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Regional Outlook Forum 2019: Disruptions, Re-alignments, Opportunities

Wednesday, 9 January 2019 – The Regional Outlook Forum (ROF) is the flagship event of ISEAS – Yusof Ishak Institute held at the beginning of every year. The one-day event focuses on macro trends, developments and challenges facing Southeast Asia in the immediate, short and medium-term, with insights from distinguished practitioners, scholars and intellectuals with international and regional reputation.


Welcoming Remarks by Mr Choi Shing Kwok, Director of ISEAS - Yusof Ishak Institute (Credit: ISEAS - Yusof Ishak Institute)

ROF2019 is the 22nd edition of the event. This year, more than 650 participants attended the event at Shangri-La Hotel. They came from diverse backgrounds including the government and diplomatic community, the business and financial sectors, academia as well as domestic and international media.

The five sessions, with 11 speakers and five moderators in total, revolves around two broad themes. The first theme is the intensification of the geo-strategic competition between the United States and China that will affect the outlook of countries in Southeast Asia. The second theme is related to the pre- and post-election politics taking place in a number of Southeast Asian countries, namely, Indonesia, Thailand, Malaysia and Myanmar that will shape the political landscape in these countries in the years ahead.

One particular country where the dominant role of the ruling party is not threatened by periodic elections is Vietnam. For the first time, Vietnam is being allocated a session in the ROF because of its relatively large and dynamic population of over 90 million and a GDP growth rate that has exceeded 6% in recent years.

Session 1: U.S.-China Strategic and Economic Rivalry and Implications for the Region




From left to right: Mr Peter Varghese, Dr Zha Daojiong,  Dr Joseph Liow Chin Yong and Ms Bonnie Glaser (Credit: ISEAS - Yusof Ishak Institute)

Session 1 was moderated by Dr Joseph Liow Chin Yong (Dean, College of Humanities, Arts and Social Sciences and Professor of Comparative and International Politics, S. Rajaratnam School of International Studies, Nanyang Technological University). The three panellists were Ms Bonnie Glaser (Senior Advisor for Asia and Director of China Power Project, Center for Strategic and International Studies), Dr Zha Daojiong (Professor, School of International Studies, Institute of South-South Cooperation and Development, Peking University), and Mr Peter Varghese (Chancellor, University of Queensland).


Dr Joseph Liow Chin Yong: Dean, College of Humanities, Arts and Social Sciences and Professor of Comparative and International Politics at the S. Rajaratnam School of International Studies, Nanyang Technological University (Credit: ISEAS - Yusof Ishak Institute)

Ms Bonnie Glaser traced the development of Sino-American ties over the years and how they have reached the current state of increasing contention and strategic competition. Bipartisan support for economic engagement with China has waned over time. America initially welcomed China’s ascension into the World Trade Organisation (WTO) in the belief that global competition will force China to liberalise. However, this optimism proved to be unfounded. China is now pursuing an assertive foreign policy that is intended to weaken American influence and even exclude America from Asia. In 2014, Chinese President Xi Jinping had called for Asia to take care of its own matters, to resolve its own problems and to look after its own security. Xi also broke his promise not to militarise the Spratly islands. China’s growing assertiveness has provoked bipartisan American support for a “tougher stance”, even amongst the business community. Such strong sentiments against China will last beyond the Trump administration. Bonnie painted three scenarios in the US-China relationship going forward. The first is a return to “strategic hedging”, where there is “more even balance between competition and cooperation”. The second scenario is a new type of Cold War where the United States and China would “posture their military forces against the array of threats posed by the other side”. There could even be efforts to decouple their economies. The third scenario is a “grand strategic bargain” between the two powers where there is a peaceful and stable transition to a genuine balance of power in the Western Pacific and selective accommodation of China’s demands for adjustment of the international system.


Ms Bonnie Glaser: Senior Adviser for Asia and Director, China Power Project, Center for Strategic and International Studies (CSIS), USA (Credit: ISEAS - Yusof Ishak Institute)

Dr Zha Daojiong outlined three sources of “ideological disconnects” between the United States and China. The first ‘dis-connect’ is related to the issue of American acquiescence to China’s one-party communist state system. The Chinese believe that the 1972 détente indicated some degree of acceptance by America of the Chinese political system. However, for the Americans, the U.S.-China rapprochement was merely a “Cold War-era necessity”. The second ‘dis-connect’ concerns China’s economic rise as it coincided with “the decline in American manufacturing”. While the United States would like to claim credit for allowing China’s ascension into the WTO and China’s subsequent economic take-off, China would point to the significant concessions it has had to make to join the WTO. Furthermore, in China’s view, the relocation of manufacturing away from America and into China is better explained by the natural progression of “technology and forces of globalisation”. The third ‘dis-connect’ is a disagreement on the global responsibilities China should bear. While China subscribes to the principle of common but differentiated responsibilities the United States wants China to do more. He remained sanguine about the United States and China finding a way out of the current impasse and suggested that ASEAN re-assert its role as a convening power to mitigate the rivalry between the big-powers.


Dr Zha Daojiong: Professor, School of International Studies, Institute of South-South Cooperation and Development, Peking University, PRC (Credit: ISEAS - Yusof Ishak Institute)

Mr Peter Varghese explained how Australia viewed the evolving US-China dynamics and reaffirmed the importance of engaging China to create a “new strategic equilibrium”. A policy to contain China will not work and will only serve to confirm China’s worst fears. The trend of multi-polarity in Asia will get stronger. While China has to grapple with significant domestic challenges, the sheer size of its economy meant that the long term security of the Indo Pacific cannot “simply rely on the maintenance of US strategic predominance”. Moreover, the United States has global interests which dilutes the attention it can pay to particular regions. China, as a resident Asian power, will naturally view the region as its geopolitical priority. The process of adjusting to shifting power balances in a multipolar Asia will be incremental and organic. China is unlikely to behave like a classic revisionist power because it has been too much a beneficiary of the existing international system, although it will seek to change certain elements of the current system. He regarded the idea that “global technological supply chains could be divided” into separate Chinese- and American-led systems as “both economic and geopolitical folly”. He expressed his hope that the United States will strive to assert its leadership “by lifting its game, not spoiling China’s”. 


Mr Peter Varghese: Chancellor, University of Queensland, Australia (Credit: ISEAS - Yusof Ishak Institute)


Session 2: Political and Economic Outlook for Vietnam




From left to right: Dr Vu-Thanh Tu-Anh, Mr Manu Bhaskaran and Dr Alexander L Vuving (Credit: ISEAS - Yusof Ishak Institute)

Session 2 was moderated by Mr Manu Bhaskaran (Director, Centennial Group International and Founding CEO, Centennial Asia Advisors). The two panellists were Dr Alexander L. Vuving (Professor, College of Security Studies, Asia-Pacific Center for Security Studies) and Dr Vu-Thanh Tu-Anh (Dean, Fulbright School of Public Policy and Management, Fulbright University Vietnam).


Mr Manu Bhaskaran: Director, Centennial Group International and Founding Director & Chief Executive Officer, Centennial Asia Advisors (Credit: ISEAS - Yusof Ishak Institute)

Dr Alexander L. Vuving opined that the 1986 doi moi, although intended to be a correction course for the Communist Party of Vietnam (CPV), inadvertently steered the country into a rent-seeking state. This outcome was contrary to what happened in other Asian countries where the same combination of authoritarianism and capitalism gave rise to developmental states. By the mid-2000s, rent-seeking became the most important policy current in Vietnam, with most rent-seeking activities centred around four key networks/personalities: (1) former Prime Minister Nguyen Tan Dung, (2) the Ministry of Defense, (3) the Ministry of Public Security, and (4) the local party-government in Ho Chi Minh City. Current General Secretary Nguyen Phu Trong has launched a new correction course comprising an anti-corruption campaign and economic reform measures. However, the impact of both is limited. The anti-corruption campaign for instance has made some headway, particularly in dislodging former Prime Minister Nguyen Tan Dung during the 12th Congress of the CPV. However, not only are the bosses of the rent-seeking empires still untouched, but incentives for rent-seeking have remained. Trong has adopted the cautious approach of “not breaking the vase while beating the rats” and is reluctant to deviate from the primary aim of ensuring party stability.


Dr Alexander L Vuving: Professor, College of Security Studies, AsiaPacific Center for Security Studies, USA (Credit: ISEAS - Yusof Ishak Institute)

Dr Vu-Thanh Tu-Anh argued that Vietnam’s economy required new engines of growth to move away from overreliance on cheap labour, natural resources, and foreign direct investment. One of the new sources of growth is to promote private enterprise, which will require the replacement of import-substitution policies with import-promotion policies, and a move away from state-owned enterprises as well as the opening of markets. The second new engine of growth is to promote urbanisation and urban productivity as opposed to a primary focus on rural and agricultural development. The third engine of growth is to promote innovation and technology with an emphasis on “adoption” and “adaptation”, rather than “invention” per se. On the economic impact of the 2018 trade war on Vietnam, he saw Vietnam’s expected gain from trade diversion away from China in the short run as quantitatively modest, totalling less than 6% of Vietnam’s total exports. In the medium term, however, Vietnam may be able to benefit from the reallocation of global supply chain functions and foreign investment away from China, which will depend on Vietnam’s ability to exploit these opportunities.  


Dr Vu-Thanh Tu-Anh: Dean, Fulbright School of Public Policy and Management, Fulbright University Vietnam (Credit: ISEAS - Yusof Ishak Institute)


Session 3: Outlook for Thailand and Myanmar




From left to right: U Min Zin, Dr Michael Montesano and Mr Matthew Wheeler (Credit: ISEAS - Yusof Ishak Institute)

Session 3 was moderated by Dr Michael Montesano (Visiting Senior Fellow and Coordinator for Myanmar and Thailand Studies Programmes, ISEAS-Yusof Ishak Institute). The two panellists were Mr Matthew Wheeler (Senior Analyst for Southeast Asia, International Crisis Group, Thailand) and U Min Zin (Founding Member and Executive Director, Institute for Strategy and Policy, Myanmar).


Dr Michael J Montesano: Visiting Senior Fellow and Coordinator, Myanmar and Thailand Studies Programmes, ISEAS - Yusof Ishak Institute (Credit: ISEAS - Yusof Ishak Institute)

Mr Matthew Wheeler observed that the current Thailand’s military regime has created a political order akin to ‘Thai-style democracy’ with the underlying notion that Thailand is not ready for real democracy and needed a strong leader at the helm who could effectively respond to the needs of its people. The National Council for Peace and Order (NCPO) has created a system that sought to control the consequences of popular elections, thus consolidating its own power. This is evident from the 2017 constitution, which disadvantages large established parties like the Pheu Thai and the Democrat Party. The 2017 constitution also allowed the NCPO to fully appoint all 250 Senate members, while providing broad powers for the judiciary and its “independent agencies”. Such actions appear designed to offer a pretext for the junta to get rid of any future elected government which does not conform to the demands of the former. There are new developments/dynamics that bears watching. For instance, Thai voters have become more educated and better informed. The Thai economy is also no longer growing by double digits like in the 1980s. Also, under the 2017 constitution, the pro-military party has to engage in a significant amount of deal-making to form the new government, and that even if it succeeds in this task, it would itself be saddled with the constitutional constraints of its own creation. There are doubts whether the issue of political legitimacy could be resolved in the forthcoming elections.


Mr Matthew Wheeler Senior Analyst, Southeast Asia, International Crisis Group, Thailand (Credit: ISEAS - Yusof Ishak Institute)

Mr Min Zin gave his assessment of the state of democratic transition in Myanmar. There has been some progress under the National League for Democracy (NLD) as the new president, Win Myint, has brought more energy into the office. For instance, he has launched anti-corruption and anti-narcotics campaigns. There has also been a transfer of the military-controlled General Administration Department (GAD) to a ‘civilian-run’ Ministry of the Office of the Union Government. Win Myint has also placed more pressure on regional chief ministers to be more responsive to the plight of ordinary citizens. However, power remains primarily and ultimately vested in State Counsellor Aung San Suu Kyi. The 21st Century Panglong peace process was at a deadlock as the two major ethnic groups, the Karens and Shans, have announced their withdrawal from the peace process. On the Rakhine crisis, Min Zin suggested that the government’s handling of the situation has driven Myanmar to international pariah status, as well as into China’s embrace. With the slow decline in investment from the West, Myanmar has become desperate in luring Chinese investments, particularly through the China Myanmar Economic Corridor. 


U Min Zin Founding Member and Executive Director, Institute for Strategy and Policy, Myanmar (Credit: ISEAS - Yusof Ishak Institute)


Session 4: Indonesia: Gearing Up For 2019 Presidential Elections




From left to right: Mr Endy Bayuni, Dr Leonard C. Sebastian and  Mr James Castle (Credit: ISEAS - Yusof Ishak Institute)

Session 4 was moderated by Dr Leonard C. Sebastian (Coordinator of Indonesia Programme, S. Rajaratnam School of International Studies, Nanyang Technological University). The two panel speakers are Mr Endy Bayuni (Senior Editor, Jakarta Post) and Mr James Castle (Founder, CastleAsia).


Dr Leonard C Sebastian: Associate Professor, Coordinator of Indonesia Programme, S. Rajaratnam School of International Studies, Nanyang Technological University (Credit: ISEAS - Yusof Ishak Institute)

Mr Endy Bayuni noted that the forthcoming April 2019 elections will be the fifth time that Indonesians will be electing their leaders through free and fair elections since 1998. The 2019 presidential race has the same two candidates from the 2014 election but different political dynamics. Although most surveys show incumbent President Jokowi as leading his contender Prabowo by a considerable margin, Endy saw 15-20% of survey respondents as undecided voters who could swing the outcome on election day. At present, Jokowi has corralled a coalition of political parties that is more significant than Prabowo. Although, the vice presidential candidates may appear to have a limited impact on the presidential candidate’s electability, that they could prove to be decisive factors in a tight race. The choice of Ma’ruf Amin, current chairman of the Majelis Ulama Indonesia, as Jokowi’s running mate has defused concerns that Prabowo might use religion as a campaign tool. Meanwhile, Sandiaga Uno as Prabowo’s running mate is popular among housewives and millennials. This economy is the central issue in the campaign. As incumbent, Jokowi has to defend his economic record, while Prabowo will try to highlight Jokowi’s shortcomings in this area.


Mr Endy Bayuni Senior Editor, The Jakarta Post, Indonesia (Credit: ISEAS - Yusof Ishak Institute)

Mr James Castle outlined the current economic situation in Indonesia as a backdrop leading up to the forthcoming presidential and legislative elections. In his view, Indonesia’s economic orientation is too inward-looking. Although the macro-economic management of Indonesia has been good for the past three years, growth has remained stuck at 5%. Indonesia has also increased its trade barriers and decided to look inwards for drivers of economic growth. The government’s acquisition and ownership of PT Freeport is an example of such a trend. It is increasingly difficult to regard Jokowi for being too liberal and too friendly with foreign investors given how his administration has overseen the greatest takeover of foreign investor operations since the socialist expropriation of the Soekarno era some 60 years ago. In the forthcoming presidential election, both candidates were prioritising the economy as the primary focus of their campaigns. Jokowi has occasionally shown a mild liberal streak that Prabowo is trying to exploit. While Prabowo has a more dynamic public speaking style than Jokowi, this dynamism often descends into hyperbole which can offend as many voters as it attracts. 


Mr James Castle Founder, CastleAsia, Indonesia (Credit: ISEAS - Yusof Ishak Institute)


Session 5: Malaysia: A New Beginning?




From left to right: Dr Wong Chin Huat, Dr Francis Hutchinson and YB Khairy Jamaluddin Abu Bakar (Credit: ISEAS - Yusof Ishak Institute)

Session 5 was moderated by Dr Francis Hutchinson (Senior Fellow and Coordinator for Regional Economic Studies Programme and Malaysian Studies Programme, ISEAS-Yusof Ishak Institute). The two panellists were YB Khairy Jamaluddin Abu Bakar (Member of Parliament, Rembau Constituency, Negeri Sembilan, Malaysia) and Dr Wong Chin Huat (Head, Institutional Reforms and Governance, Penang Institute, Malaysia).


Dr Francis Hutchinson: Senior Fellow and Coordinator, Regional Economic Studies Programme and Malaysia Studies Programme, ISEAS - Yusof Ishak Institute (Credit: ISEAS - Yusof Ishak Institute)

YB Khairy Jamaluddin Abu Bakar said that Malaysian politics today is in uncharted territory with the Barisan Nasional (BN) losing power in 2018. Despite this sea change, the peaceful transfer of power is testimony to the coming of age of Malaysian democracy. GE14 saw the outright rejection of former Prime Minister Najib Razak by voters due to the multiple scandals surrounding him. PH had effectively campaigned on the premise that the Goods and Services Tax (GST) was instituted to offset the losses made by the 1Malaysia Development Berhad (1MDB) financial scandal. Pakatan Harapan (PH) managed to capture the people’s frustrations over the rising costs of living. Mahathir’s leadership of PH was another important factor that appealed to voters. Moreover, PH’s message of hope and change amidst the scandals surrounding BN eventually tipped the balance in its favour. PH’s unexpected victory has raised expectations. Malaysians were initially quite forgiving when some of PH’s campaign promises went unfulfilled – but not anymore. He cited the weak Malaysian Ringgit and an unclear economic strategy, among other pressing issues, as current sources of discontentment. There were also policy reversals by the current administration on certain issues, such as the railway projects with China which have been re-approved, and the use of public funds for the development of a new national car when the government had earlier given the assurance that the project would be privately funded. The rise of identity politics in recent months was an additional cause for concern.


YB Khairy Jamaluddin Abu Bakar Member of Parliament, Rembau Constituency, Negeri Sembilan, Malaysia (Credit: ISEAS - Yusof Ishak Institute)

Dr Wong Chin Huat offered a critique of Malaysia’s permanent coalition system in practice since 1955. In his view, the permanent coalition system does not allow internal competition due to the typical seat allocation agreement between the component parties of a coalition. This is usually done by assessing the ethnic composition of a constituency – hence a Malay-majority constituency will typically be fielded by a candidate from a Malay-based political party – as well as the past electoral records of the component party in that constituency. PH’s coalition model differs from that of BN’s due to the absence of a dominant component party in the former. This has translated into a different way of allocating ministerial posts to candidates from the respective component parties; apparently, more ministerial posts have been assigned to candidates from Bersatu and Amanah than PKR and DAP. He questioned whether PH’s current coalition model is sustainable. He suggested political parties break away from race- or ethnic-based parties to non-communal-based agendas by working on rights issues such as social class and environment preservation. At the same time, component parties within a coalition should also be allowed to compete with one another to ensure that every party can strive on a level playing field. To achieve that, he suggested having a mixed-member election system, where voters get to choose their members of parliament alongside choosing the political party they support.


Dr Wong Chin Huat Head, Institutional Reforms and Governance, Penang Institute, Malaysia (Credit: ISEAS - Yusof Ishak Institute)

Click here to download the Welcoming Remarks by Mr Choi Shing Kwok.
To view the Rapporteurs' Notes, please click here.
For media coverage, click here.
For more photos of the event, click here.
For videos of the sessions, click these links:
- Session 1
- Session 2
- Session 3
- Session 4
- Session 5

What people say about the ROF2019

"I am so proud to see how ROF has developed as a key flagship event of the Institute. Having taken part in the inaugural event on 16 January 1998, I can see that the event has grown from strength to strength. It should be ISEAS-Yusof Ishak’s Institute’s aim to make the ROF’s 25th anniversary a signature event." (Dr Leonard Sebastian, RSIS)

"Overall the ROF was one of the best I have attended." (Manu Bhaskaran, Centennial Asia Advisors Pte Ltd)


"This year’s ROF was memorable for the excellent speakers—a very good mix of academics, policy makers and business professionals." (James Lim, MINDEF)

"Well done! Looking forward to ROF 2020! Great coverage of relevant and current topics." (Danny Ng, ICA)

"Commendable presentations by the two speakers (Session 3), an extremely interesting and honest presentation by Khairy, and the treatment by Dr Wong Chin Huat is replete with robust and in-depth analysis from multiple angles. A strong panel on a topic that is closely watched by many observers in Singapore. Great insights! (Session 5)" (Jansen Wee, RSIS, NTU)

"Really excellent informative presentations (Session 2), Fascinating analysis by Dr Wong and an astonishingly positive performance by YB Khairy. (Session 5)" (Victor Mills, SICC)

"James Castle clearly knew the ground and his sharing was both frank and insightful. (Session 4)" (Saifudin Hamjuri Samsuri, Civil Service College)

"I thought Francis did the best job as a moderator: Introducing and summarizing the session. YB Khairy was an engaging speaker. Good choice of speaker (Session 5)" (RC, MINDEF)