EXECUTIVE SUMMARY
• As digital platforms continue to evolve, youths increasingly employ social media, online forums, and digital campaigns to advocate for social and political change. While this phenomenon is often considered disparagingly as slacktivism, recent studies find that individuals engaging in digital activism often also participate in other conventional forms of activism.
• Despite a surge in youth activism across Southeast Asian countries, comparative analysis in this region remains scarce. Using data from the World Values Survey of several studies, and case studies on Indonesia, this article examines the extent to which online political activism serves as a catalyst for mobilization, awareness and community building among young people in Indonesia, Malaysia, Thailand and the Philippines.
• Additionally, it examines the interplay between online and offline political activism and its impact on traditional forms of activism.
• The study argues for a reciprocal relationship between online and offline political activism, particularly noting the potential for digital efforts to influence real-world action, especially on cohesive issues such as corruption.
Trends in Southeast Asia 2024/10, April 2024
EXECUTIVE SUMMARY
- The China-Philippines Bilateral Consultation Mechanism (BCM) was established in May 2017 for discussing issues of mutual concern in the South China Sea and exploring possible areas of cooperation, especially in oil and gas development. It was intended as a confidence-building measure and to show how China can cooperate with Southeast Asian claimant states.
- However, after eight rounds of meetings, the BCM has yet to embark on any oil and gas joint development. Despite some initial progress, cooperation in this area has stalled, due primarily to constitutional and legal constraints on both sides.
- The 2023 ruling by the Philippine Supreme Court, which declared that the 2005-2008 Joint Marine Seismic Undertaking involving companies from China, the Philippines and Vietnam was unconstitutional, has made it more challenging for Beijing and Manila to achieve a breakthrough in joint oil and gas development.
- China’s actions to prevent the Philippines from conducting oil and gas activities in the Philippines’ EEZ and Continental Shelf have led Manila to impose a ban on such activities in the West Philippine Sea, thereby complicating efforts to explore joint oil and gas development with China.
- The working groups on fisheries, oil and gas, marine scientific research and environmental protection, and political security, formed under the BCM framework, function more like discussion groups, without producing any concrete results.
- Rising tensions in the SCS between China and the Philippines, compounded by the Taiwan issue, have further hindered the BCM’s ability to fulfil its original objectives. Nevertheless, Beijing is likely to press ahead with the BCM, in line with its position that the SCS disputes must be left to the directly concerned parties.
* Lye Liang Fook is Senior Fellow in the Regional Strategic and Political Studies Programme at ISEAS – Yusof Ishak Institute.
ISEAS Perspective 2024/26, 9 April 2024
INTRODUCTION
Almost seven years have passed since the China-Philippines Bilateral Consultation Mechanism (BCM) was established in May 2017 to discuss mutual issues of concern and work towards practical cooperation in the South China Sea (SCS). But at their last 8th BCM in January 2024, the two countries failed to reach agreement on any concrete projects, particularly on oil and gas cooperation, despite some initial progress made in the earlier years.
In fact, the 8th BCM reflected growing differences between the two countries, with China calling on the Philippines to properly manage maritime emergencies related to Ren’ai Jiao (or Second Thomas Shoal), where Beijing had interdicted Manila’s resupply missions to the Sierra Madre, a marooned ship on the shoal. More significantly, China demanded that the Philippines abide by the one-China principle on the Taiwan issue.
How did the BCM, meant to foster trust and confidence between the two countries, end up amplifying their differences? To shed light on this issue, this paper examines China’s rationale for establishing the BCM, the state of progress of the BCM, the challenges faced by the BCM and China’s expectations of the BCM going forward.
BCM’S ORIGINS AND PURPOSES
Beijing is against the internationalisation of and involvement of third parties on the SCS issue. However, its expansive claims in the SCS came under international spotlight when the 2016 arbitral tribunal ruled that its claims based on its self-proclaimed historic rights had no legal basis.[1] Before the ruling, Beijing had been criticised for building artificial islands in the SCS. After the ruling, Beijing insisted that it would complete the building of these islands and outfit them with military structures and facilities.[2] It even took punitive action against the Philippines for initiating the ruling,[3] and other countries for siding with the United States on this issue. [4]
To improve its image and regain the initiative on the SCS issue, Beijing devised the idea of a BCM to discuss and cooperate on mutual issues of interest in the SCS with the Philippines. If the BCM made progress, it would bolster Beijing’s call for the SCS issue to be left to the directly concerned parties, i.e., the claimant states themselves. By extension, argued Beijing, extra-regional powers like the United States would have no grounds to interfere.
Beijing was provided the opportunity to showcase its preferred approach when Philippine President Rodrigo Duterte assumed office in June 2016 and ended his predecessor’s policy of confronting China on the SCS issue. During Duterte’s visit to Beijing in October 2016, the two countries agreed to establish a BCM that would meet regularly to address mutual issues of concern, and explore areas of cooperation in the SCS.[5]
The BCM convened its first meeting in Guiyang, China, in May 2017,[6] just after the ASEAN-China Senior Officials Meeting (SOM), to discuss the implementation of the Declaration on the Conduct of Parties in the South China Sea (DOC).[7] By hosting the BCM back-to-back with the ASEAN-China SOM, China sought to reinforce the message that the directly concerned parties were taking proactive measures and were capable of handling the SCS issue themselves.
The BCM underpins Beijing’s “dual track” approach on the SCS issue. One track involves China and ASEAN working together on the DOC and a prospective code of conduct of parties in the SCS (COC) to address wider issues related to peace and stability in the SCS. The other track, encompassing the BCM, involves the directly concerned parties working bilaterally to address their differences and finding a way forward on the SCS issue. The BCM was further meant to be a confidence-building measure to build trust and strengthen China-Philippines relations through practical cooperation. If successful, it could be a reference for China to collaborate with other Southeast Asian claimant states in the SCS.[8]
BCM’S LIMITED OUTCOMES
So far, eight BCMs have been held (see Annex). At the 1st BCM in May 2017, China organised a ceremonial launch, with the Chinese and Philippine co-chairs jointly sounding a gong, followed by an exchange of gifts and a photo-taking session, to get the meeting off on a positive footing. It saw the launch as an indication of the “great importance” the two countries attached to consultations, and their commitment to properly manage the SCS issue with a “positive and constructive attitude”.[9]
Some progress was made in the initial years. The first BCM agreed on its terms of reference, the composition of its members and the frequency of its meetings. The 2nd BCM in February 2018 agreed to convene technical working groups in the specific areas of fisheries, oil and gas, marine scientific research and environmental protection, and political security.[10] These working groups were convened in subsequent BCMs although there is scant information to date on what was achieved. It appears that the working group discussions were largely confined to exchanging views and fostering understanding of each other’s positions. By the 7th and 8th BCMs in 2023 and 2024 respectively, there was no further mention of the convening of these working groups.
The only area where there was initially some progress was in the oil and gas sector. At the 3rd BCM in October 2018, China and the Philippines discussed the possibility of joint exploration and development in oil and gas. They subsequently signed a Memorandum of Understanding (MOU) on Cooperation on Oil and Gas Development during Chinese President Xi Jinping’s visit to the Philippines in November 2018.[11]
China regarded the MOU as a “new step forward” and expressed its wish to comprehensively advance practical cooperation with the Philippines in various maritime areas. It even looked forward to strengthening communication with the other SCS littoral states to cooperate in similar areas to make the SCS a sea of peace, friendship and cooperation.[12] Beijing had expected the BCM to be a model for its cooperation with other Southeast Asian claimant states.
The MOU called for the setting up of an inter-governmental joint steering committee to negotiate and agree to the cooperation arrangements and the maritime areas to which they will apply.[13] The two countries committed themselves to agree on the cooperation arrangements 12 months from the MOU signing, i.e., by November 2019.[14] However, the inter-governmental joint steering committee only convened in October 2019, around the same time as the 5th BCM,[15] with no specific agreement reached.
The Covid-19 pandemic further disrupted progress with the 6th BCM held online 19 months later in May 2021. In June 2022, the Philippines initiated the termination of joint oil and gas negotiations with China.[16] At the 8th BCM in January 2024, there was no more talk about oil and gas cooperation. Instead, China called on the Philippines to properly manage emergencies related particularly to the Second Thomas Shoal. It further brought up the Taiwan issue which was beyond the scope of the BCM.
OBSTACLES IN OIL AND GAS COOPERATION
Intractable Constitutional and Legal Constraints
The foremost reason for the lack of progress on the China-Philippines oil and gas cooperation are the intractable constitutional and legal constraints, which both sides could not overcome. China’s preference was for both countries to temporarily set aside sovereignty-related issues while pursuing joint development in a disputed area.[17] However, setting aside sovereignty-related issues is unacceptable to the Philippines because Manila views this oil and gas cooperation as taking place within its own exclusive economic zone (EEZ), thus falling under the Philippines’ sovereign rights. For example, according to the 2016 arbitral tribunal ruling, the gas-rich Reed Bank is a fully submerged feature within 200 nautical miles from the archipelagic baselines of the Philippines, and is hence part of the Philippines’ EEZ.
Meanwhile, China sees the Reed Bank as a disputed feature and does not accept that the Philippines has exclusive sovereign rights to resources in this area. Doing so would contravene China’s own domestic laws.[18] Article 2, Chapter 1 of China’s “Regulation on Foreign Cooperation in the Exploitation of Offshore Petroleum Resources” states that “all petroleum resources in the internal waters, territorial sea and continental shelf of the People’s Republic of China and in all sea areas within the maritime jurisdiction of the People’s Republic of China belong to the People’s Republic of China”. The same article further states that in the sea areas mentioned above, “all buildings and structures set up and vessels operating to exploit petroleum, as well as the corresponding onshore oil (gas) terminals and bases, shall be under the jurisdiction of the People’s Republic of China.”[19]
Two earlier failed attempts underscore the difficulties of overcoming existing constitutional and legal constraints. The first is the Joint Marine Seismic Undertaking (JMSU)[20] between China, the Philippines and Vietnam from 2005-2008 in Block SC-72 on the Reed Bank, which lapsed as Manila considered it a violation of the Philippine Constitution. In 2012, a second attempt was made by China National Offshore Oil Company (CNOOC) and Philex Petroleum (now PXP Energy) to collaborate in SC-72. However, just before the two companies were about to sign an agreement, the Philippine government wanted to include additional wording to clarify the roles of both parties in terms of the owner and developer. This would require China to recognise the Philippines as having sovereign rights over SC-72, which was unacceptable to Beijing. Hence, the deal fell through.[21]
The 2016 arbitral tribunal award, which reaffirmed the Philippines’ sovereign rights in its EEZ and Continental Shelf, has become central to Manila’s diplomatic positions in the BCM discussions with China.[22] Even President Duterte, who advocated closer China ties, affirmed the award as part of international law and rejected attempts to undermine it in 2020.[23] Furthermore, the 2023 Philippine Supreme Court’s ruling that the JMSU was unconstitutional has made it imperative for the Philippines to adhere to the safeguards provided in Section 2, Article 12 of its Constitution in joint oil and gas development with China.[24] This article states that “The exploration, development, and utilisation of natural resources shall be under the full control and supervision of the State.”[25]
According to Antonio Carpio, former Supreme Court associate justice, the 2023 Supreme Court’s ruling upholds the four modes in the Philippine Constitution for joint oil and gas development, namely, direct undertaking, co-production, joint venture, and production-sharing agreements. Only companies that are 60% owned by Filipinos can participate under the last three modes; foreign majority-owned companies can only participate in a direct undertaking by the State by becoming a service contractor of the State. Under this arrangement, the Philippine government has full control and supervision over all activities.[26]
China’s Opposition to the Philippines’ Unilateral Oil and Gas Activities
China’s maritime vessels have prevented Philippine vessels and other foreign vessels from working with Manila to conduct research and seabed exploration activities in the Philippine EEZ and Continental Shelf disputed by China.[27] These actions appear to be aimed at pressuring the Philippines to conclude an oil and gas deal with Beijing via the BCM framework. Beijing is cognizant that the Philippines urgently needs alternative oil and gas resources to replace the existing Malampaya gas field that supplies a fifth of the country’s energy needs and that is expected to run dry by 2027.[28]
China is also apparently telling the Philippines that it cannot conduct oil and gas activities, either unilaterally or jointly with other countries, in these areas without Beijing’s approval. And seeking approval would mean that the Philippines recognises China’s claims in its EEZ and Continental Shelf. Even if the Philippines were to conclude an oil and gas deal with China, there is no indication that Beijing would grant permission for Manila to conduct oil and gas activities in these areas.
Rather than give in to Beijing’s pressure, the Philippines opted to impose a ban on oil and gas activities in the West Philippine Sea (WPS), which stalled any attempt at reviving oil and gas cooperation between the two countries.[29] One reason behind the ban announced in March 2022 was China’s harassment of the survey vessels hired by the Philippine service contractors.[30] The ban was aimed at preventing any untoward incidents at sea in the disputed areas involving Chinese and Philippine vessels.[31] Thereafter, in June 2022, the Philippines unilaterally called off oil and gas negotiations with China, effectively handing over the responsibility to conclude a deal to the incoming Ferdinand Marcos Jr. administration.
Critics regard the ban as the Philippines buckling under Chinese pressure. They noted that Malaysia and Indonesia have persisted with oil and gas activities in their respective EEZs despite China’s threats and harassment. In their view, the Philippines should proceed with oil and gas activities in the WPS without being subjected to the restart of joint exploration talks with China.[32]
This is easier said than done. China is likely to continue to interdict such activities, which could lead to an escalation in the event of a miscalculation or mishap. Furthermore, if the Philippines were to provide some form of protection for its companies to harness resources in the WPS, China would probably do likewise, which could complicate matters. In fact, President Duterte disclosed in 2017 that China had threatened “war” if the Philippines insisted on drilling for oil and gas in disputed areas in the WPS.[33]
Deteriorating China-Philippine Relations
The deterioration in China-Philippine relations in the past two years has made it difficult for the BCM to deliver results, especially on oil and gas cooperation despite initial efforts after Marcos Jr. assumed office in June 2022. When Marcos visited China in January 2023,[34] both sides affirmed the importance of the BCM as a confidence-building measure and agreed to resume discussions on oil and gas development at an early date.[35]
However, during the 7th BCM in March 2023, two months after Marcos’ visit, the meeting merely made a general commitment to promote practical cooperation in areas such as diplomacy, defence, coast guard, oil and gas development, fisheries, maritime affairs, maritime search and rescue, and marine scientific research and marine environmental protection.[36] No breakthrough was achieved in terms of oil and gas joint development.
Moreover, the tone at the 7th BCM became more guarded, with the Chinese read-out saying that both sides agreed to “exercise restraint, make good use of the hotline between the two foreign ministries, improve maritime communication and dialogue mechanisms, and enhance talks and exchanges between different departments and on multiple levels”. Both sides further agreed to “manage and control differences and properly handle emergencies at sea through friendly consultations”.[37] This came after a series of incidents at sea especially one involving a Chinese coast guard vessel pointing a military-grade laser at a Philippine coast guard vessel on a resupply mission to Second Thomas Shoal in February 2023.[38] Also in February 2023, much to China’s chagrin, Manila granted US access to four more military bases in the Philippines during US Defence Secretary Lloyd Austin’s visit to the Philippines.[39]
By the 8th BCM in January 2024, China-Philippines relations had hit a new low. China’s read-out of the BCM said both sides agreed to “properly handle maritime emergencies, in particular, the situation on the ground at Ren’ai Jiao” (Second Thomas Shoal). This was the first time Second Thomas Shoal was specifically mentioned, reflecting rising tensions between the two countries near the shoal.[40]
More significantly, the 8th BCM exceeded its mandate with China lodging “solemn representations with the Philippines on Taiwan-related issues”, demanding that the Philippine “earnestly abide by the one-China principle” and “immediately stop its wrong words and deeds on Taiwan-related issues”.[41] The strong language was directed at Marcos who had earlier congratulated Taiwan’s independence-leaning candidate Lai Ching-te on his presidential election victory in January 2024.[42] In contrast, the Philippine read-out did not mention the Taiwan issue at all.[43]
WITHER THE BCM?
The BCM has not met its original objective of being a confidence-building measure, i.e., to discuss issues of mutual concern in the SCS and pursue practical cooperation especially on oil and gas development. Six years after the 2018 MOU was signed, the two countries have not reached agreement on any specific project.
The BCM has also not fulfilled its “pathfinder” role of showing that only the directly concerned parties, in this case the Philippines and China, are able to resolve their differences in the SCS through bilateral negotiations and without external interference. By extension, China’s longer-term expectation for the BCM to serve as a basis for similar cooperation with other claimant states such as Brunei, Malaysia and Vietnam, remains elusive.
Nevertheless, Beijing is likely to press ahead with the BCM as it bears President Xi Jinping’s personal imprint; he had agreed with Philippine President Duterte to establish this mechanism in October 2016. Discarding the BCM would be tantamount to acknowledging that his diplomacy had failed.
Moreover, the BCM enables Beijing to portray itself as a reasonable party by keeping the door open for consultation and cooperation despite current tensions with Manila. This was evident when China’s foreign ministry spokesperson said that the 8th BCM enabled both countries to: (i) implement the important consensus reached by the leaders of the two countries on maritime-related issues; (ii) continue to properly manage maritime-related conflicts and differences through friendly consultations; (iii) continue to promote practical maritime cooperation, and; (iv) jointly maintain maritime peace and stability.[44]
There is also a quasi-official Chinese view lauding Beijing’s effectiveness in getting the Philippines back onto the BCM track by using various means at its disposal including diplomacy, maritime rights protection, law enforcement, and military preparations.[45] Inherent in this message is a veiled threat that while Beijing remains open to talks with the Philippines, it could resort to tougher action if the need arises.
For the time being, given the tensions in the SCS between the two countries, Beijing is likely to continue with the BCM and hold it up as a strand of its multi-pronged approach in engaging the Philippines on the SCS issue. Even though Beijing appears to be wielding more of the stick now based on actions it has taken against Philippine vessels in the SCS, the BCM is there to show that China stands ready to talk with the Philippines at some future point.
ANNEX
| Event | Date | What transpired |
| 1st BCM | 19 May 2017 (Guizhou) | Co-chaired by China’s Vice Foreign Minister Liu Zhenmin and Philippine Ambassador to China Jose Santiago L. Sta. Romana. Agreed that the BCM should be a platform for confidence-building measures and for promoting maritime cooperation and maritime security. It will comprise equivalent officials from the respective foreign ministries and relevant maritime affairs agencies, and will meet alternately in China and the Philippines once every six months. Discussed the promotion of next-step practical maritime cooperation and possible establishment of relevant technical working groups. |
| 2nd BCM | 13 Feb 2018 (Manila) | Co-chaired by China’s Vice Foreign Minister Kong Xuanyou and Philippine Foreign Affairs Undersecretary for Policy Enrique A. Manalo. Exchanged views on ways to strengthen cooperation in areas such as marine environmental protection, fisheries, marine scientific research, and oil and gas. Discussed mutually beneficial joint initiatives and agreed to convene technical working groups in the areas of fisheries, oil and gas, marine scientific research and environmental protection, and political security. The technical working groups identified a number of possible cooperative initiatives although details of these initiatives were not made public. |
| 3rd BCM | 18 Oct 2018 (Beijing) | Co-chaired by China’s Vice Foreign Minister Kong Xuanyou and Philippine Foreign Affairs Undersecretary for Policy Enrique A. Manalo. Exchanged views on ways to enhance maritime cooperation in areas such as on recent developments in the SCS carrying political and security implications, maritime search and rescue, maritime safety, marine scientific research and environmental protection, and fisheries in relevant working group meetings under the framework of the BCM. Discussed possible cooperation in joint exploration and development of offshore oil and gas. |
| 4th BCM | 2-3 Apr 2019 (Manila) | Co-chaired by China’s Vice Foreign Minister Kong Xuanyou and Philippine Foreign Affairs Assistant Secretary Meynardo LB. Montealegre of the Office of Asian and Pacific Affairs. Exchanged views on strengthening maritime cooperation through the respective working groups. Areas covered included the development of the political and security situation in the SCS, maritime search and rescue, maritime security, marine scientific research and environmental protection and fisheries. Discussed cooperation in offshore oil and gas development. |
| 5th BCM | 28 Oct 2019 (Beijing) | Co-chaired by China’s Vice Foreign Minister Luo Zhaohui and Philippine Foreign Affairs Undersecretary for Policy Enrique A. Manalo. The working groups on political security, fisheries cooperation, and marine scientific research and environmental protection were convened. Considered to undertake mutually agreed practical maritime cooperation initiatives covering maritime search and rescue, maritime safety, and marine research or marine environment protection and fisheries cooperation in the SCS. Discussed establishing possible mechanisms for exchanges of visits and communication. (First meeting of the Philippines-China Inter-Governmental Joint Steering Committee on Cooperation on Oil and Gas Development was convened on the sidelines of the 5th BCM.) |
| 6th BCM | 21 May 2021 (via video link) | Co-chaired by China’s Assistant Foreign Minister Wu Jianghao and Philippine Foreign Affairs Undersecretary Elizabeth Buensuceso. The working groups on political security, fisheries cooperation, and marine scientific research and marine environmental protection were convened. |
| 7th BCM | 24 Mar 2023 (Manila) | Co-chaired by China’s Vice Foreign Minister Sun Weidong and Philippine Foreign Affairs Undersecretary Maria Theresa P. Lazaro (the first face-to-face BCM meeting since the onset of Covid-19). Agreed to promote practical cooperation in areas such as diplomacy, defence, coast guard, oil and gas development, fisheries, maritime affairs, maritime search and rescue, and marine scientific research and marine environmental protection. |
| 8th BCM (Shanghai) | 17 Jan 2024 | Co-chaired by China’s Assistant Foreign Minister Nong Rong and Philippine Undersecretary of the Department of Foreign Affairs Maria Theresa P. Lazaro. The Chinese side said that both sides agreed to improve maritime communication mechanism, properly manage maritime disputes and differences through friendly consultation, “properly handle maritime emergencies, in particular, the situation on the ground at Ren’ai Jiao” (i.e. Second Thomas Shoal), and constantly promote practical maritime cooperation. The Chinese side added that it “lodged solemn representations with the Philippines on Taiwan-related issues, demanding that the Philippine side should earnestly abide by the one-China principle and immediately stop its wrong words and deeds on Taiwan-related issues. The Philippines reiterates its adherence to the one-China policy and will continue to implement the policy in earnest”. The Philippine side did not mention the Taiwan issue in their read-out of the 8th BCM meeting. On the situation near Second Thomas Shoal, it said that “both sides presented their respective positions on the Ayungin Shoal and assured each other of their mutual commitment to avoid escalation of tensions.” It further said that both sides agreed to improve maritime communication mechanisms in the SCS, including communications between foreign ministries and coast guards of the two countries. It added that both sides agreed to initiate talks on academic exchanges on marine scientific research between Filipino and Chinese scientists. |
Meetings of the China-Philippines Bilateral Consultation Mechanism (BCM)
ENDNOTES
For endnotes, please refer to the original pdf document.
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EXECUTIVE SUMMARY
• Proton has been a vital part of Malaysia’s industrialization journey and a key pillar of its modernization drive.
• Launched in 1983 to fulfil then Prime Minister Mahathir Mohamad’s vision of a pride-infused national car company, the state-owned Proton grew quickly and captured a dominant share of the country’s domestic car market, aided in no small measure by generous protective measures and subsidies.
• However, in the subsequent decades, the car giant lost market share and power due to a variety of challenges, such as non-market performance requirements, less effective protection, and growing competition from a second national car firm and from global car companies.
• The automaker has had a variety of ownership structures over time, but was resolutely kept in domestic hands—public and private. This did increase control over the corporation, but did so at the expense of exposure to and adoption of leading-edge technology.
• This impasse was resolved in 2017, when Proton sold a 49.9 per cent share to the Chinese auto firm Geely. The joint venture has rejuvenated the carmaker, which has begun to reconquer market share through a number of popular SUVs.
• Despite this, the Malaysian auto market is becoming increasingly competitive. Going forward, Proton will need to begin to export significantly to expose its vehicles to new niche markets as well as global standards, obtain and retain skilled workers, and continue to rationalize costs in its supply chains and distributorship.
Trends in Southeast Asia 2024/9, April 2024
EXECUTIVE SUMMARY
• Following the formation of the Unity Government in December 2022, two of its component coalitions, Pakatan Harapan (PH) and Barisan Nasional (BN), jointly campaigned during the state government elections held in August 2023. A key question arising from this cooperation between PH and the BN lead party, the United Malays National Organization (UMNO), was the extent to which it would strengthen the appeal of both coalitions, especially among Malay voters.
• Using granular polling station and polling stream data for forty-seven seats contested by the PH member Democratic Action Party (DAP), this paper explores the effect of this relationship on voter support. This Trends in Southeast Asia finds that, contrary to expectations, DAP actually gained voter support from campaigning with UMNO.
• DAP gained an average 5 per cent increase in the level of support from 2022 to 2023, with an 8 per cent increase in Malay support and a 2 per cent increase in Chinese support.
• DAP would probably still have won at least forty-one of these state seats without transferring BN/UMNO votes, but working with UMNO allowed the DAP to win by comfortable margins some of what would usually be marginal seats for the party.
• The increase in support for the DAP was highest in Negeri Sembilan, at 6.7 per cent, followed by Selangor at 5.2 per cent Penang at 4.3 per cent and finally Kedah at 1.4 per cent.
• In general, DAP gained the largest transfer of Malay votes from older voters who show stronger allegiance to BN. These findings show that UMNO’s grassroots outreach is still somewhat effective among older voters but much less so among younger voters.
• The average support for PN in these DAP-contested seats increased from 13.1 per cent in GE2022 to 19.2 per cent in the 2023 state elections. Clearly, more of the Malay votes that previously supported the BN went to the Perikatan Nasional (PN) than to PH. The calculations in this article show that four out of five Malay voters who previously supported BN in these seats voted for PN in the 2023 state elections.
• Going forward, the DAP’s stranglehold over these seats may well become weaker, due to demographic changes, and if turnout and support for PH and the DAP should decrease among non-Malay voters.
Trends in Southeast Asia 2024/8, April 2024
EXECUTIVE SUMMARY
- Former two-time Thai prime minister Thaksin Shinawatra is back in Thailand after 17 years of exile overseas.
- He has lately captured a great deal of media and public attention and been at the centre of political intrigues and rumours.
- A recent poll showed him to be the most powerful person in Thai politics – even though he is a convict, whose jail term has just been commuted in a royal clemency from eight years to one.
- It is unclear whether he is actually the mastermind in the Thai political arena, or just a victim of his own complicated fate.
- His youngest daughter Paetongtarn is now leader of Pheu Thai, the main government party. She has no ministerial post in the Srettha Administration; however, she is widely regarded as the prime minister-in-waiting.
- Thaksin still faces two criminal charges in an old lese-majeste case. His younger sister, former prime minister Yingluck, is in exile, fleeing since 2017 a jail term of five years for dereliction of duty.
- Thaksin hopes to be absolved of all pending charges, and to enable Yingluck to return home scot-free.
- In return, Thaksin and Pheu Thai will – under some “secret deals” – work with the conservative establishment to keep the reformist Move Forward Party from gaining government power.
* Termsak Chalermpalanupap is Visiting Fellow and Coordinator of the Thailand Studies Programme, ISEAS – Yusof Ishak Institute.
ISEAS Perspective 2024/25, 5 April 2024
INTRODUCTION
Former two-time prime minister Thaksin Shinawatra[1] has undoubtedly captured a great deal of media and public attention in Thailand lately. In a recent survey, the 75-year-old IT media tycoon turned politician was voted the most influential person in Thai politics, eclipsing Prime Minister Srettha Thavisin, who came a distant second.[2]
Thaksin’s youngest daughter, Paetongtarn (36), is now leader of Pheu Thai (PT), the main government party. Thaksin has been grooming her to be prime minister, and she is in line to be the fourth in the Shinawatra family to head a Thai government.[3]
But how soon Paetongtarn, a mother of two with little political experience, will rise to the premiership depends, according to political rumours, on how promptly Thaksin delivers on his “secret deals” with the powers-that-be in the restless conservative establishment.[4]
Ever since he returned from 17 years of exile overseas on 22 August 2023, Thaksin has been at the centre of political intrigues and rumours. What is unclear is whether he is actually the mastermind in the political arena, or just a struggling captive of his own schemes and controversial past.
On his first return, Thaksin looked normal, cheerful and healthy. He paid careful respect to the portrait of King Maha Vajiralongkorn – obviously set up by his family for media consumption. Then he moved swiftly to greet his supporters and several PT bigwigs, including Phumtham Wechayachai, a deputy PT leader and one of the key negotiators for the formation of a new government. Thaksin was then whisked to a Bangkok prison, presumably to start serving eight years of a jail term stemming from past three convictions for corruption and conflict of interest.
That same afternoon, PT’s premiership candidate, Srettha, won approval in parliament to be the 30th prime minister of Thailand.[5] Those who voted for the 61-year-old real estate tycoon included 152 senators who were allies of then Prime Minister General Prayut Chan-o-cha. Those senators who supported Deputy Prime Minister General Prawit Wongsuwan, a premiership candidate of Palang Pracharat Party (PPRP), mostly abstained.
The PT has switched sides to team up with the PPRP, Bhumjaithai, and United Thai Nation (three major parties from the previous Prayut Administration), after ditching the Move Forward Party (MFP), which came first in the May 2023 general election. Srettha getting the premiership is widely believed to be part of “secret deals” done between Thaksin and whoever represented the conservative establishment, most probably, in this case, General Prayut.[6] Thaksin and General Prayut used to be sworn enemies, but both have found common interest in stopping the MFP from gaining government power.
Against all poll surveys and pundit predictions, the MFP had scored a huge surprise victory in the general election. It beat the PT – the hottest frontrunner – and came first with 151 House seats and nearly 14.44 million votes (in the second ballot for party-list House seats). The PT finished second with only 141 House seats and about 10.795 million votes. The MFP alone won more House seats and popularity votes than the PPRP, Bhumjaithai, and United Thai Nation combined.[7]
The spectacular victory of the MFP happened despite Thaksin’s active participation behind the scenes from his exile base in Dubai to drum up support for the PT. He even dispatched Paetongtarn to attract young voters. In March 2022, Paetongtarn assumed a high-profile but informal role as the “Head of Pheu Thai Family”. But it was too little and too late. Her political debut could not stop the MFP from overtaking the PT in the election.
THAKSIN’S “SECRET DEALS”
Thaksin’s return from exile is believed to be part of the “secret deals” widely discussed by news commentators and pundits. Their common assumption is that Thaksin, with the support of the PT, agreed to counteract the rise of the reformist MFP, protect the vested interests of the conservative establishment in general, and defend the monarchy in particular.
But what will Thaksin receive in return for his invaluable service?
For starters, Thaksin who had for more than a decade been talking about a homecoming,[8] would finally be allowed to return to Thailand safely, which he did on 22 August 2023. On the day of his return, PT’s premiership candidate, Srettha, won the top government post in parliament, with strong support of senators from General Prayut’s camp. This came in exchange for the PT’s break-up of their alliance with the MFP . The PT+MFP coalition had in July 2023 failed to win the premiership for MFP leader Pita Limjaroenrat – chiefly because of a lack of active support from senators.
Next, Thaksin would be given special consideration for his health issues while in fictitious “detention”. Before midnight on his first day in a Bangkok prison, Thaksin complained of severe chest pain and shortness of breath. He was rushed to the Police Hospital, arriving at 00:20 a.m. on 23 August, and sent to a premium suite on the 14th floor of the hospital. The whole process seemed well-planned and promptly executed.
According to the Corrections Department, Thaksin has had a long history of sickness, including long COVID and damage in his lungs, myocardial ischemia (reduced oxygen and blood flows in heart arteries), high blood pressure, and a weakened spine.[9] Thaksin had to be sent to the Police Hospital – instead of the prison hospital which would have been the case under normal circumstances – because he was suffering from some life-threatening heart conditions, and the prison hospital was not adequately equipped to handle such an emergency.[10]
Thaksin soon received the news that he had been waiting for. On 1 September, in response to Thaksin’s request for royal clemency, the Royal Gazette published the King’s decision to commute Thaksin’s jail term, reducing it from eight years to one.[11] However, in the published announcement, Thaksin was called a “male convict” (นักโทษเด็ดขาดชาย) who “admits guilt of his offence” (ยอมรับผิดในการกระทำ), and “repents for his wrongdoings” (มีความสำนึกในความผิด).[12]
Counter-signing the royal command was General Prayut, in his capacity as the caretaker prime minister. On 29 November, General Prayut was appointed a member of the Privy Council. The appointment, in effect, has removed the 70-year-old army strongman from national politics.
Thaksin might have hoped for a full pardon, so that he could return home as soon as his health permitted. Another setback is that his criminal record cannot be erased.[13] This means he is no longer eligible to hold public offices, certainly not a third premiership term.
Thaksin reportedly underwent several undisclosed treatments, including a surgery to repair torn ligaments in his right shoulder. He was seen in public only once, on 23 October, when he was wheeled out of his room to undergo CT and MRI scans.[14]
On 18 February, Thaksin was released under parole, having served the first 180 days of his one-year jail term under “detention” in the hospital. On his ride home, he was seen wearing a neck brace, and a protective elbow sling on his right arm.
However, unlike others released under parole, the Corrections Department said Thaksin did not need to wear any ankle electronic monitor device due to his old age and health conditions.
On 19 February, he was seen in a wheelchair at the Office of the Attorney-General, where he acknowledged a criminal case against him. He has been charged with violating Section 112, the so-called lese-majeste law, because of a media interview in Seoul in May 2015. He was accused of insulting the previous monarch, King Bhumibol, by implying that the king, who passed away in October 2016, had supported the Army’s coup against Thaksin a decade ago.
Thaksin was also charged with violating the Computer Law of 2017 for causing the creation and circulation of fake news harmful to national security. This particular violation carries a maximum jail term of five years; the violation of the lese-majeste law carries a jail term ranging from three to 15 years. Thaksin pledged not guilty to both charges. He was released on bail of 500,000 baht.
This is not the first time Thaksin has faced the charge of violating the lese-majeste law. Previously. all such similar charges against him had either been dropped by public prosecutors due to lack of evidence, or he was ruled not guilty in court.
The Chief Attorney-General has scheduled 10 April for announcement of his decision on how to proceed in this case against Thaksin. In late 2015, a different Chief Attorney-General put on record his opinion that the case was prosecutable, pending the arrest of Thaksin. Should the Chief Attorney-General decide to prosecute Thaksin, it will still take quite some time, perhaps years, before a final verdict can be reached. Meanwhile, Thaksin will be handicapped by uncertainties, not knowing how and when the lese-majeste case against him will end.
On 20 February, Thaksin received his first VVIP guest at home – former Cambodian prime minister Hun Sen. After a private lunch, Hun Sen returned to Phnom Penh without calling on Prime Minister Srettha.[15] Three days later, it was Srettha’s turn to visit Thaksin. Thaksin has been permitted to travel to his hometown of Chiang Mai, from 14-16 March, for an early Sheng Meng, to pay respect to his deceased parents and ancestors (Hakka Chinese in Moichu, Canton).
BEATEN BUT STILL HOPEFUL
For a short while, the Constitutional Court’s ruling on 24 January to acquit Pita for holding iTV shares[16] raised new hope in the MFP. With his return as an MP, Pita could help the MFP score more political points as the chief opposition party in the House of Representatives. The MFP, after all, can be a potent counterbalance to the PT.
The short-lived optimism was soon brutally dashed by another Constitutional Court’s ruling just one week later. The Constitutional Court, in a unanimous decision by all its nine judges, ruled that the MFP had abused freedom and liberty in order to overthrow the democratic system of government of the constitutional monarchy; this is prohibited under Section 49 of the Constitution. The Constitutional Court ordered the MFP to stop all activities relating to the call to abolish Section 112 of the Criminal Code (the lese-majeste law).[17]
The Constitutional Court cited as unconstitutional two major incidents: the MFP’s use of Section 112 as a campaign issue in the general election of May 2023; and the MFP’s proposed bill submitted on 25 March 2021 by Pita and 43 MPs of the MFP to amend Section 112.[18]
However, the Constitutional Court’s ruling did state that any change to the lese-majeste law can only be done through proper legislative means.[19] This has raised a sticky legal question whether the Constitution Court could find fault with the 44 MPs of the MFP who submitted the controversial bill in 2021, since they were exercising their legitimate legislators’ rights.
After the ruling, the MFP removed from its website all references to its policy on Section 112. Yet, the MFP still questions whether the Constitutional Court has the authority to prevent MPs from doing their job in the House. On 6 March, the MFP proposed to the House Speaker the formation of an ad hoc House committee to study this issue.[20]
The MFP now faces a grim prospect of imminent dissolution as a follow-up punishment for the serious wrongdoings. The offences cited in the ruling of the Constitutional Court constituted a violation of Section 92 (Paragraph 1) of the 2017 Political Party Act. On 11 March, the Election Commissioners reached a unanimous decision to request the Constitutional Court to dissolve the MFP.[21]
The Constitutional Court, when it is its turn to act, may ask the MFP to testify to defend itself. In the case of Future Forward Party, the MFP’s predecessor, the Constitutional Court took less than two months to announce its final decision on 21 February 2020 to that party, and to ban its executive committee members, including founder and party leader, Thanathorn Juangroongruangkit, from national politics for ten years.
Facing a similar ban are Pita and other members of the MFP’s executive committee from 2020 to September 2023. Pita and four others are party-list MPs.[22] They can resign before the dissolution of their party and thus enable the MFP to keep those five House seats by filling them with others on the party’s list. After dissolution of a party, its MPs (who are not on the affected executive committee) will have 60 days to join another party and keep their House membership.[23]
Also facing a ban are those 44 MPs who sponsored the bill to propose amendments to the lese-majeste law in 2021. Apart from Pita, the others in this group included several well-known MFP rising stars, notably: Ms Sirikanya Tansakul, Viroj Lakhana-adisorn, Rangsiman Rome, Natthawudh Buapathum, Ms Benja Saengchan, and Pakornvudh Udompipatsakul.[24]
In addition, Pita was saddled with a new criminal conviction on 5 February for organising an unlawful “flash mob” within 150 metres of a royal residence (namely Princess Sirindhorn’s) near the MBK Mall. He is appealing the conviction, which includes 4 months of suspended jail term.[25] A criminal conviction, once finalised in the Supreme Court, disqualifies the convicted from holding public offices – just like in the case of Thaksin.
Once Pita and his colleagues are knocked out from active national politics, who shall then emerge to form the third generation of reformists to continue working for structural changes in Thailand? Some party insiders hold hope of seeing some among the MFP’s current economic advisors to step forward.[26] Ms Sirikanya, leader of the group, should be able to do so, at least temporarily.[27]
WHAT IS TO BE DONE?
Obviously, most in the embattled MFP would not give in to despair. They believe the MFP, standing on the shoulder of its dissolved predecessor Future Forward Party, has woken up Thailand with its convincing call for reforms. A significant number of Thai voters have embraced the MFP’s reformist ideas and can-do mentality. More than 14 million of them voted for MFP candidates in the last election, even without knowing many of them personally. Their common goal now is to win more than 250 House seats in the next general election and form a single party government in order to change Thailand for the better.
However, in the next electoral battle, it will be much more difficult for any single party to score a majority victory. Traditional conservative parties are trying to rebrand themselves as “neo-conservative”, “modern conservative” or “liberal democratic”. They still enjoy implicit support from their allies in the bureaucracy, the military, and even the judiciary.
At the same time, the skilful PT will be able to make good use of its government power to gain popular support. It can also count on Thaksin’s political ingenuity and connections. Once again, the PT + Thaksin and the conservative establishment will still share one common interest in the unfinished crucial mission to stop the reformist movement.
Rumours are spreading, once again, that a “new secret deal” is being developed. Thaksin certainly hopes to be absolved of all remaining criminal charges in the pending lese-majeste case. More importantly, he also wants Yingluck to be able to return from exile without having to face any charges.
The former first Thai female premier mysteriously fled the country through the Thai-Cambodian border in August 2017. Her bail money of 30 million baht has been confiscated. One month after her disappearance, she was convicted for dereliction of duty (for failing to stop the massive corruption in the paddy pledging scheme of her government). And she was sentenced to five years in jail.
Spending time in a hospital, a la Thaksin, after returning from exile and awaiting a royal clemency will be more difficult to arrange for Yingluck. The 56-year-old single mother of one teenage son looks healthy and in high spirits in her seventh year of exile. One practical alternative for Yingluck is “home detention” in lieu of actual imprisonment.[28] All in all, Thaksin will be asking for quite a lot of favours for himself and Yingluck. But what can he give in return?
CONCLUSION
Several past rumours have turned out to be true: It had turned out that Thaksin has not needed to spend time in prison; Srettha – who has no leadership role in the PT – did become the 30th prime minister of Thailand; Paetongtarn did walk in unopposed to lead the PT; and Move Forward Party is facing dissolution, etc.
More exciting developments are unfolding in Thailand. And soon it will be clearer whether Thaksin is indeed the mastermind, or just a victim of his own complicated fate.
ENDNOTES
For endnotes, please refer to the original pdf document.
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EXECUTIVE SUMMARY
- Decades of cultivating relations between Japan and Southeast Asia have not only strengthened their diplomatic and economic ties but also deepened interpersonal and societal interactions, ultimately shifting Southeast Asians’ postwar animosity towards Japan into a prevailing positive sentiment today.
- While Japan’s significance to the region in the economic sphere has relatively declined, its soft power and people-to-people connections with the region have never been more profound.
- The burgeoning human connections between Japan and Southeast Asia are exemplified by their increasingly symbiotic labour relations, Japan’s longstanding contributions to Southeast Asia’s human resources development, and growing mutual tourist flows and cultural appreciation.
- These connections will invigorate Japan-Southeast Asia relations going forward, and underscore Southeast Asia’s growing importance to Japan beyond its traditional role as a market or investment destination.
- Southeast Asia is becoming a reservoir of alternative resources for sustaining Japan’s economic growth, signifying a more balanced and reciprocal partnership.
*Hoang Thi Ha is Senior Fellow and Co-coordinator of the Regional Strategic and Political Studies Programme, and Pham Thi Phuong Thao is Senior Research Officer of the ASEAN Studies Centre at ISEAS – Yusof Ishak Institute, Singapore.
ISEAS Perspective 2024/24, 3 April 2024
INTRODUCTION
Last year, ASEAN and Japan celebrated the 50th anniversary of their dialogue relations with the establishment of the ASEAN-Japan comprehensive strategic partnership. The evolution of this relationship, initially overshadowed by bitter memories of Japan’s occupation and atrocities during the Second World War, as well as concerns over Japan’s economic expansion in the 1960s and 1970s, into one characterised by deep strategic trust and mutual interdependence today is a remarkable achievement. This transformation has been made possible thanks to Southeast Asia’s forward-looking and pragmatic approach that prioritised their security and development needs rather than their past trauma. It has also been nurtured through decades of Japanese strategic assurances, economic engagements, and sustained efforts to be a steadfast friend and a good neighbour.[1] A milestone in this journey is the Fukuda Doctrine, which laid the foundations for Japan’s contemporary relations with Southeast Asia. Launched in 1977 amid a wave of anti-Japanese sentiments, the doctrine committed Japan to pursue peace and relinquish military dominance, support regional economic growth, and foster a “heart-to-heart” equal partnership with Southeast Asian nations.[2]
Today, Japan enjoys the highest level of trust among the public and the elite circles in Southeast Asia, surpassing all other major powers.[3] This achievement has been attributed to several factors. First, Japan has played a crucial and constructive role in shaping the regional order through its active engagement with and support for ASEAN multilateralism and its member countries, serving as a stabilising force amid periods of US disengagement, neglect or distraction from the region. Second, Japan has been a significant contributor to Southeast Asia’s economic ascendancy through its investments, trade ties and development assistance. It is the largest provider of Official Development Assistance (ODA) to the region, its fourth largest trading partner, and among its top sources of foreign direct investment (FDI).[4]
Another crucial yet often overlooked factor is the intensity of people-to-people connections between Japan and Southeast Asians. These connections have never been more profound in history. Nearly 50 years since the Fukuda Doctrine, the “heart-to-heart” dimension in the relationship is coming to fruition not only at the inter-governmental level but also in the broader fabric of societal and interpersonal interactions.[5] This article delves into the expanding human connections between Japan and Southeast Asia in three dimensions, namely (i) labour cooperation; (ii) education and human resource development; and (iii) tourism and cultural flows. It argues that these connections will bring new momentum to Japan-Southeast Asia relations. Notably, these human ties underscore the growing importance of Southeast Asia to Japan, transcending its traditional role as a market and production base for Japanese products and companies. The region is becoming a reservoir of alternative resources for sustaining Japan’s economic growth, signifying a shift towards a more balanced and reciprocal partnership between both sides.
INCREASINGLY SYMBIOTIC LABOUR RELATIONS
Beyond trade, aid and investment, the symbiosis between Japan and Southeast Asia extends significantly into the labour sector. Southeast Asia has become an increasingly important source of labour for Japan, which has been grappling with economic challenges stemming from its ageing population and shrinking workforce. The Japanese population was 122.4 million in 2023, down 800,523 from a year earlier, marking the largest drop since 1968.[6] Of these, 59.5% or 72.8m are of working age (15-64), and this figure is projected to drop to 45.4 million in 2070.[7] According to the Japan International Cooperation Agency (JICA), to maintain economic growth, Japan will need 6.74 million foreign-born workers by 2040, nearly quadrupling the number of foreign workers in Japan in 2020.[8]
As Japan’s demographic challenges become more acute, the importance of foreign workers is poised to grow. In October 2023, the number of foreign workers hit a record 2.05 million, up 12.4% from 2022 and a two-fold increase from 2012. Vietnam is now the largest source of foreign labour in Japan, with 518,364 workers (25.3% of the total). The Philippines is another significant source, with 226,846 workers (11.1%).[9] The number of workers from Indonesia and Myanmar is increasing rapidly.[10] Southeast Asian nationals collectively represent one-third of all foreign residents in Japan (Table 1).
Table 1: Southeast Asian Nationals in Japan
| Total foreign residents in Japan | 2020 | 2021 | 2022 |
| 2,887,116 | 2,760,635 | 3,075,213 | |
| Indonesia | 66,832 | 59,820 | 98,865 |
| Cambodia | 16,659 | 14,736 | 19,604 |
| Singapore | 2,958 | 2,738 | 3,306 |
| Thailand | 53,379 | 50,324 | 56,701 |
| The Philippines | 279,660 | 276,615 | 298,740 |
| Viet Nam | 448,053 | 432,934 | 489,312 |
| Malaysia | 10,318 | 9,659 | 11,045 |
| Myanmar | 35,049 | 37,246 | 56,239 |
| ASEAN | 912,908 | 884,072 | 1,033,812 |
Source: Immigration Services Agency of Japan, 2023
Japan’s demand for foreign labour has necessitated the establishment of legal and regulatory frameworks for this purpose. In 1993, Japan introduced the Technical Intern Training Programme (TITP) with the intent to make international contributions through human resource development. However, the TITP with its strict transfer restrictions has been criticised as providing a backdoor for Japanese employers to secure cheap labour without sufficient protection of foreign workers’ rights, leading to labour abuses.[11] In 2019, the Specified Skilled Worker (SSW) system was launched to recruit foreign specialists to work in certain industrial fields. All Southeast Asian countries, except Brunei and Singapore, have signed cooperation agreements with Japan regarding the SSW system. Vietnam is the largest participant in both the TITP and SSW schemes, accounting for 54% of TITP trainees and 59% of SSW.[12]
Amid mounting criticisms of the TITP, an advisory panel for the Japanese government issued a report in 2023 proposing its replacement with an alternative scheme to be incorporated within the SSW framework. One of the aims is to facilitate foreign workers trained under the new scheme to shift to the SSW so that more foreign workers will be able to perform highly skilled jobs.[13] The report is anticipated to pave the way for the Japanese government to submit a bill to the parliament in 2024 to enact the new scheme.[14] The imperative to reform the TITP, originally designed to foster human resources for the benefit of the sending countries, reflects the evolving nature of labour cooperation between Japan and Southeast Asia, underscoring the significance of Southeast Asia as a co-creator of prosperity for Japan rather than merely being a beneficiary.
However, a significant segment of the Japanese populace maintains deep-seated reservations about migration. 35% of Japanese respondents in a 2020 survey done by the International Labour Organization (ILO) said that their country does not need low-skilled workers, 52% thought that crime rates had increased due to migration, and 41% thought that migrant workers threatened Japanese culture and heritage. The survey also pointed out that Japanese people have the lowest level of encounters with foreign workers, compared to Southeast Asian labour importing countries such as Singapore and Malaysia.[15]
While being mindful of public backlash, the Japanese government has taken incremental steps to attract more foreign labour. As highlighted by Yusaku Yoshikawa, “attracting foreign workers is not an act of kindness, but an imperative for Japan”.[16] This has become all the more urgent as Japan is becoming less appealing to Southeast Asians due to the situation of stagnant wages, a weakened Yen, and limited prospects of job replacement and long-term residence associated with the TITP scheme. New measures adopted by the Japanese government in 2023 include two new immigration pathways to attract foreign talents[17] and amending the Immigration Control and Refugee Recognition Act which is meant to enhance immigration management and protect the rights of foreign nationals.[18] The SSW visa will likely be expanded to include new sectors of road transportation, railways, forestry and timber.[19]
As for Southeast Asia, Japan has made concrete commitments in the Implementation Plan of the 2023 ASEAN-Japan Joint Vision Statement to “further ease barriers to entry for foreign workers in professional and technical fields to work in Japan”, including through language training, education and skill programmes for Southeast Asian workers, and explore mutual recognition of workers’ skills.[20] Japan should also foster mutual understanding and integration between local communities and foreign workers. With foreign nationals projected to constitute 10.2% of Japan’s population in 2067, they will increasingly become an integral part of local communities in both cities and rural areas.[21] Therefore, adjustments and accommodations are imperative to prevent backlash from arising on either side. On their part, Southeast Asian countries should step up efforts to curb misconduct by sending organisations, eliminate brokers in the process, and educate their workers about Japanese laws and regulations.
C0-CREATING TALENT: JAPAN’S SUPPORT FOR SOUTHEAST ASIA’S HUMAN RESOURCE DEVELOPMENT
Closely intertwined with Southeast Asia-Japan labour relations is the significance of Japan’s support for education, training, and capacity building in the region over many decades. Japan has been a trailblazer in this respect with the roll-out of the ASEAN Human Resources Development Project in the 1980s aiming to “cultivate talent for the future of the ASEAN region”. Japan has played an instrumental role in aiding industrial human resource development and higher education in the original ASEAN members in the 1980s and in providing capacity-building for the newer ASEAN members – Cambodia, Laos, Myanmar and Vietnam (CLMV) since their opening-up and reforms in the 1990s.
Japan’s support includes the establishment of human development institutions in these countries (Table 2), capacity building projects for their government and education institutions, and provision of scholarships in Japanese universities. According to JICA, Japan-supported programmes have cultivated 12,508 industrial talents in the region as of 2022.[22] Japan is also the biggest bilateral ODA provider for Southeast Asia’s education sector with US$1.03 billion spent for 2,760 projects from 2015 to 2021, surpassing the US which contributed US$670 million for 651 projects. Conversely, China’s contribution in this domain remains modest, totalling only US$155 million for 41 projects.[23]
Table 2: Japan-Supported Human Development Institutions in Southeast Asia
| Country | Japan-Supported Human Development Centres |
| Brunei | N.A. |
| Cambodia | Cambodia-Japan Cooperation Centre |
| Indonesia | Center for Vocational and Extension Service Training |
| Laos | Laos-Japan Human Resource Development Institute |
| Malaysia | Centre for Instructor and Advanced Skill Training |
| Myanmar | Myanmar-Japan Center for Human Resources Development |
| Philippines | Philippines Human Resources Development Center |
| Singapore | Singapore Productivity Development Project (the Kaizen project) |
| Thailand | Thailand Primary Healthcare Training Center; Thai-Japan Institute for Technological Promotion; Sirinthorn International Institute of Technology |
| Vietnam | Vietnam-Japan Institute for Human Resources Development |
Source: Compiled by authors, based on different sources
In addition to bilateral frameworks, Japan has sponsored several multi-year multilateral initiatives that have earned widespread acclaim and appreciation from generations of participants. These initiatives include the Japan East-Asia Network of Exchange for Students and Youths (JENESYS)[24] and the Attachment Programme at the ASEAN Secretariat for CLMV Diplomats/Officials.[25] Japan’s support for ASEAN integration through education and human resources development has garnered significant appreciation from Southeast Asians, as evidenced in a public survey conducted by the Ministry of Foreign Affairs of Japan in 2019.[26]
This support does not merely represent a benefactor-beneficiary relationship but as a collaborative endeavour in human resource development. Japanese companies, both domestically and overseas, increasingly rely on quality labour from Southeast Asian countries. Therefore, investing in human capital development in the region not only benefits Southeast Asia but also strengthens Japan’s economic ties and competitiveness in the global market. Acknowledging this symbiotic relationship, the Ministry of Economy, Trade and Industry (METI) includes “building an ecosystem for co-creation of dynamic human capital” as a key component of its ASEAN-Japan Economic Co-Creation Vision and Future Design and Action Plan. This component encompasses building a network of young Japanese and ASEAN business leaders and promoting the circulation of human resources through endowed courses, overseas internship programmes and job fairs, among other things. Prime Minister Fumio Kishida’s announcement at the 2023 ASEAN-Japan commemorative summit further underscores Japan’s dedication to human resources development in Southeast Asia, with a plan to train 5,000 people in domains such as maritime safety and digitalisation over the next three years.[27]
MUTUAL TOURISM AND CULTURAL APPRECIATION
One of the most remarkable achievements in Japan-Southeast Asia relations is the transformation of Southeast Asians’ postwar animosity into a prevailing positive attitude towards Japan across the region. This stands in contrast with Northeast Asia, where Japan’s militant past remains deeply apprehended and heavily politicised. According to a public survey in 2023, the perception of Japan as “a combative nation” has significantly diminished among Southeast Asians, registering at only 4% whereas 88% positively appreciate Japan as a “peace-loving nation”.[28] Instead, their top impressions about Japan are its strong economy and advanced technology, rich traditions and culture, natural beauty, high standard of living, and its introduction of new cultural trends such as animation, fashion, and cuisine. As noted by Lam Peng Er, “Time does not naturally heal, but common interests, patience, goodwill, and political wisdom on both sides helped to eventually overcome this problem of the heart”.[29]
The “heart-to-heart relationship” between ASEAN and Japan finds its most tangible expression in the cultural sphere and the burgeoning tourism ties between their peoples. Initially, cultural and tourist flows predominantly represented a one-way movement from Japan to Southeast Asia. However, in the past decade, there has been a notable shift towards more balanced, two-way interactions and mutual appreciation. For instance, visitor arrivals to Japan from six major ASEAN countries, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, increased more than six folds from 325,000 in 1990 to more than 2 million in 2015.[30] Between 2008-2018, the number of Vietnamese tourists to Japan soared by 868.1%, followed by Thailand (489.3%) and Indonesia (448.7%).[31] Before the pandemic, Southeast Asian tourists visiting Japan surpassed 3.8 million, comprising 12% of total international arrivals to Japan in 2019. They also play a significant role in Japan’s post-pandemic tourism recovery, with 3.6 million arrivals in 2023, accounting for 14.5% of total international arrivals to Japan (Table 3).[32] According to the State of Southeast Asia 2023 survey done by ISEAS-Yusof Ishak Institute, Japan is the most popular tourist destination for more than 27% of Southeast Asian respondents, surpassing the second-place EU (15.3%) and third-place US (9.7%).[33]
Table 3: Southeast Asian Visitors to Japan
| 2019 | 2023 | |
| Thailand | 1,318,977 | 995,500 |
| Singapore | 492,252 | 591,300 |
| Malaysia | 501,592 | 415,700 |
| Indonesia | 412,779 | 429,400 |
| The Philippines | 613,114 | 622,300 |
| Vietnam | 495,501 | 573,900 |
| ASEAN-6 | 3,834,215 | 3,628,100 |
| International visitors | 31,882, 049 | 25,066, 100 |
(Source: Japan Tourism Statistics https://statistics.jnto.go.jp/en/graph/)
The burgeoning tourism ties between Japan and Southeast Asia are underpinned by a growing understanding and familiarity at the societal level between both sides while memories of wartime experiences with imperial Japan – though not forgotten – have gradually faded away particularly among younger generations.[34] Japan’s cultural influence in Southeast Asia extends across domains such as cuisine, design, lifestyle, traditional arts, and trendy fashion. According to an opinion poll on perceptions of Japan conducted by Japan’s foreign ministry in 2023, the top aspects of Japanese culture that attract Southeast Asians are its food (81%), lifestyle and way of thinking (63%), and animations (61%).[35] The appreciation of Japanese culture and design has boosted Southeast Asian consumption of Japanese products especially in the content and creative industries. This trend has been propelled by initiatives such as the “Cool Japan Strategy” and the “Cool Japan Fund” which were introduced by the Japanese government in 2012 and 2013, respectively. These aim to leverage Japan’s cultural influence to stimulate demand for Japanese products and services. In Southeast Asia, the fund has supported various endeavours, including opening of Japanese retail and dining outlets, promotion of Japanese content, and collaboration with local companies to co-create products that blend Japanese and local elements.[36]
A compelling illustration of this phenomenon is the success of Uniqlo clothing, Japan’s most valuable retail brand. Since opening its first Southeast Asian store in Singapore in 2009, Uniqlo has significantly expanded its footprint, and plans to quadruple its number of stores in the region within 10 years, aiming to reach the same level as in China. The Uniqlo story shows the potential of Southeast Asia as a driver for Japanese economic growth. Furthermore, Japanese pop culture – notably anime and manga – is in high demand among young Southeast Asians, with the Philippines, Vietnam and Malaysia being among the top five countries globally in terms of anime consumption.[37] This has even given rise to “glocalised versions” of Japan’s cultural products such as hijab cosplay, Duterte anime and Doreamon tofu.[38]
ASEAN countries are also popular destinations for Japanese people; more than 5.7 million Japanese tourists visited the region in 2019, a million more than in 2015.[39] Singapore, Manila and Bangkok are among the top ten overseas destinations for Japanese travellers.[40] With its cultural tapestry and beautiful landscapes, the region offers a wealth of experiences that are both distinct from and complementary to Japanese culture and nature. In recent years, there has been a growing presence of Southeast Asia delicacies in Japan. Another noteworthy trend is the increasing number of Japanese long-stay tourists or lifestyle migrants to Southeast Asia, particularly among retirees and young individuals seeking a better cost of living and a different way of life.[41] There are over 200,000 Japanese nationals residing in Indonesia, Malaysia, Singapore, the Philippines, Thailand and Vietnam, accounting for 16% of the Japanese expatriate population worldwide.[42]
CONCLUSION
Decades of nurturing connections between Japan and Southeast Asia have deepened their cultural and social bonds, laying the foundation for a more balanced and mutually beneficial relationship. Now more than ever, these people-to-people connections also provide the ballast for Japan’s soft power, given that its economic influence has relatively declined with the rise of other competitors, especially China and South Korea. Recognising this, the ASEAN-Japan commemorative summit in 2023 agreed to further the “Heart-to-Heart Partners” and “Partners for Co-creation of Economy and Society of the Future” initiatives, alongside “Partners for Peace and Stability”.[43] The “heart-to-heart” and “co-creation” themes underscore a shift in the relationship between Japan and Southeast Asia towards greater reciprocity and equality. This is because the region is now becoming a centre of global growth and offers a large pool of human talent, creativity and entrepreneurship that can synergise with Japan’s needs. The recently revised Development Cooperation Charter guiding Japan’s ODA also highlights the imperative for “co-creation” of social values and new solutions with developing countries, based on dialogue, cooperation and equal partnership.[44] Of note, Japan aims to bring back these values and solutions to Japanese society with a hope to spur its economy. Among those values, one of key significance to both Southeast Asia and Japan is the acceptance of foreign workers and a multicultural and inclusive community.[45] This forward-looking vision marks the beginning of an important shift in Japan’s perspective, as it recognises the significance of Southeast Asia in fostering mutual growth and collaboratively addressing new challenges to its evolving society.
ENDNOTES
For endnotes, please refer to the original pdf document.
| ISEAS Perspective is published electronically by: ISEAS – Yusof Ishak Institute 30 Heng Mui Keng Terrace Singapore 119614 Main Tel: (65) 6778 0955 Main Fax: (65) 6778 1735 Get Involved with ISEAS. Please click here: /support/get-involved-with-iseas/ | ISEAS – Yusof Ishak Institute accepts no responsibility for facts presented and views expressed. Responsibility rests exclusively with the individual author or authors. No part of this publication may be reproduced in any form without permission. © Copyright is held by the author or authors of each article. | Editorial Chairman: Choi Shing Kwok Editorial Advisor: Tan Chin Tiong Editorial Committee: Terence Chong, Cassey Lee, Norshahril Saat, and Hoang Thi Ha Managing Editor: Ooi Kee Beng Editors: William Choong, Lee Poh Onn, Lee Sue-Ann, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
EXECUTIVE SUMMARY
- Malaysia has embarked on a quest for structural transformation to revitalise the country’s pace of economic growth.
- Strengthening the economic relationship between Malaysia and China can potentially contribute towards Malaysia’s structural transformation in terms of re-industrialisation and greening of its economy.
- A significant challenge of leveraging a strengthened Malaysia-China economic relationship for structural transformation will be the constraints arising from the US – China geopolitical rivalry.
- This challenge will differ across industries. Some will require adaptation to new trade regulations (in electrical machinery and electronics), while others call for further market diversification (solar) and greater regional integration of their supply chain (electric vehicle).
* Cassey Lee is Senior Fellow at ISEAS – Yusof Ishak Institute. The author thanks Tham Siew Yean, Siwage Dharma Negara, Lee Hwok Aun and Jayant Menon for their useful comments and suggestions. The usual caveat applies.
ISEAS Perspective 2024/23, 27 March 2024
INTRODUCTION
Malaysia and China are celebrating the 50th anniversary this year of establishing mutual diplomatic relations. One key feature of the relationship between the two countries is the deepening of economic interactions in terms of trade and investment. The strength of this relationship is reflected in the State of Southeast Asia 2023 published by ISEAS – Yusof Ishak Institute, in which 65 percent of the Malaysian respondents in the survey identified China as the most influential economic power in Southeast Asia. Malaysian Prime Minister Anwar Ibrahim has already made two official trips to China since assuming office in November 2022, and the value of economic deals inked in the various memoranda of understanding signed during the two trips amounted to about RM200 billion (Appendix Table 1).
Beyond these headlines, how will Malaysia gain from the further enhancement of its economic relations with China? To answer this question requires an understanding of the economic challenges presently facing Malaysia; there are also uncertainties over how current global geopolitical tensions will affect the economic linkages between the two countries. This essay attempts to answer these questions by examining the economic challenges facing Malaysia, the current state of Malaysia-China economic relations, and finally, the potential role that China can play in Malaysia’s economic transformation.
UNDERSTANDING MALAYSIA’S QUEST FOR ECONOMIC TRANSFORMATION
The Malaysian economy has been slowing down for the past two decades (Figure 1). From 2010 to 2019, it grew at an average annual rate of 5.4 per cent, which is considerably lower than the 9.3 per cent growth rate during 1988-1997. There are two major causes for the economic slowdown, namely, lower levels of investment, and total factor productivity (TFP) (Figure 2). TFP is related to innovation-related productivity (as opposed to labour productivity).[1]
The long-term decline in investment has serious consequences as it lowers the economy’s productive capacity. In the past, two surges in investments — during 1976-1983 and 1987-1997, laid the foundations for the high growth rates in the 1970s, 1980s and 1990s (Figure 3). FDI played an important role in boosting investments in the 1990s. However, a significant proportion of investments originated domestically, with the private sector share of domestic investment gradually increasing from 55 per cent in 2010 to 78 per cent in 2022. The long-term decline in domestic savings since 2008 has put additional pressure on the need to increase investment through FDI (Figure 3).
Source: World Bank
Source: Asian Productivity Organization
Source: World Bank
The decline in investment since the late 1990s has been accompanied by a decline in the role of manufacturing in the economy. Manufacturing’s share of GDP was stagnant at around 30 per cent from 1999 to 2004 before declining to 21 per cent in 2019 (Figure 4).[2] The relative decline in the manufacturing sector has sparked concerns about premature deindustrialisation – involving a relative decline in a country’s manufacturing sector before the country has become a developed nation.[3]
Since Malaysia’s manufacturing sector is very export-intensive – with more than half of its manufacturing output being exported – the country’s export-to-GDP share has declined since 2006 (Figure 5). The size of net exports (or exports minus imports) has also shrunk. There was a mini revival in trade during the pandemic, but this has not reversed the long-term decline in trade as an engine of growth for the country.
Source: World Bank
Source: World Bank
MALAYSIA – CHINA TRADE RELATIONS
China is one of Malaysia’s most important trading partners. China accounts for around 15 per cent and 21 per cent of Malaysia’s exports and imports, respectively. Even as Malaysia’s trade ratio declines, China’s share of the country’s goods export has increased consistently until the outbreak of the Covid-19 pandemic in 2020 (Figure 6). Subsequently, the pandemic in China caused a slowdown in Malaysia’s export of goods to China, resulting in a decline in China’s share of Malaysia’s goods exports after 2020.
Despite the slowdown in overall exports of goods from Malaysia to China, Malaysia’s export of electrical machinery and equipment to China has been increasing rapidly in recent years (Figure 7). The increasing importance of China as an export market for electrical machinery and equipment is a long-term trend. Data from COMTRADE show that the share of electrical machinery and equipment in Malaysia’s total exports to China increased from 33.3 per cent in 2011 to 42.6 per cent in 2022. Imports of electrical machinery and equipment products have also increased, consistently exceeding the export of these products. Both trends indicate that Malaysia is embedded in China’s regional value chain in this industry.
Source: Department of Statistics, Malaysia
Source: COMTRADE
There is additional evidence that the supply chain linkages between these two countries in the electrical machinery and equipment industry have deepened over time. Historical data from OECD’s Trade in Value Added (TiVA) dataset show that the share of value-added originating from China (via imports) in Malaysia’s exports of computer, electronic and optical products has increased, especially since 2010 (Figure 8). In the opposite direction, the share of value originating from Malaysia in China’s exports of computer, electronic and optical products has remained relatively stable at slightly more than one per cent during the same period (Figure 9). Comparing the two trends in this industry (technically, backward participation and forward participation rates, respectively), Malaysia’s dependence on China has deepened as it has increased its outsourcing to China (by importing more parts and components), but the reverse flow has not happened. Crucially, more recent data are needed to assess whether the trade tension between China and the United States has changed these trends.
Source: TiVA (OECD)
Source: TiVA (OECD)
FOREIGN DIRECT INVESTMENT FROM CHINA
Before the pandemic, annual net FDI inflows into Malaysia averaged around 30 to 45 billion ringgit (Figure 10).[4] In the post-pandemic period, the recovery in FDI has been driven mostly by FDI inflows from Japan, Singapore and the United States. Official data for 2022 and the first nine months of 2023 indicate that more than 60 per cent of the FDI went to the manufacturing sector, especially the electrical and electronics (E&E) industry. The FDI flows from China had been relatively small before the pandemic except for 2016 and 2017.[5]
A significant proportion of recent FDI inflows from China went to the manufacturing sector (Figure 11). In terms of the share of total FDI stock (or cumulative investments) in Malaysia, China’s share was at three per cent in 2022. Most of China’s FDI stock in Malaysia is split evenly (41 per cent each) between manufacturing and services.
Source: Department of Statistics, Malaysia
Source: Department of Statistics, Malaysia
Source: Department of Statistics, Malaysia
CHINA’S ROLE IN MALAYSIA’S STRUCTURAL TRANSFORMATION
Trade and investment relations between Malaysia and China have deepened over the years. Malaysia’s trade relations with China accelerated after China’s accession to the WTO. FDI from China, however, is a more recent phenomenon, exhibiting two major surges – first between 2015 to 2017, and more recently, since 2019. These trade and investment linkages between the two countries hold long-term implications where the structural transformation of the Malaysian economy is concerned. The current set of economic strategies undertaken by the government provides a useful context in which to assess the significance of these investments, and also of future ones. For this purpose, two recent medium-term and long-term policies are examined here, namely, the New Industrial Masterplan 2030 (NIMP) and the National Energy Transition Roadmap (NETR).
Re-Industrialisation
Malaysia launched the New Industrial Masterplan 2030 (NIMP 2030) to revitalise the country’s manufacturing sector for the next seven years, from 2023 to 2030. The Masterplan is underpinned by four “missions”, namely the innovation and production of more technologically sophisticated (complex) products, digital transformation, net zero future, as well as economic security and inclusivity. A number of strategies are listed under each mission and each strategy has a list of implementable action plans. Most of the action plans are cross-cutting and only a few are sector and project specific. These specific action plans provide some clues on the potential contributions of China to Malaysia’s manufacturing sector.
A total of 21 sectors and four new growth areas are covered in NIMP2030. The five key sectors targeted are electrical and electronics (E&E), chemical, pharmaceutical, medical devices and aerospace. The sector-specific action plans that focus on the E&E include integrated circuit design and wafer fabrication.
The role of China in Malaysia’s E&E sector is complex. There is a heavy presence of American and European multinationals in the industry. Recent examples of announced investments include those by Intel (US$7 billion new chip packaging facility in Penang), Infineon Technologies (US$5.5 billion investment in a new silicon carbide power fab plant in Kulim) and Texas Instruments (US$3.16 billion in new assembly and test factories in Melaka and Kuala Lumpur).[6] Despite having a relatively smaller production presence in Malaysia, China plays an important role in terms of market demand. China is a major export market for the semiconductor industry via direct exports to China or indirectly through Hong Kong (Figure 13).[7] The products from Infineon Technologies’s new plant are to be sold to renewable energy businesses and electric vehicle producers that will include Chinese companies.[8] These developments, which involve economic spillovers across industries (e.g. E&E and EV), is a key strategy in the NIMP2030.
Source: Department of Statistics, Malaysia
There are some uncertainties in terms of how the geopolitical rivalry and tensions between China and the United States will impact both countries’ future roles in Malaysia’s manufacturing sector. The NIMP2030 takes cognisance of this challenge but only provides broad policy pronouncements in terms of pushing for “greater vertical integration across value chains” and for “an international, rules-based order, while maintaining ASEAN centrality” (NIMP2030, p.34). At the industry level, recent media reports suggest that Chinese multinational enterprises (MNEs) in the E&E industry are increasing their footprint in Malaysia. Examples include Chinese-owned companies and domestic-owned firms involved in chip packaging for assembly graphics processing units.[9]
There is also anecdotal evidence that American multinational enterprises (MNEs) in the E&E industry are addressing the market restrictions that have emerged amidst the China-US geopolitical tensions by modifying their products. When the US imposed export curbs on advanced chips (such as Nvidia’s A100 and H100), both Nvidia and Intel responded by altering their chips to bypass them.[10] These developments imply that the investment flows from the US and European countries that will strengthen trade linkages in E&E between Malaysia and China could continue despite the geopolitical tensions, given the importance of the China market to American and European E&E MNEs.
Green Economy
Malaysia’s strategies for industrial transformation are embedded in a broader goal of promoting greater use of green energy. The National Energy Policy 2022-2040 was launched in September 2022 by the previous Prime Minister Ismail Sabri to achieve the Low Carbon Nation Aspiration.[11] Subsequently, the Anwar Administration launched the National Energy Transition Roadmap (NETR) in August 2023 with the aim of accelerating the structural shift of energy systems towards cleaner sources of energy. The NETR contains significant targets for green sources of energy as well as green mobility (Table 1). These include increasing renewable energy’s share of installed capacity to 70 per cent and the share of four-wheel electric vehicles to 80 per cent by 2050.
Table 1: Targets in the National Energy Transition Roadmap
| Levers | Sector and Key Driver | Target for 2050 |
| Energy Efficiency | Industry and commercial energy efficiency savings (%) | 23% |
| Residential energy efficiency savings (%) | 20% | |
| Renewable Energy | Coal share of installed capacity (%) | 0% |
| RE share of installed capacity (%) | 70% | |
| Hydrogen | Green hydrogen production (MTPA) | Up to 2.5 |
| Green hydrogen feedstock phase off (%) | 100% | |
| Hydrogen hubs | 3 | |
| Bioenergy | Biofuel capacity (billion litres) | 3.5 |
| Bioenergy power generation (GW) | 1.4 | |
| Green Mobility | Urban public transport modal share (%) | 60% |
| Electric vehicle (4W) share of fleet (%) | 80% | |
| E2W share of fleet (%) | 80% | |
| Light vehicle fuel economy | -30% | |
| Heavy transport fuel economy | -24% | |
| Biofuel blending for heavy transport | B30 | |
| Hydrogen penetration for heavy transport (%) | 5% | |
| Green fuel penetration in marine transport | 40% | |
| SAF blending mandate by 2050 (%) | 47% | |
| Carbon Capture, Utilisation & Storage | Number of CCUS clusters (%) | 3-6 |
| CO2 storage capacity (Mtpa) | 40-80 |
Source: National Energy Transition Roadmap (p.22)
Can China play an important role in helping Malaysia achieve its goals for renewable energy? Under the NETR, the key focus for renewable energy is the development of solar power. The target for solar PV’s share of total installed capacity is 58 percent by 2050.[12] The equipment to meet the demand for solar PV in the future will come from domestic production and imports. In the case of domestic production, Malaysia attracted significant FDI flows for solar module manufacturing from China in the period 2015-2016 (Table 2). This earlier wave of FDI flows from China was driven by the imposition of import quotas in Europe and import tariffs in the United States on solar cells and modules from China. One consequence of the FDI-driven buildup in solar module production has been the lowering of the cost and price of this product. However, the domestic demand for solar PV have been met by imports from China .[13] Such imports have reduced the cost of solar PV installation in Malaysia.
Table 2: Selected Foreign Investments from China in Malaysia’s Green Economy
| Renewable Energy |
| . Jinko Solar – solar cell and module plant in Penang (US$100 million, 2015), PERC technology upgrades (US$500 mil, 2017) . LONGi Solar – silicon rod, wafer, cell, and module manufacturing in Sarawak (RM5.6 billion, 2016) and Serendah (RM1.6 billion, 2023) . Risen Energy – high-efficiency photovoltaic modules (RM42.2 billion, 2021-2035) |
| Green Mobility |
| . Geely acquisition of 49.9% in Proton Holdings of Malaysia and 51% in Lotus (US$235 million) plus US$40 million cash injection. . Geely to invest up to US$10 billion in Proton’s new Automotive Hi-Tech Valley manufacturing base (announced in 2023) . Sime Darby invested RM500 million to distribute BYD cars (starting in 2022); Sime Darby acquired 61.2% of UMW holdings for RM3.57 billion. |
Source: Author’s compilation based on media reports
The present wave of FDI in the solar cell and module industry is set to further increase Malaysia’s exports within this industry. However, the export activities of this industry are also caught up in the US–China trade tensions. In August 2023, the US Department of Commerce determined that a number of companies based in Cambodia, Malaysia, Thailand, or Vietnam were exporting solar cells and modules to circumvent antidumping and countervailing duties levied by the US on these products from China.[14] In Malaysia’s case, two companies – Hanwha Q CELLS and Jinko Solar Technology (Chinese-owned) – were found not to be circumventing these duties, whilst the status of adverse facts available (AFA) were imposed on five companies. In these AFA cases (involving missing or deficient information due to non-cooperation of companies), the US Department of Commerce has discretionary powers to declare the involved companies as circumventing duties.
China can potentially contribute to achieving Malaysia’s goals for green mobility as well as re-industrialisation. In the NETR, the electric vehicles’ (EV) share of the car fleet in Malaysia is expected to be 80 percent by 2050. The Chinese automaker Geely, which currently owns 49.9 per cent of Proton, has announced plans to establish Proton as a major EV hub in the Southeast Asia region via a US$10 billion investment. The regional focus of Geely is imperative given the relatively small size of the Malaysian EV market and the recent entry of BYD into the market via Sime Darby. Geely’s regional strategy – it is investing in Thailand as well – will link up the automotive supply chains in Malaysia and Thailand. This is a strategic move given Thailand’s existing comparative advantage in the automotive sector. Thailand has already attracted FDI from many of China’s large EV companies such as BYD, SAIC Motor group and Great Wall Motor. Compared to the E&E and solar industries, the EV industry is less vulnerable to the geopolitical tensions between the US and China. Its supply chain and export markets are more regional.
CONCLUSION
Malaysia’s economic relationship with China has deepened since the two countries established diplomatic relations 50 years ago. There are opportunities for Malaysia to further strengthen the trade and investment relations between the two countries. This could be undertaken in such a way as to support Malaysia’s strategies for economic transformation in terms of re-industrialisation and greening its economy. Industries that are export-oriented, such as E&E and solar, will see their export potential impacted more seriously by the geopolitical tension between the US and China. Export market diversification will be an important strategy for these industries.
Appendix Table 1: Memorandums of Understanding Signed During Malaysian PM’s Visit to China
| March 2023 | September 2023 |
| . 19 MOUs . Total value: RM170 billion . DRB-Hicom Bhd and Zhejiang Geely Holding Group Co, Ltd on a proposed joint venture on the development and commercialisation of an automotive high-technology valley in Tanjung Malim, Perak, for new energy vehicles. . Associated Chinese Chambers of Commerce and Industry of Malaysia and the China Chamber of Commerce – import and export of machinery and electronic products . Digital Way Group Sdn Bhd, China Silk Road Group Ltd and China Kairous Capital – jointly establish a Malaysia-China digital and development fund in China and Malaysia . Development of a waste-to-energy plant in Malaysia | . 3 MOUs . Total Value: RM 19.84 billionCitaglobal Bhd and Shanghai SUS Environment – developing waste-to-energy power plants primarily in Malaysia (RM15 billion). . PM Access World and Beibu Gulf International Port Group – warehousing and logistics cooperation between the two companies in supporting the New International Land-Sea Trade Corridor to promote economic and trade cooperation between Guangxi and Malaysia (RM2.34 billion). . Sime Darby Oils International Limited and Guangxi Beibu Gulf Port Group to build a trading and distribution centre for refined palm oil and shortening in Qinzhou, with an estimated annual transaction volume of 500,000 tonnes. (RM2.5 billion) |
Sources: https://theedgemalaysia.com/node/661736
ENDNOTES
For endnotes, please refer to the original pdf document.
| ISEAS Perspective is published electronically by: ISEAS – Yusof Ishak Institute 30 Heng Mui Keng Terrace Singapore 119614 Main Tel: (65) 6778 0955 Main Fax: (65) 6778 1735 Get Involved with ISEAS. Please click here: /support/get-involved-with-iseas/ | ISEAS – Yusof Ishak Institute accepts no responsibility for facts presented and views expressed. Responsibility rests exclusively with the individual author or authors. No part of this publication may be reproduced in any form without permission. © Copyright is held by the author or authors of each article. | Editorial Chairman: Choi Shing Kwok Editorial Advisor: Tan Chin Tiong Editorial Committee: Terence Chong, Cassey Lee, Norshahril Saat, and Hoang Thi Ha Managing Editor: Ooi Kee Beng Editors: William Choong, Lee Poh Onn, Lee Sue-Ann, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
EXECUTIVE SUMMARY
- Since 2017, Thailand’s Navy has been struggling to obtain three advanced submarines from China.
- Reasons for buying the Chinese submarines included keeping up with neighbours (amidst a regional arms race), attaining an “awe factor,” appeasing China, and improving naval capacities.
- The submarine purchase was hindered by parliamentary opposition pointing to their impracticality in shallow waters, high financial costs amidst other priorities such as the 2020 advent of the COVID-19 pandemic, and Germany’s refusal to allow export of Germany-made submarine engines to China.
- In 2021, the Thai government of General Prayut Chan-o-cha delayed paying instalments for the first submarine while the engine issue remained unresolved. Funding for the purchase of the second and third Chinese submarines has also been suspended.
- Now, the Srettha Administration is exploring all practical options, and a potential positive breakthrough in March is in the offing.
* Paul Chambers is Lecturer and Special Advisor for International Affairs, Center of ASEAN
Community Studies, Naresuan University, Thailand. In March-May 2021 and January-June 2024, he was Visiting Fellow in the Thailand Studies Programme at ISEAS – Yusof Ishak Institute. Termsak Chalermpalanupap is Visiting Fellow and Coordinator of the Thailand Studies Programme, ISEAS – Yusof Ishak Institute.
ISEAS Perspective 2024/22, 22 March 2024
INTRODUCTION
The ongoing saga of the Royal Thai Navy (RTN) to buy three Chinese submarines is heading towards yet another intriguing climax. Defence Minister Sutin Klungsang plans to seek a Cabinet decision in March on how the RTN shall proceed.
Most probably, the Cabinet will be asked to endorse the RTN’s proposed acceptance of four China-made diesel generator engines (the number typical in fleet-type subs)[1] – instead of better German-made ones, which are now unavailable – to fit into the first S-26T submarine[2] which the RTN has ordered from China Shipbuilding & Offshore International Company (CSOC) since May 2017.
However, it remains unclear whether Minister Sutin will support the RTN’s original plan of buying up to three Chinese submarines, altogether costing about 36 billion baht (US$996 million).
Since the pandemic has ended and the Thai economy has regained steady growth, the RTN apparently feels that it is now appropriate to ask once again for the money to pay for two more Chinese submarines. After all, the Royal Thai Air Force (RTAF) is also going to ask for an urgent allocation to buy a squadron of new F-16 (Block 70th) fighters, costing about US$63 million each.
NAVAL HISTORY AND RIVALRY
In the 1932 Revolution which ended the Siamese absolute monarchy, the naval faction in Kanarasadorn (People’s Party) was an active and influential third party in the power struggle between the army and the civilian faction.
By the early 1930s, Thailand’s Royal Thai Army (RTA) and the RTN were increasingly large forces financially competing for procurement from abroad. In 1938, the RTN purchased and received from its Axis Power ally (Imperial Japan) four Mitsubishi-constructed submarines at a cost of 3.28 million baht (about US$97,312). The deal included submarine training for the Thai crew.[3] This made the RTN the first navy in Southeast Asia to have submarines. Thailand also bought from Japan two light gunboats,[4] and, from its Axis ally Italy, two light cruisers.
The RTN received the first of four Japan-built submarines on 25 May 1938. The RTN has thus celebrated 25 May as “Submarine Day”. All four small coastal submarines arrived in Thailand on 29 June 1938. They took part in fighting the French navy in January 1941 around Koh Chang near the Thai-Cambodian maritime boundary.[5]
After World War II, the four Thai submarines were in a bad state of disrepair, and were eventually decommissioned on 30 November 1951.
In 1946, the RTN’s military procurement patron became the United States. Washington sold or provided coastal patrol boats, minesweepers, a frigate, and a dredger, with the final delivery arriving in 1954.
In a June 1951 ceremony marking the US handover of dredger SS Manhattan to the RTN, Prime Minister Field Marshal Phibun Songkram, who had come aboard Manhattan to officially take charge of it, was detained at gunpoint by naval officers attempting a coup. The influential army field marshal was placed onboard the RTN’s flagship HTMS Sri Ayutthaya. But the RTA, the RTAF, and the Royal Thai Police (RTP) refused to support the navy’s coup attempt. Warplanes bombed navy facilities and eventually sank Sri Ayutthaya. PM Phibun managed to escape unharmed and quickly rallied his forces to crush the rebellion.
In the ensuing crackdown, more than 70 senior naval officers implicated in the rebellion were arrested, expelled from the RTN, and jailed. They included the submarine force commander, Rear Admiral Kanok Noppakhun.
After the failed coup, the RTN’s budget was heavily axed, and much of its hardware was given to the RTA or the RTAF. In addition, military procurement for the RTN was cut to a minimum (only three small landing ships were obtained by the RTN from 1962-1973).[6]
In the 6 October coup of 1976, RTN Commander Admiral Sa-ngad Chaloryu was nominally appointed the coup leader, because of his military seniority as he was then concurrently the Supreme Commander. The actual coup was plotted mostly by senior army generals without much involvement of the RTN. The admiral was similarly appointed leader of the October 1977 coup which overthrew the right-wing royalist government of Thanin Kraivichien.
In 1978, with the accession of arch-royalist General Prem Tinsulanonda as Army commander, the RTN again diminished in influence. General Prem went on to become Prime Minister (1980-1988). Once again, the RTA and the RTAF received procurement priority over the RTN. The RTAF, in particular, was favoured because Crown Prince Vajiralongkorn developed a keen interest in flying F-5 jet fighters.
THAILAND’S SUBMARINE PLANS
When the Cold War ended in 1992, the RTN tried to obtain funding for submarines and other military hardware from almost every successive government. The newly elected civilian government of Chuan Leekpai (1992-1995) did not veto the RTN’s purchase from Spain of the first aircraft carrier in Southeast Asia (a helicopter carrier called the HTMS Chakri Naruebet). It began service in 1997, the very year of the Asian Financial Crisis.[7]
The RTN seemed on its way to finally gain a sufficient budget for the modern procurement of equipment to become a competitive navy. But the economic crisis diminished funding for operating the carrier such that only a limited use was possible.[8] Even up to 2024, it has remained an effective “white elephant”, carrying no aircraft. Meanwhile, the RTN has acquired smaller vessels, with China, the United States, and South Korea as its principal sources of hardware.
Though Chuan had vetoed RTN efforts to acquire submarines in 1994, the RTN re-introduced the proposal to Chuan’s successor, Prime Minister Banharn Silapa-archa (1995-1996), in 1995.
But allegations that the chosen submarine manufacturer, Swedish Kockums, had bribed Banharn’s political party to accept the deal, caused a firestorm in Thailand. Thereupon, parliament voted against the submarine purchase.[9] And when the idea of submarines was brought before Banharn’s successor Prime Minister General Chavalit Yongchaiyudh (1996-1997), the Asian financial crisis had hit, and prevented any such purchase.
Under the 2001-2006 Thaksin government, Defence Minister General Chavalit blocked the RTN from purchasing submarines because of the high price-tag. However, there were reports that China was on the verge of selling diesel-electric Romeo-class submarines to the RTN. The 2006 RTA-led coup against Thaksin Shinawatra ended any such transaction.[10]
After the coup-borne 2006-2008 regime of General Surayud Chulanond, the RTA and the RTAF subsequently gained military hardware. Not the RTN.[11] In 2007, King Bhumibol apparently showed his disapproval of the RTN’s idea of acquiring submarines, joking that they would probably get stuck in the mud in the shallow Gulf of Thailand.[12]
During the Abhisit administration (2008-2011), China offered to sell two Song-class submarines to Thailand, which were in need of extensive modernisation.[13] Then, there was a move to purchase two more capable though pricier U209 submarines from South Korea.[14] But the RTN, which preferred Western technology, opted instead to buy two to six second-hand diesel-electric German U206A submarines. However, a 2011 change in government ended the RTN’s submarine purchase attempt.[15]
The Yingluck government (2011-2014) rejected the U206As in favour of cheaper Chinese or Russian submarines,[16] and by 2012 was furthermore prioritising buying frigates over submarines; the RTN fell in line obediently.[17]
During the past seven decades, the RTN has thus been nurturing a dream of reviving its submarine force. One big justification was and still is the need to have Thai submarines as deterrent against neighbours whose navies have deployed submarines.[18]
The RTN saw a new opportunity to resurface its submarine programme after the May 2014 coup which toppled the Pheu Thai-led government of Prime Minister Yingluck Shinawatra. The military regime led by coup leader General Prayut brought new hope to the RTN.
The RTN sent teams to look for the best possible submarine options. In early July 2015, RTN Commander Admiral Kraison Chansuwanit disclosed the RTN’s choice of three Chinese submarines, based chiefly on recommendations from RTN’s submarine officers.
The commander mentioned that submarine producers from six countries, including China, Germany, Sweden, and South Korea, had been approached. And CSOC offered the best deal with a proposal to sell three Yuan-class submarines, equipped with Germany-made MTU diesel-electric engines and the air-independent propulsion (AIP) system which will enable the submarines to stay submerged for up to 21 days without resurfacing for air. A non-AIP submarine can stay submerged for up to only five days.
In March 2017, Prime Minister General Prayut voiced support for the RTN’s programme to buy the three Chinese submarines, which he described as “Buy 2 Get 1 Free”. The programme involved spending about 36 billion baht for three Chinese submarines of the Yuan-class. The RTN would designate the China-built submarines as the S26T class, which General Prayut said would be “the cheapest, and good enough”.[19]
On 18 April 2017, the Cabinet approved the allocation of 13.5 billion baht for the purchase of the first S26T submarine from CSOC.
On 1 May 2017, RTN Chief of Staff Admiral Luechai Ruddit led a team of naval senior officers to explain officially for the first time in a press conference the RTN’s submarine programme. Admiral Luechai outlined five major reasons for buying the Chinese submarines.[20]
Another likely reason to buy the Chinese submarines, despite the RTN favouring those from Europe, was to send a signal to the United States. Thailand has been since 2003 a “non-NATO ally” of the United States. But Washington had criticised Thailand’s military for carrying out the May 2014 coup against an elected government—what Greg Raymond calls “dominance denial messaging.”[21]
In addition, the RTN’s interest in buying Chinese submarines reflected the growing amity between the two geographically-close countries. China has been for several years the top trading partner for Thailand, as well as the largest source of foreign tourists to Thailand.
THE CHINESE SUBMARINE DEAL
After the 2019 general election, General Prayut returned as prime minister as well as concurrently defence minister of a new coalition government led by the pro-military Palang Pracharat Party. His support for the RTN’s submarine programme continued.
But by April 2020, parliamentary opposition to the RTN’s submarine programme amidst growing economic malaise, fears that generals only wanted submarine-related kickbacks, and the onset of the COVID-19 pandemic, forced the Prayut government to delay funding the submarine purchase. Budget allocation for the second and the third submarines were put on hold until after COVID.[22]
In February 2022, new formidable issues seemed to be dooming the submarine programme. First it was discovered that CSOC was unable to buy German MTU396 diesel engines, because Germany by law could not allow export of these engines to China (given the embargo of the EU and Germany on military hardware for China) to be fitted on submarines to be sold to the RTN.
A second problem was that it was discovered that the submarine deal might not be a formal government-to-government deal. Indeed, allegations grew that CSOC, a state enterprise in charge of building the S26T, and accompanying submarine dock/facilities, had listed its naval engineers coming to Thailand as international school-teachers instead of employees of CSOC. CSOC’s own representative in Thailand was listed as a Thai business, Natthaphon Co., Ltd., which had donated US$56,599 to Deputy Prime Minister General Prawit Wongsuwan’s Palang Pracharat Party.[23]
While the second problem faded, the export ban of German engines did not. CSOC offered in place of the German engines, Chinese-made CHD 620 engines, which incidentally had never been used in submarines. But by August 2022, RTN Commander Admiral Somprasong Nilsamai had refused to change the original submarine agreement which required the use of the German engines. If China could not deliver the first submarine with German engines before 2024, then the agreement would be null and void.[24]
Admiral Somprasong’s successor Commander Admiral Choengchai Chomchoengpaet, was more flexible towards the Chinese. Under him, CSOC and the RTN worked out an agreement whereby the Chinese would have to provide appropriate compensation regarding breach of the agreement about the S-26T submarine engines; and during the period before the S-26T delivery, China would have to temporarily provide one or two used Type 039A submarines for the RTN to train on.
PHEU THAI’S DILEMMA
Being the chief opposition party during the Prayut Administration (2019 – 2023), Pheu Thai (PT) used to vigorously oppose the RTN’s submarine programme. The most outspoken critic was MP Yutthapong Charas-sathien, a deputy PT leader from the northeastern province of Mahasarakam. Yutthapong questioned the validity of the so-called “Government–to– Government” agreement between Thailand and China on the purchase of the three Chinese submarines.
He contended in a dramatic press conference on 23 August 2020 that the admiral representing the Thai Government to sign the agreement in Beijing on 5 May 2017 lacked “full powers”; and the “secret” agreement, which he showed during the press conference, did not bind the RTN to buy up to three Chinese submarines.[25] Yutthapong is now an advisor to Prime Minister Srettha Thavisin.
At the same time, Sutin Klangsang, also a deputy PT leader and a veteran politician from Mahasarakam, was the opposition chief whip. He had on numerous occasions criticised the RTN for its alleged lack of transparency and unwillingness to share pertinent information with the House of Representatives. He and the PT accused General Prayut of trying to appease the RTN in pushing for the three Chinese submarines, in total disregard of the plight of the poor Thais suffering in economic hardship during the COVID-19 pandemic.
Now, with the PT becoming the chief government party, and Sutin being the new defence minister, the PT and Sutin are facing a sticky dilemma on what to do with the RTN’s troubled submarine programme.
Sutin has the distinction of being the first civilian politician to hold the defence minister post without concurrently holding the premiership. The highly influential but sensitive defence portfolio is traditionally held concurrently by a prime minister,[26] or by an ex-military man.
NEW SOLUTION TO AN OLD PROBLEM?
During his introductory visit to the RTN Headquarters last October, Defence Minister Sutin acknowledged that there had been pending issues in the submarine programme, and he would try to find a pragmatic solution that would be in the Thai national interest, and that would uphold the good relations between Thailand and China. He interestingly mentioned one new idea: Instead of getting the S26T submarine, the down payment of about 6 billion baht paid to CSOC could go to paying for a Chinese frigate, or a smaller offshore patrol vessel (OPV).[27] The latter would replace the sunken “Sukhothai” corvette.[28]
Just to play safe, in November 2023, Navy Commander Admiral Adoong Pan-iam sought legal advice from the Office of the Attorney-General on three particular points: Whether replacing the German engines with the Chinese engines would constitute a “substantive change” in the agreement on the S26T submarine? If it did, then how and who can authorise such a “substantive change”? And whether or not exchanging the submarine to a frigate will also constitute a “substantive change”?[29]
Subsequently, in early February, Minister Sutin disclosed that the Attorney-General Office’s response was quite positive and clear: the Cabinet has the authority to authorise the RTN to negotiate on any “substantive change” in the submarine agreement.[30]
POSITIVE SOLUTION IN MARCH
Minister Sutin set up an ad hoc advisory committee to examine all pros and cons of every proposed solution, and this was headed by General Somsak Roongsita, an advisor to the defence minister.
The committee met twice in February and will soon submit its findings and recommendations to Minister Sutin. After that, Sutin plans to present the RTN’s case at a cabinet meeting in March. Most probably, he will want the Cabinet to approve the RTN’s acceptance of the Chinese engines in the first S26T submarine.
After all, the RTN is apparently determined to proceed with its submarine programme. Construction of a submarine berthing pier and weapon storage facilities in Sattahip naval base has been ongoing. HTMS “Chang”,[ the huge China-built multi-purpose amphibious landing platform ship has been commissioned since last April, and it will soon be refitted to serve as a submarine tender ship.
How far Minister Sutin and the PT are prepared to support the RTN’s submarine programme remains unclear, particularly on the question of getting the second and the third Chinese submarines.
The Srettha government is financially stretched; it does not have money (about 500 billion baht are needed!) to fund its ambitious “Digital Wallet” programme to give every poor Thai who is 16 years old and above 10,000 baht worth of digital credit to spend, with the aim of stimulating the Thai economy.
The RTN has always maintained that ideally, at least three submarines should be bought to constitute a credible and effective deterrent: one to patrol the Gulf of Thailand, one to operate in the Andaman Sea, and one for training as well as to be on stand-by to replace either the one in the Gulf of Thailand or the one on the Andaman Sea should the need arise.
CONCLUSION
The troubled saga of the RTN’s submarine programme will reach a climax in March. It looks very likely that the RTN will get its first China-built submarine equipped with Chinese engines.
This will be good news to the RTN, and will help salvage its lost prestige of being overwhelmed by the RTA and surpassed by the RTAF.
However, the RTN may have to wait a little bit longer to get its second and third China-built submarines. Neither Defence Minister Sutin nor Pheu Thai want to be seen asking for 22.5 billion baht to pay for two more submarines when the country is supposedly facing an impending economic crisis owing to deflation and the loss of general purchasing power in Thailand.
ENDNOTES
For endnotes, please refer to the original pdf document.
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EXECUTIVE SUMMARY
• ASEAN Economic Community (AEC) building is a long journey. For continued relevance and impact, the AEC must remain dynamic while taking into consideration evolving contexts and emerging opportunities and challenges.
• Notable progress has been made under the two AEC Blueprints (2015 and 2025), particularly in laying down the frameworks for regional economic integration and community building. Nonetheless, gaps remain in implementation, calling for a more streamlined but result-oriented agenda and stronger institutional coordination.
• Today, the AEC is faced with a markedly different context and unprecedented challenges resulting from a poly-crisis, involving geo-economic fragmentation, supply chain restructuring, and climactic changes. Without adjustment, ASEAN’s pillar and sector-centric approach can be expected to fall short in effectively responding to these challenges.
• As AEC 2025 enters its final quarter, ASEAN needs to recalibrate its priorities. It also increasingly needs to take a whole-of-community approach to integration, as issues and their solutions are spread across multiple sectors. Furthermore, as it develops the AEC Post-2025 agenda, it needs to strike a balance between ambition and pragmatism, and to support substance with institutions and processes.
Trends in Southeast Asia 2024/7, March 2024
EXECUTIVE SUMMARY
- Born from a protest movement against Anwar Ibrahim’s unceremonious sacking by Mahathir Mohamad in 1998, the People’s Justice Party (PKR) was officially established from a merger between two parties. Founding members came from different segments of society, tied by a common bond to its twice-jailed leader, Anwar.
- PKR has emerged as a definite force in mainstream Malaysian politics, winning an average of 35 seats (16% of total seats) and 2 million votes (18% of total vote share) over the past 15 years. The party has clearly grown stronger from its wobbly start in the 1999 and 2004 general elections.
- PKR is the second largest party in Malaysia, behind only UMNO, with 1.16 million members. Its membership growth is attributable to a low barrier to entry, party election incentives, and anticipated federal power patronage.
- Selangor is PKR’s strongest base, with the highest total membership (30 per cent of total) and highest cumulative parliamentary seats won. This is followed by the East Malaysian states, though with low electoral returns, and Perak, where it has established a strong grassroots presence and won a sizable share of parliamentary seats.
- The centre of power lies in the hands of the president and the central leadership council, although the national congress is the highest authority. The state leadership is less powerful compared to the divisions in nomination and grassroots matters, partly due to the members’ loyalty to the division leaders elected through direct elections.
- PKR holds the largest party elections in Malaysia via a one-person-one-vote (OPOV) direct election system. The logistical hassle creates long and chaotic party elections that typically ends in highly factionalised contests. The party has introduced online voting and a hybrid voting system as a corrective measure in recent years.
- Most PKR MPs win mixed and Malay-majority seats in urban and semi-urban enclaves. This reflects PKR’s commitment to multiracialism and the party’s limited ability to win Malay votes. PKR has benefited from the split in Malay votes among several parties, and this puts its electoral successes at risk if Malay votes converge to a dominant Malay party again in future.
*James Chai is Visiting Fellow at ISEAS – Yusof Ishak Institute and a columnist at MalaysiaKini and Sin Chew Daily.
ISEAS Perspective 2024/21, 20 March 2024
INTRODUCTION
The earliest members of the People’s Justice Party (PKR) disagree on when the foundational political movement, Reformasi, started. Some say it was 2 September 1998 when the then deputy prime minister, Anwar Ibrahim, was unceremoniously sacked by then prime minister Mahathir Mohamad.[1] Some say it was 20 September 1998 when the largest protest was staged at Masjid Negara.[2] Some say it was 17 May 2004 when the Registrar of Societies approved the merger between Parti Keadilan Nasional and Parti Rakyat Malaysia.[3] In all versions, members agree that the party was tied by a common bond to its larger-than-life figurehead, who had gone to jail twice on controversial charges: Anwar Ibrahim.
The party consists of an ‘unusual collection of leaders’[4] from UMNO, PRM, student bodies, street activists, Islamic movements, and NGOs.
Despite being one of the youngest mainstream parties in the country (see Appendix 1), PKR has managed to reverse its electoral fortunes in the first decade to emerge as a key competitor in Malaysian politics.
Notwithstanding the party’s storied past and current prominence in Malaysia’s political landscape, research on PKR remains scant compared to that done on UMNO, PAS, and DAP. This limits public understanding of the party and how it works. This Perspective will first look at how PKR operates, particularly its entry criteria, membership, organisation structure, and finance. The second part examines the key differentiators of PKR, which are its unique direct election system and diverse membership. The paper concludes with reflections on the findings.
PKR’s political journey: A brief glimpse
Table 1: Seats won and vote share of PKR since its first election in 1999
| Election Cycle | Year | Total Parliamentary Seats | Seats Contested by PKR | Seats Won by PKR (per cent of total seats) | Win Rate | Total Votes (vote share) |
| GE10 | 1999 | 193 | 78 | 5 (2.6 per cent) | 6.41 per cent | 773,679 (11.7 per cent) |
| GE11 | 2004 | 219 | 80 | 1 (0.5 per cent) | 1.25 per cent | 617,518 (8.9 per cent) |
| GE12 | 2008 | 222 | 84 | 31 (14.0 per cent) | 36.90 per cent | 1,509,080 (18.6 per cent) |
| GE13 | 2013 | 222 | 99 | 30 (13.5 per cent) | 30.30 per cent | 2,254,211 (20.4 per cent) |
| GE14 | 2018 | 222 | 71 | 48 (21.6 per cent) | 67.61 per cent | 2,046,484 (17.1 per cent) |
| GE15 | 2022 | 222 | 100 | 31 (14.0 per cent) | 31.00 per cent | 2,442,038 (15.7 per cent) |
NB: Win rate as seats won divided by seats contested; only considers parliamentary seats.
Chart 1: Total parliamentary seats won and total votes received by PKR (1999 to 2022)
Even though Reformasi created one of the largest ever protest movements in the country, it was surprisingly unable to convert the anti-government support into seats, winning only 5 seats in parliament in 1999 (2.6 per cent), and plummeting to its lowest point with only 1 seat in 2004 (Table 1 and Chart 1).[5] This was due to a limited swing from the non-Malay voters who preferred status quo stability, and the anti-corruption appeal of BN’s Abdullah Badawi.
Since 2008, however, the party has gained stable prominence by achieving an average 35 seats (16 per cent of total seats) and 2 million votes (18 per cent of total vote share). In 2018, PKR even became the largest party in parliament, carried through its victories in marginal seats in West Malaysia; it made further history by being the first multiracial party to do so. The succeeding two years were chaotic for the party, however, when it experienced the largest high-profile defection, led by the former deputy president Azmin Ali. This stemmed apparently from years of intra-party instability. After a large-scale purge in 2022, party president Anwar Ibrahim finally achieved his aspiration of becoming prime minister, Malaysia’s tenth.
Additionally, the party governed the states of Selangor and Negeri Sembilan, since 2008 and 2018 respectively, with a substantial majority.
MEMBERSHIP, STRUCTURE AND FINANCE
Entry Criteria
To be a PKR member, the applicant has to register at the party headquarters, located in Kelana Jaya, Selangor, either physically or online, and the selected division must ensure that this registration is made with the party secretary-general as the main person in charge.[6]
Table 2: Comparison of entry criteria between select mainstream parties
| Entry criteria | PKR | UMNO | PAS | DAP |
| Types of memberships | Ordinary and lifetime members[7] | Ordinary, allied (bergabung), associate (bersekutu), and lifetime members | Ordinary, associate, and lifetime members | Ordinary and lifetime members |
| Minimum age | 18 years old[8] | 16 years old[9] | 13-15 years old[10] | 17 years old |
| Fees (ordinary members, yearly) | RM2.00[11] | RM2.00 | RM10.00[12] | RM10.00[13] |
| Fees (lifetime members, one-off) | RM300.00[14] | RM100.00 | RM102.00 | RM200.00 |
As seen in Table 2, the entry criteria of PKR are not substantially different from those of other mainstream parties. Unlike UMNO and PAS, PKR does not have membership types outside the standard ordinary members (RM2.00 yearly fee) and lifetime members (RM300.00 one-off fee). Surprisingly, PAS has the highest yearly fees among the mainstream political parties because it also exacts a mandatory purchase of a membership card and a registration fee which other parties do not do.
Importantly, the estimated compliance rate for payment of yearly fees seems low for PKR, either due to inefficient collection or members’ refusal.[15] Though PKR’s 18-year-old minimum age seemed progressive at the inception, the Undi-18 wave compelled parties such as UMNO to loosen their minimum age to 16; thus, PKR’s current minimum age is the most restrictive.
Interestingly, Article 4 of PKR’s constitution attached the measurements and colours for the flag and symbol of the party. The ‘eye’ on the flag is the ‘light that sees sacrifice for justice’, and the red represents courage and commitment to seek the truth.
PKR’s constitution is also differentiated for its details on policy commitments. Compared to the Malay parties, PAS and UMNO, which broadly highlight religion, Malay language, and national unity,[16] PKR’s purpose reads like a manifesto.
Table 3: Select articles of PKR party constitution relating to policy positions
| Constitutional articles | Description |
| 5.8 | Distribution of powers with East Malaysia, in accordance with Malaysia Agreement 1963 |
| 5.10 | Special position of Malay and East Malaysian bumiputeras who are poor and abandoned, and fair protection for non-Malays and non-bumiputeras who are poor and abandoned |
| 5.11 | Fair and dynamic economy, growth and fair distribution, free from oppression and wastage, overcome poverty and concentration of wealth |
| 5.12 | High-quality infrastructure (education, health, housing, transport) with affordable rates |
| 5.13 | Workers’ rights protected |
| 5.14 | Women’s position empowered as the backbone of society, respect for women, committed to achieving 30 per cent participation in leadership and decision-making[17] |
| 5.15 | Meaningful expansion of rights for youths |
| 5.16 | Orang Asli (indigenous community)’s quality of life and respect for tradition, with development plans that protect their land rights |
| 5.17 | Environmental protection |
| 5.18 | New international system based on fairness and democracy, foreign policy that is free and ethical, facing globalisation by creating a knowledgeable society that can avoid national threats. |
As observed in Table 3, PKR’s constitution includes a wide range of policy areas to represent its values, including the rights and protection of the indigenous community, workers, women, and East Malaysia. The only other party with a policy-oriented purpose in its constitution is DAP. However, even then, PKR’s constitution is more specific, even committing to 30 per cent female participation in leadership and decision-making, and recognising the Malaysia Agreement 1963.
Membership
As of 2022, PKR has approximately 1.16 million members, making it the second largest political party in Malaysia, only behind UMNO which has approximately 3.39 million (Chart 2). Having a membership number close to that of PAS, and their ranking would be interchanging, PKR will likely remain among the 3 largest parties for the foreseeable future.
Chart 2: Total membership of each mainstream political party
NB: Membership numbers based on latest available, including UMNO (2022)[18], PKR (2022),[19] PAS (2022),[20] Bersatu (2021),[21] Amanah (2019),[22] and DAP (2022)[23].
Chart 3: Total membership of PKR from 2003 to 2022 (select years only depending on available data)
Select available data since 2003 (Chart 3) show that before 2018, PKR received steady new members, averaging 26,000 yearly applications. In its early years, PKR’s new members were driven by youthful idealism; the party represented a strong anti-regime sentiment. From 2010 onwards, it was the low barrier to entry that played an important role; after all, the multiracial party accepts members of all backgrounds. The direct election system also meant that, compared to other parties, members could vote and run for party positions. Ambitious candidates would then recruit more new members before every election to strengthen their own positions.
Membership grew rapidly to ~89,000 per year from 2018 onwards,[24] the transformative year when PKR was part of the Pakatan Harapan government. Membership rose again in 2022 when Anwar became prime minister and it is predicted to rise again, with PKR now being the leading party in government. There may be higher expectation of patronage among new members after PKR won big in 2018 and 2022.[25] PKR has not adopted the model of past parties of relying on access to federal government resources for grassroots programmes.[26]
Understandably, the rate of growth was lower between 2020 to 2021 in the wake of the large-scale defection event called The Sheraton Move, led by former PKR deputy president, Azmin Ali. Though there were reports of pockets of hundreds of members leaving the party with Azmin, the figure is likely much lower than was headlined. For instance, in Johor, the figure of members sacked was estimated at less than 200,[27] and Kelantan PKR stated that only 300-500 left instead of the reported 10,000.[28]
Party leaders argue that the membership growth and low defection resulted from a ‘brotherhood’ and ‘idealistic’ bond in PKR,[29]and the pressure to win in the party’s direct election system.[30]
Table 4: Total membership, sub-divisions, and cumulative parliamentary seat won (since 2004) in PKR by states
| No. | State | Total members (2021) | Total members (2022) | Sub-divisions (ranting) | Cumulative parliamentary seats won since 2004 |
| 1 | Selangor | 282,179 | 346,991 | 520 | 35 |
| 2 | Sabah | 173,191 | 184,251 | 144 | 5 |
| 3 | Sarawak | 84,760 | 87,334 | 70 | 6 |
| 4 | Perak | 78,194 | 85,239 | 510 | 13 |
| 5 | Kedah | 64,321 | 69,131 | 63 | 16 |
| 6 | Penang | 60,360 | 67,071 | 57 | 15 |
| 7 | Johor | 55,988 | 65,962 | 177 | 15 |
| 8 | Kelantan | 55,977 | 59,744 | 10 | 3 |
| 9 | Negeri Sembilan | 47,791 | 54,327 | 124 | 4 |
| 10 | Kuala Lumpur | 40,511 | 46,026 | 70 | 18 |
| 11 | Pahang | 32,810 | 36,123 | 65 | 6 |
| 12 | Melaka | 29,046 | 31,350 | 137 | 4 |
| 13 | Terengganu | 18,609 | 20,464 | 56 | 0 |
| 14 | Perlis | 9,176 | 10,074 | 15 | 1 |
Chart 4: Total membership, sub-divisions, and cumulative parliamentary seat won (since 2004) in PKR by states
The geographical concentration of PKR members and its successes is closely linked to the leaders and how they mobilise the ground.
Selangor was the birthplace of PKR’s activist and intellectual groups, including co-founder Syed Husin Ali, and was expectedly the first state that PKR governed. The state also has the largest PKR membership (Table 4 and Chart 4) by a huge margin, and it has won the most parliamentary seats for PKR since inception.
The East Malaysian states are ranked second and third largest despite PKR’s varied success there. In Sarawak’s case, this is due to the tireless efforts of environmental and human rights lawyers setting up base to fight the regime of former chief minister Taib Mahmud.
Although Perak only has a quarter of Selangor’s membership, it has almost as many sub-divisions, indicating a larger-than-expected grassroots strength, and sizable cumulative seats won. Leaders like Dr Lee Boon Chye were responsible over decades for setting up strong divisions like Gopeng.[31]
Kedah and Kuala Lumpur have been states that overperformed for PKR, i.e. delivering more seats with its comparatively smaller size. Kedah delivered the third-most seats cumulatively, but this plummeted to only one in the recent elections and the party was overtaken by its opponents. Terengganu is the only state where PKR has yet to win a parliamentary seat; it did win a state seat in 2013.
Party Structure
The PKR constitution specifies that the highest authority is the national congress (Kongres Nasional, KN), while the executive function is carried out by the central leadership council (Majlis Pimpinan Pusat, MPP)(Chart 5).[32] This hierarchy is followed by the separate wings (youth and women), state leadership council (Majlis Pimpinan Negeri, MPN),[33] and the basic unit of division (cabang), which requires a minimum 100 people to be set up.[34] [35] Other than that, the MPP has authority to create by-invitation political bureaus (biro politik) covering administrative and policy areas.[36]
This makes PKR’s structure quite similar to UMNO’s. In fact, before 2008, PKR’s Malay terminology of its bodies was similar to UMNO’s, calling divisions bahagian, its state leadership council Badan Perhubungan Negeri, and its central leadership council Majlis Tertinggi, and members anggota instead of ahli, as is the case today. However, these terminologies were changed to be closer to that of Indonesia, in order to be more democratic and to be devoid of phrases such as ‘tertinggi’ (highest), together with the ‘one person, one vote’ direct election system introduced at the same time.[37]
Chart 5: Organisation structure of PKR
(See Appendix 2 for PKR’s president and deputy presidents since 1999)
In practice, the KN is merely symbolic in passing resolutions on major directions that have been agreed to by the MPP, prior to the KN.[38] [39] Examples of these major directions include the merger with PRM,[40] the campaign to Free Anwar from prison, and the coalition with other parties to form Pakatan Rakyat and Pakatan Harapan. This is not unusual as the highest congress typically serves as a place to obtain legitimacy for a decision and boost members’ morale,[41] rather than functioning as a debating and negotiating forum.[42]
In the MPP, the most powerful decisionmaker is the president, followed by the deputy president, vice-presidents, heads of wings, and the 20 MPPs.[43] PKR is the first party to specify a three-term limit for its president; the only other party with a similar restriction is DAP.[44] Interestingly, PKR’s constitution does not describe the president’s powers, unlike other parties that describes the president or equivalent as ‘main leader’ or ‘head’.[45] This may mean that future PKR presidents may rely on precedents to determine the limits of their power.
Additionally, the MPN, like the sub-divisions (ranting), are not registered with the Registrar of Societies, thus they do not carry as much power as the division.[46] [47] MPN’s role is mainly to organise and coordinate state-level programmes. However, the separation between national and state elections means that the MPN has increasing negotiation power in deciding election and state minister candidates, as the president and election director will largely account for the MPN leaders’ views.[48]
A division’s strength comes down to how likely it can negotiate for a candidate to be nominated in an election.[49] The first criterion is whether the seat is considered a winnable seat,[50] and PKR’s strongholds have traditionally been in mixed urban or semi-urban seats, with Selangor as its core.
Second, divisions with large membership tend to have more power, as they hold the leverage of mobilisation.[51] Third is whether the leadership considers the seat strategic for training good outsider candidates, like Lembah Pantai,[52] Wangsa Maju and Bandar Tun Razak.[53] For division-level activities, its division leaders have complete authority; whereas for election nomination, their inputs are considered but not guaranteed anything more than that.
Over the years, the influence of divisions has waned. This is partly due to the introduction of an open system where members can submit nominations online, potentially bypassing a division’s preference. Anwar’s dual position as prime minister and PKR president also means that his increased influence creates greater centralisation in decision-making, giving lesser say to divisions.[54]
Finance
Although PKR is the second largest party in Malaysia, its main revenue source is donations from its elected representatives—a mandatory 20 per cent cut from their salaries[55]—accounting for 57.3 per cent of the total revenue of 2019.[56] The other sources of revenue are public donations (24.3 per cent), fundraising dinners (17.3 per cent), and membership fees (1.1 per cent).[57] The total revenue per year appears lower than for other parties; the party does not have assets or revenue-generating business activities like UMNO or MCA.
In the past, the only significant revenue-generating activity was the sale of the party newspaper, Suara Keadilan, which at its height sold 180,000 copies per week. Recently, PKR started a cooperative to generate revenue, called Koperasi KEADILAN Berhad (KIRA).[58] The party’s cost structure is lean, with minimal party headquarters upkeep, only requiring additional firepower during elections.[59] [60]
THE LARGEST PARTY ELECTION: ONE PERSON, ONE VOTE
At its inception, PKR had adopted the delegate system to elect its leaders like other parties. Every year, around 2,000 delegates voted for the highest leadership, including the president, at the KN (Table 5).
Table 5: PKR’s party election system since inception
| Period | Pre-2010 | 2010-2021 | 2022- |
| Party election system | Delegate system | One-person, one-vote system | Hybrid system |
This changed in 2009, when the KN passed a resolution to make PKR the first mainstream party to implement the one-person-one-vote (OPOV) direct election system. This is a comprehensive system to elect division leaders to the MPP, including the president, deputy president, and vice-presidents.[61] The premise for OPOV at that time was to stamp out ‘unhealthy practices’ of money politics[62] and ‘phantom divisions’ that happened in other parties.[63]
The OPOV system created the most expansive voting system among all parties, giving up to 122 votes to eligible members, including voting for the president (see Table 6).
Table 6: Eligibility to vote and maximum eligible votes before and after the amendment to introduce a hybrid election system (mix of direct election and delegate system)
| Levels | Type of positions | Eligible to vote? (2010-2021) | Eligible to vote? (from 2022) | Total eligible votes (2010-2021) | Total eligible votes (from 2022) |
| MPP | Top Six (President, Deputy President, 4 Vice-Presidents) | Yes | Yes | 6 | 6 |
| 20 exco-level MPPs | Yes | No | 20 | 0 | |
| Youth (national) Top 5 (Chief, Deputy, 3 vice) | Yes | Yes | 5 | 5 | |
| Youth (national) 20 excos | Yes | No | 20 | 0 | |
| Women (national) Top 5 (Chief, Deputy, 3 vice) | Yes | Yes | 5 | 5 | |
| Women (national) 20 excos | Yes | No | 20 | 0 | |
| Division (cabang) | Top Three (Head, Deputy, Vice) | Yes | Yes | 3 | 3 |
| 15 division-level excos | Yes | Yes | 15 | 15 | |
| Youth (division) top 3 (Chief, Deputy, Vice) | Yes | Yes | 3 | 3 | |
| Youth (division) 15 excos | Yes | Yes | 15 | 15 | |
| Women (division) top 3 (Chief, Deputy, Vice) | Yes | Yes | 3 | 3 | |
| Women (division) 7 excos | Yes | Yes | 7 | 7 | |
| Maximum eligible votes | 122 | 62 | |||
NB: Voters are only eligible to vote according to their eligibility, i.e. a 20-something member could vote for the MPP and division for the highest excos and the youth leaders, but not vote for the women’s wing leaders. That means a young female member would have the highest maximum eligible votes.
When run efficiently and credibly, the OPOV system is a source of strength. The selection is more competitive—the VP contest is always crowded[64]—and PKR leaders’ strength is assessed in a ‘survival of the fittest’ contest,[65]creating winners who are likely to be in touch with the national electorate and could mobilise the masses for a common goal.[66] Direct election also creates a sense of ownership, making members more supportive of the party over time.
However, the logistics and labour overload lead to lengthy campaign and election periods, which may give rise to factionalism and intense rivalry.
Since the presidency, helmed by Anwar Ibrahim (or Wan Azizah in place of him when Anwar was in jail or disqualified), is never contested, the focus—and the factional battles—has always been on the deputy presidency, seen as the heir apparent to Anwar. Teams are formed around the deputy president candidate, and the faction that receives Anwar’s blessing, however indirectly, is seen to have the legitimacy to win.
Table 7: Total days taken to complete the party election process
| Year of party election | Total days taken |
| 2010 | 41 days |
| 2014 | 135 days |
| 2018 | 51 days |
| 2022 | 98 days |
| Average | 81.3 days (or 3 months) |
While all parties take at most 2-3 days to complete their leadership selections, PKR takes an average 81.3 days (or 3 months) (Table 7). In 2014, the vicious three-cornered rivalry between Azmin Ali, Saifuddin Nasution, and Khalid Ibrahim took 135 days (~4.5 months) to complete.
Though many party leaders concur that it should be shorter, the length is due to the logistical nightmare, where the party has to organise the way a national election commission would, with a formal body, procedures, rules, coordinators, counting and polling agents, and even police and auditors.[67] As PKR has presence in all states, with 222 divisions, it also needs to coordinate the voting by states so that the process is managed without instances of manipulation or fraud.[68]
Box 1: Sample briefing materials of PKR party election
| Briefing for PKR Party Election (Sample, 2022) . Administration of voting . Documents and equipment for voting . Methods of voting . Date of voting . Voting manual . Voting day physical plan . Voting rules . Voting procedure . Campaign code of ethics |
Efforts have been made in recent years to ease this burden. First, PKR adopted a hybrid selection system for the first time in 2022,[69] where the executive committees at the national and division levels are chosen by delegates (see Table 6 above). This halves the maximum votes available to the members, which had proven to be too many for members in the first place (‘over-democracy’).[70] Two, introducing online voting (via the ‘ADIL’ application) that will minimise logistics and potential cheating. In 2022, more than half the eligible members voted online, and this method may prove vital in handling the volume in future elections.[71]
These recent innovations to the party election system may increase the turnout rate, which has hovered around 15-20 per cent since 2010.[72]At the minimum, they have helped PKR reduce the campaign and election period to merely 2 weeks, massively scaling down the effort required.
PKR leaders have suggested external assistance, including from the national election commission, to ease the burden of logistics, especially as most involved in the party elections are volunteers with varying experience and organising skills.[73]However, PKR needs to overcome the low turnout rate and persistent factionalism in party elections before it can derive the full benefits of party democracy.
ELECTORAL PERFORMANCE: DIVERSITY AS THE WINNING FORMULA
To date, PKR remains the only party to have won at least a parliamentary or state seat in every Malaysian state.[74] It is also the only party to have a division in every parliamentary seat in the country[75]—a feat not even the oldest party, UMNO, has achieved. This implies that PKR pursues diversity not in a ‘tokenistic’ sense, but as a meaningful factor.[76]
To an extent, this is by design. Not only was diversity an explicit aim of the party at its formation,[77] [78] it is also included in the constitution. Article 21.7 of the PKR constitution gives the president appointment powers of key positions, including the vice-presidents, secretary-general, treasurer, information chief and others. Among the vice-presidents, the constitution requires at least one leader to be from East Malaysia as an in-built diversity requirement. It is also common for the leadership to appoint any ethnic group underrepresented in the line-up.[79] Unlike Gerakan and DAP that started out as a more balanced multiracial party that reflected the national composition but eventually changed, PKR continued with its multiracial makeup at every level of its leadership, down to the divisions and political bureaus.[80]
PKR’s stronghold lies in mixed and Malay-majority seats in urban and semi-urban areas (Table 8). The ethnic background of its MPs largely mirrors the population (with the exception of East Malaysia) (Table 9), giving it flexibility to contest on a diverse spectrum.
Table 8: PKR stronghold demographics
| PKR stronghold demographics | |
| Total stronghold seats | 40 |
| Malay majority | 67.5 per cent |
| Mixed or non-Malay majority | 32.5 per cent |
| Urban | 62.5 per cent |
| Semi urban | 37.5 per cent |
| Rural | 0 per cent |
| Malay population mean (per cent) | 54.7 per cent |
| Chinese population mean (per cent) | 30.3 per cent |
| Indian population mean (per cent) | 11.0 per cent |
NB: Stronghold as seats won at least twice by PKR
Table 9: Ethic profile between PKR elected MPs and Malaysia’s national population
| Ethnic group | PKR MPs’ ethnic profile (2022) | Malaysia’s national ethnic profile (2022)[81] |
| Malay | 58 per cent | 53.5 per cent |
| Chinese | 25 per cent | 21.0 per cent |
| Indian | 13 per cent | 6.1 per cent |
| Bumiputera Sabah and Sarawak | 3 per cent | 11.3 per cent |
Nomination data in 2013 reveal that PKR was uniquely positioned to face the Malay, Indian, and Chinese parties of Barisan Nasional, showing that it was ‘walking the walk’ in its multiracial pursuit, extending to even East Malaysia.[82]
However, even among the Malay-majority seats that PKR contests in, the Malay population is barely over half, indicating that PKR has had limited success in courting Malay votes, and often relied heavily on strong non-Malay support to win. Furthermore, its strength in East Malaysia, especially Sarawak, has been eroded drastically after the Sheraton Move, as many key indigenous figures such as Baru Bian and See Chee How had gone on to form separate parties to fight for local causes. PKR’s partnership with the dominant GPS coalition with the present unity government will further dilute PKR’s strength in Sarawak.
Anwar’s approach has always been to merge and accommodate different beliefs under one roof. While party leaders are confident that PKR is unlikely to abandon its multiracial core to please Malay voters,[83] the recent erosion of influence at the 2023 state elections is cause for concern.[84]
It could be argued that PKR’s previous electoral successes have been largely due to voters’ anger towards corruption—most serious during the 1MDB crisis between 2016-2018—which coincided with the growth of Malay parties and multi-cornered fights that split the Malay votes. PKR has always benefited from fence-sitter swing votes, but that also makes it vulnerable when Malay votes converge to a dominant Malay party. PKR’s potential electoral upside can only be captured if it first defends its core and then manages to win enough Malay votes.[85]
REFLECTIONS
Since its inception, PKR has been a party unafraid of taking big bets on the shape of society in years to come. One of its biggest bets—the OPOV system—has both yielded positive (rapid membership growth) and negative (factionalism) outcomes. The lower barrier to entry and expectation of rewards increased membership rapidly, but they remain under-mobilised, as evident in the low membership fee collection and turnout rates. The long-drawn party election has also exacerbated factionalism, typically centred on the vicious battle for deputy presidency, a position seen as the one that an heir apparent would hold, below the uncontested position of president.
Its second biggest bet was to establish a multiracial party in a meaningful sense. Its leadership, candidates, and representatives consistently reflect a multiracial mix,[86] [87] and this has given PKR an electoral flexibility and edge to compete at mixed and Malay-majority seats. Gaps, however, still exist, especially in its dissipated East Malaysia influence, besides its youth and Chinese membership.
PKR’s mobilisation strength and multiracial depth will ultimately affect its electoral performance, beyond its leadership’s strength in setting the narrative. The challenge for the party is to stay on course long enough for teething problems, however extended, to be resolved so that it becomes a party that succeeds in practising what it preaches.
APPENDIX 1
| Party | Founding year |
| United Malay National Organisation (UMNO) | 11 May 1946[88] |
| Pan-Malaysian Islamic Party (PAS) | 24 November 1951 |
| Democratic Action Party (DAP) | 11 October 1965 |
| People’s Justice Party (PKR) | 10 December 1998 |
| National Trust Party (Amanah) | 16 September 2015 |
| Malay United Indigenous Party (PPBM or Bersatu) | 8 September 2016 |
APPENDIX 2
| Year | President | Year | Deputy President |
| 1999 – 2018 | Wan Azizah Wan Ismail | 1999 – 2001 | Chandra Muzaffar |
| 2001 – 2007 | Abdul Rahman Othman | ||
| 2007 – 2010 | Syed Husin Ali | ||
| 2018 – present | Anwar Ibrahim | 2010 – 2020 | Mohamed Azmin Ali |
| 2020 – 2022 | Vacant | ||
| 2022 – present | Rafizi Ramli |
ENDNOTES
For endnotes, please refer to the original pdf document.
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