escalation of tension in the South China Sea with the Philippines and the ongoing difficulties in progressing the Code of Conduct negotiations.

Vietnam’s assent to the “Community with a Shared Future” does not equate to a wholesale acceptance of China’s worldview.

Economically, Beijing also wants to strengthen ties with Vietnam. First, it wants to integrate Vietnam into its economic ecosystem, particularly by linking Vietnam with its southern industrial hub through the “Two Corridors, One Belt” framework. The “two corridors” in the framework refer to the economic routes linking the northern Vietnamese provinces of Lao Cai, Hanoi, Haiphong, and Lang Son with the southern Chinese cities of Nanning and Kunming. Meanwhile, the ‘one belt’ denotes the economic zone encompassing the Gulf of Tonkin’s rim. The proposed railway projects linking Northern Vietnam with Southern China reflect this idea. Second, Vietnam’s warm relationship with Western partners potentially offers Chinese enterprises a buffer zone amid the West’s de-risking policies that penalize doing business with China-based entities. This explains the sharp increase in China’s investment in Vietnam over the past two years. By November 2023, China had become the biggest investor in Vietnam in terms of newly registered projects.

Additionally, China positions itself as a direct competitor to Western partnerships by offering cooperation in new drivers of growth in Vietnam such as rare earth exploitation, innovation, and green energy transition (cooperation in these sectors was extensively discussed during the U.S. President Joe Biden’s trip to Hanoi three months ago). President Xi’s approach underscores a compelling proposition: China is not only able to match the offerings of Western partners but can do so at a more competitive price, as committed in the third Belt Road Initiative Forum last October.

Hanoi is receptive to Chinese offers due to several reasons. First, Vietnam wants a strong relationship with China as much as Beijing does. China is Vietnam’s most important economic partner, not just because it is the country’s biggest trade partner and the second biggest export market after the U.S. Vietnam is hugely dependent on Chinese imports for its manufacturing industry, while half of its agricultural exports goes to China. Second, as both countries share the ideological alignment, there are good reasons for Vietnam to forge strong political ties with China for the common goal of ensuring regime security. Third, Hanoi knows well that its balanced approach in the great power competition is essential for retaining its geopolitical leverage as a “swing state” in Asia. Having a warm relationship with Beijing is vital toward that objective.

Vietnam’s assent to the “Community with a Shared Future” does not equate to a wholesale acceptance of China’s worldview. Hanoi is more interested in maintaining the current rules-based international order rather than jumping into a China-led one, where it may be disadvantaged in negotiating tricky issues with China and where no one can enforce China’s adherence to the rules, such as the South China Sea dispute. Furthermore, Vietnam is also concerned about being over-dependent on China, which explains why it has been cautious in receiving big Belt Road Initiative projects, unlike other Southeast Asian countries. Hanoi wants to leverage its advantageous geopolitical position to develop a high-tech, high value-added economy where it could position itself as an independent economic hub instead of being over-reliant on a single market. This is obvious in Vietnam’s recent diplomatic upgrades with the U.S. and Japan, which have emphasized economic interests and downplayed geopolitical tensions.

As such, while Vietnam embraces China’s economic and trade proposals, it will remain cautious to join China-led political initiatives. Despite big announcements in Hanoi, Xi’s trip is unlikely to change the direction of Vietnam’s foreign policy, which continues to strike a delicate balance between China and the West.

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Commentaries / Indonesia / Indonesian Politics / Religion

Is the Establishment of a Spiritual Area on the Gadjah Mada Campus Linked to Joko Widodo?

Universitas Gadjah Mada, one of Indonesia’s top campuses and alma mater of the current president as well as four of the six candidates vying for the 2024 presidency and vice presidency, is constructing worship facilities for all six of Indonesia’s recognised religions.

Leo Suryadinata   9:07AM, 18 Dec, 2023

In late October this year, the Student Activities Unit (UKM) at the University of Gadjah Mada (UGM) announced that a “spiritual area” consisting of houses of worship on its campus would be ready soon. (Photo by Universitas Gadjah Mada / Twitter)

In late October this year, the Student Activities Unit (UKM) at the University of Gadjah Mada (UGM) announced that a “spiritual area” consisting of houses of worship on its campus would be ready soon. A public university, UGM is the alma mater of President Joko “Jokowi” Widodo and the only Indonesian university where houses of worship for various religions (other than Islam) are being established. This is a significant symbol that would show UGM embraces Pancasila and religious pluralism.

As Jokowi is known as a Pancasila-ist and is still powerful even near the end of his presidency, one wonders who conceived this project and why it is being completed near the end of Jokowi’s presidency? Was President Jokowi involved?

In the New Order era, to combat the resurgence of Communism, Suharto promoted six official religions: Islam, Protestantism, Catholicism, Hinduism, Confucianism, and Buddhism. However, Confucianism was “de-recognised” by the administration in 1978-79 when the abovementioned objective was achieved. Confucianism was seen as hindering ethnic Chinese assimilation and only returned as Indonesia’s sixth officially recognised religion after Suharto’s fall.

Although mosques are typically established on state university campuses in Indonesia, worship houses are not built for the other five religions. After Jokowi assumed the presidency, things began to change. In 2017, Professor Panut Mulyono, then the new rector of UGM, reportedly released a masterplan for the construction of campus buildings for the period 2017-2022, including that of worship houses for the five other recognised religions.

… Professor Mulyono stated that this Spiritual Area will be a symbol of tolerance and religious harmony.

The masterplan targeted the completion of these houses of worship by 2022 but as late as November 2021, the plan faced various difficulties. The Intellectuals Club at UGM hosted dialogues, inviting students, the religious communities, and university management to discuss the plan. The university revealed that difficulties included funding, the adjustment of the masterplan, and persuading senior UGM staff members to move out from areas where the planned houses of worship were to be built. The pandemic was probably another delaying factor.

Nevertheless, on 21 May 2022, Professor Mulyono announced the laying of the foundations for the five houses of worship in a Spiritual Area (Kawasan Kerohanian) on campus that would occupy an area of 4,789 square metres. Each house of worship can accommodate 250-300 people and construction was due to be completed by mid-December 2023.

At the May event, Professor Mulyono stated that this Spiritual Area will be a symbol of tolerance and religious harmony. He noted that its establishment was one of the commitments to make UGM a “Pancasila university”, meaning an open tertiary institution that catered to various religious activities. These activities would be connected with the activities of the campus mosque.

Professor Mulyono was the first to lay the foundation stone, followed by Pratikno, Minister of the State Secretariat and chairman of the Board of Trustees of UGM. Pratikno welcomed the establishment of this Spiritual Area, noting that the world was becoming more pluralist and that various cultures and religions had been interacting rigorously. Indonesia had been able to deal with challenges facing other multicultural countries using the concept of “unity in diversity” (Bhineka Tunggal Ika). Pratikno added that this plurality “should be maintained within the education system for Indonesia’s future generation”.

In August 2023, UGM leaders inspected the project and stated that 46 per cent was complete. The authorities believed that it would be completed as scheduled. Professor Wening Udasmoro, Chairman of the Academic Senate, noted that the construction of this spiritual complex would be “a place for learning as well as a place for students to practice the values of tolerance and solidarity”. A university website piece ran in September announcing some limited funding awarded to the Hindu spiritual facility, reiterating the timeliness of the project’s completion.

The building of the Spiritual Area at UGM may well have been the brainchild of Professor Mulyono, the rector for 2017-2022. As his predecessor, Pratikno, a UGM professor and former rector for 2012-2017, was possibly also involved from the beginning. There is no clear evidence that Jokowi was directly involved but Pratikno has been the Minister of the State Secretariat in Jokowi’s cabinet since 2014. As noted above, the plan for the Spiritual Area was released in 2017 and Pratikno attended the foundation laying ceremony last year.

The above circumstances and personalities involved suggest that Jokowi has probably tacitly endorsed the project. Some may see this as Jokowi refining one aspect of his presidential legacy, specifically at his alma mater. Others may interpret the plan as the university leadership’s effort to make UGM more attractive to a younger generation of Indonesians and foreign students, given Indonesia’s status and growing influence in the region.

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15 Dec, 2023

- The First Debate Unveils the Character of Indonesia’s 2024 Presidential Campaign

- Carbon Border Adjustment, Trade and Climate Change: Emerging Issues at COP28

- A Tale of Two (or More) Prime Ministers

Commentaries / Indonesia / Indonesian Politics

The First Debate Unveils the Character of Indonesia’s 2024 Presidential Campaign

The first debate among the three presidential candidates for 2024 underscores a shift in tenor in Indonesia’s politics. Whether this more amicable front lasts as campaign season wears on will depend on the ratings game.

Made Supriatma   2:50PM, 15 Dec, 2023

The three presidential contenders at their first debate on 12 December 2023, General Elections Commission (KPU) building, Jakarta. (Photo: KPU via X)

Indonesia’s 2024 election campaign is now at a pivotal stage: a series of five televised debates among the contenders. Until a week before the first round took place on 12 December, there was still confusion surrounding the debate format and rules. This confusion was primarily whether there would be a clear distinction between debates featuring the presidential candidates (three rounds) vis-à-vis the vice presidential (VP) candidates (two rounds).

An initial suggestion that the two VP debates might be done away with raised concerns and sparked allegations that the General Election Commission (KPU) was favouring Gibran Rakabuming Raka – President Joko Widodo’s (Jokowi) son and frontrunner Prabowo Subianto’s vice-presidential candidate. Gibran is not expected to be a strong debater against his more experienced competitors, Mahfud MD (Ganjar Pranowo’s running mate) and Muhaimin Iskandar (Anies Baswedan’s running mate).

Now, the KPU has decided that all candidates will be present at every round but in the two VP rounds (on 22 December and 21 January), the presidential candidates will accompany their prospective VPs and while the former may speak, they cannot dominate the stage.

The inaugural debate focused on six themes: law, human rights, governance, corruption eradication, bureaucratic reform, and the fortification of democracy. Moderated by two hosts, the event featured 11 panelists comprising subject matter experts who had meticulously formulated the debate questions and were responsible for randomly picking questions for the three candidates to address.

For the 2024 campaign, political slogans have shifted from being purely political to embracing a more cheerful tone.

The participants could pose selected questions to one another and there were some heated exchanges, mainly between Prabowo and Anies. However, in a display of political finesse, all three seasoned politicians adeptly navigated the harder questions without providing definitive answers.

In this author’s view, the standout performance of the night belonged to Anies Baswedan, who presented himself as a candidate advocating for change. He appeared assertive and went on the offensive early, clearly positioning himself as a catalyst for transformation.

Leveraging his intellectual background, Anies was exceptionally at ease and energetic in the debate. He skillfully incorporated data to bolster his arguments. By making “change” the central theme and mission of his campaign, Anies strategically drew a sharp contrast between himself and President Jokowi’s administration, establishing himself as a formidable opposition figure.

On the flip side, Prabowo Subianto appeared defensive, particularly when addressing his first question on past human rights violations in Papua and Anies’ challenge to him on the Constitutional Court’s decision allowing Gibran to run as a VP contender.

Answering the charge that he was behind the kidnappings of pro-democracy activists in 1997-98, Prabowo countered that those problems had already been resolved. He bluntly asserted that even democracy activists who were once victims of kidnappings now supported him. An activist who was imprisoned during the New Order era, Budiman Sudjatmiko, former head of the leftist People’s Democratic Party, visibly endorsed Prabowo by raising his hand from the audience stand at that point.

Ganjar Pranowo assumed a middle ground and appeared somewhat uncertain about his stance, while avoiding drawing sharp contrasts with Jokowi. Ganjar’s positioning, seemingly vying for the role of Jokowi’s successor against Prabowo, might prove risky in the election. Ganjar’s debate performance lacked memorable moments even though he seemed at ease and confident, as it left voters with little to recall.

Prabowo and Anies undeniably commanded the stage. When Anies further probed Prabowo’s human rights record, it revealed Prabowo’s quick temper and tendency to condescend. Near the end of the debate, Prabowo defiantly declared he did not fear losing power. To the audience’s (albeit mainly his supporters) delight, he mocked Anies at least twice by shaking his head when addressing him, and even engaging in a gesture from his goyang gemoy dance.

In essence, this first debate could be aptly described as a dialogue, as participants mostly refrained from drawing sharp contrasts with each other. Ganjar and Prabowo exercised caution in evaluating Jokowi’s government.

This debate diverges from the tone of the two previous presidential campaigns in 2014 and 2019 when Jokowi faced Prabowo. Then, the campaigns were characterised by supporters’ fervour for both candidates.

In 2014, the campaign centred on preserving reform and democracy. Prabowo was perceived as a symbol of the lingering influence of the New Order regime, posing a threat to reform and democracy. In contrast, Jokowi presented himself as a representative of the common people outside elite circles and was viewed as a child of Reformasi (reform).

In 2019, the campaign revolved around pluralism with the shameless use of identity politics, marking a divisive period in Indonesian politics. Jokowi’s camp successfully portrayed Prabowo as a conservative, intolerant force backed by radical Islamic elements. Against this foil, Jokowi emerged as a symbol of tolerance, pluralism, and multiculturalism.

The 2019 election was impacted by the 2017 Jakarta gubernatorial election, where then incumbent Basuki Tjahaja Purnama (a Christian, Chinese Indonesian governor nicknamed “Ahok” and close to Jokowi) faced contender Anies Baswedan. Massive protests by Islamic groups in December 2016 accusing Ahok of blasphemy ultimately led to his defeat. These protests were attributed to religious mobilisation which resulted in Anies gaining victory.

The mood and landscape of the 2024 election appear different. As reflected in this first debate, there is a noticeable effort to temper passion in campaigning. Prabowo no longer presents himself as the fiery nationalist warrior dedicated to protecting Indonesia’s territorial integrity. He has replaced his fervent speeches on the theft of Indonesia’s natural wealth by foreign interests with a more relaxed persona who, rather than discussing policy programmes, opts to dance.

For the 2024 campaign, political slogans have shifted from being purely political to embracing a more cheerful tone. Politics is seemingly more upbeat, where the candidates’ electability takes precedence. The presidential contenders now vie to be likeable in voters’ eyes but perhaps at the cost of avoiding serious political discourse.

2023/296

Commentaries / Climate Change / COP28

Carbon Border Adjustment, Trade and Climate Change: Emerging Issues at COP28

What has been overlooked amid the furore over the recent UN Climate Change Conference (COP28) in Dubai is the World Trade Organization’s emphasis on the interconnection between trade and climate change.

Melinda Martinus   12:59PM, 15 Dec, 2023

The intersection of trade and climate issues is expected to become increasingly significant in the future, mirroring the COP developments and the emergence of the G7 Climate Club. (Photo: Suzanne Lynch / Twitter)

The recently concluded 2023 United Nations Climate Change Conference (COP28) in Dubai yielded both positive outcomes and disappointments. On the positive side, parties successfully sealed a deal for a loss and damage fund and increased climate finance commitments and renewable energy production. On the downside, the conference saw a record number of fossil fuel lobbyists, a delayed agreement on the Global Goal on Adaptation, and sorely disappointing negotiations on the Global Stocktake.

What was overlooked at this year’s COP, however, is the World Trade Organization’s (WTO) inaugural participation in co-chairing “Trade Day,” signifying a greater emphasis on interconnection between trade and climate change.

As the only global organisation dealing with trade rules between nations, the WTO is often criticised for failing to facilitate a rise in climate-trade-related disputes. In November this year, the European Union (EU) launched the transitional phase of the Carbon Border Adjustment Mechanism (CBAM) — a policy to speed up global emission goals and tackle the risk of carbon leakage by requiring industries to report their emissions. The leakage occurs when companies based in the EU shift carbon-intensive production to non-EU countries which have less rigorous climate policies. When the policy fully takes off in 2026, EU importers of six commodities — electricity, aluminium, iron and steel, cement, fertilisers, and hydrogen — are expected to pay a carbon levy based on the embedded emissions generated during the production process. The adjustment tariff will be collected in the European jurisdiction for EU importers. Global producers planning to export to the EU must report their emissions and expect additional business costs.

To date, the EU CBAM stands out as the most important climate policy with significant impacts on trade. Various studies have scrutinised the merits and drawbacks, pointing to concerns about its effectiveness in reducing global emissions, potential fragmentation of global trade blocs, impacts on the welfare of developing countries, and technical complexities of implementation within today’s intricate and interconnected supply chains. The WTO, being the sole global trade body equipped with a Dispute Settlement Body to address trade conflicts, has initiated discussions regarding the emergence of “green protectionism” and the perceived unilateral move by the EU.

The WTO’s response to the EU CBAM has been generally ambivalent thus far. In multiple public hearings, WTO representatives affirmed their support for more ambitious climate goals while expressing apprehension about the risk of discrimination and trade frictions associated with such a policy. The WTO, in principle, supports global carbon pricing, provided it is less fragmented. To put it in perspective, global carbon prices currently differ considerably. The EU’s Emissions Trading Scheme (ETS) reached a record high of US$108 per Mt of carbon dioxide (CO_2) in February 2023. In contrast, exporting countries like China, Korea, and Japan, operating under their respective national ETSes, imposed taxes of US$9.20, US$18.75, and US$2.30 per Mt CO_2 emitted, respectively, in 2022. Recently, the WTO has taken a proactive step by launching a task force to determine global carbon prices, aiming to ensure that future carbon adjustments imposed on imports do not unfairly penalise developing countries.

The EU CBAM thus presents an opportunity for ASEAN countries to initiate a more robust domestic carbon tax regime. Collecting carbon taxes domestically is likely to be politically less sensitive than the challenge of facing carbon adjustment tariffs within European jurisdiction.

Various countries have intensified their responses to the EU CBAM. Most notably, China has formally requested the Committee on Trade and Environment at the WTO to facilitate discussions on the EU CBAM. Bilaterally, India and the EU have initiated a dedicated workstream on the CBAM through their joint Trade and Technology Council. Within Southeast Asia, policymakers are navigating diverse responses as they grapple with the potential impacts of this policy.

Indonesia and Malaysia generally have a negative stance toward the EU CBAM, partly influenced by ongoing disputes over palm oil with the EU. Conversely, Singapore exhibits comparatively less concern, as the EU CBAM has limited implications for its current export commodities, mainly organic chemicals and pharmaceutical products, to the EU. Meanwhile, Vietnam and Cambodia have experienced an upward trajectory in trade relations with the EU in recent years. Consequently, policymakers in these countries view complying with EU CBAM as essential to enhancing the global competitiveness of their economies and sustaining the growth of trade with the EU.

The intersection of trade and climate issues is expected to become increasingly significant in the future, mirroring the COP developments and the emergence of the G7 Climate Club. While global policymakers may require an extended duration to address this complex nexus through the WTO, which grapples with the delicate balance between trade liberalisation and climate considerations, industries must be confident in adapting to growing sustainable commitments. This adaptation is essential to avoid both the loss of market access and competitiveness on a global scale.

Southeast Asian countries possess a crucial asset for adapting to the EU CBAM through their increasing commitment to implementing domestic carbon pricing mechanisms. Singapore has successfully implemented a robust carbon tax policy and pathway to raise the carbon price in the future. Indonesia is exploring cap and tax schemes for coal power plants. Additionally, Thailand and Malaysia have established voluntary carbon exchanges, enabling corporations to purchase carbon credits and offset their carbon footprint, thus contributing to nationwide climate mitigation efforts. Without strong standards and safeguards of the integrity of voluntary carbon mechanisms, however, these efforts run the risk of greenwashing.

An often-overlooked aspect of the EU CBAM is that if a non-EU producer can demonstrate that it has paid the price for the carbon used in the production of the goods exported to the EU,  the corresponding cost can be fully deducted for the EU importer. The EU CBAM thus presents an opportunity for ASEAN countries to initiate a more robust domestic carbon tax regime. Collecting carbon taxes domestically is likely to be politically less sensitive than the challenge of facing carbon adjustment tariffs within European jurisdiction. Channelling the collected revenue from carbon tax back to companies to improve their sustainability standards should be considered. This is important to boost their confidence in navigating the rise of green standards in international trade.

2023/295

Commentaries / Editor Picks / Thai Politics / Thailand

A Tale of Two (or More) Prime Ministers

Judging from Srettha Thavisin’s recent off-the-cuff comments, Thailand might have more than one prime minister at the moment.

Napon Jatusripitak   9:00AM, 15 Dec, 2023

Srettha kissing Paetongtarn’s hand at the Pheu Thai Party’s headquarters in Bangkok on October 29, 2023 (Photo: thenationthailand / Instagram)

Despite coming to power with substantial parliamentary backing, Srettha Thavisin still faces scepticism about his authority as prime minister. The issue extends beyond questions of legitimacy, which remains shaky given that his appointment was secured through a controversial alliance between Pheu Thai and military-backed elements. This arrangement, which excluded the Move Forward Party, the winner of the May general elections, has been widely criticised as a betrayal of Thai voters’ mandate. Rather, the prevailing concern is about Srettha’s autonomy or the apparent lack thereof, with Thaksin Shinawatra and his youngest daughter Paetongtarn still in the picture.

Srettha’s perceived lack of de facto power as prime minister came under scrutiny in October following the screening of the movie “Sap Pa Rer (The Undertaker),” attended by cabinet ministers and Paetongtarn. When a reporter referred to Srettha as “Prime Minister,” he jokingly replied, “Which prime minister? Thailand has two prime ministers.” His standing was further questioned after a Pheu Thai Party meeting two days later, when Srettha congratulated Paetongtarn on becoming the party’s leader with a hand kiss and a bow. Despite Srettha’s subsequent attempt to retract the comment after being questioned by veteran journalist Suthichai Yoon, his initial remark inadvertently underscored the ambiguity surrounding the real locus of power in the government.

This ambiguity allows for a far-fetched yet plausible interpretation — that Srettha may be acting as a puppet for Thaksin, who secretly wields influence from a private room on the 14th floor of the Police General Hospital, and through his daughter, Paetongtarn. Paetongtarn not only formally leads Pheu Thai but also remains one of the party’s prime ministerial candidates. Paetongtarn maintains that the “Shinawatra family does not own Pheu Thai; Pheu Thai belongs to everyone”. But only Paetongtarn commands the party’s endorsement to potentially become Thailand’s next prime minister.

Theoretically, Paetongtarn may replace Srettha as the prime minister. This might happen after the junta-appointed Senate’s term ends in May 2024 and the prime minister is selected solely by Members of the House of Representatives. In the meantime, Srettha will continue to play his part as a “salesman prime minister” to court foreign investments to Thailand. Domestically, he will pave the way for Paetongtarn, such as by allowing her to “shadow” him during his trips to the provinces (thus giving new meaning to the word) and appointing her as the deputy chairwoman of the National Soft Power Strategy Committee, a role that comes with real budgetary power but limited accountability. At the same time, Srettha will also turn a blind eye to any signs of possible special treatment to ensure Thaksin’s comfortable life outside prison.

“If it is indeed the case that Srettha operates within narrow confines, this raises significant concerns about governance in Thailand. This situation implies that crucial policy decisions and government actions may reflect the interests and preferences of Thaksin rather than the needs of the people.”

Ultimately, this interpretation is captivating not so much due to concrete evidence of Thaksin’s meddling in government affairs, but rather because of Srettha’s perceived lack of political clout with Thaksin lurking in the background like a shadow puppeteer. Similar doubts have plagued previous prime ministers in Srettha’s position. This includes Samak Sundaravej, and has even extended to members of Thaksin’s own family, such as Somchai Wongsawat, who is married to Thaksin’s sister Yaowapha, and Yingluck Shinawatra, who did not shy away from campaigning under the slogan “Thaksin Thinks, Pheu Thai Acts” in 2011.

Srettha’s situation bears similarities to Samak’s in that he is an outsider to the Shinawatra family. However, Srettha does not hold any formal leadership position in Pheu Thai and has no direct influence over any Pheu Thai MPs. Worse, it is an open secret that Srettha’s ascent to the role of prime minister owed much to Thaksin and little to his personal popularity. Throughout the government formation period earlier this year, it was Thaksin whom Pheu Thai leaders and other party leaders turned to for advice. Thaksin’s return on 22 August to Thailand just hours before the vote for Srettha’s appointment as prime minister further reinforced the perception that he played a pivotal role in Srettha’s selection. It is, therefore, unsurprising that both the cabinet and even his own official team of advisors are replete with individuals closely associated with Thaksin. After all, Srettha was chosen; he did not choose.

If it is indeed the case that Srettha operates within narrow confines, this raises significant concerns about governance in Thailand. This situation implies that crucial policy decisions and government actions may reflect the interests and preferences of Thaksin rather than the needs of the people. At stake are issues of democratic accountability, as well as critical matters such as the pace and nature of constitutional reforms, and the fate of those awaiting an amnesty bill for lese majeste charges. It remains open to question whether Srettha will be willing to tackle these issues head-on, given the potential risk of antagonising the conservative establishment, which appears to be the sole guarantor of Thaksin’s security and legal immunity.

Whatever path Srettha chooses, he must tread carefully. Failure to achieve significant accomplishments, such as the implementation of the ambitious digital wallet scheme, could jeopardise his position as prime minister. Yet, if he exceeds expectations, particularly on the domestic front, he may also face the risk of being replaced, as his successful performance could overshadow Paetongtarn and delay her rise to the premiership. Furthermore, if Srettha aligns himself too closely with Thaksin, he could face significant public backlash, much like Yingluck. Her government’s attempt to pass a controversial amnesty bill, which would have allowed Thaksin to return home without facing charges, resulted in widespread protests and, eventually, the 2014 coup d’état.

On the other hand, if Srettha treads too carefully and does little to please the Shinawatras, he may find himself left in the cold, similar to Samak whose bid to return to power in 2008 after being dislodged by the Constitutional Court was thwarted by his party’s decision to nominate Somchai Wongsawat as his replacement. Ultimately, Srettha’s lifeline, setting him apart from all previous Thaksinite parties’ prime ministers, may be his status as a political outsider and a classic Thai elite background that places him closer to the traditional centres of power in Thai society — a status that not even Thaksin can lay claim to. The rest depends on his political acumen to leverage this trait, which, as of now, he has demonstrated only indirectly.

2023/294

14 Dec, 2023

- The Prabowo-Gibran Pairing: Wise or Foolish?

- Late to the Party: Vietnam and the Belt and Road Initiative

Long Reads / Indonesia / Indonesian Politics

The Prabowo-Gibran Pairing: Wise or Foolish?

Polls suggest that Prabowo Subianto’s decision to pick President Jokowi’s son Gibran Rakabuming Raka as his vice-presidential running-mate has been a net positive, despite the controversies and criticisms surrounding the circumstances under which Gibran’s eligibility to contest the polls were approved.

Burhanuddin Muhtadi | Kennedy Muslim   2:41PM, 14 Dec, 2023

Facebook Page of Prabowo Subianto. Source: https://www.facebook.com/PrabowoSubianto. Accessed 6 December 2023.

INTRODUCTION

The decision of the coalition of parties supporting Prabowo Subianto (Gerindra, Golkar, Demokrat, PAN and others) made on October 22 to advance Gibran Rakabuming Raka, the son of President Jokowi, as Prabowo’s running mate is an electoral gamble that has captured much media attention. The dramatic process at the Constitutional Court (Mahkamah Konstitusi or MK), which issued its ruling to pave the way for Gibran to run as a vice-presidential candidate has created controversy. The MK ruling triggered nationwide criticism on TV and social media, and the Indonesian Democratic Party of Struggle (PDIP) alleged that there was intervention by powerful actors to influence MK’s decision. This storm of criticisms led the Constitutional Court Honorary Assembly (MKMK) to dismiss Anwar Usman, President Jokowi’s brother-in-law, from his position as the Chief Justice of MK.

But from the point of view of Prabowo’s coalition, Gibran is an asset in the upcoming 2024 presidential election. This article addresses the competitive electoral landscape among the three presidential contenders, based on the most recent poll after the MK ruling and the official registration of the Prabowo-Gibran pair at the General Elections Commission (KPU).

Gibran is like a double-edged sword for Prabowo’s coalition. On the one hand, many parties believe that Gibran will boost support for Prabowo in Central Java and East Java. Prabowo lost badly in 2014 and 2019 in these two big provinces, which are Jokowi’s stronghold electoral bases. Prabowo has calculated that by running with Gibran, Jokowi’s support base would shift to his camp in the 2024 elections. Moreover, Prabowo’s coalition of parties assumes that Gibran represents the young generation, thus having the potential to attract the support of voters aged under 40 years old. According to the 2020 BPS census, Generation Z, born between 1997-2012, reached 75.49 million people, equivalent to 27.94% of the total population. The millennial generation born between 1981-1996 reached 69.90 million people or 25.87% of the general population. Taken together, young voters (Gen-Z and millennials) will make up around 52% of the whole electorate in the 2024 elections.

The negative campaign in the media and social media portraying Gibran as an inexperienced and privileged son of President Jokowi seems not to bother young voters.

Another driving factor is the fact that the Indonesian public still shows a high level of support for Jokowi’s government. At the elite level, there are expectations that Gibran’s appointment as Prabowo’s running mate will secure President Jokowi’s full support and lead to the mobilization of the state apparatus under the President’s control in support of Prabowo. Some prominent civil society activists have already sounded the alarm on the lack of neutrality in the national army and police (TNI-Polri) apparatus and among over 271 acting regional heads (at the level of district head, mayor, and governor) directly appointed by the Ministry of Interior.

There is a further counter argument that instead of being an asset, Gibran could actually become a liability for Prabowo’s coalition. The issue of political dynasty and nepotism emanating from the MK’s ruling to allow Gibran to run has been widely echoed by civil society coalitions both in mainstream mass media and on social media. However, past surveys show that presidential votes are driven mainly by presidential candidate figures, not their vice-presidential candidate. Moreover, Gibran is not Jokowi. Jokowi rose to the apex of power from the bottom. Meanwhile, Gibran has only been mayor of Solo for two years. His father served two terms as mayor in the same city. Before entering the presidential election arena, Jokowi had also served as Governor of DKI Jakarta.

The public also believes in the argument that Gibran is not experienced enough for the position, and is too young. This was reflected in the Indikator’s survey in early October (47% agreed with this statement vs 29% who disagreed. The rest did not answer). The controversial MK ruling, along with the political dynasty issue, were seen by many observers to have the potential to be an election matter for the anti-establishment movement. The net effect on Prabowo-Gibran electability will depend on future turns of events.

THE POLLING SIMULATION DATA SO FAR

Below are details from the latest electability poll done by Indikator after the MK’s controversial ruling and after the registration of the Prabowo-Gibran pair at the General Election Commission (KPU). The data presented are consistent with many other credible pollsters’ findings conducted during similar survey periods, such as Poltracking and Populi Center.

Figure 1: Three Presidential Contenders Simulation

Source: Indikator Survey October 2023

A nationally representative survey conducted from October 27 till November 1, 2023, covering 1,220 respondents, found that support for Prabowo Subianto was at 40.6% while that for Ganjar Pranowo was at 27.8%, showing a difference of 12.2%. Anies Baswedan came last with 23.7%, 4.1% after Ganjar Pranowo. Prabowo’s electability slipped somewhat, although not significantly, after his pairing with Gibran. Conversely, the electability of Ganjar-Mahfud pair had increased after Mahfud MD was chosen.

Figure 2: Electability Trends of the Three Presidential Candidates

Source: Indikator Survey October 2023

Interestingly, after the registration of the Prabowo-Gibran as Presidential-Vice Presidential candidates, the poll shows a sharp drop in support for Ganjar by around 7%, from 34.8% to 27.8%. Some voters switched to Prabowo, while some remained indecisive. Meanwhile, some of Prabowo’s supporters shifted to Anies when they learned that Gibran would be Prabowo’s running mate.

Figure 3: Three-way Presidential Pair Electability Trends among 2019 Presidential Election Self-identified Voter Base

Source: Indikator Survey October 2023

Previously, surveys had shown that the majority of Prabowo’s voters had lower approval for Jokowi’s performance. This was because Prabowo was Jokowi’s main rival in the last two presidential elections. When Gibran became Prabowo’s running mate, some of them decided to switch their votes to Anies, who is ideologically closer to them. Prabowo’s supporters from 2019 shifted away after the Prabowo-Gibran official registration. Meanwhile, the support for Anies increased significantly among Prabowo’s traditional voter base. The potential additional votes for Anies can be greater if Prabowo cannot exploit Gibran to solidify support in Jokowi’s stronghold voter bases.

Be that as it may, Prabowo’s declining support among his traditional voter base is more than compensated for by the significant increase in support from among Jokowi-Maruf Amin’s 2019 supporters. The number increased from 29.6% to 34.9%. In contrast, Ganjar’s support from the same set of voter groups declined from 51.1% to 44.4% compared to the previous poll. An initial assumption had been that Gibran would not instantly become an electoral asset because of the issue of political dynasty, but the latest poll seems to contradict this. Interestingly, Gibran has instead accelerated the shift of Jokowi’s 2019 supporter base to Prabowo’s camp.

Based on our latest poll, Gibran has been an electoral asset for Prabowo. Gibran’s decision to run with Prabowo has weakened Ganjar’s support base across different segments of voters, especially among young voters and Jokowi’s non-PDIP 2019 voters.

GIBRAN EFFECT ON YOUNG VOTERS

In various media publications and appearances, Prabowo’s coalition campaigners have been drumming up the potential of winning the majority of young voters (Gen-Z and millennials) given their decision to pick Gibran as his running mate. But what do the latest poll data tell us about this assumption?

A few days after Prabowo-Gibran registered at KPU, Indikator’s late October poll found a significant boost in support for them, especially among Gen-Z (under 26 years old). Interestingly, Prabowo already has a solid support base among young voters, especially Gen-Z and millennials. The negative campaign in the media and social media portraying Gibran as an inexperienced and privileged son of President Jokowi seems not to bother young voters.

Prabowo-Gibran’s support jumped from 38.1% to 52.4% among Gen-Z voters within a week after officially registering at KPU.

Figure 4: How Potent is the Issue of Political Dynasty?

Source: Indikator Survey October 2023

Table 1: Three-Candidate Vote Choices Based on Perception of Political Dynasty

Source: Indikator Survey October 2023

The Indikator poll in October found that around 39.2% of respondents worried about political dynasties. This number dropped from 47.6% in the previous poll. At the same time, 42.9% of respondents perceived political dynasties as normal, and 9.6% were not worried. Concerns about political dynasties seemed to have waned within a few weeks. Ganjar and Prabowo’s supporter bases dominate among respondents who perceive political dynasties as normal or not worried about it. This is especially true for Prabowo-Gibran’s supporters. In contrast, Anies’ supporter base is dominated by respondents concerned about political dynasties.

CONCLUSION

Prabowo’s electoral strategy from the beginning has mainly rested on getting Jokowi’s full endorsement. This climaxed in his decision to choose Gibran as his running mate. This strategy has lots of upside from an electoral standpoint as Jokowi’s approval is still very high, hovering around 75% in various polls and at one point even reaching 82%. But this strategy also has its downside since Prabowo’s 2019 voter base is prone to switch to Anies’ camp over his decision to choose Gibran. This is important to note because the increase in Gerindra and Prabowo’s votes in the early October survey correlates with decreased votes for PDIP, Ganjar, and President Jokowi’s approval rating. This may indicate that Prabowo inadvertently maintained his old electoral posture as a vessel for some anti-Jokowi votes. The latest Indikator poll has clearly shown the tendency in Prabowo’s traditional support base to shift towards Anies’ camp. At the same time, Gibran holds positive potential since non-PDI-P Jokowi supporters are likely to switch their votes to Prabowo-Gibran pair due to the growing rift between Jokowi and PDIP.

Based on our latest poll, Gibran has been an electoral asset for Prabowo. Gibran’s decision to run with Prabowo has weakened Ganjar’s support base across different segments of voters, especially among young voters and Jokowi’s non-PDIP 2019 voters. The benefits for Prabowo in picking Gibran to attract Jokowi’s supporters have been substantive so far. This presents a challenge for Ganjar to reverse the decline in support that he enjoys, and made evident in the latest poll; this drop was due to the exodus of Jokowi’s non-PDIP supporters. Ganjar, along with PDIP and its political patron Megawati, have triggered a democratic movement similar to the Reformasi movement of 1998 to challenge the MK’s decision. The goal is to question Gibran’s nomination process as well as the lack of neutrality among state actors, including President Jokowi, in the next election.

Perhaps it is too early to conclude that Gibran is an electoral asset. Central Java and East Java will be the testing ground. So far, according to the latest poll, Prabowo is still trailing far behind Ganjar in Central Java; he has however overtaken Ganjar in East Java. In Central Java, the PDIP is still dominant, despite fierce contestation between the party and Jokowi’s supporters. In East Java, Jokowi’s own popularity and his closeness to NU elites will give Prabowo a boost in this second most populated province after West Java. Even if Gibran succeeds in eroding Ganjar’s support base in these two provinces, Prabowo is still not guaranteed to win the presidential election in the first round. A run-off scenario is more likely to transpire, judging from the current poll. This is because the influx of new supporters from Jokowi’s base has been counteracted by the departure of Prabowo’s traditional support bases in West Java, Banten and Sumatra; Gibran is disliked as vice presidential candidate in these places.

Anies seems to be the beneficiary of the recent announcement of Gibran as Prabowo’s running mate. Some of Prabowo’s supporters who disapprove of a Jokowi dynasty tend to shift to Anies’ camp. If this pattern continues, Anies and Prabowo could advance to the second round of the presidential election, after defeating Ganjar. Should PDIP then blame Jokowi and Gibran for their failure, that will open up the opportunity for groups opposing Jokowi-Prabowo to unite in the second round (involving embittered PDIP supporters and elites and the rank and file of coalition groups supporting Anies). Ultimately, the decision to choose Gibran as running mate remains debatable. Ganjar might be the candidate who will suffer the most setbacks due to the growing rivalry between his PDIP party and Jokowi. It may mean that non-PDIP diehard supporters of Jokowi will flock to the Prabowo-Gibran pair. Anies, meanwhile, will benefit if Prabowo fails to stop his old support base, which tends to be anti-Jokowi, from switching to the opposing camp

This is an adapted version of ISEAS Perspective 2023/95 published on 6 December 2023. The paper and its references can be accessed at this link.

Commentaries / China-Vietnam Relations / Vietnam / Vietnamese Economy

Late to the Party: Vietnam and the Belt and Road Initiative

Chinese-funded investments into Laos and Cambodia have transformed the geo-economic landscape in Vietnam’s immediate neighbourhood. This has caused Hanoi to give China’s Belt and Road Initiative another look.

Hoang Thi Ha   9:21AM, 14 Dec, 2023

Vietnam’s President Vo Van Thuong (3rd R) arrives at Beijing Capital International Airport ahead of the Belt and Road Forum in the Chinese capital on October 17, 2023. (Photo by Parker Song / POOL / AFP)

In October 2023, Vietnam’s President Vo Van Thuong attended the 3rd Belt and Road Forum (BRF), which commemorated the 10th anniversary of the Belt and Road Initiative (BRI) – a hallmark initiative that signifies China’s ascent as a global economic powerhouse. During his meetings with Chinese leaders, Thuong underscored the importance of harnessing the BRI to enhance connectivity and trade linkages between Vietnam and China. Yet, despite Vietnam’s official support for the BRI through high-level joint statements and its leaders’ attendance at the BRF, the country does not host any flagship BRI projects. In fact, it lags behind neighbouring Cambodia and Laos in this regard.

According to Lowy Institute data, Chinese investments in the energy, water & sanitation, communications, industry, construction & mining, and transport & storage sectors between 2015-2021 in Laos and Cambodia surpassed those in Vietnam in terms of the number of projects and disbursed finances (Figure 1). Chinese-funded infrastructure projects in Vietnam included mostly coal-power plants, railway system improvements and a metro line in Hanoi.

Vietnam Lagging Behind

Figure 1: Chinese infrastructure financing in Cambodia, Laos and Vietnam (2015-2021)

Country

Spent

Pledged

No of Projects

Realisation status

Vietnam

2.34 billion

7.00 billion

14

33%

Laos

6.07 billion

7.68 billion

33

79%

Cambodia

3.33 billion

5.14 billion

36

65%

Source: Lowy Institute Southeast Asia Aid Map

Vietnam’s relatively limited involvement in the BRI can be attributed to several factors. It allocates substantial public spending at 6 per cent of GDP to infrastructure development and also has access to alternative financing from Japan, South Korea and multilateral development banks. Past controversies with Chinese-funded projects, such as the Cat Linh-Ha Dong metro line, the Thai Nguyen steel plant, and bauxite mining in the Central Highlands, have contributed to scepticism about the BRI, even though many of these originated from governance challenges within Vietnam itself. This scepticism is underpinned by a prevailing lack of trust in China among the Vietnamese, despite China’s proven engineering prowess. According to the 2019 State of Southeast Asia survey, Vietnamese respondents displayed the highest level of distrust in the BRI among ASEAN countries. A case in point is the cancellation of international bidding for a North-South expressway project in 2019. The decision was ostensibly made on national security and defence grounds, but it was arguably due to the overwhelming dominance of Chinese firms in the initial bidding process.

While Hanoi maintains a cautious approach, China’s extensive infrastructure development in Laos and Cambodia is bringing about significant transformation in the geo-economic landscape of Vietnam’s immediate neighbourhood. China-funded port, railway, highway and waterway projects have, among others, enhanced the logistics capabilities of Laos and Cambodia. This has and will continue to impact Vietnam’s national competitiveness, including its self-proclaimed role as an economic bridge between China and ASEAN. Two prominent projects illustrate this evolving dynamic.

First, the 414-km Boten-Vientiane railway linking China’s Kunming province with Laos’ capital city has become a pivotal part of the North-South economic corridor connecting China and Southeast Asia. The railway commenced operations in 2021. In its first year of operation, the railway handled a cargo volume of 11.2 million tonnes — double Vietnam’s total national volume at 5.7 million tonnes. Many Thai agricultural exports to China now opt for the new railway due to its time efficiency, bypassing transhipment through Vietnam. Vietnamese officials have raised concerns about the railway intensifying the competition faced by Vietnamese farm exports to China from other Southeast Asian countries.

Second, the proposed Funan Techo Canal in Cambodia could wield significant repercussions on Vietnam’s economic and ecological well-being, according to preliminary assessments. The 180 km waterway aims to harness water from the Mekong River to enable Cambodia’s direct access to the sea for goods transport, bypassing the need for conventional transit through a Vietnamese port. The Vietnamese government is undertaking a multi-dimensional impact assessment of the canal project on the country.

As these transformative projects have and will redefine the dynamics of regional connectivity, the Vietnamese government is in a complex predicament. It must weigh the potential benefits of riding the BRI train to enhance its national competitiveness, as Laos and Cambodia have done, against the perceived economic and security risks as well as potential public backlash. Despite substantial public spending on infrastructure, Vietnam still faces an annual shortfall of US$15-18 billion to sustain its economic growth.

While these developments may suggest Hanoi’s shifting stance, it remains to be seen whether they will translate into substantial Chinese-funded infrastructure projects. This uncertainty stems not only from Vietnam’s constraints but also the level of priority that China affords Vietnam within the BRI, given their mutual mistrust and geopolitical tensions.

There have been indications of Vietnam becoming more receptive to the BRI especially in rail connectivity with China. In February this year, the Politburo issued a decision setting the direction for the country’s railway development. In October, the Vietnamese government issued a follow-up resolution stating, among others, the imperative to work with China on cross-border rail transport and to increase Vietnam’s exports to third countries using Chinese railways. The focus remains on enhancing railway connectivity between Vietnam’s northern economic hubs to the Chinese bordering regions, especially the Hanoi-Lao Cai-Hai Phong express railway link with Kunming. Infrastructure construction and transport connectivity were highlighted in the joint statements during General Secretary Nguyen Phu Trong’s visit to Beijing in 2022 and Prime Minister Pham Minh Chinh’s visit to China in June 2023. In a subsequent visit to Nanning in September, Chinh held meetings with major Chinese firms, including China Railway Corporation (CREC), Power China and Huawei, and welcomed their involvement in Vietnam’s infrastructure projects. During Chinese President Xi Jinping’s recent visit to Hanoi, both sides signed a number of connectivity-related agreements, focusing on cross-border rail and road transport.

While these developments may suggest Hanoi’s evolving stance, it remains to be seen whether they will translate into substantial Chinese-funded infrastructure projects. This uncertainty stems not only from Vietnam’s constraints but also the level of priority that China affords Vietnam within the BRI, given their mutual mistrust and geopolitical tensions. The low disbursement of Chinese financing to Vietnam serves as an indicator of China’s hesitance. Going forward, a key indicator of Hanoi’s participation in the BRI will be the extent of China’s involvement in building Vietnam’s ambitious North-South high-speed train. Chinese conglomerates, including the China Communications Construction Company, have expressed their keen interest, but the Vietnamese government is still leaning towards Japan for the time being.

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13 Dec, 2023

- Mandarin Learning in Brunei’s Chinese Schools: Practical Considerations

Commentaries / Brunei / China / Education

Mandarin Learning in Brunei’s Chinese Schools: Practical Considerations

The learning of Mandarin in Chinese schools in Brunei is driven less by the projection of Chinese soft power but more by practical considerations.

Chang-Yau Hoon | Hannah M.Y. Ho   9:31AM, 13 Dec, 2023

There are currently eight Chinese schools in Brunei, of which three offer a comprehensive K-12 education and the other five are primary schools. (Photo by Chung Ching Middle School, Brunei / Facebook)

The global and regional rise of Mandarin learning attests to China’s soft power. China’s agency in promoting Chinese culture and language is evident in Southeast Asia, a region that has responded to China’s rise as an economic superpower not least because of its integration into the Belt and Road Initiative. Along cultural and linguistic lines, China’s focus on establishing ties with Southeast Asian nations has resulted in an increased uptake of Mandarin in the region, where 41 Confucius Institutes (CIs) are operating. This is in sharp contrast to the CIs in the United States, United Kingdom and Australia, which have been treated with suspicion and have experienced scrutiny, restricted funding or even closure.

Unlike the experiences in other ASEAN countries, however, the case of Brunei Darussalam demonstrates that Mandarin learning — its spread, sustainability, and strength —is driven less by Chinese soft power projection but more by a set of local and regional factors.   Our research on Chinese schools established by the Chinese community in Brunei indicates that parental and students’ choices to learn Mandarin in these schools are primarily based on the academic rigour and opportunities that schools represent, rather than the intrinsic attraction to the language or its place of origin.

Elsewhere, a growing enthusiasm for studying the Chinese language, sometimes referred to as “Mandarin Fever”, is often associated with the rise of China and attributed to China’s concerted efforts to promote Chinese language through CIs and scholarships to study in China. In Brunei, however, CIs are absent possibly due to religious sensitivities but Chinese-government scholarships are available to high school and university graduates. China’s efforts to enhance its soft power are evident through various activities conducted by the Chinese embassy, such as organising the annual China Day event, donating books to local schools and universities,  sponsoring painting competitions in schools and offering support to Chinese language programme at Chinese schools. When it comes to the learning of Mandarin, however, China’s soft power efforts play a subsidiary role compared to the intrinsic attraction of Chinese schools.

Rather than a consequence of China’s cultural diplomacy, Mandarin learning in Brunei is motivated by immediate concerns of academic success and enhancing worldviews through a different language and culture.

Since Brunei’s independence in 1984, the use of language in the educational system has witnessed two main shifts: the first was the Malay-English Bilingual System introduced in 1984, and secondly, the National Education System for the 21st Century (SPN-21) from 2009 onwards. SPN-21 prioritises English as the medium of instruction, in particular, for STEM subjects. Mandarin is included only as an elective subject in the national curriculum, which is adhered to by state and private schools in Brunei. Chinese schools are an exception as Mandarin is a core subject, even while English is used as the instructional language for other subjects.

Chinese schools in Brunei have a history dating back to 1916. There are currently eight Chinese schools in Brunei, of which three offer a comprehensive K-12 education and the other five are primary schools. Although the use of Mandarin as a medium of instruction has ceased since mid-1970s, these schools continue to teach Mandarin as a standalone subject, alongside English and Malay.

The Chinese middle schools are patronised significantly by the Chinese community, which accounts for 9.6 per cent of the total population today. In contrast, primary schools mostly located in rural areas have witnessed a higher enrolment in recent years amongst the non-Chinese population. The urban migration of ethnic Chinese residents has created further vacancies for non-Chinese residents, including Malays, Dusuns and Ibans, at Chinese primary schools located in various villages.

Chinese secondary schools in Brunei enjoy a strong reputation as educational institutions. Their students frequently achieve top positions in national rankings for their outstanding academic performance in high-stakes public examinations. The academic discipline, rigorous training, and the consequent high performances of students cement the credibility of these schools. This track record precedes these schools, and parents believe that Chinese schools will have a positive influence, instilling strong academic ethics and values in their children.

Another important aspect is that Mandarin language classes in these schools offer excellent opportunities for non-Chinese students to learn an additional language and gain insights into a different culture. Chinese schools often organise Chinese language fun fairs, cultural dances and other activities to enhance the cultural immersion of students. Mandarin language teachers also reveal that they maintain levels of student interest through practices of linguistic diversity, such as using Malay translations in their pedagogy to enrich the learning of Mandarin vocabulary. The multicultural school environment also serves to equip the youth with the experience needed to thrive in an increasingly diverse and interconnected world.

Chinese soft power that contributes to the global production of Mandarin Fever plays an auxiliary role in promoting Chinese language learning in Brunei. Chinese language education is dictated more by practical considerations of academic rigour found in Chinese schools. Rather than a consequence of China’s cultural diplomacy, Mandarin learning in Brunei is motivated by immediate concerns of academic success and enhancing worldviews through a different language and culture. As the economic ties between Brunei and China have grown in recent years, it will be fascinating to observe the impact of this development on the learning of the Chinese language and enrolment in Chinese schools.

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12 Dec, 2023

- Aspiring High: Unlocking Southeast Asia’s Potential through the ASEAN Digital Economy Framework Agreement

Commentaries / ASEAN / Digitalisation

Aspiring High: Unlocking Southeast Asia’s Potential through the ASEAN Digital Economy Framework Agreement

ASEAN can demonstrate to global stakeholders how digital integration is possible through cooperation. For DEFA to achieve its aspirations, it should be principle-based and impact-focused, learn and adopt existing digital provisions, and foster continuous innovation and inclusive growth.

Ming Tan | Maria Monica Wihardja   11:22AM, 12 Dec, 2023

The 10th ASEAN Economic Community (AEC) Dialogue took place on 30 November 2023, serving as a platform to socialise the ASEAN Digital Economy Framework Agreement (DEFA), the world’s first regionwide legally binding instrument on digital economy. (Photo by Will Nankervis / Twitter)

Guided by the 2021 ASEAN Bandar Seri Begawan Roadmap, the ASEAN Digital Economy Framework Agreement (DEFA) — slated to be the first regional digital economy agreement in the world — is timely.  Just like existing traditional free trade agreements and other digital economy agreements, DEFA will be legally binding.  DEFA aims to unlock an additional USD1 trillion to the region’s digital economy by 2030, compared to the business-as-usual trajectory. Nine areas of digital economy, from cross-border data flows to digital ID to talent mobility, will be up for negotiations, which kicked off on 1 December 2023 and are expected to conclude in 2025. Coupled with ASEAN’s diversity across the legal, socio-economic and political spheres, DEFA is an opportunity to demonstrate to global stakeholders how digital integration is possible through cooperation.

Negotiators face at least three challenges to unlocking Southeast Asia’s digital potential.  The first is to strike a balance between respecting the national policy objectives and regulatory systems of sovereign member states while enabling digital interoperability across the region through alignments, standardisation and harmonization of regulations and infrastructure (“horizontal integration”). The second challenge is to keep in view the ultimate goal of global competitiveness by developing standards, frameworks and systems to suit the region while enabling global interoperability (“vertical integration”). The third challenge is to narrow the significant digital divide across ASEAN member states (AMS) by giving time and space for AMS to adopt and implement the newly agreed standards, frameworks and systems, and to secure commitments for capacity building so that the benefits of DEFA are inclusive and equitable.

How might DEFA address these challenges? Drawing on insights of experts working in government, business and civil society at the 10th ASEAN Economic Community Dialogue in Jakarta on 30 November 2023, we identify three key policy recommendations for advancing ASEAN’s digital economy.

DEFA’s success rides on ambition and commitment to solve fundamental elements of the digital economy, especially regarding seamless data flow and talent development.

First, rather than a prescriptive treaty, DEFA should strive to be a principle-based and impact-focused agreement forming the basis for a framework on cooperation, with ample policy space for AMS to determine the governance approaches that best fit their respective local contexts. However, it is crucial for AMS to ensure that local laws and regulations support interoperability across borders within and beyond ASEAN, underpinned by clear principles, a common taxonomy and standard definitions. Vision alignment and an agreement on baseline rules can also help set the policy floor for the desired outcomes.

The elements mooted for DEFA negotiations such as harmonising standards, frameworks and systems — especially those requiring legal compliance — are not “all-or-nothing.” Areas in DEFA that are more developed and have the greatest impact can be prioritised for implementation. A progressive alignment of regulations through a modular approach can be pursued, with nascent areas subject to principle-based collaboration. Digital trade and cross-border e-commerce have advanced, since most AMS have already adopted paperless trade and the UNCITRAL Model Law on Electronic Commerce into their domestic law. DEFA negotiations can build on these existing country-level achievements and also agreements such as the ASEAN Agreement on E-Commerce. While further conversation will be needed to enable cross-border recognition and cooperation in digital identity initiatives and governance of emerging technologies, AMS can agree on common values and guiding principles such as responsible AI practices.

Second, to ensure interoperability and integration to the global market, DEFA should learn and adopt existing digital provisions in free trade agreements and plurilateral trade agreements, digital economy agreements, and country-level and region-level initiatives. Notable references include the Regional Comprehensive Economic Partnership, the Singapore-Australia Digital Economy Agreement and Digital Economy Partnership Agreement, the e-commerce chapter of the agreement establishing the ASEAN-Australia-New Zealand Free Trade Area, and APEC’s Cross-Border Privacy Rules. However, ASEAN should advance its own unique and pragmatic approach to DEFA that is fit for purpose and best suited for the region’s diverse society and culture.

Third, it is important for DEFA to be ‘future-proof’ and not become obsolete as new technologies emerge. Hence, DEFA should be technology-neutral, not favouring or discriminating against any types of technology. This protects DEFA against obsolescence even when technological breakthroughs, new digital solutions or innovative business models disrupt the current landscape. Nurturing continued digital and technology innovation through a fair level playing field between large and small companies, and between incumbent and incoming players, should be prioritised.

Continued cooperation among governments and among the public and private sectors as well as civil society on emerging topics is vital given the pace of technological innovation. While the ubiquity of artificial intelligence, for example, might be the current subject of debate, new technologies and business models could quickly render existing governance and market structures obsolete. Emerging topics may require ongoing learning as companies test innovative solutions and scale across the region safely. Regulatory sandboxes promoting regulatory learning while encouraging innovation to serve the needs of the region is a good start; even more ambitious would be a regional approach to regulatory sandboxes, such as sandbox corridors across several countries to encourage growth and alignment at scale.

Beyond these specific recommendations, DEFA’s success rides on ambition and commitment to solve fundamental elements of the digital economy, especially regarding seamless data flow and talent development. Trusted free flow of data is fundamental to DEFA’s goal of digital integration, but data localisation laws and disparities in data governance regulations dampen the potential. Common frameworks, standards and principles for online safety, cybersecurity and personal data protection can address many of the concerns surrounding cross-border data flows. DEFA should promote talent development and mobility across the technical, business and governance domains, through capacity building and knowledge exchanges, and mobility across countries as well as the private and public sectors. Such progress would lay the foundations for fruitful public-private partnerships for technical assistance, governance initiatives and standards alignment.  DEFA can set a new pathway as global trade and technology governance evolve in the digital age.  For a start, it can be the basis for meaningful cooperation and coordination for an empowered, safe and integrated ASEAN that is innovative, interoperable and investable.

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11 Dec, 2023

- PAS’ Prime Minister Candidate: Great Expectations

Commentaries / Editor Picks / Malaysia / Malaysian Elections / Malaysian Politics

PAS’ Prime Minister Candidate: Great Expectations

Parti Islam SeMalaysia is touting a technocratic parliamentarian as the opposition coalition’s prime ministerial candidate. Dr Samsuri Mokhtar has his work cut out for him.

James Chai   2:31PM, 11 Dec, 2023

Dr Sam (R) is perceived to have earned his stripes by working patiently, first as the political secretary to Hadi (L) at the age of 38, before being elevated to the state assembly 10 years later. (Photo by Abdul Hadi Awang / Twitter)

In the 2 December parliamentary by-election in Kemaman, the winner, Dr Samsuri Mokhtar (or “Dr Sam”) said his landslide was a “game-changer” for Perikatan Nasional’s (PN’s) march to Putrajaya. When asked whether he is now the coalition’s PM candidate, Dr Sam remained coy, but kept the door open. His presumed anointing underscores the political ambitions of Parti Islam SeMalaysia (PAS).

Perhaps no by-election prior to Kemaman has created so much excitement for PAS. The party converted a moral defeat (parliamentary seat annulled by the Election Court) to an opportunity to place a technocratic, scholarly politician as its first PM candidate. Dr Sam’s candidacy at Kemaman attracted overwhelming praise from PAS’s top two leaders, former PM Mahathir Mohamad, and Bersatu president Muhyiddin Yassin, who touted Dr Sam as PN’s secret ingredient to capture Putrajaya. Dr Sam won the seat with a 37,220 vote majority. PAS is a key member of the PN coalition.

The timing seemed fitting. PAS’s triumphant showing at GE15 in November 2022 and state elections in July 2023 created a lasting tailwind, and PN’s current PM candidate, Muhyiddin Yassin, has indicated his desire to step down. With the backing of PAS’s senior leadership, especially its president Hadi Awang, Dr Sam appears to have an appointment with destiny.

Dr Sam’s doctorate in aerospace and university lectureship sufficiently differentiates him from the stereotypical PAS leader. He is unlike the traditionally conservative Kelantan leadership or the populist Sanusi Md Nor in Kedah. Serving his second term as the chief minister of Terengganu — which he won with a clean sweep in 2022 — he spearheaded the “state government four” SG4 initiative among the four PAS-led states. Within PAS, Dr Sam is also perceived to have earned his stripes by working patiently, first as the political secretary to Hadi at the age of 38, before being elevated to the state assembly 10 years later.

PAS’s decision to place Dr Sam in Parliament provides more evidence that PAS intends to build internal capabilities to go to Putrajaya on its own steam. It is even willing to neutralise its hardline image — toning down Islamist rhetoric and sidelining its populist leader, Sanusi — and introduce a moderate leader to win urban and non-Malay votes.

In the first parliamentary sitting of 2024, Dr Sam’s role would be the opposition’s centre of focus. To give meaning to Dr Sam’s PM positioning, he needs to be elevated to a senior and influential shadow minister role. The most ideal scenario for PAS is to see Dr Sam take on the minister-level Leader of Opposition role that comes with perks and standing to match the government. These choices entail replacing a senior leader from Parti Bersatu Pribumi Malaysia (Bersatu) — PAS’ coalition partner in PN. Currently, most of the senior shadow ministers (finance, economy, education and defence) and the opposition leader, Hamzah Zainuddin, are from Bersatu.

Although Muhyiddin does not discount the possibility that Dr Sam could be a future PM candidate, he did not openly accept PAS’s desires. This is understandable as Bersatu sees itself as the de facto party to assume the role.

Once again, PAS’s expansion of influence will have to come at the expense of Bersatu, and the parliamentary term of 2024 will likely uncover the relationship both parties are most comfortable with. Factions will consolidate in Bersatu: One a realist worldview, comfortable playing a supporting role to PAS as a strategic measure to capture Putrajaya; another an expansionist mindset, insisting that Bersatu should be the dominant partner.

PAS’s decision to place Dr Sam in Parliament provides more evidence that PAS intends to build internal capabilities to go to Putrajaya on its own.

Touting Dr Sam as a PM candidate also comes with a burden that PAS must bear. While Dr Sam’s elevation to Parliament is meant for his exposure and training, his parliamentary and state performance will now be scrutinised. No longer will Dr Sam enjoy the relative political isolation he did in Terengganu; instead he will be tested on national issues, beyond Terengganu and SG4’s development outcomes. Dr Sam will likely start on federalism contentions, fighting for more decentralisation and increased allocation and royalties from the federal government to the states. This, however, is not new. Over time, he will carry the burden of lifting the standard of opposition debates.

While PAS has marketed Dr Sam as an exceptional technocratic leader, validated through his latest state budget entitled “Heading to a New Era Terengganu”, changes in the state have been anything but transformational. Other than outperforming national GDP numbers in 2021 and increasing the amount of investments, there have not been memorable flagship policies or projects. Terengganu’s satisfaction rate of 69.2 per cent was lower than other key states, and this rating was even lower in areas such as the economy, water, and welfare. Analysts surmised that PAS’s clean sweep of Terengganu may be more reflective of a desire for a PAS federal government than a direct endorsement of Dr Sam’s administration.

Bridging the perception-reality gap is important for Dr Sam, and this is most vital in his treatment of non-Malays. Kemaman, after all, was a 94 per cent Malay constituency and did not reflect any non-Malay and urban sentiment towards Dr Sam.

Dr Sam may try to appease the non-Malays in Terengganu by expanding allocation for non-Muslim education, cultural festivities, and places of worship, but they must be substantial instead of tokenistic. Dr Sam could also adopt a strategic egalitarian approach to race (and not religion) like PAS’s earliest leaders, to win over non-Malays.

However, even if Dr Sam succeeds in doing these, he will only be seen as a façade to the hardliners within his party. Non-Malays could also tell the difference between PAS’s late spiritual leader, Nik Aziz, who was the voice of the party, and Dr Sam, who is only third in rank, surrounded by conservatives in the party hierarchy.

After the excitement dies down towards the end of the year, Dr Sam will be given the daunting task of realising the expectations placed on him. Aside from his credentials and scandal-free past, Dr Sam’s track record has yet to be built. As such, PAS’s historic experiment to ascend to the peak of political power in Putrajaya has only started.

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8 Dec, 2023

- October Offensive by Resistance Forces Exposes Gaps in Myanmar Military

Commentaries / Myanmar / Myanmar Military

October Offensive by Resistance Forces Exposes Gaps in Myanmar Military

A military offensive by anti-junta forces in October has exposed weaknesses in State Administration Council forces. While resistance forces seek to overthrow the junta, challenges remain given differing interests.

Maung Maung Oo | Kyi Sin   1:51PM, 8 Dec, 2023

MNDAA forces secure a large SAC weapon cache post-Kokyan battle in December 2023 in the Kokang region (source: the Kokang)

A key offensive launched by a three-party alliance of anti-junta forces in late October catalysed attacks on State Administration Council (SAC) forces on multiple fronts across Myanmar. While the junta has vowed to strike back to retake lost ground, no major operation has since materialised. It remains to be seen whether resistance forces will be able to capitalise on their gains to evolve into a more cohesive anti-junta movement.

On 27 October, the military offensive by the Three Brotherhood Alliance (3BHA), composed of the Arakan Army (AA), Myanmar National Democratic Alliance Army (MNDAA), and the Ta’ang National Liberation Army (TNLA), took SAC forces by surprise and upended the conflict landscape in Shan State. Caught off-guard, the SAC lost control of 202 military outposts and five townships across northern Shan State as of 3 December. Key trade routes to China are now in 3BHA hands. Despite the SAC chief’s statement vowing a counter-offensive, SAC troop operations in Shan State have primarily been on the defensive, with no major operation yet to retake lost ground. The turnaround is quite remarkable. Since the February 2021 coup, Myanmar’s Shan State which has been a crucial link for uninterrupted border trade with China amidst the violence following the coup, has remained relatively stable, except for sporadic clashes in the north.

One factor behind the lack of a concerted response from SAC forces could be the lack of combat experience. Myanmar has been in a constant state of warfare since gaining independence in 1948, with the military engaged in conflicts with multiple actors throughout this period. However, peace deals with major ethnic armed organisations in the 1990s freed up Myanmar’s military regimes to shift their attention towards civilian politics. Even the SAC chief, Senior General Min Aung Hlaing, can claim experience from only one major battle: driving out the Myanmar National Democratic Alliance Army (MNDAA, now part of the 3BHA) from Kokang region in 2009.

Adding to Operation 1027’s surprise element, resistance forces across the nation have opened new fronts against the SAC. In Kayah state, the Karenni Nationalities Defence Force (KNDF) is making a bid to seize the state capital Loikaw from SAC control. In Chin state, local Chin ethnic resistance groups have launched an offensive operation aimed at consolidating control along the India-Myanmar border. In the Sagaing region, the People’s Defense Forces (PDF), allied with the civilian resistance coalition National Unity Government, have seized their first district (or secondary administrative division) centre. The Arakan Army (AA), a member of the 3BHA, has also initiated another major offensive in Rakhine state.

Attempts to retake lost territories may be further hampered by the military’s lack of preparedness for the evolving military landscape within Myanmar. In response to the Myanmar military’s monopoly on firepower, resistance groups turned to weaponised commercial drones

The SAC also requires troops for garrison duties across the country to monitor potential protests by communities suffering from the SAC’s economic mismanagement. The Myanmar military, which has long struggled with recruitment shortages and understrength battalions, now faces an overstretch of manpower. This situation effectively leaves the Myanmar military with fewer reserve troops to spare for a major operation capable of retaking lost territories and reopening trade routes. The regime recently ordered civil servants and former military personnel to mobilise into units, purportedly for “emergency situations” such as “natural disasters and security.” Spouses and relatives of rank-and-file military personnel are being assigned patrol duties and combat training.

Attempts to retake lost territories may be further hampered by the military’s lack of preparedness for the evolving military landscape within Myanmar. In response to the Myanmar military’s monopoly on firepower, resistance groups turned to weaponised commercial drones. Starting from small-scale drone strikes aimed at enhancing intelligence, surveillance, and reconnaissance (ISR) capabilities, resistance groups used more sophisticated large-scale drone swarm attacks in Operation 1027. Even Min Aung Hlaing acknowledged the effectiveness of 3BHA’s drone attacks at the National Defence and Security Council meeting on 8 November.

According to a recent interview conducted by BBC Burmese with regime troops involved in actions in northern Shan state, 3BHA deployed dozens — sometimes up to 40 — drones in each operation, for continuous bombing. The SAC’s anti-drone warfare relies on simple jamming devices, which are ineffective against more advanced drones reverse-engineered by resistance members. The technology gap between the SAC troops and resistance forces may help explain some of the hasty abandonment of the Myanmar military’s outposts and bases, leaving behind a substantial quantity of weapons and ammunition.

However, it is also important to note that, before and after the coup, the Myanmar military sought to modernise its arsenal, securing MiG-29s for the air force from Russia and submarines from India and China for the navy. But there was little effort to enhance the capabilities of the infantry. As a result, thinly-spread infantry units across the country relied heavily on air and artillery support. A recent example is the military’s recent counter-offensive in Rakhine State, where retaking the coastal town of Pauktaw from the Arakan Army required extensive naval fire support, air strikes, and artillery cover. In Shan State, where the hilly terrain and weather do not favour the effective deployment of SAC airpower, SAC troops struggled to counter Operation 1027 advances.

Despite the ongoing successes of the resistance forces against the SAC, the SAC retains its considerable firepower. The National Unity Government’s strategy of revenue denial, including targeted sanctions on the SAC’s capital sources, is aimed at undermining the SAC’s ability to wage war effectively. But the strategic approach of the resistance demands sustained and coordinated efforts from its various factions, each driven by their own varying interests, to collectively achieve the ambitious goal of overthrowing SAC. This might be a tall order given the differing interests involved.

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6 Dec, 2023

- No China Backlash, So Far: The Philippines’ New Assertive Transparency Policy in the South China Sea

Commentaries / Editor Picks / China / Philippine / South China Sea

No China Backlash, So Far: The Philippines’ New Assertive Transparency Policy in the South China Sea

The Philippines’ assertive transparency in the South China Sea has so far not generated negative economic repercussions for the country.

Collin Koh   12:16PM, 6 Dec, 2023

Philippine Coast Guard personnel are seen on Thitu Island in the disputed South China Sea on December 1, 2023. (Photo by JAM STA ROSA / AFP)

The Philippines stood out in recent months as an emerging example of how a smaller, weaker country could stand up against a larger, stronger power in the South China Sea (SCS). The Marcos Jr. administration has projected newfound assertiveness not seen in the aftermath of the 2012 Scarborough Shoal incident. The Philippines has started to vocally speak out against Chinese transgressions in its exclusive economic zone (EEZ), bolster its longstanding alliance with the United States, and cultivate closer security partnerships with friendly players outside the SCS, such as Australia, India, and Japan, and pushed on with its defence posture shift from an internal to external orientation.

Coined as “assertive transparency”, this policy innovation revolves around strengthening national resilience, building international support, and imposing reputational costs on China. The last aspect is particularly noteworthy – especially one that has not been observed before in Southeast Asia: the open publicising of maritime incidents with China and calling out Chinese aggression or intimidation, starting from China’s laser pointing episode this February. Manila’s new “name and shame” strategy does appear to have put Beijing on the back foot, perhaps due to the element of surprise more than anything else.

Except for activities around the Second Thomas Shoal, according to the Philippine Coast Guard, its Chinese counterpart has exhibited less aggressive behaviour since its actions were thus “exposed”. In August, the Chinese fired water cannon at the Filipinos during the latter’s rotation and resupply mission to Second Thomas Shoal, resulting in a further spike in tensions.

Some have warned about potentially negative consequences of the Philippines’ new SCS policy, particularly on the economic front in the form of Chinese foreign investments being pulled out. For example, Sergio R. Ortiz-Luis Jr., president of the Philippine Exporters Confederation, Inc. (Philexport), who is concurrently honorary chairman of the Philippine Chamber of Commerce and Industry (PCCI), revealed that some of the potential big China industrial investors who were keen to invest in the country after Marcos Jr.’s state visit to Beijing in January 2023 became “jittery” or paused their inquiries with the PCCI following the Second Thomas Shoal flare-up.

After all, the weaponisation of trade and investments is not new in Beijing’s modern statecraft. As China remains a major trade partner of the Philippines, one could justifiably assume that Beijing might seek to tighten the economic pressure valve on Manila in retaliation. This is especially salient as foreign trade and investments constitute a “soft underbelly” for the Philippines’ economic recovery and developmental trajectory.

So far, however, there are no indications of coercive economic reprisals from China since the start of the Philippines’ publicising of China’s aggressive behaviour in the SCS in February. Trade and investment data published by the Philippine Statistics Authority reveal that until September, there was in fact a sharp rise in Philippine trade with China. Despite the August 2023 water cannon incident at the Second Thomas Shoal, mentioned above, Philippine trade with China from August to September did not appear to have been affected – in fact, it rebounded from below to above 20 per cent of total trade between February and September 2023 (Figure 1).

Figure 1: Chinese Trade (as Percentage of the Philippines’ Total Trade), February to September 2023

Source: Philippine Statistics Authority

What about Chinese investments in the Philippines? This has been one of the more contentious aspects of the bilateral relationship, largely because most of Beijing’s investment pledges did not materialise during the previous Duterte administration. Given the importance of infrastructure investments to Philippine economic growth, this would be another area where Beijing could seek to dial up pressure on Manila over the SCS issue. Since 2021, most plausibly influenced by the Covid-19 pandemic, China’s share of total approved foreign investments in the Philippines has hovered below 5 per cent. Interestingly, even in the wake of the SCS flareups since early 2023, Chinese investments picked up from 0.07 per cent in the first quarter to 0.38 per cent in the second, spiking at 6.76 per cent in the third.

If China desires to uphold its image as a proponent of common development in the Global South and a strong supporter of economic integration, weaponising trade and investment against the Philippines may be foolhardy.

The SCS flare-ups have not had any discernible negative impact on Chinese investor interest in the Philippines, especially in renewable energy and critical minerals. In April, while tensions brewed in the SCS, the Philippine government revealed that a Chinese company was already “actively seeking partners” for nickel processing in the Philippines. In the same month, Dajin Heavy Industry, the world’s largest manufacturer of wind turbine towers and structural products for offshore wind power projects, expressed interest in building manufacturing plants in the Philippines. In October, the Philippines secured a combined total of US$4 billion worth of investments from a pair of Chinese equipment makers in the renewable energy industry. Finally, the Department of Foreign Affairs clarified that the Philippines remains in China’s Belt and Road Initiative, adding that infrastructure projects funded with Chinese official aid are still being implemented.

The question is to what extent China is willing to weaponise trade and investment to retaliate against the Philippines’ pushback in the SCS, if at all? Saddled with its own economic woes, China probably does not want to cast itself as an increasingly less reliable and therefore unattractive trade and investment partner. Moreover, if China desires to uphold its image as a proponent of common development in the Global South and a strong supporter of economic integration, weaponising trade and investment against the Philippines may be foolhardy.

So far, the Philippines’ pushback against China’s grey zone actions in the SCS can be deemed generally successful. Assertive transparency ought not to be the approach exclusively executed by Manila but can perhaps be more broadly adopted by other Southeast Asian claimants. That the Philippines has not experienced any major negative economic impact since the SCS flare-ups early this year demonstrates the limit of China’s grey zone coercion.

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5 Dec, 2023

- Ringfencing the Islamic Cause? Muslim Youth and Philanthropy in Indonesia

Commentaries / Indonesia / philanthropy

Ringfencing the Islamic Cause? Muslim Youth and Philanthropy in Indonesia

Indonesians are top in the world for charitable giving. However, one recent survey suggests that young Muslim donors might be more inclined to give to their fellow Muslims than to any other type of cause.

Iim Halimatusa’diyah   9:44AM, 5 Dec, 2023

While religious giving — defined as philanthropy driven by religious values or teachings, to religious communities or organisations or for religious causes — has existed since Islam first arrived in Indonesia, the privatisation and institutionalisation of religious charities have rapidly evolved in tandem with Indonesia’s political changes. (Photo by CHAIDEER MAHYUDDIN / AFP)

For the fifth consecutive year, Indonesia has ranked as the world’s most generous country in terms of philanthropy. The Charities Aid Foundation’s 2022 World Giving Index (WGI) gave Indonesia a total score of 68 per cent, measuring three aspects of giving behaviour: one’s readiness to help a stranger in need, donating to charities, and volunteering one’s time to organisations.

As the world’s most populous Muslim-majority country, Indonesia’s giving culture is clearly influenced by Islam, in that this religion has concepts like zakat (almsgiving), sadaqah (voluntary charity), infaq (donation), and waqf (endowment). This pervasive culture is prevalent among both adults and youth. Many Indonesian Muslims have been donating, for instance, to help their fellow Muslims in Palestine and this has increased given the developments there since October 7. While Muslims often consider Islam to be a religion for humanity, the Indonesian Muslim youths in the author’s recent survey tend to ‘ringfence’ the Islamic cause by donating mainly to Islamic humanitarian concerns.

While religious giving — defined as philanthropy driven by religious values or teachings, to religious communities or organisations or for religious causes — has existed since Islam first arrived in Indonesia, the privatisation and institutionalisation of religious charities have rapidly evolved in tandem with Indonesia’s political changes. The end of the Suharto era in 1998 was a turning point when Islamic charitable activities were institutionalised as Islamic philanthropy. Since Reformasi, state and non-state Islamic philanthropic institutions focusing on long-term charitable initiatives have emerged.

Another development is the expansion of digital technology, where donating has become easier and more convenient for Indonesians who use online platforms to give. One March 2022 survey showed that 69 per cent of 952 respondents (aged 26-40 years) frequently donated more than 2.5 per cent of their income online. (Editor’s note: 2.5 per cent of income is the required amount for one’s zakat obligation.) The convenience of cashless payments, the accessibility of online donation information, and the credibility of online donation agencies might explain why young people prefer making online donations.

Different types of online donation platforms have emerged in Indonesia. Some, like Rumah Amal Salman, focus on religious giving. Established in 2007, this online platform is affiliated with the dakwah (propagation) movements on campuses (dakwah kampus), as in the case of the Salman Mosque at the Bandung Institute of Technology (ITB). In line with the orientation of this mosque, Rumah Amal Salman is geared more towards religious giving, that is, fundraising by and for Muslim communities.

Not all donation platforms focus on religious giving. For example, Kitabisa (“We can”), a leading online donation platform established by Indonesian youth in 2013, facilitates online fundraising and donations for religious giving such as zakat for Muslim communities but also for non-religious causes including medical and humanitarian causes, and disaster relief.

Which charitable causes are Indonesia’s youth more inclined to support? Between October and November 2023, the author conducted a 119-question survey of 566 Muslim students (242 male, 324 female) at one of Indonesia’s largest Islamic universities. A slice of the results shows the respondents’ overwhelming preference for religious-based giving behaviours, especially to organisations or recipients which share the donor’s religion. Meanwhile, their inclination to donate to non-religious causes or institutions was lower.

Although 94.35 per cent of the respondents felt comfortable helping those from different religions, their frequency of charitable giving to those of other religions remains lower.

As shown in Figure 1, where donation to different causes is measured against frequency of donation, female and male Muslim youth have similar proclivities in their giving behaviour. On average, the survey respondents donate more frequently to Muslim organisations or communities and to their fellow Muslims in need than to non-Muslim causes or recipients, or to non-religious causes including politics.

Figure 1. Muslim University Students’ Charitable Giving by Gender

Data Source: Halimatusa’diyah, 2023

Note: Confidence interval 95% with a margin of error at 3%.

Proportional stratified random sampling using 4-point Likert scale.

Although 94.35 per cent of the respondents felt comfortable helping those from different religions, their frequency of charitable giving to those of other religions remains lower.

In this author’s view, a reason for the students’ responses could be their thinking that while it is permissible for Muslims to donate to people of other religions, giving to Muslims should come first. This thinking is driven by a sense of belonging to the Ummah (global Islamic community). The ummah represents a single body and if any part of it is unwell, the entire body suffers, according to the Prophet’s sayings.

The survey showed that at least for the group surveyed, Indonesian Muslim youth’s generosity is defined by religious barriers. This generosity fosters social cohesion and care among Muslims. Yet, generosity that bridges different religious groups remains limited: giving to non-religious causes and inter-religious civic activities are important for forming inclusive relationships among different religious groups in Indonesia.

Religion plays a predominant role in Indonesian society, including for its youth. Ninety-eight per cent of Indonesians (in a different survey by Pew) say that religion is very important in their lives and 79.3 per cent of youth often consider religious teachings or values when making important decisions.

In Islam, giving is not limited to religious causes. If Islam is committed to the notion of a religion for humanity, then Islamic philanthropy must address non-religious causes or recipients such as victims of sexual violence and environmental and humanitarian causes and should extend to non-Muslims. It is important for religious leaders to actively advocate humanist Islamic values such as the concepts of hablum minannas (a good relationship with fellow human beings) and ta’awun (helping one another), both of which are forms of social piety that highlight the importance of humans helping each other, including those from other religions.

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4 Dec, 2023

- Wars in Europe and Middle East Can affect East Asian Power Balance

- Asia-Based Regional Banks’ Growing Footprint in Indonesia

Commentaries / Armed Conflict / China / Middle East / Southeast Asia / U.S. / Ukraine

Wars in Europe and Middle East Can affect East Asian Power Balance

The wars in Ukraine and the Middle East portend more geopolitical uncertainty for East Asia

Daljit Singh   1:16PM, 4 Dec, 2023

The US-Philippines Balikatan military exercises came following China’s increasing military presence near Taiwan and the South-China Sea. (Photo by Ceng Shou Yi / NurPhoto via AFP)

Southeast Asian states know that a balance of power and influence between China and the U.S. in East Asia is necessary for their independence and security. Hence the concerns that surface periodically about the sustainability of the U.S. presence in the region. There are no such concerns about China because its geographical proximity ensures a permanent presence.

There are dangers that the wars in Europe and the Middle East, if prolonged, will be detrimental to the U.S. posture in the Asia-Pacific. Take the Ukrainian conflict. After enjoying military gains in 2022, Ukraine’s 2023 counter offensive to drive the Russians out of Ukrainian territory has not achieved any significant breakthrough. The conflict has become a grinding war of attrition, with neither side making significant territorial gains and both incurring heavy casualties. It will not end anytime soon. Russia has clear advantages in such a prolonged war of attrition and is likely to prevail in the end. It is the much bigger country with a GDP nearly 10 times bigger than Ukraine’s before the invasion, a population four times bigger that enables it to recruit many more soldiers, and a far larger capacity to produce weapons and munitions.

The Israel-Hamas war has also diverted U.S. attention from Asia. If the war spreads and the U.S. gets sucked into a conflict from which there is no easy exit, then more resources and attention will have to be allotted.

What will happen when it becomes clear that Ukraine will not recover its lost territories and indeed may lose more territory? It is unlikely that the U.S. and NATO will get directly involved in the war against Russia as that could lead to a third world war. The other option is to persuade Ukraine to accept a “settlement” that allows Russia to keep the parts of Ukraine it already occupies. Such a “settlement” is unlikely to be enduring and will not extricate the U.S. from Ukrainian entanglement. Indeed it may entrench it in a long-term confrontation with Russia, which will not abandon its goal of incorporating the whole of Ukraine into Russia or enfeebling it if it cannot do so. So the conflict could become a frozen one, like the one on the Korean peninsula. It will demand continual U.S. military and economic support for Kyiv as Russia will continue to try to weaken Ukraine through subversion and other pressures or launch another invasion later on. In this dismal drama, Russia-China strategic cooperation could also become further entrenched which will have implications for Northeast Asia where Russian naval and air forces carry out patrols near Japan and Taiwan.

There is also the dimension of U.S. domestic politics. Already there is growing opposition to U.S. support for Ukraine within the Republican Party and disquiet among sections of the American public. If a Republican like former President Donald Trump is elected to the White House and decides to end support for Ukraine, the implications would be immense. If European NATO members are unable to substantially increase their own support, the casualty would not just be Ukraine but a vital principle of the United Nations Charter against aggression and the violation of territorial sovereignty, with ominous international implications.

The Israel-Hamas war has also diverted U.S. attention from Asia. If the war spreads and the U.S. gets sucked into a conflict from which there is no easy exit, then more resources and attention will have to be allotted. At a time when the U.S. is in intense competition with China for influence in Southeast Asia, its mostly strong support for Israel is already hurting its relations with important Muslim majority states in the region like Indonesia and Malaysia. Since support for Israel is particularly strong on the right of the U.S. domestic political spectrum, a Republican win in 2024 could further bolster support for Israel even as the U.S. weakens support for Ukraine.

Like the Ukrainian conflict, the longer-term prospects for the Israeli-Hamas conflict do not look good. It is unlikely that Israel would be able to obliterate Hamas. It is also uncertain what price it and the international community would have to pay in the process of it trying to do so. The uncertainties would include the effects of pressures that moderate Arab states will face from their populations, of anti-Israel public sentiments on the policies of democratic Western states, including the U.S., and a possible wider war involving Hezbollah, uprisings in the West Bank and possible Iranian participation. Israel will not agree that a realistic long-term solution should be based on a two-state formula. And since the U.S. will remain tied closely to Israel, it will probably have to continue supporting it come what may. Already the US has got itself directly involved, though only in a small way, when a U.S. Navy destroyer shot down cruise missiles launched by Iran-backed Houthis and directed at Israel.

U.S.- China relations remain marked by deep distrust and so are prone to misunderstanding and miscalculation. Nobody wants a U.S.-China military confrontation but what if there is an accidental clash in the South China Sea? Or if China for some reason decides to test U.S. resolve in the South China Sea, over the Diaoyu/Senkakus islands or on Taiwan? Would the U.S. be able to respond adequately to maintain confidence in the East Asian balance among its allies and partners? This question would become more pressing, if Washington becomes increasingly entangled in other regions and faces domestic problems and financial stresses. In conclusion, the wars in Europe and the Middle East portend more geopolitical uncertainty for East Asia. In addition, U.S. distraction to other regions and deeper Russia-China strategic cooperation would only compound the miserable geopolitical mix facing the region.

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Commentaries / Finance / Indonesia / Indonesian Economy

Asia-Based Regional Banks’ Growing Footprint in Indonesia

Indonesia’s present banking landscape bears the imprint of the 1997-8 financial crisis. The sector is stronger but, as regional interest shows, has room for further consolidation and development.

Manggi Habir   9:40AM, 4 Dec, 2023

Panoramic view of the Jakarta business and financial district on a cloudy Sunday in Indonesia capital city. (Photo by jakartatravel/Adobe Stock)

With the recent sale of PT Bank Commonwealth Indonesia (PTBC) to PT Bank OCBC NISP Tbk (OCBC Indonesia, a subsidiary of OCBC Ltd Singapore), Commonwealth Bank of Australia (CBA) has become the second Australian bank after Westpac Bank to exit Indonesia.

Coincidentally, U.S.-based Citigroup Inc. has completed the sale of its Indonesian consumer banking business to PT UOB Indonesia Tbk, a subsidiary of UOB Singapore. With sluggish post-pandemic recovery, stiffer competition from local and regional banks, and increased global uncertainty, Australian and U.S. banks are struggling to profitably grow their Asian businesses and are shifting their focus to more profitable core businesses closer to home.

As these banks retreat from Asia, regional and local Asian banks are steadily growing their regional footprint, including in Indonesia.

The growing presence of Asia’s regional banks in Indonesia has raised competitive pressure, forcing local banks to innovate, expand, and improve services as well as maintain stronger financials.

The PTBC sale was priced at AUD 220 million (US$142 million) and the whole transaction is expected to be completed by late next year. The sale represents a price significantly lower than its book value or the valuation of existing banks. This is due to the bank’s shrinking assets and rising losses. As of 30 September 2023, PTBC’s total assets were at 16.6 trillion rupiah, down from 18.4 trillion rupiah a year ago. For the first nine months of 2023, PTBC recorded a loss of Rp415.8 billion.

Still, OCBC Indonesia is acquiring a relatively clean bank with problem loan levels (non-performing loans) manageable at 1.95 per cent of total loans, which is below the industry average. With loans at just 76.1 per cent of total deposits, the bank remains sufficiently liquid. PTBC’s market focus, which is Indonesia’s consumer and SME market, is similar to OCBC Indonesia’s.

Another interesting feature of PTBC is its sizeable foreign exchange business from Australian tourists visiting Bali and remittances to Indonesian students studying in Australia. It will be interesting to see how OCBC Indonesia will try to keep and grow this Australia-related business.

This sale has limited impact on Indonesia’s banking industry given PTBC’s relatively small size but it reflects the steadily growing footprint of Asia’s regional banks. OCBC Indonesia was not the only suitor: other interested banks include Cathay Bank (Taiwan) and more recently, Japan’s JTrust and Malaysia’s CIMB.

The regional banks’ acquisitions of Indonesian banks have altered the line up of Indonesia’s top ten banks (Table 1):

Table 1. Top Ten Indonesian Banks by Total Assets (as of 30 September 2023)

Rank

Bank

Majority Shareholder

Total Assets (in Rp trillion)

1

PT Bank Rakyat Indonesia Tbk

State-owned

1,852

2

PT Bank Mandiri Tbk

State-owned

1,560

3

PT Bank Central Asia Tbk

Djarum group

1,381

4

PT Bank Negara Indonesia Tbk

State-owned

972

5

PT Bank Tabungan Negara (BTN) Tbk

State-owned

402

6

PT Bank CIMB Niaga Tbk

CIMB (Malaysia)

329

7

PT Bank Permata Tbk

Bangkok Bank (Thailand)

252

8

PT Bank OCBC NISP Indonesia Tbk

OCBC (Singapore)

247

9

PT Bank Panin Tbk

Gunawan family

211

10

PT Bank Danamon Indonesia Tbk

MUFG (Japan)

208

Source: Author’s compilation from public sources

The top four are locally owned and together control 49.8 per cent of total banking assets. They are the market price leaders. The remaining six consist of one state-owned mortgage bank (BTN), one locally-owned private bank (Panin Bank) and four subsidiaries of various Asia-based banks: Malaysia’s CIMB, Thailand’s Bangkok Bank, Singapore’s OCBC, and Japan’s MUFG.

Before the Asian financial crisis of 1997-98, all of Indonesia’s top ten banks were either state-owned or local privately owned banks. It was soon after the crisis that regional banks and investors started to acquire Indonesia’s local private banks. The first wave involved the purchase of recapitalised banks taken over by the Indonesia Bank Restructuring Agency (IBRA or its Bahasa Indonesia acronym, BPPN). Buyers included CIMB which bought Bank Niaga (this later merged with Lippo Bank to become PT CIMB Niaga Tbk). Temasek, Singapore’s sovereign fund, bought two banks, PT Bank Danamon Indonesia Tbk and PT Bank International Indonesia Tbk (BII), formerly owned by the Sinar Mas group.

The second wave of bank acquisitions did not involve IBRA as it was dissolved in 2004 when Indonesia’s economy stabilised. From Singapore, OCBC Bank and UOB acquired controlling interests in Bank NISP and Bank Buana, respectively. (These were renamed PT Bank OCBC NISP Tbk and PT UOB Indonesia.) From Japan, SMBC bought PT Bank BTPN Tbk, MUFG purchased PT Bank Danamon Indonesia Tbk, and Jtrust Bank bought Bank Mutiara. From South Korea, Woori Bank bought Bank Saudara and Kookmin Bank bought PT Bukopin Tbk. The last foreign acquisition was Bangkok Bank’s purchase of PT Bank Permata Tbk from Standard Chartered Bank and Astra International.

In March 2008, the Indonesian monetary authorities limited each buyer to just one bank – Temasek thus sold BII to Malaysia’s Maybank (renamed PT Bank Maybank Indonesia Tbk). Other banks bought from IBRA were PT Bank Permata Tbk by UK-based Standard Chartered Bank and local automotive group PT Astra Internasional Tbk, and Indonesia’s largest private bank, PT Bank Central Asia Tbk, by U.S.-based fund Farallon Capital, which sold it to the Djarum group.

Of the top ten largest banks in Indonesia today, only two are local privately owned banks, BCA and Panin. Foreign interest in Indonesian banks continues, with recent reports indicating that Japan’s MUFG and SMBC are competing for the potential acquisition of PT Panin Bank Tbk.

The growing presence of Asia’s regional banks in Indonesia has raised competitive pressure, forcing local banks to innovate, expand, and improve services as well as maintain stronger financials. Tighter regulatory oversight has strengthened banking industry capital levels. Overall, this development has helped the government’s objective of banking sector consolidation but it has still some way to go.

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1 Dec, 2023

- A Green Industrial Policy for Indonesia

Commentaries / Climate Change / Indonesia

A Green Industrial Policy for Indonesia

As one of the world’s largest emitters of greenhouse gases, Indonesia needs to implement a green industrial policy. Despite the challenges involved, green growth is said to support GDP growth of around 6 per cent a year.

Vinod Thomas   9:30AM, 1 Dec, 2023

A protester holds placards as they march down a street during the Global Climate Strike in Jakarta on September 17, 2023. (Photo by Yasuyoshi CHIBA / AFP)

Indonesia, which is the world’s ninth biggest contributor to global greenhouse gases (GHGs), needs to implement a green industrial policy effectively. Doing so would be instrumental in attaining high-income status by 2045 as a low-carbon economy and a sustainable user of natural assets.

The motivation for embarking on a green industrial policy rests on two urgent priorities: decarbonising production across industry and ensuring the more efficient use of resources.  The case for both is clear as the Indonesian archipelago is ranked 14th among 181 countries on the Global Climate Risk Index. Industry, comprising manufacturing and construction, has a leading role in the economy as it constitutes  41 per cent of the economy, contributes 37 per cent of GHGs, and has vital links to the country’s vast natural resources.

Definitions of industrial policy refer to it as comprising economic activities aimed at long-term social benefits rather than only short-term financial gains. A green industrial policy adds the decarbonisation dimension. The principles of a low-carbon economy and sustainable consumer of natural assets are contained in the Law of the Republic of Indonesia No. 16 of 2016 concerning the Paris Agreement on the United Nations. But they need to be followed up with action.

Policy is best implemented with neutral or uniform incentives for green growth across entities. The incentives should then be taken advantage of by the more competitive sectors in the market setting, and not offered case by case by the government in the spirit of picking industrial winners.  The approach can use carbon tax revenues (below) to finance the incentives. Furthermore, since growth with sustainability calls for more than tinkering on the margin, green industrial policy would call for a structural transformation that values all three forms of capital, physical, human, and natural, and relies on the productivity of investment and checks on efficiency through openness to global trade.

The incentives would favour low carbon development, as envisaged in the current National Medium-Term Development Plan (2020-2024). Indonesia has the largest mitigation potential in Southeast Asia with a 36 per cent share of the region’s emissions. The country has committed to becoming carbon neutral by 2060 and is working on a Long-Term Strategy for Low Carbon and Climate Resilience to 2050. The Presidential Decree on Renewable Energy of September 2022 encourages the use of renewables and the early retirement of some coal plants. The country is committed to a renewables share of 23 per cent in electricity by 2025.

The motivation for embarking on a green industrial policy rests on two urgent priorities: decarbonising production across industry and ensuring a more efficient use of resources.  The case for both is clear, inter alia, as the Indonesian archipelago is ranked 14th among 181 countries on the Global Climate Risk Index.

But Indonesia is way off in carbon trends: renewables constitute less than 12 per cent of energy consumption today. As the world’s largest exporter of coal, 60 per cent of Indonesia’s electricity generation comes from coal. In fact, in view of the urgency of the climate crisis, Indonesia would want to become net zero by 2050 rather than the government target of 2060. That calls for faster economic diversification from natural resources, investments in knowledge, technology, and innovation. In addition, there needs to be participation in clean energy value chains, facilitated by financial innovations including blended instruments, guarantees and feed-in tariffs.

Emissions from fossil fuels need to be cut massively, especially in the cement, iron and steel sectors that contribute some 4/5th of industrial effluents.  Companies need to be nudged to explore alternative fuels, such as solar and wind, as well as biomass and municipal waste. Cement companies can ramp up waste heat recovery systems, which capture the heat generated during production and redirect it to generate electricity. In steel, companies can speed up energy-efficient technologies, such as electric arc furnaces, increasingly using electricity instead of fossil fuels. Realistically, however, carbon capture and storage appear to be some years away.

Pricing carbon would underpin the drive for green investments.  A carbon market and a carbon tax on coal fired power plants, pushed to 2024, are good first steps, and they need to be implemented and their scope vastly expanded.

Managing resources sustainably would be the other big part of green industrial growth.  Regulation of the Ministry of Industry (Kemenperin) No. 50 of 2020 states that Green Industry would prioritise efficiency and effectiveness in the use of resources.  There need to be government regulations to standardise the frameworks green industries utilise. A centerpiece of this standardisation would be guidelines and monitoring of production waste generated by the industry. This would involve the reduction of waste at the source, reuse of waste, recycling of waste, and separation of a material or energy from waste.

Related to resource management is the sustainable use of natural ecosystems.  That is because forestry and land use, which are major inputs for agri-business, contribute half of Indonesia’s emission reduction target.  Relative to others in Southeast Asia, Indonesia also has a large gap to fill pertaining to emissions related to the management of natural resources. This includes forestry and land use.

The political economy of forest and land use management presents huge challenges as the status quo favours certain interests of large companies, small landholders as well as local governments. But innovation in green technology can lower the cost of operations and combat unsustainable but financially profitable practices.  Digital technologies like the internet, artificial intelligence (AI), and machine learning can be deployed to make selling sustainable products more profitable, for example building and using low-cost sensors and applying AI capabilities to improve air quality in urban and rural areas. Subjecting agribusiness exports to the tests of clean energy use can help.

Pursuing a green economy in Indonesia, comprising decarbonisation of industry and sustainable use of resources, could bring multiple benefits. A Bappenas study finds that one of the key benefits of green industry is the possibility of supporting a GDP growth of around 6 per cent a year without mortgaging the environment and ecosystems. Despite the challenges involved, such rates of environmentally sustainable growth should be attractive enough for Indonesia to push ahead with green industrial policy.

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30 Nov, 2023

- Myanmar-Russia Relations Since the Coup: An Ever Tighter Embrace

- Structural Transformation for Inclusive Growth in Cambodia

Editor Picks / Long Reads / Myanmar / Myanmar-Russia Relations

Myanmar-Russia Relations Since the Coup: An Ever Tighter Embrace

Myanmar-Russia relations have strengthened considerably since Moscow acknowledged the Tatmadaw’s seizure of power on 1 February 2021, and the junta endorsed the Kremlin’s invasion of Ukraine on 24 February 2022. This Long Read focuses on the four main areas of Myanmar-Russia cooperation since the coup: diplomatic validation; defence; energy; and commerce and tourism.

Ian Storey   1:00PM, 30 Nov, 2023

Russian President Vladimir Putin meets with Myanmar junta leader Min Aung Hlaing on the sidelines of the 2022 Eastern Economic Forum in Vladivostok on September 7, 2022. (Photo by Valery SHARIFULIN / SPUTNIK / AFP)

INTRODUCTION

In February 2023, Myanmar and Russia marked the 75th anniversary of the establishment of diplomatic ties. For most of that period, relations have been insubstantial. It was only in the 2010s that the two countries began to move closer together, primarily due to the Myanmar military’s (Tatmadaw) growing preference for Russian-made arms over Chinese-manufactured equipment. Since the Tatmadaw seized power in a coup on 1 February 2021, and Russia invaded Ukraine on 24 February 2022, the two countries have entered into a much tighter embrace. In the face of international disapprobation and Western sanctions, Naypyidaw and Moscow have forged closer diplomatic and political ties and moved to deepen military and economic cooperation.

Nearly three years on from the coup, Myanmar has become the second most important country for Russia in Southeast Asia after Vietnam. For Myanmar, although China remains its largest source of trade and investment, Russia is the junta’s preferred major power partner. Significantly, Russia was the only major power to acknowledge the Tatmadaw’s 2021 power grab, while Myanmar was the only ASEAN member state to endorse Moscow’s invasion of Ukraine and to send military supplies to Russia’s armed forces.

This article focuses on the four main areas of Myanmar-Russia cooperation since the coup: diplomatic validation; defence; energy; and commerce and tourism.

MUTUAL DIPLOMATIC VALIDATION

On 1 February 2021, the Tatmadaw ousted the democratically-elected government of the National League for Democracy (NLD) led by State Counsellor Aung San Suu Kyi. Senior NLD leaders were detained on trumped up charges and a state of emergency was declared. Coup leader Senior General Min Aung Hlaing appointed himself chairman of the State Administration Council (SAC) and later prime minister of a provisional government. The junta used violence to suppress anti-SAC protests, which ultimately escalated into a civil war that has engulfed every part of the country.

The coup elicited international condemnation. Western countries denounced the takeover and imposed sanctions on SAC leaders. The Association of Southeast Asian Nations (ASEAN) also condemned the coup. Min Aung Hlaing attended a special ASEAN leaders’ meeting in Jakarta where he reluctantly accepted a Five-Point Consensus (FPC) designed to end the escalating violence and encourage political dialogue among all parties. However, the SAC refused to take the initiative seriously, leading ASEAN to ban SAC officials from attending the organisation’s high-level meetings. China, which had established close ties with the Tatmadaw following an earlier coup in 1988, was taken aback by the putsch and did not immediately recognise the SAC’s authority. Although Beijing has sought to protect its sizeable economic interests in Myanmar, politically, it has kept the SAC at arm’s length. Min Aung Hlaing himself appears to view China with distrust, especially its close relations with several Ethnic Armed Organisations (EAOs) which have been in conflict with the central government for decades. Since seizing power, the SAC Chairman has not visited China nor met with any senior Chinese leaders. When Chinese Foreign Minister Wang Yi visited Bagan to attend a foreign ministers’ meeting of the Lancang-Mekong Cooperation Forum in July 2022 he pointedly did not travel to Naypyidaw to see the SAC chairman. Beijing did not invite Min Aung Hlaing to the Belt and Road Initiative (BRI) Summit in Beijing in October 2023, even though China has financed a number of major BRI projects in Myanmar. The SAC’s relations with Beijing have deteriorated since a coalition of EAOs launched a sustained military offensive against the Tatmadaw in late October in northern Shan State, blocking trade routes to China.

In sharp contrast, the Kremlin viewed the 2021 coup as a golden opportunity to advance Russia’s interests in Myanmar, particularly arms sales which have fallen in other Southeast Asian countries, particularly Vietnam. Moscow moved quickly to consolidate relations with the SAC by utilising strong personal connections between the two countries’ military leaders. After his appointment as commander-in-chief of the armed forces in 2011, Senior General Min Aung Hlaing visited Russia on several occasions, during which he forged a good rapport with Defence Minister Sergei Shoigu and his deputy Colonel-General Alexander Fomin. A few weeks after the coup, Fomin travelled to Myanmar and was the highest-ranking foreign dignitary to attend the Armed Forces Day parade in Naypyidaw on 27 March.

In a clear indication of the position Russia occupies in the hierarchy of the SAC’s foreign relations, three of the four overseas trips Min Aung Hlaing has undertaken since the coup have been to Russia: to Moscow, Kazan and Irkutsk in June 2021; Moscow again in July 2022; and Vladivostok and Irkutsk in September 2022. Min Aung Hlaing has used these visits to convey the impression that Myanmar is not internationally isolated, to cement relations with the Kremlin leadership (though he has only met President Vladimir Putin once, on his third trip) and to promote bilateral cooperation in areas such as defence, energy and trade. The SAC chairman has repeatedly praised Putin as a leader, and expressed his gratitude to the Kremlin for its assistance since the coup, including the supply of Russia’s Sputnik COVID-19 vaccine. In a media interview during his first trip to Moscow as SAC chairman, he pointedly referred to Russia as Myanmar’s “forever friend”, relegating China and India to the rank of “close friends”.

To reciprocate the Kremlin’s solidarity following the coup, the SAC immediately endorsed Russia’s invasion of Ukraine on 24 February 2022, significantly the only ASEAN member state to do so. However, as Myanmar’s NLD-appointed ambassador to the United Nations was able to retain his position due to support from the United States (with no objection from China or Russia), Myanmar has consistently voted for UN General Assembly resolutions condemning Russia’s aggression against Ukraine. The exiled National Unity Government (NUG) – composed of ousted NLD parliamentarians and representatives from various ethnic groups – has also denounced Russian aggression. Kremlin leaders have repeatedly expressed their appreciation for the SAC’s criticism of Western sanctions and for “understanding” its rationales for invading Ukraine. Moscow agrees with Naypyidaw that anti-SAC resistance fighters  are “terrorists” while Naypyidaw accepts the Kremlin’s narrative that Ukrainian forces are “terrorists” (leading some of ASEAN’s dialogue partners to boycott meetings of the ASEAN Defence Ministers’ Meeting-Plus experts working group on counter-terrorism, which is co-chaired by Myanmar and Russia).

Russia has helped provide Myanmar with other opportunities to break out of its diplomatic isolation. As Myanmar’s relations with ASEAN have soured due to the SAC’s failure to implement the FPC, the junta has looked to associate itself with other multilateral forums, especially those in which Russia (and China) play key roles. These include the Shanghai Cooperation Organization (SCO), to which Myanmar became a dialogue partner in September 2022. The Brazil-Russia-India-China-South Africa (BRICS) grouping agreed this year to accept new members starting from 2024, and Myanmar is expected to submit a formal membership application soon. The SCO and BRICS not only provide Myanmar with alternative diplomatic options to ASEAN, but are also viewed by the SAC as potentially important avenues of economic cooperation. Myanmar has courted investments from SCO members in its energy sector and seeks access to financial loans through the BRICS’ New Development Bank. Myanmar has also expressed an interest in forging closer ties with the Russian-led Eurasian Economic Union (EAEU), presumably with a view to negotiating a free trade agreement (as Vietnam and Singapore did in 2015 and 2019, respectively).

Russia and Myanmar have also initiated cooperation in areas that support each other’s authoritarian rule. Moscow has voiced support for the SAC’s plans to hold legislative elections (probably in 2025), which Western countries have already derided as a sham. In May 2023, the election bodies of Myanmar and Russia signed an MOU on electoral cooperation. In an effort to counter negative reporting about Myanmar and Russia in the international press, in September 2023 Russia’s state-owned news agency Sputnik signed a content-sharing agreement with the SAC’s mouthpiece The Global New Light Of Myanmar.

The SCO and BRICS not only provide Myanmar with alternative diplomatic options to ASEAN, but are also viewed by the SAC as potentially important avenues of economic cooperation.

THE DEFENCE NEXUS

In the 1990s, China became Myanmar’s main weapons supplier. Under Western sanctions, and with Russia’s defence industrial sector in disarray following the dissolution of the Soviet Union, the Tatmadaw had few other choices. However, by the early 2000s the junta had moved to diversify its arms imports away from China, both because of dissatisfaction with the quality and reliability of Chinese-made equipment and as part of an overall policy aimed at reducing the country’s dependence on Beijing. Russia was the main beneficiary of this policy. In the 2000s, Myanmar purchased Russian-made MiG-29 Fulcrum multi-role jet fighters, Mi-35 attack helicopters and Mi-17 transport helicopters. These formidable aircraft enabled the Myanmar Air Force (MAF) to step up attacks on EAOs along the country’s periphery, including in the Kachin, Kayin, Shan and Chin States that had been in conflict with the central government for decades.

Myanmar’s defence ties with Russia moved into a higher gear following the appointment of General Min Aung Hlaing as commander-in-chief of the armed forces in 2011. He not only considers Russian weapon systems to be superior to Chinese equipment but also distrusts Beijing’s intentions in Myanmar, especially its close ties with several EAOs. Between 2013 and 2020, Min Aung Hlaing visited Russia four times, forming close personal bonds with the Russian armed forces’ senior leadership. Even during the NLD’s six years in office (2015-21), defence cooperation remained the mainstay of Myanmar-Russia relations. Between 2017 and 2021, the Tatmadaw placed orders with Russia for a significant quantity of military hardware, including 22 Yak-130 light-combat aircraft, six SU-30MK Flanker fighter jets, 20 BRDM-2 armoured reconnaissance vehicles, Pantsir-S1 surface-to-air missiles and Orlan-10E surveillance drones.

Since the military takeover, Myanmar’s defence cooperation with Russia has become even more vital. As civil war has engulfed Myanmar, and conflict has spread from the periphery to the Burmese heartland, the SAC has lost control over large parts of the country and suffered heavy combat losses. In response, the Tatmadaw has been forced to become more reliant on air power to counter anti-SAC resistance forces, including the armed wing of the NUG, the People’s Defence Forces (PDFs) and various EAOs. MAF fighter jets have targeted NUG-aligned administration centres and local service providers, including schools, clinics and displaced persons camps. Air strikes against civilian targets have led to numerous atrocities. For example, on 11 April, the MAF attacked the opening ceremony of an NUG administration office in Pazigyi village in the Sagaing region, killing 170 civilians including 40 children. According to the United Nations Special Rapporteur on the Human Rights Situation in Myanmar, Tom Andrews, and various NGOs that monitor the conflict in Myanmar, the majority of MAF air strikes have been carried out using military aircraft from Russia and China, especially the former. In particular, the MAF has relied heavily on its Yak-130s and Mi-35s, including in the attack on Pazigyi village. Andrews has accused Russia and China of being complicit in probable war crimes and crimes against humanity perpetrated by the SAC.

Both Russia and China have resisted calls to impose an international ban on arms sales to Myanmar. On 18 June 2021, Russia joined with China in abstaining from a vote on a non-binding resolution at the United Nations General Assembly (UNGA) calling for member states to cease all arms transfers to Myanmar. The SAC rejected the vote (adopted by 119 countries) as interference in its internal affairs. To underscore his scorn for the UNGA resolution, a few days after the vote, Min Aung Hlaing travelled to Russia and visited the headquarters of the state-run arms exporter Rosoboronexport in Moscow, the production facilities of the Kazan Helicopter Company in Kazan, and the United Aircraft Corporation in Irkutsk, the makers of Sukhoi fast jets. Over the past two years, Myanmar and Russia have exchanged numerous high-level defence delegations.

Since the coup, Russia has displaced China to become the largest provider of military assistance to Myanmar. According to the Swedish think tank SIPRI, between 2021 and 2022, Russia provided Myanmar with US$276 million in military supplies, compared to US$156 million from China. The UN estimates that during the same period, Russian commercial entities transferred US$406 million in defence supplies to Myanmar, with China in second place at US$267 million. It should be noted, however, that the SAC and Russia have not signed any new big defence contracts since the coup.

The SAC has shown its appreciation for the Kremlin’s military support in two ways. First, and most importantly, the junta has returned the favour. In early 2023, the head of Ukraine’s military intelligence, Lieutenant-General Kyrylo Budanov, revealed that Moscow had requested military supplies from a number of countries using Russian-made weaponry, including Myanmar, to make up for equipment shortfalls which were hampering its combat operations in Ukraine. A few months later, it was reported that Russian tank manufacturer Uralvagonzavod had imported optical targeting systems from Myanmar to upgrade T-72 tanks which had been taken out of storage, refurbished and sent to the frontline in Ukraine to make up for the Russian army’s huge tank losses. The spare parts had been provided by Uralvagonzavod to the Myanmar army for its own T-72 tanks which it had purchased from Ukraine in the early 2000s. In July, reports emerged that Russian forces were using 120mm mortar rounds manufactured in Myanmar. While the SAC’s transfer of munitions and spare parts will not have a decisive impact on Russia’s war efforts in Ukraine, they underscore how close relations between the two countries’ armed forces have become since 2021. No other country in Southeast Asia has responded positively to Moscow’s request for military assistance, including Vietnam, its closest partner in the region. Second, the SAC has bestowed personal honours on officials in the Russian government who have played a key role in promoting defence ties between the two countries. Thus, in November 2022, the SAC awarded honorary titles to three Russian defence officials: Defence Minister Shoigu was awarded the title Sithu (the lowest order awarded to people who are deemed to have done ‘great work’ for the country); Colonel-General Fomin was named Thiri Pyanchi (for ‘outstanding performance’); and Alexander Ostrovsky from the Federal Service for Military-Technical Cooperation was awarded an ‘excellent administrative performance’ medal.

Russia’s Foreign Minister Sergei Lavrov (R) and Myanmar’s Foreign Minister Than Swe attend a press conference after their meeting in Moscow on September 14, 2023. (Photo by Yuri KOCHETKOV / POOL / AFP)

ENERGY COOPERATION

The coup turned Myanmar’s existing electricity generation problems into a full-blown energy crisis. The country’s power infrastructure has been damaged in fighting between the Tatmadaw and PDFs, resulting in rolling blackouts in major towns and cities. Rising global oil prices and the falling value of the currency have created fuel shortages for the population, while the withdrawal of Western energy companies from offshore gas fields has halted upstream production.

To find solutions to the country’s energy crisis, the SAC has turned primarily to Russia.

As a short-term measure, Myanmar has begun importing Russian crude oil which Moscow is offering to non-sanctioning countries at discounted prices. Between March and June 2023, Russian oil exports to Myanmar jumped from almost nothing to 8.36 million barrels of oil. A proportion of that oil is likely to have been jet fuel for use by MAF aircraft to conduct air strikes. However, not all Russian oil shipped to Myanmar is for domestic consumption. According to Energy Intelligence, from February 2023 Russia began delivering an estimated 70,000 barrels of oil per day to China using a Chinese-funded oil pipeline from the port of Kyaukphyu in Myanmar to Kunming in Yunnan Province.

As a longer-term solution to the problem, the SAC seeks to achieve a higher level of energy self-sufficiency by exploiting hydrocarbon resources and developing renewable energy sources. The junta has requested technical assistance from Russian energy companies to develop inland and offshore oil and gas fields – presumably including those from which Western and Japanese companies have withdrawn – and the construction of additional oil pipelines and oil refineries. For renewable energy sources, the SAC has partnered with Russia’s state-owned energy giant Rosatom to develop hydro, wind and, controversially, nuclear power.

In the early 2000s, the previous junta signed a series of MOUs with Rosatom to develop nuclear power capabilities. The NLD government shelved those plans but after the coup, the atomic power option was urgently revisited. In 2022, the SAC and Rosatom signed three MOUs with the ultimate aim of providing Myanmar with a small modular reactor (SMR). SMRs are much cheaper, more mobile and reputedly safer than conventional nuclear power plants. In February 2023, the first concrete outcome of these MOUs was the opening of a Nuclear Technology Information Centre in Yangon. A fourth MOU on nuclear cooperation between Myanmar and Rosatom was signed during Russia Energy Week in Moscow in October 2023.

In December 2022, SAC spokesman Zaw Min Tun predicted: “We expect construction of a small-scale nuclear reactor to start within a few years.” However, achieving that goal is an ambitious target for Myanmar. Questions include who would run the nuclear facilities (Myanmar or Russian technicians, or both?), how would a cash-strapped Myanmar pay for such a costly programme, and whether a Russian-supplied SMR would be subject to International Atomic Energy Agency (IAEA) safeguards. The SAC’s quest for atomic power has also rekindled speculation that the Tatmadaw has ambitions to acquire nuclear weapons, despite no solid evidence that a ‘Burmese Bomb’ is indeed the SAC’s ultimate goal.

Since the coup, Russia has displaced China to become the largest provider of military assistance to Myanmar. According to the Swedish think tank SIPRI, between 2021 and 2022, Russia provided Myanmar with US$276 million in military supplies, compared to US$156 million from China.

COMMERCE AND TOURISM

In addition to arms sales and energy projects, Myanmar and Russia have sought to circumvent Western sanctions and strengthen commercial ties. Myanmar’s economy is in a dire state. The coup effectively wiped out a decade of GDP growth as Western companies pulled out, exports plummeted, energy costs rose, trade revenue fell, inflation soared and the value of the kyat collapsed.

Since the coup, Myanmar and Russia have regularly held government-to-government talks on how to promote closer trade and investment ties and exchanged high-level business delegations. Myanmar business people have attended the St. Petersburg International Economic Forum and the Eastern Economic Forum in Vladivostok. In late 2022, in an effort to evade Western financial sanctions on both countries, the Russian and Myanmar central banks agreed to direct ruble-kyat payments to facilitate commercial transactions, presumably including arms sales. Economic ties between Myanmar and Russia should be kept in proportion. Commerce between the two countries is minuscule. According to the International Monetary Fund, in 2020, two-way trade amounted to a mere US$58.3 million before falling to US$34.5 million in 2021. In 2022, it had risen to US104.4 million. In the same year, however, Myanmar-China trade was worth US$11.5 billion.

Myanmar has been keen to attract Russian tourists, especially to its beach resorts in areas such as Rakhine State. Post-coup, Russian visitors have been offered visa-free travel to Myanmar and allowed to use Russian-issued Mir credit cards, one of only a handful of countries to do so. During 2022, the two sides discussed establishing direct air links between Yangon and Mandalay and several Russian cities including Moscow, St. Petersburg, Novosibirsk and Vladivostok. In August 2023 it was announced that from September, Myanmar Airways International (MAI) would fly twice a week from Yangon and Mandalay to Novosibirsk. Located in Siberia, Novosibirsk is Russia’s third largest city and appears to have been given priority over Moscow and St. Petersburg because it is home to the company that manufactures the SU-34 fighter-bomber (which the MAF appears keen to acquire due to its central role in suppressing anti-Assad forces in Syria since 2015) and a Rosatom facility that processes uranium and fabricates nuclear fuel.  Direct flights between Yangon and Moscow with MAI are expected to start in 2024.

CONCLUSION

The Tatmadaw’s ouster of the NLD government in February 2021, and the Kremlin’s full-scale invasion of Ukraine a year later, have pushed Myanmar and Russia much closer together. The Russian government has taken advantage of the coup to promote its arms sales and other economic interests in Myanmar. Wary of becoming dependent on China, coup leader Senior General Min Aung Hlaing has looked to Russia as his preferred major power partner, and has sought Moscow’s assistance to resolve two major problems: defeat anti-SAC resistance forces and solve the country’s energy crisis. Russia’s military assistance is prolonging the conflict in Myanmar and its estrangement from ASEAN, and Moscow may be complicit in SAC war crimes. So long as the SAC holds power, and the conflict in Europe drags on, the Myanmar-Russia embrace will grow ever tighter.

This is an adapted version of ISEAS Perspective 2023/86 published on 21 November 2023. The paper and its references can be accessed at this link.

Commentaries / Cambodia / Cambodian Economy

Structural Transformation for Inclusive Growth in Cambodia

Cambodia’s economic aspirations must be girded by strenuous efforts to overcome its constraints, internal and external, through diversification and reform.

Jayant Menon   10:00AM, 30 Nov, 2023

1. People work at the Jiangxi 3L Medical Products factory in the Sihanoukville Special Economic Zone (SSEZ) in Sihanoukville, Cambodia on Nov. 21, 2023. (Photo by Liao Hongqing / XINHUA / Xinhua via AFP)

Cambodia has a tragic history but has recovered remarkably since the 1991 Paris Peace Agreements and continues to harbour great aspirations. It aims to become an upper-middle-income country by 2030 and a high-income country by 2050. To realise these aspirations, Cambodia must address various constraints to achieve more inclusive growth that is also sustainable and resilient. This type of growth should be driven by, as well as generate, decent paying and sustainable jobs in the formal and informal sectors.

To do this, Cambodia needs a new phase of structural transformation. So far, the limited amount of diversification of its economy has not affected the rapid pace of growth but only its quality and inclusiveness. Cambodia’s average growth rate exceeded 7 per cent in the decade prior to the pandemic, driven by preferential trade access to developed country markets, tourism centred on Angkor Wat, and large capital and aid inflows into infrastructure and real estate.

With its graduation from the Least Developed Country status expected this decade, Cambodia will become a victim of its own success as trade preferences and aid flows diminish. It will need to pursue new drivers of growth, which will require a new type of diversification.

The initial phase of structural transformation involving rural-urban migration from agriculture into industry and services may be reaching its limit. The horizontal shift into sectors producing higher value products and services generated a one-off increase in productivity, which raised incomes and living standards, but this increase is not sustainable.

Future increases in Cambodia’s productivity will have to come from intra-sectoral diversification. This involves the vertical shift into higher value-added products and activities within sectors. This type of diversification is sometimes referred to as moving up the value-chain. In manufacturing, it involves greater participation in global supply chains.

Cambodia must address two sets of constraints to enable greater intra-sectoral diversification for more inclusive growth. These are its limited human capital and the high cost of doing business. To ensure that the new type of growth continues, another set of constraints that limit resilience and sustainability must be addressed. The Cambodians will require policy reforms, and public as well as private investment, to address all three types of constraints.

While the pandemic may have dashed Cambodia’s hopes of realising its vision of upper-middle-income status by 2030, addressing the constraints to inclusive, resilient, and sustainable growth in getting there is critical.

First, there is an urgent need to improve the quality of primary and secondary schooling. Technical and vocational education and training (TVET) and tertiary education can succeed only if students have a strong foundation. The World Economic Forum’s Executive Opinion Survey ranked Cambodia at 100 out of 130 countries for primary education quality in 2017. Improvements in educational quality need to be accompanied by measures to improve access and retention rates, which are currently low.

Cambodia needs to invest in skills development and training in close collaboration with the private sector to avoid skills mismatches. TVET and tertiary education institutions need to align their curricula more closely with the needs of the private sector.

For companies, the high cost of doing business in Cambodia stems from limited physical and logistics infrastructure, and expensive energy and finance.

With widespread infrastructure deficits, there is a need to prioritise investments within the transportation sector and economy wide.

The high cost of electricity limits vertical upgrading from labour-intensive assembly activities to higher value-added but energy intensive production of parts and components in electronics and automotive supply chains. Cambodia needs to invest in renewable energy and energy efficiency to reduce costs and the reliance on diesel and heavy fuel oil in electricity generation.

The high cost of finance, especially for small-scale farmers and micro-, small, and medium enterprises (MSMEs), perpetuates poverty. Their limited access to formal avenues of finance is closely related to cost. The potential for digital innovation, including for fintech and blockchain technology, however, presents significant opportunities for Cambodia’s financial sector to enhance financial inclusion.

Finally, there is a need to increase versatility in managing and responding to shocks, and to ensure the sustainability of growth and its drivers.

First, climate change threatens the livelihoods of millions, especially poor and vulnerable communities. The Asian Development Bank estimates that Cambodia’s GDP could be 10 per cent lower than it could be in 2050 due to lost labour productivity from climate change.

Economic growth and environmental protection are often considered trade-offs but there can be complementarity. The intersection between the two is green growth, which fosters ecologically sustainable economic growth with low carbon emissions and socially inclusive development.

Transitioning from heavy reliance on fossil fuels, reducing deforestation, and adopting more sustainable agricultural and fishing practices will be critical for Cambodia to protect its environment and to ensure the prospects of these industries. As sustainability aspects of production become increasingly important in business and investment decisions of international firms given rising global demand, reducing Cambodia’s carbon footprint would present it with new growth opportunities.

Second, Cambodia will need to strengthen its financial sector resilience by enhancing regulatory and supervisory frameworks, improving asset quality and risk management practices, and addressing other weaknesses in the banking system that threaten its stability.

Third, government spending on healthcare needs to be significantly increased before the next pandemic. This was a major limitation for Cambodia in managing the COVID-19 pandemic, as it required more stringent mobility restrictions than countries with more robust healthcare systems.

Cambodia’s acceleration towards a digital economy will produce many benefits but will also create new challenges. Many low- and medium-skilled jobs may be initially lost and redeploying displaced workers will require substantive reskilling and retraining.

While the pandemic may have dashed Cambodia’s hopes of realising its vision of upper middle-income status by 2030, addressing the constraints to inclusive, resilient, and sustainable growth in getting there is critical. This will take more time but the journey is as important as the destination.

2023/283

29 Nov, 2023

- Peace and Friendship-2023: Will It Reduce China’s Trust Deficit?

Commentaries / Editor Picks / ASEAN-China Relations / China / Military

Peace and Friendship-2023: Will It Reduce China’s Trust Deficit?

A recent land and maritime exercise among China and five Southeast Asian countries highlights some emerging trends but breaks little new ground.

Ian Storey   12:45PM, 29 Nov, 2023

The opening ceremony of the “Peace and Friendship-2023” joint military exercise is held in Zhanjiang, south China’s Guangdong Province, Nov. 13, 2023. (Photo by Lin Qinghua / XINHUA / Xinhua via AFP)

On 22 November, military personnel from China and five Southeast Asian countries — Cambodia, Laos, Malaysia, Thailand and Vietnam — wrapped up a 10-day land and sea exercise in the port of Zhanjiang in southern Guangdong Province.

While the exercise was not a groundbreaking event, it did reinforce emerging trends in China’s regional defence diplomacy, specifically, hosting larger multilateral drills.

The multilateral drills, called Peace and Friendship-2023 (Aman Youyi-2023 in Malay “peace” and Chinese “friendship”), capped an extremely busy year for China’s armed forces in Southeast Asia.

Between February and September, the three services of the People’s Liberation Army (PLA) and the China Coast Guard participated in 11 regional defence diplomacy engagements.

Peace and Friendship-2023 was not the biggest multilateral exercise China has held with its Southeast Asian neighbours in terms of the number of countries involved. In October 2018, China co-hosted (with Singapore) the ASEAN-China Maritime Exercise (ACMEX) in which the navies of nine ASEAN member states participated (landlocked Laos was an observer).

It did, however, involve the largest number of military personnel.

According to China’s Ministry of Defence, 3,000 sailors and soldiers took part. As each of the five Southeast Asian countries contributed around 100-150 personnel, PLA forces made up over 80 per cent of participating forces.

In addition to its size, Peace and Friendship-2023 was notable in that it provided further evidence of China’s move towards multilateral defence cooperation.

China is undertaking this shift gradually and following in America’s footsteps. Over the past decade, the U.S. military has transformed several of its annual bilateral exercises into multilateral drills, most notably Cobra Gold, Balikatan and Southeast Asia Cooperation and Training (SEACAT).

The advantage of multilateral exercises over bilateral engagements is that they help improve interoperability between and among all the participating countries. In addition, some countries are reluctant to exercise with their neighbours unless a bigger country like the U.S. takes the lead.

Peace and Friendship-2023 is in fact the fifth iteration of the exercise. The drills started as a table-top exercise between Malaysia and China in December 2014. The PLA and Malaysian Armed Forces then went on to hold two field exercises: a naval exercise in the Straits of Malacca in September 2015 and a small jungle warfare training exercise in November 2016. Two years later, the drills became a multilateral engagement when the Royal Thai Armed Forces contributed a small number of troops to Peace and Friendship-2018, another naval exercise off the coast of Malaysia. Another iteration of Peace and Friendship was planned for 2020 but was cancelled due to the COVID-19 pandemic.

Perhaps the most notable aspect of Peace and Friendship-2023 was that the naval forces from two Southeast Asian claimants in the South China Sea (SCS) participated. (Cambodia, Laos and Thailand sent only ground troops.) Vietnam sent the Gephard-class frigate HQ-016 Quang Trung and Malaysia the Kedah-class offshore patrol vessel KD Selangor (plus some special forces troops by air).

Although both countries’ navies had exercised with the PLA Navy (PLAN) before－both bilaterally and in ACMEX — this was the first time they had done so in a China-hosted multilateral exercise. Zhanjiang, moreover, is the headquarters of the PLAN’s South Sea Fleet, which is responsible for upholding Beijing’s territorial and jurisdictional claims in the SCS. Those claims have regularly led to friction between the PLAN and the Vietnamese and Malaysian navies.

It is noteworthy that the other main Southeast Asian claimant in the SCS, the Philippines, did not take part. As the exercise got underway, the Philippines was already hosting Kamandag 7, a training exercise in northern Luzon involving 3,000 troops from the U.S., Japan, South Korea and Britain. Kamandag-7 also began life as a bilateral exercise in 2016 before expanding into multilateral drills.

China and the Philippines are currently going through another of their tense periodic spats over Scarborough Shoal and Second Thomas Shoal. As such, it is hard to envisage the PLAN and the Philippine Navy working alongside each other in a friendly and cooperative manner. But with Vietnam and Malaysia, relations are a bit calmer with Beijing over the SCS. For Vietnam, it was another demonstration of how it balances relations with the U.S. and China.

Perhaps the most notable aspect of Peace and Friendship-2023 was that the naval forces from two Southeast Asian claimants in the South China Sea participated.

Overall, however, Peace and Friendship-2023 broke little new ground.

As with most of China’s previous exercises with Southeast Asian militaries, its focus was on building non-combat cooperation to address transnational threats such as piracy and maritime terrorism, as well as activities like search and rescue and humanitarian relief. Such threats are relatively uncontroversial as they are perpetrated by non-state actors or arise in the aftermath of natural disasters.

Moving forward, we can expect the frequency and size of China’s bilateral and multilateral military exercises with Southeast Asian countries to increase.

But whether these events will become less performative than they currently are is another matter. As I wrote in Fulcrum a few months ago, the advanced drills the U.S. military regularly holds with its Southeast Asian counterparts require a high degree of strategic trust.

China has already established a fair degree of trust with Cambodia, Laos and Thailand, primarily because they do not have territorial or maritime boundary disputes with Beijing. But with other regional states, and especially those that have overlapping claims with Beijing in the South China Sea, deep trust is much harder to win, and in some cases possibly unwinnable.

China, however, probably calculates that events like Peace and Friendship-2023 help to reduce the trust deficit with some of its neighbours, even if only marginally.

2023/282

Table of Contents

Fulcrum: 29 Dec, 2023

29 Dec, 2023

Troubled Waters Ahead for Philippine-Vietnam Strategic Partnership on the South China Sea

Same Moon, Different Dates for Hari Raya (Again!)

28 Dec, 2023

“Red Card” for the President? Vietnam’s Biggest Political Drama in Decades

On the Horns of Anwar’s Twin Dilemmas

27 Dec, 2023

China’s Military Exercises in Southeast Asia Belie Lack of Trust

Anwar’s First Year: Performative and Underperforming

26 Dec, 2023

Making Sense of Cambodia’s Reaction to AUKUS

Anwar Ibrahim’s Visit to Saudi Arabia: Is His Foot in the Door?

22 Dec, 2023

Is Malaysia’s “Green Wave” More a Tsunami of Discontent?

Anwar’s First 100 Days: Passing Grade but Stern Tests Ahead

Collaboration Between Pheu Thai and Move Forward Parties on Their Core Issues Will Determine Thailand’s Future

A Well-Earned Break … For Now

21 Dec, 2023

Laos as ASEAN Chair: Flying into Headwinds

Road to Carbon Zero in Southeast Asia: Spur Innovation and Price Carbon

20 Dec, 2023

Malaysia’s Identity Politics Will Perpetuate Exclusivity If Left Unchecked

19 Dec, 2023

The Postings of My Father: Tradeoff Between Privacy and Misinformation

ASEAN-Japan Relations at 50: Taking a Harder Edge

18 Dec, 2023

Xi Jinping in Hanoi: Courting for a Common Destiny?

Is the Establishment of a Spiritual Area on the Gadjah Mada Campus Linked to Joko Widodo?

15 Dec, 2023

The First Debate Unveils the Character of Indonesia’s 2024 Presidential Campaign

Carbon Border Adjustment, Trade and Climate Change: Emerging Issues at COP28

A Tale of Two (or More) Prime Ministers

14 Dec, 2023

The Prabowo-Gibran Pairing: Wise or Foolish?

Late to the Party: Vietnam and the Belt and Road Initiative

13 Dec, 2023

Mandarin Learning in Brunei’s Chinese Schools: Practical Considerations

12 Dec, 2023

Aspiring High: Unlocking Southeast Asia’s Potential through the ASEAN Digital Economy Framework Agreement

11 Dec, 2023

PAS’ Prime Minister Candidate: Great Expectations

8 Dec, 2023

October Offensive by Resistance Forces Exposes Gaps in Myanmar Military

6 Dec, 2023

No China Backlash, So Far: The Philippines’ New Assertive Transparency Policy in the South China Sea

5 Dec, 2023

Ringfencing the Islamic Cause? Muslim Youth and Philanthropy in Indonesia

4 Dec, 2023

Wars in Europe and Middle East Can affect East Asian Power Balance

Asia-Based Regional Banks’ Growing Footprint in Indonesia

1 Dec, 2023

A Green Industrial Policy for Indonesia

30 Nov, 2023

Myanmar-Russia Relations Since the Coup: An Ever Tighter Embrace

Structural Transformation for Inclusive Growth in Cambodia

29 Nov, 2023

Peace and Friendship-2023: Will It Reduce China’s Trust Deficit?