6-7 January 2022, Thursday-Friday – The 25th Regional Outlook Forum, organised by ISEAS – Yusof Ishak Institute, was held over two days via Zoom and was attended by over 500 participants.
REGIONAL OUTLOOK FORUM 2022
WELCOMING REMARKS
The welcoming remarks for the 2022 Regional Outlook Forum were delivered by Mr Choi Shing Kwok, Chief Executive Officer and Director of the ISEAS – Yusof Ishak Institute. Mr Choi began by elaborating on the theme of the Forum, “Regional Disruptions Amidst Global Recovery”. The theme reflected guarded optimism about economic growth for 2022 and one that will also be punctuated by continuing disruptions in Southeast Asia. The global economy is expected to recover further in 2022 but most countries in the region are likely to experience slower growth than the global average.
Drawing lessons from the experience of the past two years, Mr Choi opined that it will be prudent to still expect some twists and turns in the road ahead. Developments that continue to cloud our view of the future include the explosive spread of the Omnicron variant, persisting inflationary pressures and the Federal Reserves’ likely response to them, continuing geopolitical tensions between China and the US, and the anticipated but still shocking impact of climate change which is increasingly being felt everywhere.
The economic and political trajectories of Southeast Asian countries are likely to witness some degree of divergence in 2022 due to differences in their Covid-19 policy approaches and bureaucratic capacities, as well as other specific circumstances. As such, Mr Choi suggested that country-level details and insights will matter greatly. In this regard, the Forum provides discussions on global and regional issues in the first panel, before going on to five country panels covering Vietnam, Thailand, Myanmar, Indonesia and Malaysia.
Mr Choi also outlined some of key issues on the horizon for each of the panels. They range from the worrying trajectory of superpower competition, escalating domestic unrest in Myanmar, political factionalism in Thailand, fleet-footed balancing between different strategic imperatives by Vietnam and the surprisingly politicised atmospheres in Malaysia and Indonesia, where elections are at least technically not due so soon.
He ended his remarks by wishing the participants an intellectually stimulating experience listening to the insights that our speakers will share on these issues. Finally, he expressed his thanks to the Platinum and Gold sponsors for their financial contributions to the Forum. They are Huawei, Mitsubishi Corporation, OUE, SP Group, Mapletree Investments, Nikkei Group Asia and The Asia Foundation.
KEYNOTE ADDRESS
The keynote address for the 2022 Regional Outlook Forum was delivered by Senior Minister Teo Chee Hean, Singapore’s Senior Minister and Coordinating Minister for National Security. Senior Minister Teo began his address by describing how COVID-19 has accelerated many global trends and caused major disruptions, to Southeast Asia and the world. He noted that, at the individual level, the pandemic has affected the health of many, disrupted our way of life, how we work, and how we do business. At the global level, it has accelerated pre-existing geo-political trends. The US-China rivalry has intensified with competition between the two major powers, manifested itself over trade, and has spilled over into other domains. Multilateralism has also been disrupted, with international organisations like the World Health Organisation (WHO) facing difficulty coordinating a global response. Global supply and production chains have also been put under great stress.
Senior Minister Teo proceeded to elaborate on some of the underlying causes of these trends. These trends in many countries have been fueled by a sense that the fruits of free trade and globalisation have not been distributed equitably. The digital revolution has also brought both real and imagined threats to existing economic sectors and jobs, raising anxieties and fears. This is expected to be further accentuated by 5G. There has also been a failure to equip workers and small businesses to deal with these changes which has led to growing social divisions. These divisions have been reinforced by social media echo chambers and fake news with the consequence of pitting people against one another and fracturing social and political stability. These developments have fueled a wave of nativism and protectionism among the left and the right. They have also congregated people on the extremes, leaving the middle ground empty.
Senior Minister Teo then elaborated on how these dynamics have diminished trust in political and social institutions that are meant to intermediate between groups with different views to find common ground. In this environment, politicians find it expedient to define their ideologies and platforms to appeal to specific segments of society. It has become easy to gain political capital by arousing the basic human instincts – anxiety and fear, greed and envy – in both developed and developing countries.
Another trend observable in international relations is the expediency of externalising domestic problems. Once such narratives take hold, the space for dialogue narrows. The middle ground is shrinking against this backdrop. As a consequence, there is no place for the middle way for the moderate voice which seeks a meeting of minds and consensus. This development will lead to a fractious world, dominated by the extremes, where outcomes are seen in zero-sum terms, rather than making attempts to seek shared win-win solutions. Attitudes on issues such as race and religion, access to opportunities, and income and wealth distribution will harden within countries.
This led Senior Minister Teo to the question of whether this is the right way or whether it would be much better for us to channel our energy and effort into reaping the opportunities and benefits of digitalisation or the green economy, to grow the pie rather than fighting over a stagnant or even shrinking one. It also leads us to enquire about the pathway that will bring us closer to solutions to deal with the global challenges that we all face – securing our recovery from COVID-19, climate change, counter-terrorism and counter-proliferation.
Senior Minister Teo highlighted three key areas that will enable us to build better lives for our people and to build a better world. They are: (i) Governance; (ii) Multilateralism; and (iii) Partnerships.
Good governance, rather than on dogma or ideology, is the key to bringing a better life for our people. In this regard, many ASEAN countries continue to face real development challenges, and struggle to provide the infrastructure, housing, power supply, healthcare and other services that their populations need. The young population is projected to grow in many ASEAN countries and countries can only reap this demographic dividend if they invest in education and developing their young. However, there are also growing numbers of seniors who have healthcare and retirement needs which, if not adequately provided for, will strain the budgets of the state, individuals and families.
Beyond Southeast Asia, the major economies are facing pressing domestic challenges. There is a need for China to address the growing income gap particularly between its rural and urban populations, and the gap in development between its coastal regions and inner provinces. The country also needs to avoid falling into the middle-income trap before its population ages. The US, on the other hand, needs to deal with its growing inequality gap, its “culture wars”, and to create sufficient new jobs for another generation of middle-class workers with higher aspirations. It also needs to invest significantly to upgrade its basic education and infrastructure.
As every country faces different circumstances and challenges, each country will have to organise itself, derive its own guiding principles for governance, structure its system, and find its own blend of social and economic policies, based on its own unique circumstances. Finding the right formula and continually refining it will provide the pathway for each country to address its challenges for the long term.
Senior Minister Teo advocated practical governance informed by actual experience and outcomes taking into account the realities of each country and society. A logical rather than an ideological approach should be taken and policies need to evolve over time, based on actual experience, to meet changing needs and requirements. This approach will achieve stability and continuity of policy, and achieve sustained progress towards a better life for all.
Second, instead of acting unilaterally for our own narrow self-interests, we need to be guided by principles which serve the good of the broad community of nations. We live in a much more interconnected world – the same ecosphere and biosphere. We should uphold a rules-based, multilateral system where the rules are set and accepted by the broad community of nations. It is hard work, takes time, requires compromise and consensus, and can be imperfect – such as the Paris Agreement on Climate Change, negotiations at the WTO, and cooperative action at the WHO. But it is important to broaden the middle ground for countries to work together and prosper together.
Multilateralism has been key to Southeast Asia’s growth and development. Southeast Asian countries have managed to set aside their differences and resolved to work together for the common good of the region. ASEAN was formed in 1967 and the organization has been a source of stability, strength and growth. It has also provided the ASEAN countries with a platform to engage the major powers, and other countries and regions. This gives ASEAN countries the initiative to shape the region’s future rather than have it shaped for them.
Senior Minister Teo also touched on the benefits from committing to a rules-based multilateral order. These include the impact of China’s entry into the WTO in terms of economic growth and poverty alleviation. Trade between China and the US as well as Europe has flourished prior to the trade war.
Another challenge highlighted by Senior Minister Teo is the shift that manufacturers may have to make from a “just-in-time” and “lean production” model, to a “just-in-case” and “resilient production” paradigm. This change aimed at building a more robust global supply chain will incur some costs.
Senior Minister Teo also highlighted other key issues that require collective action and global solutions, such as terrorism, climate change and cybersecurity. He expressed hope that the US and China will manage their outstanding bilateral issues in such a way that will allow them to act in an enlightened, rather than narrow self-interest manner. This will enable them to work together to exercise global leadership to collectively address the global challenges.
Senior Minister Teo drew comparisons between the collective responses of big countries during the Global Financial Crisis (200702008) to the COVID pandemic. In the former case, the G20 countries were able to take collective and concerted action to stabilise the world economy and restore growth. However, the G20 was not able to muster the collective and concerted action needed to deal with the pandemic. This leads to the question of whether countries should look for cooperation with other countries especially when the contestation between the US and China supersedes cooperation.
In response to this question, Senior Minister Teo suggested that smaller countries should consider partnerships that involve like-minded countries with the view to help shape the global order. This includes taking steps to uphold and update the global security architecture or trading system, even if the major countries are unable to do so in the short-term. Examples of this includes the Global Governance Group (or 3G) involving 30 small- and mid-sized countries and P4 (comprising Brunei, Chile, New Zealand and Singapore). The latter was instrumental in the formation of the CPTPP. ASEAN countries, which formed the core of the RCEP with its six FTA partners, have also persisted even after India pulled out. These developments are a reminder of what smaller countries can do to shape the global order when they come together. Looking forward, smaller countries or countries in this region could find a way for risk pooling and “insurance”, to collectively invest in vaccine production capacity so that supply can be ramped up quickly when needed.
In concluding his speech, Senior Minister urged everyone to internalise the lessons from the Pandemic and work together for a better future. Everyone is united by a common goal – to create a better life for our people, and to create a better world. There is a need to think beyond the immediate, think in terms of enlightened self-interest, not narrow self-interest, and create new options and opportunities.
SESSION 1: US-CHINA RELATIONS
The first session of the Regional Outlook Forum 2022 focused on the regional strategic environment in the midst of the geopolitical contest between China and the United States. Ms Hoang Thi Ha (Fellow and Co-coordinator, Regional Strategic and Political Studies Programme, ISEAS – Yusof Ishak Institute) moderated the session which featured a panel of three speakers who conveyed the perspectives of the United States, China and ASEAN, respectively.
Mr Ryan Hass (Senior Fellow and the Michael H. Armacost Chair, Brookings Institution) began by contextualizing how, in the view of the United States, bilateral relations with China have “stabilized” in the past year. When President Biden first assumed office, the relationship was “effectively dysfunctional” and characterized by a dynamic of “confrontation through public condemnation”. Currently, even though there has not been a dramatic reduction in tensions, Mr Hass observed a renewed sense of “professionalism” between Washington and Beijing.
Mr Hass noted that the Biden administration made a few adjustments in Washington’s approach towards China. The rhetoric of containing or decoupling from China has been jettisoned; instead, the framing has now instead shifted towards “creating a favourable balance of power in Asia” for the United States. The administration is also prioritising Asia as the future geostrategic “centre of gravity”, and has accordingly sought to limit the United States’ involvement in the Middle East and Afghanistan. Moreover, the White House is clear about the limits of engagement and cooperation: its pursuit of public diplomacy with China is for the purposes of ensuring tensions do not overheat. Bilateral dialogue is seen as a “pressure release valve” to manage US-China tensions, rather than as a means of advancing a more comprehensive and concrete agenda.
Since neither side has much that they need from the other, or has high expectations about the possibility of substantive bilateral cooperation, Mr Hass suggested that both major powers are settling into “a zone of mutually tolerable friction”. While regular interactions between the leaderships of the two countries will provide a “floor” preventing the relationship from significantly deteriorating, domestic political pressures will also firmly place a “ceiling” on what both can achieve together.
However, in the longer term, Mr Hass anticipated that the world will come to expect more of China and the United States, especially to address global challenges such as the climate and public health. According to Mr Hass, the demand for both powers to focus on these issues may compel Beijing and Washington to eventually “see beyond themselves and their differences”. As Mr Hass explained, the respective global prestige of the United States and China will ultimately depend on their performance, particularly in term of how they are able to improve the lives of both their citizens and the rest of the world. In sum, Mr Hass believed that US-China relations will experience “heightened but manageable levels of tensions” in the coming year.
In expounding the Chinese perspective, Professor Chen Dongxiao (President, Shanghai Institutes of International Studies) noted the “paradigm shift in the US-China bilateral relationship” that has been ongoing since President Trump, who initiated a reversal of the United States’ policy of engagement. In its place, the United States has adopted a posture of “strategic competition” against China, which Beijing views as a “new containment” policy. Professor Chen explained that Beijing has, in response, decided to engage in a “grand struggle” to establish a “peaceful coexistence” between the two powers grounded on “mutual respect”. This stance is partly reflected in Beijing’s increasing proactiveness at agenda-setting in instances of bilateral dialogue and interactions between the two powers.
According to Professor Chen, the United States have started to move towards Beijing’s position, especially with President Biden’s pronouncement that the United States and China have to live in a “competitive coexistence with guardrails”. For Professor Chen, Biden’s approach indicates that the United States recognizes that its relations with China is the country’s “most important bilateral relationship”. Moreover, it suggests that the United States has no interest in containing China through its alliance system (or to embark on a new Cold War), or any intention of changing the “One China policy”. However, Professor Chen acknowledged that both countries still differ on what “competition” between the two should look like.
As such, Professor Chen described “rising competition and repeated frictions” as the “new normal” of US-China relations, adding that the “Taiwan question” remains the single most volatile issue between the powers. Moreover, there is increasing uncertainty on both sides about whether the other will seek to unilaterally and fundamentally the status quo.
Thus, 2022 is likely to be another year of uncertainty, since the Chinese Communist Party (CCP) will be holding a momentous 20th Party Congress, while mid-term elections will occur in the United States. Given their domestic political preoccupations, the leaderships in both countries would likely be keen for “a more stable bilateral relationship” – though Professor Chen expressed worries that President Biden might be tempted to engage in China-bashing to win support from the Republican Party for his domestic agenda.
Professor Chen concluded by reiterating the need for “stable and predictable patterns” in the bilateral relationship, including regular communication and dialogue at every level of government. He also emphasized the importance of conflict prevention and crisis management on sensitive issues such as Taiwan, Hong Kong, Xinjiang and the South China Sea.
Professor Khong Yuen Foong (Li Ka Shing Professor in Political Science, Lee Kuan Yew School of Public Policy, National University of Singapore) provided a regional perspective. According to him, the trade and technology conflicts between the United States and China are merely “manifestations or symptoms” of the broader shift in the Asian balance of power, in which American hegemony is replaced by one in which China is closing in terms of comprehensive power. This creates a bipolar system in Asia, leading the two countries to compete for power and influence in the region across the board.
While experts believe that China will want to displace the United States as the predominant power in Asia in the long run, it is likely that China only wants to insist on a status of “co-equality” with the United States for now. However, because the United States has been reluctant to recognise China as a peer power, Beijing has decided to put “facts on the grounds” in order to force the issue. Professor Khong explained that this would translate into increasing pressure on regional countries to “choose sides”. While ASEAN would prefer to remain friends with both China (for economic gains) and the United States (for security), Professor Khong believed that it would be “increasingly tough to maintain” this stance in the coming years.
Professor Khong mentioned that the US-China economic decoupling is “chugging along, but not as fast as expected”. The slow pace is partly due to the recognition that the cost of decoupling is “uncomfortably high”, as a recent United States Chamber of Commerce report indicated. He also observed that President Biden has not relented on the trade war started by his predecessor. And while the region would generally prefer a more stable trade environment, the realignments prompted by the trade war have benefitted some in the region, such as Vietnam, Indonesia, Thailand, and Malaysia, which manufacture products similar to China. The tech decoupling and growth of e-commerce have benefitted Singapore, which is seen as an “economic safe haven” for both American IT companies and Chinese tech firms. For the latter, Singapore is a useful base to carry out their strategy of separating their global operations from their domestic headquarters.
Commenting on the emergence of rival institutional linkages in the Indo-Pacific (such as the Quad and AUKUS), Professor Khong stated that such developments would make ASEAN less central in the regional security architecture. In the aftermath of the Cold War, ASEAN was at the forefront of creating regional mechanisms (such as the ASEAN Regional Forum, the ASEAN + 3, and the East Asian Summit) to enhance confidence building and encourage dialogue. However, China’s rise has prompted the United States to “corral allies and strategic partners”, which includes Japan, Australia and India, in an effort to “balance” China and preserve American hegemony. Professor Khong described institutions such as the Quad and AUKUS as “more exclusive security arrangements” that will compete with the “more inclusive” ASEAN institutions, though he suggested that the latter could perhaps still play a role in “defanging the sharper edges” of the US-China rivalry.
However, Professor Khong made a case for ASEAN’s economic salience, pointing to its involvement in originating the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP). He also identified the ASEAN Digital Masterplan 2025 as an exercise of regional agency in constructing digital rules for the region, which he expects the United States and China to want to “weigh in” on.
In sum, Professor Khong warned that we are heading into “a decades-long geopolitical contest between the two leading powers of Asia”, which is likely to be more intense and dangerous than the Cold War. There will be immense pressure for Southeast Asian to choose sides, with some that having already done so (due to their geographic realities), while others considering their choices based on their “domestic politics, perception of economic opportunities, and estimation of the United States’ staying power”.
The Q&A segment opened with queries for Mr Hass from Professor Danny Quah (Lee Kuan Yew School of Public Policy, National University of Singapore) and Dr William Choong (ISEAS – Yusof Ishak Institute). Professor Quah asked for examples of the policy issues that China and the United States could constructively engage in. Mr Hass outlined four possible baskets of issues: economics and trade, climate, strategic stability, and region-specific matters. To Dr Choong’s question whether the United States’ posture of “strategic competition” amounted to “pseudo-containment”, Mr Hass maintained that Washington’s policy of competitive coexistence is not an attempt to contain or isolate Beijing. He also discounted the possibility that President Biden might be rely on China-bashing to advance his domestic agenda, noting that the administration recognizes that the president will not win over the Republicans in Congress even with such rhetoric.
Ms Ha asked the panel whether it was a “silver lining” for the region that that the United States and China are competing with each other to “provide solutions”, such as offering Covid-19 vaccines to the region. Professor Khoong acknowledged that Southeast Asia has benefitted as both the United States and China have prioritized the region in their respective “vaccine diplomacy”. However, he surmised that the region would prefer a more “predictable environment” in which the “constructive habits of dialogue” prevails. Professor Chen mentioned that it would be ideal if both countries could collaborate in establishing a more “efficient” division of labour to provide “global public goods”, arguing that this was a case of “positive-sum, not zero-sum, competition”. Mr Hass observed that it is not necessarily a bad thing that China and the United States are seeking to “outperform each other” since it would create “a race-to-the-top dynamic”.
Dr Ooi Kee Beng (Penang Institute) and Ms Sharon Seah (ISEAS – Yusof Ishak Institute) asked about the future prospects of ASEAN’s internal cohesion and strategic role. Professor Khong suggested that the days of ASEAN being in the driver seat and playing the “honest broker role” on the security front are over. However, he reiterated his belief that ASEAN may still be relevant in the economic domain while acknowledging that ASEAN solidarity will be increasingly tested as a result of the US-China competition.
Mr Andrew Tan (Temasek Holdings) queried about the public diplomacy efforts of both major powers. Mr Hass underlined the importance of the United States to “improve its performance at home”, stating that the United States has the “capacity to inspire other countries by living up to its ideals”, even if the country was falling short of them at the moment. Meanwhile, Professor Khong affirmed the need for consistency between the rhetoric and policy of public diplomacy, observing that countries are acutely sensitive to what is being said and what is actually being done “on the ground”.
SESSION 2: VIETNAM
The second session was on Vietnam’s political and economic outlook for 2022 and beyond. Moderated by Dr Le Hong Hiep (Senior Fellow and Coordinator of the Vietnam Studies Programme at ISEAS), the panel featured two eminent country experts.
Dr Edmund Malesky (Professor of Political Economy at Duke University) presentation focused on the nation’s political future. The discourse focussed on three key themes: elite politics, COVID-19, and anti-corruption policies. In the 2021 Vietnam general elections, while the top leadership positions were retained, 60 per cent members of the central committee and 50 per cent of the politburo were re-elected. Among the notable trends, Professor Malesky emphasised: the relaxation of the retirement age of elected officials (preventing the entry of younger candidates); the emergence of a regional divide in the top leadership representing the three major parts of the country (the southern provinces are not represented in the top positions); the restoration of a separation between the general secretary and the presidential roles (this could help keep a check on the president’s veto powers); and the decline in the number of non-party members in the national assembly.
With regards to Vietnam’s pandemic mitigation strategy, Professor Malesky said that, while the government did have a fairly robust support plan in place, inefficient targeting meant that the poorest unskilled workforce continued to bear the brunt of the COVID-induced job losses. One major point of contention between policymakers and international investors was the impact of the strict border closure measures. The government had to weight loss of investment opportunities against the public support for lockdown to keep a check on infection figures.
One of the Vietnamese Communist Party’s flagship campaigns has been the much touted anticorruption drive. Since 2018, around 643 cases of corruption have been reported in the country and 1,579 individuals have been tried as a result of the new policy. This has been complemented by public efforts to streamline administrative reform, especially in terms of minimising procedures for businesses and moving the vast majority of administrative tasks online. Preliminary comparative statistics between 2016 and 2021 suggest that these measures have resulted in a drop in petty corruption throughout the nation.
Professor Malesky concluded his discussion by sharing some insights on the outlook for 2022. The year will be marked by the re-emergence of economic activity, and uptick in international air traffic and commerce. However, the inequality in relief efforts could lead to a K-shaped recovery, he added. In terms of global integration, 2022 could see three major trade agreements taking full-fledged effect in Vietnam – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Regional Comprehensive Economic Partnership (RCEP) and EU-Vietnam Free Trade Agreement.
Dr Can Van Luc (Chief Economist at the Bank for Investment and Development of Vietnam) presented his views on the country’s economic outlook. The discussion comprised three segments: economic opportunities on the global and ASEAN stage, Vietnam’s socio-economic landscape, and implications for foreign investors.
Dr Luc first shared a graph on the global recovery since 2021, underscoring the jump in GDP growth rates observed in most major economies, including ASEAN. The latest World Bank estimates predict that the international economy will grow by around 5 per cent this year. The post-slowdown phase, however, will be characterised by steep inflation of around 3.3 per cent. Other significant challenges include: the emergence of new, more infectious coronavirus variants and slow vaccination rates; the continuation of the trade war between China and the US; geo-political tensions across many parts of the world; and post-COVID financial uncertainties facing most governments.
Dr Luc then drew the audience’s attention to the 2022 forecast for the Vietnamese economy. After witnessing the lowest growth rate since its 1987 economic reforms (Doi Moi) in 2021 (2.58 per cent), the country is expected to grow by 5.5 per cent this year. The simultaneous recovery of most of its key trade partners – the US, China, EU, ASEAN, Korea and Japan – signals that the volume of imports and exports is poised to reach very close to 2019 figures in 2022. Interestingly, despite the pandemic, Vietnam’s FDI diminished by just 1 per cent in 2021. The government is hopeful of investment inflows attaining pre-COVID levels by the middle of this year. But the overall optimism could be marginally marred by: slow recovery of the services sector; increased budget deficit and non-performing loans; and low competitiveness of the some of the country’s institutions compared to that of their regional counterparts.
Shedding light on what these statistics mean for international investors, Dr Luc said that Vietnam offers many opportunities in the areas of health services, fintech, retail, digital economy, agribusiness and tourism. The perpetually rising size and income of the middle class will be particularly lucrative to global businesses that are keen to increase their foothold in Southeast Asia. While challenges remain, the government is committed to continuing its economic reforms, he assured.
In the Q&A session, Dr Le posed questions to the speakers on public perception of the incidence of high-profile corruption scandals in the country, and on the remarkable spike in Vietnamese exports in 2021. The virtual audience also asked several questions, including: the country’s particular comparative advantages from joining the RCEP; whether participating in the CPTPP will expedite institutional reforms; the socio-economic advantages of Vietnam’s demographic dividend; the effects of the apparent loss of the nation’s low-wage labour advantage; and Vietnam’s balancing act in the face of the ongoing trade-ward between the economic powerhouses.
SESSION 3: THAILAND
Dr Michael J Montesano (Visiting Senior Fellow and Coordinator, Myanmar and Thailand Studies Programmes, ISEAS – Yusof Ishak Institute) welcomed the participants to the webinar and introduced the speakers.
Dr Kirida Bhaopichitr (Research Director for International Economics and Development Policy, Thailand Development Research Institute) opined that the Thai economy grew by 0.75 per cent in 2021 compared to the 6.1 per cent economic contraction in 2020. The pre-Covid level would only be attained in 2023. The Thai economy will return to its 2019 pre-Covid 19 level anytime soon as household income has been heavily affected by unemployment and reductions working hours.
A big driver of the Thai economy is exports which make up 50 per cent of the Thai GDP. In the first 11 months of 2021, exports expanded by 16.4 per cent, owing to the recovery of major markets and low base last year. Exports are expected to expand at around 16 per cent this year. In 2022. Export growth may slow down slightly to 10 per cent. This will be driven by the recovery of global demand, fewer production disruptions from Covid19 outbreak, semiconductor shortages and the easing of container shortages. Most major exports have already recovered and their values are higher than 2019.
Another big driver, household consumption, has recovered and is expected to rise further this year. However, amidst high underemployment and with gradual recovery in income and high household debt, household consumption this year will remain below that of 2019.
Another big driver is tourism. International tourism accounts for 12 per cent of the GDP and domestic tourism another 6 per cent. The number of tourists declined from 40 million to only 400, 000 last year. International tourism has been recovering slowly even with the opening since July with the implementation of the Phuket Sandbox and the Samui Plus. Thailand has reopened to foreign tourists starting in November 2021. The number of tourists in 10M2021 is 106,000 and is expected to be 300, 000 in 2021, 5 million in 2022. However, tourism will not likely return to pre-Covid levels until 2024. Domestic tourism will likely recover to its pre-Covid level in 2023.
Another driver of the economy is private investments. Despite the drop in capacity utilisation during the 3rd and 4th waves of Covid-19 outbreak (since May), private investment continues to exceed the 2019 levels. Many of the foreign direct investments that have come to Thailand are relocations from the private sector due to the Chinese government’s greater control on the private sector and energy shortages. Most of these companies are higher tech companies. Most of the lower tech companies move from China to Vietnam.
The government itself is still stimulating the economy. Thailand’s macro-indicators are strong, the fiscal stand is also strong and it will be able to stimulate the economy more this year. But most of the stimulation measures will focus on consumption rather than investment or helping small-medium enterprises. There are still resources left from the loans the government has taken.
The Thai Baht is expected to depreciate this year compared to last year as there is less capital inflows especially through tourism and also since the US dollar is strengthening and the US interest rates will rise. It will probably slowly strengthen over the next few years. This will be good for exporters but imported goods will be more expensive for us.
Prices in the world have increased compared to the year before and will remain high because of supply disruptions. These include energy prices, freight costs and agricultural materials. One emerging risk from the global economy is the slowdown in China’s economy due to the Chinese government’s intentional policies to slow down growth, e.g., tech companies. China is also facing energy shortages in its efforts to decarbonise. That has resulted in higher prices for other goods such as fertilisers. The US-China tech and trade wars will affect Thailand which is a user of technology, and it may have to choose between the US and China, for example, in the semiconductors industry.
There are some risks that would result from the prolonged economic downturn, which will leave a lot of economic scars on households and small and medium enterprises. Household debt has risen and incomes have fallen. Working hours have reduced. Many workers have moved back to the rural areas. These will pose risks to the Thai economy once the Covid pandemic has died down. Small and medium enterprises are also not performing well.
On digitalisation, there has been a big take up of e-commerce and cloud, from the work from home economy and telemedicine. Thailand has also embarked on decarbonisation through the Bio-Circular and Green Economy. Thailand is producing bio-based products that are less carbon intensive and green. Thailand is also ageing rapidly with a falling labour force. This will impact the social welfare that is needed for older citizens in the future. There is a big market for seniors over 60 years old. Inequality will widen and will lead to greater political tensions. The lower income households are especially affected as they cannot access digital services such as telemedicine.
Dr Kanokrat Lertchoosakul (Assistant Professor of Political Science, Chulalongkorn University) opened by saying that after a long political conflict, Thailand experienced a second decade of the confrontation with political parties. In 2020, there was a rise of the youth movement and the continued popularity of opposition parties. In 2021, there was a full-scale battle for the forces of change versus the conservative elite with short-term success for state suppression of political opposition.
In 2020, the Future Forward Party was dissolved followed by an immediate rise of the youth movement, a phenomenon that has not been seen since the 1970s. This phenomenon shook the whole society. There was also the continuing popularity of opposition parties such as the Move Forward Party amongst the younger generation. The Pheu Thai and Red Shirt movements were popular among lower middle class.
The Youth Power battle in 2020 was an expansion of the youth movement in the country, which proposed for radical changes such as monarchic reform. The government looked at these movements as being mobilised by political parties, so they used similar methods to suppress the youth movements such as tear gases and high water pressure tanks. Both Move Forward Party and Pheu Thai provided moral support to the movements.
In 2021, the confrontations became more severe with temporary victories achieved by both the youth movement and the opposition parties. Prior to this, by the end of 2020, the Move Forward Party had failed at making progress in provincial administrative organisation. The Phuea Thai Party was also internally fragmented with the departure of Sudarat to form a new party. The Thai government had also overruled the constitutional amendment.
The youth movements had changed in 2020 to 2021 to become more violent, and the conservative elites were reluctant to react suppressively in 2020 but they changed their methods to a more threatening method of handling the youth movements which were deemed more radical.
From August to October, the youth power was considered a national threat and not a student protest. As a consequence, the government used high-pressure water cannon, tear gases and rubber bullets to deal with the protest. There were also arrests and lawsuits. These youths were the urban poor youth, who were school-leavers at a young age and directly affected by Covid-19. They called for the resignation of the Prime Minister.
Even though there was an expansion of the youth movement, the government was successful in suppressing it. The constitutional court issued a verdict over the 20 monarchy reform proposals. This became a nail on the coffin for the youth movement. This can be seen as just a temporary victory for the Thai state as they were successful only in suspending the youth protests. There were no state structural reforms that would relieve the pressures on the youth population. Political activism persisted among younger generations and liberalism became a mainstream view.
The Pheua Thai party and the Move Forward party performed well in the local elections – 38 of their 196 candidates won in the Bangkok sub-district elections.
In Q&A session, in response to the question on the economic outlook for Thailand especially in the tech sector with regard to US-China tech war, Dr. Kirida said that there will be more interest in investing in technologies by both countries in Thailand. However, there are two different standards used by the US and China – if one installs one system, one will not be able to communicate with the others using other system. It will be costly to install both systems from both countries.
In response to a question on the fundamental issues that the Thai state needs to address, Dr Kanokrat said that in 1970s, the Thai military and security were supported by the US in their fight against the communist insurgency. Then, the US military was supporting the “Eagle Wing” of the Thai Army which was fighting against communism and leftist student activism. Intellectual insurgency was also very crucial, bolstered by the psychological war and the rural development. After the US withdrew, the Eagle Wing became dominant. The 1991 military coup involved the Eagle Wing. By 2014, the top echelon in the Army were mostly from the Eagle Wing and that explains the extensive use of military power in recent times. Most of the inner circle of the government is from the militant faction. The militancy faction has consociated with the big business group and royalists which makes it difficult to implement policy reforms.
SESSION 4: MYANMAR
Ms Moe Thuzar (co-coordinator for the Myanmar Studies Programme at ISEAS-Yusof Ishak Institute) opened the Myanmar panel by welcoming the audience to this first session on the second day of the Regional Outlook Forum (ROF) 2022. Providing some context to the discussion, she brought the audience’s attention to the tremendous shift of outlook in Myanmar: from one of measured optimism to one of grim uncertainty after the military coup on 1 February 2021 destroyed Myanmar people’s aspirations, not only for the country’s recovery from the COVID-19 disruptions but also for the continuation of democratic and economic transformations under the leadership of the newly-reelected National League for Democracy (NLD) government. With that, she introduced the two panellists.
The first panellist, Dr Min Zin (Executive Director at the Myanmar’s Institute for Strategy and Policy), kick-started the discussion by emphasising the importance of de-escalating the violence between the junta and resistance groups, in order to allow the urgent need for civilian protection and humanitarian access to be met. Prioritising the alleviation of the humanitarian catastrophe as such, he stressed, holds the key to bringing democracy and political stability back to Myanmar as a means to resolve the conflict.
However, Dr Min Zin argued, de-escalation has proved near impossible at this point. The physical and political brutality of the junta against the relatively non-violent protesters at the beginning of the aftermath of the coup had eventually triggered a violent retaliatory response from the resistance movement. This is especially after the National Unity Government (NUG)—the parallel government—called for a nationwide uprising against the junta in September 2021. Since then, the junta and resistance groups have locked themselves into binary positions wherein neither party would de-escalate their violence and resort to peaceful conflict resolution. A new conflict map emerged with a new set of actors: the People Defence Forces (PDFs). Along with existing insurgent groups—known as Ethnic Armed Organisations (EAOs), they led violent uprisings against the junta in an unprecedented number of regions across Myanmar. With their political legitimacy undermined on the ground, and combined with the junta’s failure to politically co-opt the public into its fold, the junta would likely renege on its promise of the 2023 election. The more likely consequences would either be an unconstitutional extension of the junta rule or failure of the state institutions due to the decades of prolonged and costly conflict.
Dr Min Zin highlighted that such a revolutionary pathway, in which resistance forces aim to achieve a radical zero-sum regime change, does not necessarily have to be the only way. The alternative would be the conflict transformation pathway, wherein resistance groups wage a constructive conflict against the junta using both pressure and compromise. However, he argued, convincing both parties to engage in non-violent conflict resolution may be a challenge, as it is difficult to cultivate a moderate civic political environment in a country fraught with violence. He suggested that, for international diplomatic efforts to work, countries and organisations must refrain from pursuing quick fixes and premature solutions; instead, they must explore all options so as not to exacerbate the already fragile state of the country. In the near future, however, he is convinced that, with the seemingly unstoppable and widespread conflicts across the country, Myanmar’s political outlook would likely continue to be rife with humanitarian crises—comprising civilian deaths and internal displacement of people who have been uprooted from their homes—and thus uncertainties.
Dr Matthew Arnold (independent analyst), the second panellist, argued that the expansion of the armed resistance and military dictatorship in both scope and intensity would likely continue, so much so that the conflict would become so entrenched that aspects of Myanmar’s society must only be understood in relation to how the armed conflict progresses. He showed the basis of his argument by presenting a granular description and analysis on the strategic overview and the economic ramifications of the conflict, which is underpinned by his conflict incidents dataset that focuses on the period after the resistance has turned into a nationwide armed revolt.
Dr Arnold observed that the NUG’s call for a national uprising was key to the expansion of the PDFs and military actions by major EAOs. While there is still a major armament gap between the junta and the resistance, the latter has become not only entrenched in important heartland areas but also self-sustaining by finding safe havens in EAO camps where they can safely train and equip fighters. Although this development makes the resistance difficult to extinguish, the strongest leverage of the junta is the use of extreme violence. Extending its Four Cuts strategy—a systematic violence that was previously used exclusively to quell insurgencies in EAO areas—throughout the country, the junta terrorises townships of targeted communities in order to dislocate resistance personnel from civilian communities. The strategy, however, not only depletes the already limited amount of resources of the junta—putting it under a historic level of stress bordering on an existential crisis, but also further radicalises the resistance. There is indeed a critical mass of the Myanmar public who feels that a base level of violence is needed to finally be rid of military dictatorship.
On the economy, Dr Arnold argued that the military coup has undone the significant strides made by the economic reforms towards liberalisation and diversified international engagement which were developed by the NLD government from 2011 to 2021. For instance, the junta has created the Ministry of Industry and Cooperative to re-establish state enterprises and ensure that industries would deal with its favoured trading partners, which has caused most international businesses to disassociate from the regime.
Overall, with such development, Dr Arnold argued, the conflict has crossed the threshold of scope and intensity whereby both sides would continue to escalate violence. In his opinion, the possibility of the junta losing the conflict is increasingly obvious. The military is not designed to counter a national revolution resisting the junta across multiple fronts, whereas the armed resistance has continued to expand despite all odds—as reflected in the protesters’ common refrain: “You can kill the revolutionary, you can’t kill the revolution”.
The Q&A session following the presentations brought several salient points to the fore. Responding to questions on the visit by ASEAN chairperson—the Cambodian Prime Minister Hun Sen—to Naypyidaw, the panellists agreed that the visit would likely not change Myanmar public’s scepticism on ASEAN’s effectiveness in the conflict resolution, as ASEAN has not engaged with the other important actors in the conflict—namely, the NUG and EAOs. On the junta’s future trajectory, the panellists highlighted that there had been an increasing rate of defection by low-rank soldiers due to poverty, repression and lack of military reinforcements on the ground. Combined with the military brutality faced by the Myanmar public in general, political compromises with the junta would likely not be accepted as an outcome by the people. On the role of the international community, the panellists argued that international actors are unlikely to shape the conflict because their diverging interests and the intensity of the armed conflict have hindered the effectiveness of international involvement. Lastly, on the role of the regional business communities, the panellists encouraged businesses to avoid dealing with the military conglomerate in order to deny its legitimacy.
SESSION 5: INDONESIA
Moderated by Dr Siwage Dharma Negara (Senior Fellow, ISEAS – Yusof Ishak Institute), the fifth session of the forum focuses on Indonesia’s political and economic prospects in 2022.
Professor Dewi Fortuna Anwar (Research Professor, Research Centre for Politics-National Research, and Innovation Agency) began her presentation by illustrating the overall positive sentiment toward President Jokowi and his administration, with over 70 per cent approval ratings in recent survey findings. This, however, is in contrast with Indonesia’s democratic index scores which had declined under President Jokowi’s leadership.
As for the political agenda for 2022, much of it would be to prepare for the three major elections which would be held simultaneously in 2024. Some concerns were highlighted. The first would be the finalized election date agreed by both the Election Commission (KPU) and the government. The second issue would be the intermittent period between 2022 to 2023 where most governors and district/city heads would have reached the end of their ruling terms. As these positions are usually covered by acting officials drawn from the civil servants, there is an ongoing debate on the potential politicization of civil servants. Professor Dewi also elaborated on the top three presidential candidates and highlighted how their political backgrounds could lead to possible competitions among President Jokowi’s current coalition partners in the upcoming elections.
In terms of Indonesia’s foreign policy directions, Indonesia is currently holding the position of president for the G20. Regionally, Indonesia would continue to portray a firm stance toward Myanmar and play its part in finalizing the Code of Conduct on the South China Sea while maintaining ASEAN unity. As for the Indo-Pacific region, Professor Dewi believed that Indonesia would continue to stress strategic equidistance and omni-direction strategy as her key foreign policy principles. She therefore highlighted that Indonesia would most likely push for wider support on the ASEAN outlook in the Indo-Pacific, focusing primarily on ASEAN’s centrality and building up inclusive regional architecture.
Dr Raden Pardede (Managing Partner, CReco Consulting) began his presentation by giving a brief update on the COVID-19 pandemic in Indonesia. The pandemic situation has been largely under control since the 3rd quarter of 2021, with at least 70 per cent of the population vaccinated with their first dose. With the effective control of the Delta variant, mobility had also increased significantly, leading to a surge in economic activities. Dr Pardede therefore predicted that Indonesia would have a favorable economic outlook in 2022, with improved consumer confidence, a recovery of business activities and a booming of commodities leading to export expansion. However, Dr Pardede cautioned that this economic expansion could decline after its initial boom and should not be taken for granted. Moreover, Indonesia is still facing domestic challenges triggered by the pandemic such as unemployment and poverty. This had led to uneven recovery across sectors, regions, and income groups.
Nevertheless, Dr Pardede believed that Indonesia would do well economically, with growth projected to increase from 3.8 per cent in 2021 to 5.3 per cent in 2022. There are, however, several challenges that can affect this potential growth, one being the severity of the Omicron variant. The slowing down of China’s economy, together with the Fed’s tapering in 2022, could also affect the current commodities boom experienced in Indonesia. As such, Dr Pardede emphasized the need to learn from this COVID-19 pandemic, focusing on behavioral changes and technology acceleration. He also pointed out the need to have new forms of capital such as digital and bio-capital as well as having new ways of conducting businesses in the future.
The Q&A session kicked off with a question from Professor Chan Heng Chee to Professor Dewi Fortuna Anwar on President Jokowi’s foreign policy legacy. Professor Dewi responded by stating that President Jokowi would most likely focus on regional issues in particular, ASEAN and Indo-Pacific, given that his initial focus was more toward economic diplomacy.
The next question was posed by Mr Albert Wai to Dr Raden Pardede on whether President Jokowi would be more proactive in the transition toward renewable energy sources, given Indonesia’s high reliance on coal. Dr Pardede agreed that the green energy transition would be challenging for Indonesia, and potential backlash could arise. That being said, Indonesia has become increasingly aware of its social responsibility to reduce greenhouse emissions and would like to honor its commitments in reaching its climate goals. In order to do that, there is a need to have a comprehensive reform as well as support given by developed countries, either in the form of financial assistance or providing technological support.
The next question, posed by Ms Adelina Kamal to Professor Dewi, was on the priorities of Indonesia as chairperson of ASEAN in 2023. Professor Dewi believed that one of the key priorities would be to resolve the issues of Myanmar. While ASEAN had collectively taken a firm stance toward Myanmar, Professor Dewi pointed out that there is a need to relook into the steps in dealing with non-compliance among members toward the ASEAN charter. Lastly, she emphasized the need to build up ASEAN unity and centrality toward geopolitical issues, especially in terms of Indo-Pacific issues.
Mr Richard Borsuk posed the next question, questioning the government’s ability to amend the Omnibus Law and proceed with the relocation of the new capital. Dr Pardede responded by stating that the Omnibus Law is an unprecedented type of law created in Indonesia and time would be needed for both the lawmakers and the government to work together for this amendment. In terms of the new capital’s relocation to Kalimantan, Dr Pardede believed that President Jokowi would stay committed to his promise to relocate the capital, but it may not be completed within his presidency.
Lastly, Ambassador Zainul Abidin Rasheed asked about the influence of political Islam in the upcoming 2024 elections. Professor Dewi believed that there is a high possibility for religious ideology to be used in politics in Indonesia and its influence would be dependent on the extent to which the candidates would use it as their political strategy to garner votes in the upcoming elections.
SESSION 6: MALAYSIA
Moderated by Dr Lee Hwok Aun (Senior Fellow, ISEAS-Yusof Ishak Institute), the sixth session of the Regional Outlook Forum 2022 situated the discussion within the political and economic upheavals that Malaysia experienced in the past year.
The first speaker, YB Nurul Izzah Anwar (Member of Parliament for Permatang Pauh) provided a bottom-up perspective on the political and social impacts of COVID-19 on ordinary Malaysians, based on her Multidimensional Poverty Index (MPI) research. The pandemic has resulted in a dramatic reduction to the average national household income, with a 10 per cent decline in 2020 alone. Due to rising unemployment and wage cuts, a significant portion of middle-class Malaysians has fallen beneath the “bottom forty per cent (B40)” income threshold. In addition, the pandemic has increased poverty incidence among the existing B40 population. Based on her MPI fieldwork conducted in Permatang Pauh, child poverty and family violence have increased since 2020.
School closure, which lasted for a total of 35 weeks, has further exacerbated the hardship of low-income Malaysians due to unequal access to remote learning. Children from B40 households, faced with inadequate internet access or electronic devices, are disproportionally impacted by the prolonged school closure. YB Nurul Izzah commented that many students have since lost interest in studies, or worse, dropped out from the education system. She commented that the Malaysian government had expressed interest to utilise MPI when formulating policies and long-term plans.
YB Nurul Izzah subsequently described three salient political trends in the past year. Firstly, the perceived double standards with regards to the enforcement of COVID-19 regulations have resulted in a severe trust deficit, as politicians are seen to be given preferential treatments compared to ordinary Malaysians. The trust for state institutions is further eroded as key government institutions (for instance the Malaysian Anti-Corruption Commission) are embroiled in scandals while perceived as inept in tackling natural catastrophes. Secondly, Malaysia has witnessed a resurgence of racial politics, in a similar vein to “Trumpism” in the United States. The Malaysian electorate is increasingly turning towards the familiar race-based discourse, while contestation for the Malay voters has intensified as new Malay-based parties have been established in recent months. Political parties have also steered towards a populist direction, as seen in demands from certain quarters for further Employer Provident Fund (EFP) withdrawal. Lastly, political apathy is on the rise across all age groups but especially among the younger electorate. As observed in the recent Melaka and Sarawak state election, voting turnout has decreased significantly but more so among the younger voters. YB Nurul Izzah concluded that parties across the political spectrum must tackle political apathy while providing constructive avenues for political participation.
Mr Nurhisham Hussein (Chief Strategy Officer, Employees Provident Fund) provided an overview of the Malaysian economy since the outbreak of the COVID-19, as well as the medium-term economic outlook. He argued that Malaysia’s GDP is expected to recover to pre-pandemic levels in the first or second quarter of 2022. Nonetheless, the country has lost about 10 per cent GDP compared to the scenario if COVID-19 did not occur. Export-oriented sectors remain the key driver of economic growth, as illustrated in rising export figures in the past year. However, domestic spending remains weak, as seen from the less than stellar import figures.
Mr Nurhisham cautioned that the economic slowdown in China would have an adverse impact on Malaysia, considering that China was an important source of growth for Malaysia and ASEAN in the past decade. As exports serve as a crucial pillar in the Malaysian economy, China’s falling demand for imports would affect Malaysia. He added that economic recovery in Malaysia (and ASEAN) is expected to be K shape, with tourism and hospitality remaining in the doldrums even while the overall economy improves. The emergence of Omicron variant poses a significant risk to the country’s economic recovery even as the present COVID-19 situation remains stable.
Mr Nurhisham commented that in the medium term, the economy faces significant risks on both the domestic and international front. COVID-19 has accelerated the decline of globalisation, a trend that started after the 2008 Global Financial Crisis. Malaysia is not immune to inflation which has picked up pace globally, as supply chain disruptions persist and are expected to continue into the second half of 2021. In addition, financial institutions in the United States and Europe are expected to withdraw fiscal and monetary support which would translate into higher interest rates. He commented that the rivalry between United States and China is likely to result in a multi-polar global order.
On the domestic front, social protection remains patchy as a significant percentage of employees fall outside of the government-mandated social protection schemes. Mr Nurhisham shared that only one-third of Malaysian workers are covered by the EPF, while the SOSCO unemployment scheme similarly covers only one-third of working adults. Consequently, when the COVID-19 pandemic hit, not all retrenched or furloughed workers received income assistance. He cautioned that during the past decade, Malaysia relied on retail as the engine of economic growth, while the contribution from manufacturing (as a percentage of GDP) has steadily declined. Retail, in his opinion, is less sustainable as a source of long-term economic growth. In addition, recent natural disasters illustrate that Malaysia is vulnerable to climate change with large swathes of Malaysia’s economic heartland (including KLIA and Port Klang) at risk of being submerged should sea levels continue to rise. Mr Nurhisham commented that the short-term economic outlook remains highly uncertain with significant downside risks, while Malaysia needs to be bold in experimenting with a new policy paradigm to improve its long-term economic outlook.
Dr Lee kicked off the Q&A session with questions on how Malaysia should reconfigure its economic ties with key trading partners, and the economic outlook of China. Mr Nurhisham commented that the Chinese social protection system is highly uneven as the extent of protection differs drastically across regions and municipalities. In addition, the Chinese economy is undergoing painful adjustments as it tackles the large debt overhang accumulated in the past decade. Mr Nurhisham added that for Malaysia to increase the value of its exports, an ecosystem which favours the growth and maturation of new companies is crucial.
Mr Ng Hon Kuan (journalist, Zaobao) asked if Malaysians are receptive to leadership renewal and greater female representation in politics, while Mr Michael Sng inquired if there is a trend towards younger and non-racial politicians. YB Nurul Izzah commented that Malaysians are largely disappointed with the existing crop of senior politicians, since neither the government nor opposition seem able to offer new narratives or approaches to politics. She commented that politicians, regardless of age or gender, need to be empathetic towards the needs of ordinary Malaysians. In addition, the upcoming general election presents a tough challenge in encouraging young Malaysians to cast their ballot despite the implementation of Undi-18 bill. She concluded that there is a pool of academic resources detailing the necessary reforms that Malaysia should undertake, but the present administration lacks the political will to implement these policies.
Mr Albert Wai inquired about the recent electoral losses in Melaka and Sarawak, and the prevailing ground sentiments. YB Nurul Izzah argued that all parties (except for the Malaysian Islamic Party) face challenges for leadership transition. She lamented that politicians are engrossed with internal party affairs and personal self-interest to the extent that they have little mental bandwidth to respond to external challenges. She added that in the Melaka election, UMNO successfully galvanised their base voters while PH failed to mobilise their outstation supporters to return and cast their ballot. Instead of focusing on the next general election, she suggested that PH could demonstrate its commitment to the electorate by looking at two election cycles.
Mr Raymond Yee asked if Pakatan Harapan has new policies as Malaysia heads to the 15th General Election. YB Nurul Izzah commented that Pakatan Harapan has to offer a “reset” narrative for the country. In addition, the anti-hopping law should be tabled in parliament soon to provide the electorate with some assurance of political stability. Mr Nurhisham commented that the 12th Malaysian Plan took a broad-based approach by mentioning a slew of issues that Malaysia faced, and the goals to be achieved. However, he argued that the present (and previous) administration provides scant details about the roadmap to attain these goals, with few discussions on implementation, monitoring, and execution. For instance, despite the goals to expand affordable housing and social protection the government has achieved little progress in the past decade. In addition, frequent political change means that the public service is compelled to undertake a policy reset each time an administration comes into power. He concluded that Malaysia needs to practise “evidence-based policymaking”, while incorporating bottom-up feedbacks within the implementation mechanism.
Ms Charlotte Kwong inquired on the issues concerning the younger electorate and how political parties should reach out to this particular social segment. Mr Nurhisham explained that the present generation of youths possess greater “awareness” and “aspirations”, while desiring flexibility. He shared that EPF needs to customise its marketing strategies to better engage with this population, which is a challenge for a government agency. YB Nurul Izzah commented that youths are actively organising themselves in self-help groups, especially when calamities strike. The government should consider providing matching grants and other measures to support such initiatives.
Mr Kevin Zhang (Research Officer, ISEAS) asked if there were lessons gained from the pandemic. Mr Nurhisham commented that the pandemic had illustrated the urgent need to expand social security coverage, while helping those who fall outside of formal employment protection schemes. In addition, the minuscule EPF savings among B40 is also a pressing concern as this group is unlikely to have adequate retirement savings. YB Nurul Izzah argued the incessant politicking between parties has resulted in politicians focusing on the next general election, rather than long-term strategic thinking. She stressed the need for policy continuity, with policy-making independent from the constraints imposed by the politicians. Nonetheless, she credited policymakers for creating an eco-system of enablers.
Mr Denis Hew asked about the implications as Malaysia heads towards an ageing population. Mr Nurhisham argued that pursuing the “high-income status” is of little value if Malaysia fails to tackle income inequality and expand social protection to cover a wider range of citizens. He commented that based on existing demographic trends, Malaysia has a window period of about 10 to 15 years to improve its economic competitiveness before the impact of an ageing population affects economic growth and resource allocation.
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