10 January 2023, Tuesday – The 26th Regional Outlook Forum, a flagship event organised by ISEAS – Yusof Ishak Institute, was held virtually and at the Shangri-La Hotel, Singapore. It was attended by 547 in-person and 120 virtual participants.
The one-day forum kicked off with Mr Choi Shing Kwok, Director & CEO of ISEAS – Yusof Ishak Institute, who opened the forum with his Welcome Remarks.
This was followed by Keynote Speaker, Mr George Yeo, former Minister for Foreign Affairs of Singapore, who spoke at length about how the culture of ASEAN countries enables them to set a neutral stage for an emerging multipolar world to come together. This session was moderated by Professor Chan Heng Chee, Chairman of the Board of Trustees of ISEAS – Yusof Ishak Institute and Ambassador-at-Large with the Singapore Foreign Ministry.
Following the Keynote address were five panels that saw experts share their insights on underlying forces driving the global tectonic shifts in world affairs and their implications for Southeast Asia.
Session 1: Strategic Implications of the War in Ukraine for Regional Security in Southeast Asia
This session was moderated by Ms Lee Sue-Ann (Senior Fellow and Coordinator, Regional Strategic and Political Studies Programme, ISEAS – Yusof Ishak Institute).
Dr Ashley J. Tellis (Tata Chair for Strategic Affairs, Senior Fellow, Carnegie Endowment for International Peace, United States) said that the war in Ukraine has been “calamitous” for European security and the global order and asserted that the strong American commitment to defeat Russian aggression “should not be doubted”. He identified two reasons motivating the United States to “resolutely oppose” Russia’s actions. First, from the U.S. perspective, tough resistance to the Russian invasion would serve as a “demonstrative” lesson to China that “any similar behaviour in the Indo-Pacific would also come to a sorry end”. Second, by defeating Russia in Ukraine, the reduced burden for American defence forces in Europe would leave the United States free to focus “more concertedly” on the Indo-Pacific.
Dr Tellis dismissed the view that the United States must choose between Europe and the Indo-Pacific, stating that Washington would “pursue its vital interests in both Europe and the Indo-Pacific, without sacrificing one or the other”. He suggested that the current policy dilemma facing the United States was not about the choice of theatre, but one of strategy: whether to risk a long war of attrition in Ukraine, or “double down on aiding the Ukrainians to defeat the Russians in short order”. While the Biden administration has pursued the former option to avoid the risk of escalation, Dr Tellis argued for the administration to reconsider this strategy and instead try to deliver a “quick and decisive Ukrainian victory”.
Dr Tellis noted that a Russian defeat in Ukraine would cause Russia-China relations to deepen as Moscow became increasingly reliant on Beijing for political and strategic support. This would result not only in increased Russian-Chinese military technology cooperation but also galvanise their “solidified opposition to the West”. He described this as “unfortunate consequences” that one would simply have to live with. It was important to defeat Russia which was under the thrall of “Putin-ism”— which Dr Tellis characterised as a worldview which believed in the existential struggle between the Russian civilisation and the West. He assessed that the United States did not have a choice: it would have to run the risks of having closer Russian-Chinese alignment and cope with the consequences of that risk by making certain that one partner in the alliance (i.e., Russia) was severely beaten in the years to come.
Dr Tellis acknowledged that resisting Russian aggression would mean the intensification of US-China competition, both globally and in the Indo-Pacific. However, the rivalry would be a “mixed-sum” rather than a zero-sum game, in which conflict and cooperation will be co-mingled. However, he assessed that the situation would be more “cooperation embedded in competition”, rather than “competition embedded in cooperation”. He said that Washington and Beijing would compete over (i) alliances, (ii) technology, (iii) the shape of the global trading system, (iv) technical standards, (v) control of international institutions, (vi) ideological rivalry, and (vii) military access to Asia. The multi-dimensional competition between the two powers would not be easy to navigate. Though Southeast Asia will be “caught in this crossfire”, Dr Tellis maintained that the region still retained agency in how to “manoeuvre within the framework of the competition”. However, he was sceptical about the ability of the region to “define or alter the broader parameters of the rivalry”—even if the United States were to continue paying “lip service” to the notion of ASEAN centrality.
According to Dr Tellis, the United States was “not in the business of forcing the region to choose”; it was in the business of “protecting its primacy and preventing China from dominating the region”. The structure of the US-China contestation would inevitably force countries into making choices. He concluded by asserting that Southeast Asian countries needed to “remove the blinkers” and recognise that “there is one country that threatens the interests of regional states” and another that does not. Failing to identify this “fundamental difference” would mean that any proposed foreign policy will fail to “survive contact with reality”.
Professor Wu Xinbo (Dean of the Institute of International Studies, Director of the Centre for American Studies, Fudan University) stated that, from a Chinese perspective, the Ukraine war was “a conflict caused by NATO expansion” and “a product of geopolitical rivalry between the United States and Russia”. Professor Wu said Dr Tellis failed to acknowledge how the United States’ behaviour in Europe caused the war in Ukraine.
Professor Wu saw “similarities” between the US-Russia rivalry in Ukraine and the US-China competition in the Taiwan Strait. He noted that the US-China competition was occurring against a backdrop of American containment against China, prompted by Washington’s belated discovery that Beijing has emerged as “a strategic competitor and the most severe political challenger”. According to Professor Wu, the intensification of the US-China rivalry in the Indo-Pacific has led the United States to turn Taiwan into a “geopolitical and technological leverage” against China. However, because of Taiwan’s importance, Beijing will “do whatever it takes to prevent Taiwan from being permanently separate from the mainland”—stressing that Taiwan is “far more important” to China than Ukraine is to Russia. Professor Wu said that in light of Washington’s failure to deter Russia’s military action in Ukraine, it was therefore “far less likely that Washington can deter Beijing from taking actions [that] it deems necessary on the Taiwan issue”. He also expressed doubts about the extent of the American commitment to “pursue its goals through military action in Asia”, citing the experience of the wars in Vietnam, Iraq and Afghanistan.
Professor Wu highlighted the two main fronts of the US-China competition in 2022. The first involved economic and technological decoupling, including the US crackdown on China’s semiconductor industry. Professor Wu described this as a “Cold War on the technological front between the two countries”. The second front was geopolitical. This manifested in increased American support for Taiwan “politically, militarily, and economically”, to the extent that the “defence of Taiwan” has become “a buzzword in the US strategic community”. He noted that US House Speaker Nancy Pelosi’s visit to Taiwan in August 2022 resulted in a “heavy blow” to China-US relations and elevated risk levels in the Strait to “a dangerous level”.
Professor Wu said the November 2022 meeting between Presidents Xi and Biden helped to “improve the atmosphere” and yielded a “positive roadmap” for the future relationship between the two powers. However, there was “uncertainty” about whether the recent Xi-Biden consensus can be translated into practice and how lasting it would be. Noting that there was bipartisan support for a strong anti-China policy in the United States, Professor Wu expressed his worries that while the distrust between the two countries remained “high”, the willingness to control risk and manage crises was “low”.
Professor Wu identified three implications of the US-China competition for Southeast Asia. First, the economic decoupling would force Southeast Asian countries to reconsider how to manage their economic ties with the United States and China. Professor Wu noted that the United States has departed from its usual posture of promoting free and open trade, and was instead now advancing an “implicit economic nationalism” and practising “trade and technology protectionism”. Second, the United States’ pursuit of its Indo-Pacific strategy would create pressure on Southeast Asian countries as Washington seeks to bring the region on board. For Professor Wu, the region would have to decide whether to meet this challenge in an “ASEAN way” or to “embrace the American way”. Third, Southeast Asia had to decide if it wanted to deal with the “headache” of the Taiwan issue. This would test the region’s willingness to be involved in the US-China security competition and confrontation – including the risk of military conflict – over the Taiwan Strait.
Professor C. Raja Mohan (Senior Fellow, Asia Society Policy Institute, New Delhi) highlighted the “systemic consequences of major wars”. He rejected the view that the war in Ukraine was “a distant war”, noting that the region had already felt the immediate impact of the war in terms of rising energy and food prices. However, as much as the invasion of Ukraine was “an inconvenience we would like to disappear”, Professor Mohan argued that its most consequential ramification was the resulting “structural changes in the international system”. First, given the high likelihood of Moscow being “a big loser in this war”, there would be internal consequences for Russia and external consequences for Europe. Second, the Ukraine war had “brought the Americans back”: Washington has united Europe against Russia while creating new coalitions in Asia to confront the Chinese challenge. Not only has NATO been galvanised, but the United States has also mobilised Japan, Germany and India – the world’s third, fourth and fifth largest economies respectively – to deal with the challenges posed by China and Russia. Moreover, the United States has been able to enlist the involvement of Asian countries in the European security domain, as evidenced by the attendance of the prime ministers of Australia, Japan and New Zealand and the president of South Korea at the NATO summit in Madrid. There is thus a distinctive trend in which the United States has been mobilising “its full range of allies and partners” to manage the twin Russian and Chinese challenge, suggesting that the world is not heading towards a genuinely multipolar direction.
Professor Mohan attributed India’s tepid response to the Russian invasion of Ukraine to its “historic partnership” with Russia, even though India faced a similar situation in Ladakh vis-à-vis China. India has traditionally viewed Russia as a critical partner to cope with the military threat posed by China, but New Delhi was now undertaking a “very slow” pivot away from Russia to the United States. Professor Mohan argued that “the greater the challenge from China for India’s security, the faster will India be delivered to the United States and the West”. For instance, India’s two conflicts with China in 2017 and 2020 have pushed India towards greater cooperation with the United States. He also highlighted that any outcome of the Ukraine war would be bad for India: if Russia lost, it would become a junior partner to China; if Russia won, the Sino-Russian alliance would only become stronger. For India, dealing with an increasingly stronger China remained the principal challenge. Professor Mohan contended that while New Delhi may retain its relationship with Russia and continue to buy Russian oil and weapons, there would be a “structural shift” in India’s trade, economy and defence cooperation towards the United States and the West.
Professor Mohan said that countries in Asia nonetheless had “real agency” to navigate the current geopolitical realities. Recalling how Asian countries variously responded to the Cold War—some stayed non-aligned, while others chose the United States, or tried to “play both sides”—he stated that “Asians are as good at realpolitik as the Europeans are”. He further predicted that Asia will be able to adapt to and maximise the opportunities presented by the changing structure of the international system, especially as both China and the United States will seek to reach out to cultivate friends.
Dr Nguyen Hung Son (Vice President, Diplomatic Academy of Vietnam) characterised the war in Ukraine as one of the most “divisive” topics in Vietnam. He however believed that Southeast Asia would escape the “immediate harsh headwinds” of the war with regional economic growth likely to be ahead of the global average, even if it might experience a slight slowdown in 2023. The region also stood to benefit from the economic and trade “diversions and diversifications” (particularly away from China) as a result of the war. For Southeast Asia, “business will appear—at least on the outside—as normal”, especially since Dr Nguyen did not expect any new major crisis for ASEAN in the South China Sea or the Taiwan Strait, since China would continue to exercise the grey zone tactics that had thus far served its interests well. He also described the build-ups in the South China Sea and the Taiwan Strait as having moved beyond the “conventional domain” and into the aerial, underwater, cyberspace and outer space domains, and thus mostly out of “the naked eye of the common Southeast Asian”.
The region nevertheless faced “unprecedented” challenges. For one, the war in Ukraine was eroding the international order that the ASEAN project had been built on. The relatively stable balance of power and relations between major powers in the past had enabled ASEAN to expand and focus on its integration. However, that conducive regional environment has disappeared, which meant that ASEAN will would to “re-equip itself” to discuss “hard security” topics (such as arms build-up and control, nuclear proliferation and technological competition) in order to maintain its relevance and agency. ASEAN’s economic integration and its aspiration to function as a single market and production base were also under threat. The idea that regionalisation complemented globalisation and that economic interdependence fostered peace and stability was increasingly being challenged by the increasing emphasis on economic decoupling and strategic autonomy. While ASEAN had previously been able to prosper as a “melting pot”, the global situation was currently trending towards “separating economic models and fundamentals”. Furthermore, ASEAN was built on institutions, such as the UN Charter and international law, which were now becoming increasingly fragile.
Dr Nguyen warned that the conditions that had enabled ASEAN to thrive in the post-Cold War period would soon “cease to exist”. However, ASEAN could still retain its agency by taking “unprecedented steps” to adapt to the changing geopolitical circumstances. He exhorted ASEAN to “think the unthinkable” and consider changes to the way ASEAN operated, including abandoning the need for full consensus, accepting unilateralism as an alternative to multilateralism, and pursuing “bolder security cooperation” with its dialogue partners. He said ASEAN should “re-strategise” its economic integration and ensure the “security and inclusivity” of global supply chains.
The Q&A session opened with a question from a participant who asked whether it is ever justifiable for a country to send its troops to another country and annex the latter’s territories. All four panellists affirmed that such an action cannot be justified, with Professor Mohan noting that Asia will be the “biggest loser” if such behaviour were allowed to stand. Dr Nguyen further stated that Russia was not merely contravening international law by invading Ukraine, but also breaking its bilateral commitments since it was a party to several memorandums guaranteeing Ukraine’s sovereignty and territorial integrity at the end of the Cold War.
Another participant asked about the domestic challenges facing the major powers and whether any had “Achilles’ heels” that may distract them from their quest for global influence. Dr Tellis acknowledged that the domestic “political cleavages” can limit American capacity to mobilise its national power, but considered this to be the United States’ only “one singular weakness”. In contrast, China had “manifold” weaknesses, including an impending economic slowdown and the difficulty in maintaining an appropriate pace of innovation. Dr Tellis also expressed doubts about China’s military capabilities, especially in terms of operational competence. Professor Mohan said that, for all the problems in American domestic politics, the United States has demonstrated its “capacity to mobilise allies and partners”. In particular, the United States has been successful in rallying “a large number of influential, powerful partners” through the G7, NATO and the Quad to put pressure on China and Russia simultaneously.
In his concluding remarks, Dr Nguyen reiterated the need for ASEAN to “understand and stop making assumptions” about how the world works, especially given the shifts in the geostrategic environment. He underlined the importance for ASEAN to “re-look at itself” and review its strategy, while continuing to engage its external partners to better understand how ASEAN can adapt and better fit into their respective strategies. Professor Mohan expected the Chinese—who are acutely sensitive to shifts in the power balance—to adapt and adjust their posture, especially in relation to Australia, Japan and the United States. He also expected ASEAN to prefer to have a stronger United States that could provide some balance to China, even if this was a position which would not be explicitly stated in public. Cautioning against a “short-sighted view” or “wishful thinking” of the war in Ukraine, Professor Wu stated the consequences of the war in Ukraine may be complicated, perhaps with no clear winner emerging from the conflict. Dr Tellis emphasised that the American task in Asia benefits from the fact that it can count on the self-interest and desire of countries to remain independent and autonomous. As such, the United States did not have to force its power on Asian countries, but instead leverage the “dynamics of balancing that will arise naturally in Asia” as a result of China’s growing strength.
Session 2: Understanding the Drivers of Change and Disruption in the Regional Economic Landscape
Moderated by Dr Lee Hwok Aun (Senior Fellow and Co-Coordinator, Malaysia Studies Programme, ISEAS – Yusof Ishak Institute), the second session focussed on the economic challenges facing Southeast Asia.
Tan Sri Nazir Razak (Founding Partner and Chairman, Ikhlas Capital; Chairman, PLS Plantation and Bank Pembangunan Malaysia Berhad; former Chairman and Group CEO, CIMB) addressed the ongoing economic changes and disruptions in Southeast Asia, drawing on his experience in the banking and finance sector.
He assessed that 2023 would see a global economic slowdown and recession in several developed countries due to the lingering effects of COVID-19, the war between Russia and Ukraine and the US-China trade war. Debt, inflation and interest rates are expected to rise precipitously this year. For ASEAN countries, supply chain disruptions, currency volatility and geopolitical tensions have fragmented business networks and increased the importance of national self-sufficiency (especially with respect to food security).
Tan Sri Razak assessed that the risk of a major financial accident in the region has increased dramatically in recent years. The forecast is underscored by the fact that the global debt level now stands at 257 per cent of the world’s GDP – significantly higher than the previous high of 215 per cent observed during the Global Financial Crisis of 2008/09. However, compared to previous crises, policymakers today are much better equipped to mitigate the effects of financial calamities.
With regard to the challenges surrounding Malaysia’s economic security, Tan Sri Razak highlighted emerging social protection concerns. Recent statistics showed that close to 30 per cent of the country’s population had insufficient savings for retirement. The problem has been compounded by the adverse impact of the pandemic and the government’s populist decision to allow EPF (Employees Provident Fund) withdrawals. That Malaysia is a rapidly ageing society does not help the situation either. The welfare-related decisions of the new government will therefore play a crucial role in extending social protection.
Tan Sri Razak concluded his presentation by citing examples of two market segments that have failed to manage the economic disruptions effectively due to significant delays in adopting necessary changes. First, ASEAN’s banking sector has performed poorly. In the past fifteen years, the average profit margin of banks has shrunk by more than 25 per cent, mainly due to higher compliance costs, soaring capital requirements and increased competition from non-banking financial companies. Second is the ASEAN Economic Community (AEC). At the time of its launch, the AEC promised a single consumer base and the free movement of capital across different countries in the region. However, intra-ASEAN trade has not exceeded 33 per cent of GDP in over a decade. Meanwhile, non-tariff barriers have increased significantly.
Mr Thomas Lembong (Director, Consilience Policy Institute; former Chairman, Indonesia Investment Coordinating Board; former Minister for Trade, Republic of Indonesia) spoke about the most pressing macroeconomic headwinds facing the region, highlighting the need for swift policy reforms and technological changes.
Mr Lembong said that the most significant risk facing ASEAN’s regional economy in 2023 was persistently high inflation, especially in the US and the European Union. Apart from the ongoing war between Russia and Ukraine, the primary factor driving this global inflation was China’s post-pandemic reopening, with rebounding consumption driving up prices – via increased demand for jet fuel, diesel, gasoline, natural gas and coal. The concomitant monetary tightening measures to tackle this stubborn increase in cost of living will lead to greater-than-expected interest rate increases, which will eventually suppress demand.
Mr Lembong argued that policymakers should, instead, focus on supply-side determinants of inflation. In doing so, eliminating supply chain bottlenecks was imperative. Among several developed countries, such blockages are often a result of their own policy priorities. Citing the example of the 2022 infant formula shortage in the US, Mr Lembong pointed out that the country’s focus on market concentration and protectionist trade stance had led to unforeseen critical shortages. Supplies were restored only after the Biden administration permitted a massive increase in the scale of domestic production along with greater import volumes.
Another factor behind the disruption of global value chains was the issue of perennial labour shortages. While concerns related to limited cross-border movement of migrant workers predate the COVID-crisis, enhanced border restriction measures during the pandemic exacerbated the situation. Mr Lemborg emphasised that, as the global economy continued to recover from the deleterious effects of the health crisis, adopting newer labour-saving technology was indispensable. Using the example of the growing popularity of automated counters in many of Singapore’s fast-food restaurants, he opined that other countries in the region should not shy away from following the digitalisation route either.
Mr Lembong concluded his presentation by reiterating Tan Sri Razak’s point on the dangers of pursuing populist measures to deal with economic crises. He specifically prescribed against resource nationalism as a means to acquire self-sufficiency – irrespective of how resource rich a country may be. Nations would benefit much more through trade diversification and investments in technological change.
After their presentations, the panellists fielded varied questions from the audience on (i) the political dynamics in Indonesia, (ii) welfare-related policies in Malaysia, (iii) the recent cryptocurrency market crash, and (iv) the future of e-commerce in the region.
Session 3: The Political Outlook in Thailand and Myanmar
The third session of the Forum discussed Myanmar and Thailand’s political outlook in 2023. The session was moderated by Ms Moe Thuzar (Fellow and Acting Coordinator, Myanmar Studies Programme, ISEAS – Yusof Ishak Institute) and featured Professor Ardeth Maung Thawnghmung (Chair, Department of Political Science, University of Massachusetts Lowell) and Dr Khemthong Tonsakulrungruang (Lecturer, Faculty of Political Science, Chulalongkorn University).
Professor Ardeth opened the panel with an overview of developing economic and humanitarian crises in Myanmar since the military staged a coup in 2021. The coup was the latest in a series of crises (including Covid-19, political instability as well as economic and energy challenges) to hit Myanmar since February 2020, causing drastic humanitarian disasters that the country has not seen since independence.
Professor Ardeth addressed Myanmar’s deteriorating economic conditions. By the end of 2021, the World Bank estimated that the poverty rate in Myanmar had increased from 25 per cent to over 40 per cent, with an 18 per cent contraction in GDP. The International Labour Organisation reported 2.2 million job losses in Myanmar while the World Food Programme estimated that there were around 13.2 million people in the country experiencing food insecurity. Data from the Central Statistical Organisation data showed that the monthly consumer price inflation of Myanmar reached a record-high of 12.93 per cent in June 2022. The agricultural sector was hit the hardest due to increased import costs and declining prices for outputs. The International Food Policy Research Institute estimated a 10 per cent decrease in rice output in the 2022 monsoon harvest. Overall, Myanmar was ranked as the 23rd most fragile state in the world by the Peace Fund in 2021, the only country in Southeast Asia to be listed in the top 40.
In early 2022, the State Administration Council (SAC) regained control of major cities and stabilised the economy through draconian measures. However, the SAC still cannot run the country effectively. Control of territory in Myanmar is still being contested by a parallel government, the National Unity Government, and several non-state armed groups. There is also a near collapse of government services in healthcare and education due to the civil disobedience movement among civil servants. The collapse of state infrastructure has increased impunity and rampant corruption among state authorities and security forces. Dr Ardeth said that regions with the strongest armed resistance areas suffered the highest rate of violence while communities under SAC control tended to experience lower levels of violence and thus enjoyed more stable economic conditions. Dr Ardeth also noted that centres of violence often shifted, even on monthly basis, while the nature and type of violence varied across regions.
Professor Ardeth revisited the nine possible scenarios she had earlier projected in March 2021, based on the objectives of different players, their attempts to influence the nature and direction of the crisis, and the interaction of strategies employed by the military and the protest movement. She attributed the political deadlock in 2022—in which the partial rule of the country by the military was contested by the resistance movement—to the limitations and advantages of both sides.
Professor Ardeth concluded her remarks with the observation that the SAC might hold the 2023 elections based on the 2008 Constitution. She did not expect the SAC’s planned election to be free or fair. Furthermore, a new election by the SAC will not address the underlying issues and grievances. The opposition forces have already declared their intention to boycott the SAC’s election and some had even sworn to wage an all-out war against the military. The election is thus likely to trigger more violence by the anti-SAC forces. The Myanmar political outlook for 2023 will hence depend on whether the military can hold an election and how the opposition movement will respond to the SAC’s moves.
Dr Khemthong discussed Thailand’s political outlook for 2023. Dr Khemthong broke down his discussion into three topics: (i) the monarchy, (ii) the upcoming general election and (iii) the post-election obstacles for the incoming government. The monarchy had successfully cracked down on the reform movement by employing police brutality and draconian laws. However, the crackdown has made reconciliation between the younger generation and the monarchy more challenging.
On 14 December 2022, Princess Bajrakitiyabha, the eldest daughter of King Vajiralongkorn and the most promising heir for the royal succession, collapsed due to a health issue. Her incapacitation has placed the monarchy in a succession crisis. Dr Khemthong questioned whether the monarchy’s crisis will shift the political schedule of the upcoming election, which would be Thailand’s most politically significant event of 2023. In preparation for the election, Prime Minister Prayut Chan-o-cha has formed a new political party while Members of Parliament (MPs) are already migrating out of the current ruling Palang Pracharath Party (PPRP) and the government. Dr Khemthong argued that it is dynastic politics, rather than ideological divisions, that will drive Thai politics and its political parties in the 2023 election.
Dr Khemtong assessed that the alliance between Prayut and his deputy, Prawit Wongsuwan, was over. Prawit is preferred by PPRP supporters and the business community while Prayut is still favoured by the palace. Even though Pheu Thai is expected to win the most seats, the party may not have enough seats to form a government. There seemed to be a consensus among major political parties that they would avoid the topic of monarchy reform. The overall decline in democratic spirit would disappoint young first-time voters who will likely see a governing coalition formed between former enemies. Reforms on important issues would probably be ignored and there would be more criticism of the establishment. Years under the military junta have provided civil servants to act with impunity. Moreover, large corporate entities have expanded their influence over most state apparatuses. The conflict of interest enabled the business sector to co-opt regulators to rule in their favour at the expense of fair competition. Dr Khemtong concluded that the new coalition government would face challenges in policymaking.
The Q&A session kicked off with a question directed at Professor Ardeth regarding the political and economic implications of Myanmar’s crisis on its neighbours. Professor Ardeth replied that there has been an increasing number of internally displaced people in the border areas Myanmar shares with Thailand and India. Many Myanmar youths have also left Myanmar to pursue further education in neighbouring countries such as Thailand and Singapore. Since Myanmar’s crisis was unlikely to improve in the near future, Myanmar’s working population has also been trying to migrate to neighbouring countries as migrant workers. Professor Ardeth also noted the massive outflow of financial capital with wealthy individuals moving money out of Myanmar to counteract the depreciating Myanmar kyats and to avoid arbitrary seizure by the military junta.
Professor Ardeth was asked about China’s and Russia’s interests and involvement in Myanmar. Though Russia is geographically far from Myanmar, Professor Ardeth explained that Russia and Myanmar have been improving their bilateral relations after the coup, and Russia has been providing the Myanmar military with weapons and equipment. Meanwhile, China is concerned about political and economic stability in Myanmar. Thus, China’s approach is to diversify its stake in Myanmar by engaging not only with the Myanmar military but also with other non-state armed forces. Professor Ardeth observed that, compared to Russia, China plays a more “nuisance” role in the Myanmar crisis.
The session on Thailand and Myanmar ended with a question about Thailand’s investment climate, reforms in bureaucracy and foreign policy. Dr Khemthong stated that it would take many years to recover from the legacy of the coup. The new government would need to remove the former military generals from key positions in the bureaucracy and would need the help of the Supreme Administrative Court to enforce the rules regarding the conflicts of interest between the business sector and the regulators. Dr Khemthong believed that a civilian administration would pursue better foreign policies that are more aligned with the global community’s concerns.
Session 4: The Political Outlook in Malaysia
Moderated by Dr Francis Hutchinson (Senior Fellow and Coordinator, Malaysia Studies Programme, ISEAS), the fourth session looked at the political outlook in Malaysia following the 15th General Election in November 2022. Key questions included whether Malaysia was entering a new period of politics which was more consensual rather than requiring a dominant parliamentary majority, whether the current coalition would remain stable, and what lessons could be learnt from Pakatan Harapan (PH)’s rise.
Mr Anthony Loke (Minister for Transport, Malaysia; Secretary-General, Democratic Action Party) shared his experiences of the recent general election, and how he eventually came together with “arch-rival” (and co-panellist) Mr Khairy Jamaluddin of UMNO to form a coalition government. He described this as an example of how politics was about the “art of possibilities”. The previous five years had been a time of political instability, with Malaysia going through four prime ministers during the period—more than the number of prime ministers that Singapore has had over 50 years. The 2022 general election was the first time that no clear winner had emerged. None of the parties or coalitions had managed to win a simple majority. The PH and Barisan Nasional (BN) coalitions would eventually come together to form a unity government at the suggestion of the King, even though two of the component parties – the DAP and UMNO – have been arch-rivals for more than 50 years. Both sides now recognised that they needed to come together to form a stable government. With the support of other regional coalitions from Sabah and Sarawak, their government controlled 148 seats in parliament, making it the strongest government since 2008.
Despite this strength, there are two key events to watch for in 2023. The first would be UMNO’s internal leadership elections and their implications for the coalition government. The second would be the six state elections taking place in 2023. Three of these states are governed by the Parti Islam Se-Malaysia (PAS), while the other three are under PH. The parties in the governing coalition need to perform well and gain more seats, so as to motivate them to remain in the coalition. Mr Loke assessed that the most important challenge right now was to achieve political stability. The coalition government, in spite of the many differences between its constituent parties, are working hard to achieve this. The main mechanism for inter-party cooperation is through their representation in the federal cabinet. The parties had also signed a coalition agreement regulating how the parties would work together, how government appointments would be allocated, and how potential disputes would be resolved.
Mr Loke reiterated that the coalition’s main focus was political stability, as only then could the government focus on improving the economy and the livelihoods of the Malaysian people. Citing Mr George Yeo’s earlier remarks, Mr Loke said that it was important for parties to continue to engage, even if they might not like each other. On his part, he had been meeting rivals like Mr Khairy and keeping open the lines of communication. He concluded by stating that his best lesson from politics was to never discount any possibility: there is no permanent friend or enemy in politics, and you never know when you would have to work together.
Mr Khairy Jamaluddin (Malaysian politician; former Minister of Youth and Sports, Science and Technology, and Health) agreed with Mr Loke that political stability was the most important priority for Malaysia as this would give foreigners the confidence to invest in and travel to the country. Addressing concerns about the long-term longevity of the new government, Mr Khairy assured the audience, as well as Mr Loke, that he wanted this unity government to last. He did not want to see any backroom machinations that would result in another change in government.
Mr Khairy assessed that the current government would need to look at how to win back the Malay vote. Preliminary analysis of the 2022 election results indicated that PH’s Chinese support base was stable, but the Malay votes were fractured, with 54 per cent going to the Perikatan Nasional (PN) coalition, 33 per cent to BN, and 11-20 per cent to PH. This left UMNO as the third choice for Malay voters, behind PAS and Bersatu. This had a serious implication: it had resulted in a 74-member opposition bloc in the Malaysian parliament which is almost homogenously Malay-Muslim, and could thus simply appeal to identity politics without any concerns about alienating other communities. This would run the risk of fracturing the country further, while allowing PAS and Bersatu to outflank UMNO.
Mr Khairy thought that it was a foregone conclusion that PAS and Bersatu would sweep the three states of Kedah, Kelantan and Terengganu in the northern green belt. However, the seats of mainland Penang and Selangor remain in play. Prime Minister Anwar Ibrahim’s first few moves as prime minister have been to burnish his Malay-Muslim credentials, including reaching out to Muslim international leaders, intellectuals, and academics. Anwar has also convinced the DAP to play a less prominent role due to public perceptions of the DAP as an anti-Malay party. He has attacked PAS and Bersatu, through political and non-political means, to erode their credibility.
On UMNO’s internal leadership elections, Mr Khairy said that the party would be holding its annual general meeting to discuss the rules of the contest. Some UMNO members have been pushing for the top two party positions to be uncontested. Mr Khairy hoped that this would not be the case as he felt that UMNO needs to reform and chart a new course or face losing its relevance. Mr Khairy noted that there were concerns that a change in the UMNO leadership would lead to another Sheraton Move or the collapse of the unity government. Mr Khairy sought to dispel these concerns, stating that Malaysia did not need more political instability. He told Mr Loke and the audience clearly and categorically that, if he were to win the leadership of UMNO, he would commit his support to the unity government, to Anwar, and to Mr Loke.
Concluding, Mr Khairy said that although his current relationship with Mr Loke could seem like a “bromance”, they have yet to discuss whether it was for the long term. Their present arrangement is one of expediency. Both sides have yet to discuss and agree on a common course or vision for the country that could counter the mono-ethnic PN opposition bloc.
Dr Hutchinson started the Q&A session by posing one question to each of the speakers. He asked Mr Loke about the lessons he had learnt, and what he was doing differently from his first term. Mr Loke replied that he had learnt to have more patience in government since change does not come overnight. He had been too eager for change in his first term, but now saw the need to take it progressively and think through his decisions, due to the potential implications of his decisions. This approach would lead to better results in the long run. Mr Loke also noted that the ministers had been relatively quiet over the past month, with fewer statements made. He felt that it could perhaps be a good sign that the ministers wanted to focus more on their work, instead of issuing political statements. He said that knowing how to conduct themselves was a process that they had to pick up. This applied to how Malaysia conducted its relationship with Singapore. Mr Loke shared that he had told Singapore’s foreign minister Vivian Balakrishnan that there would be no surprises from him because he understood that Singapore wanted stability in the bilateral relationship. He expressed confidence that many bilateral issues could be resolved if both sides are able to work together well.
Dr Hutchinson asked Mr Khairy to share his experiences of contesting in a new constituency. Mr Khairy had previously served as a three-term MP in a semi-rural constituency in Negeri Sembilan. In the recent election, he was sent at the eleventh hour to a new constituency in Selangor, where his party had previously lost by 26,000 votes. Mr Khairy ended up losing by around 2,000 votes. However, Mr Khairy did not regret the move, explaining that although UMNO usually performed better in rural areas, urbanisation and demographic trends indicated that such rural enclaves were getting smaller. UMNO would thus become extinct in 20-30 years if it sought to remain in its safe rural constituencies. Mr Khairy acknowledged that the move was a big risk, but that he would be sending the wrong message if he did not move. He also shared that he intended to double down after his electoral loss by registering his party membership in the constituency that he had lost, to show that he intended to run there again.
A participant noted that Mr Khairy had adopted a different approach to UMNO’s internal elections, offering a vision and ideas rather than relying on personality and patronage. He asked Mr Khairy how such a strategy has been playing out, and whether UMNO’s decision to join the unity government would affect its ability to compete with PAS and Bersatu.
Mr Khairy replied that the UMNO elections had to be about the “numbers”. The BN’s number of seats had been decreasing over the years, from 198 seats in 2004 to 30 in 2022. He stated that no self-respecting party could look at this decline without asking serious questions of the party’s leadership. This undercurrent should not be underestimated, even though personality and patronage politics would still have their roles to play. Mr Khairy shared that he had previously ran in the UMNO’s leadership elections but lost. The stakes were now much higher since the winner would lead the party into the next election. On UMNO’s decision to join the unity government while making sure it was not outflanked by PAS and Bersatu, Mr Khairy said this was a longer-term issue. UMNO had always been able to guard that flank from the centre. At its strongest, UMNO represented all of Malaysia, while still ensuring that the Malay community remained satisfied and secure with the UMNO leadership.
The participant also noted that DAP had been “sacrificed” in the current Cabinet line-up and asked how sustainable was it for the DAP to play this role, and what it was doing to manage expectations. Mr Loke replied that there had indeed been unhappiness within the DAP rank-and-file over its underrepresentation in the cabinet. However, he recognised that it would destabilise the government if the DAP were to insist on more cabinet seats. He further stated that, given the reality of Malaysian politics, the DAP’s long-term struggle is to convince others and the Malay community that the party was a worthy partner.
A media correspondent asked Mr Loke whether we would continue to see Malaysian politicians using foreign policy issues like Pedra Branca to score domestic brownie points. Mr Loke first clarified that Pedra Branca was not under his portfolio, before stating that he does not agree with the use of foreign policy issues to shore up domestic political support. Mr Loke felt that effectively managing domestic issues would translate into greater political support than playing up foreign policy issues, especially since the Malaysian public is more interested in how the government implements and delivers its policies.
Another participant asked about the key priorities and institutional changes that could show that the current unity government model could work. Mr Loke replied that the government needed to deliver on governance, especially in terms of improving people’s livelihoods. This would be the key criterion to maintaining the unity government. Dr Hutchinson then asked Mr Loke to elaborate on his goals over the next 6-12 months. Mr Loke replied that his priority is to ensure more stable MRT services in Kuala Lumpur. He shared that he had met Singapore’s transport minister the previous night and would be meeting Singapore’s former transport minister Khaw Boon Wan to learn more about Singapore’s MRT system.
A participant asked Mr Khairy about how he intended to win back Malay votes without playing the race or religion card, and whether it was feasible to avoid playing the race/religion card. Mr Khairy replied that this would involve addressing key non-race/religion issues, which UMNO seems to have difficulties with currently. Mr Khairy identified two key aspects: integrity and bread-and-butter issues. Noting that bread-and-butter issues are not unique to Malaysia, he stated that UMNO must show competence to address the matter as quickly as possible. On integrity, Mr Khairy said that this touched on existing as well as past cases. Describing the stain as deep and requiring time to scrub away, he suggested that part of the solution would consist in bringing in new faces with less baggage. Mr Khairy also argued that playing the race/religion card was not necessarily a bad thing. For one, the race/religion card was there to stay in Malaysia. He felt that there might be a need to use it to some extent, since shying away may allow others to play the card in more nefarious ways or result in the failure to touch the hearts of people. However, the race/religion card must be used in a way that is neither nefarious nor exclusivist.
A member of the press asked Mr Khairy whether he intended to run for the UMNO presidency. Mr Khairy replied that he first intended to ensure an open contest for the top two party positions, while adding that he was currently thinking about whether to run for the top post.
To audience queries about the youth vote in the recent election, Mr Khairy characterised youth support as being very fractured between the PH and PN. Describing the results as a “big surprise”, he attributed PN’s popularity among youth voters to TikTok.
Another participant asked Mr Khairy to comment about the perceptions that voters liked him personally but not his party and that UMNO leaders view him as a threat. The participant also asked about Anwar’s views of Singapore following his recent visit to Jakarta, where he had described Indonesia as a “true friend”. Mr Khairy replied that intra-party rivalry existed in all political parties and that he still has faith that UMNO can still be rescued. On the subject of Anwar’s Jakarta visit, Mr Loke clarified it was the tradition for Indonesia to be the destination of the Malaysian prime minister’s first official trip. He added that if Indonesia was Anwar and Malaysia’s “true friend”, then Singapore would be the “best friend”.
Session 5: The Political Outlook in Indonesia
Moderated by Dr Hui Yew-Foong (Visiting Senior Fellow and Coordinator, Indonesia Studies Programme, ISEAS – Yusof Ishak Institute), the fifth session focused on Indonesia’s political outlook in 2023, with a particular focus on the upcoming 2024 presidential elections.
Ms Yenny Wahid (Director, The Wahid Institute) focused her presentation on non-electoral political developments in Indonesia. Ms Wahid discussed two recent legislations which caused controversy within Indonesia: the Omnibus Law in 2020 and the recent New Criminal Code. The Omnibus Law was created to ease the process of doing business within Indonesia. It also aimed to help micro-enterprises by reducing hindrances on employment and licensing issues. Given that 97 per cent of the Indonesian labour force was employed by small and medium enterprises (SMEs), the Omnibus law facilitated job creation for the majority of the Indonesian population. However, there were criticisms of this law. Environmental activists were concerned that it could lead to less stringent regulations in order to expedite the issuing of licenses. Other concerns included labour rights issues, such as the adjustment to the minimum wage and the employment of contract workers in these industries.
Ms Wahid also examined the re-introduction of the New Criminal Code, including its provision to criminalise sexual activities outside of marriage. Ms Wahid highlighted that the new code comprised more than just the restrictions toward sexual activities, since it also banned news that ran counter to the state’s ideology and introduced the need for permits to hold protests. Democracy activists therefore felt that this code could lead to a potential loss in the freedom of expression. Even though these issues were non-electoral in nature, Ms Wahid believed that there was a need to pay close attention to them since political parties could use these issues to influence society, which would in turn influence the election outcomes in 2024.
Ms Wahid elaborated on the political landscape for the 2024 elections. She believed that young people—who preferred honest and non-corrupt candidates, rather than those who were charismatic or religious—would play a key role in the upcoming elections. Despite their clear preferences, the majority of the young population were generally apolitical, with only a superficial understanding of and easily swayed by opinions from outlets such as social media. Consequently, they may vote according to their association with the candidate rather than the candidate’s policies. She also said that President Jokowi had the capacity to influence the outcome of the 2024 presidential elections. Given that Jokowi enjoyed strong support from the general public, the candidate he endorsed would likely be the victor in the 2024 presidential race.
As 2023 is the 25th anniversary of Indonesia’s Reformasi movement, Dr Anies Baswedan (former Governor of Jakarta, Indonesia) illustrated the key factors that have set the foundation for Reformasi. The first factor was the establishment of a common language in Bahasa Indonesia—a unifying act that has enabled communication between Indonesia’s different ethnic groups. The second key factor was the abolishment of the aristocracy. By identifying the local kingdoms as cultural heritages instead of political entities, it fostered equality across social classes and generated an environment of meritocracy in which people of any status could be elected to higher office. Dr Anies highlighted President Jokowi as an example since the Jokowi hailed from a non-elite family background. The third factor was the presence of a vibrant civil society and its key role in promoting democracy. The last factor was the consistency in holding elections. The six elections held after the New Order period have served as a form of training for the electoral process in Indonesia. With all these factors as the foundation, Indonesia now had a more democratic political landscape, with more political parties contesting in each successive election.
Dr Anies also talked about democratic consolidation within Indonesia. He cited how political parties were willing to accept the results of Indonesia’s first-ever direct local elections after having contested it in the local court. Dr Anies believed that the act of accepting defeat was a sign that the foundation of democracy was present within the country. The current challenge now was to monitor those in power. There was a need to instil an understanding that an incumbent would need to leave office at the end of their term. This is to prevent any leader from seeking to extend their time in office. Talk about a third term for President Jokowi was hence a worrying sign as it strayed from the original intention of Reformasi, which was to end the practice of a president staying in power over multiple terms. It also suggested that the ruling elites’ belief in democracy was declining.
In his concluding statement, he acknowledged that the quality of democracy had declined in Indonesia, as seen with recent legislation and policies which were implemented with minimal public engagement. Despite these worrying signs, Dr Bawedan expressed his hopes for democratic consolidation in Indonesia in the future. The country’s vibrant civil society, together with the strong foundation of Reformasi, will continue to act as guardians of Indonesia’s democracy.
The Q&A session kicked off with questions from Dr Hui to both speakers. He asked Ms Wahid about the Nahdlatul Ulama’s (NU) position in the 2024 elections and the existence of swing votes among the Islamic voters. Ms Wahid responded that it was difficult to pinpoint the latter given that there was a diverse range of Muslim voters in Indonesia. She also mentioned that the NU chairperson, Mr Yahya Cholil Staquf, had indicated that NU would not be endorsing any candidate for the upcoming election. As such, potential presidential candidates would need to reach out to these voters directly through the grassroots and other organisations associated with NU, and not so much through NU itself. However, she shared that based on data collected on NU voters, at least 25 per cent are expected to vote for the Indonesian Democratic Party of Struggle (PDI-P). Most have also expressed an inclination to vote for Mr Gajar Pranowo, though Dr Anies was ranked second in their choices.
The question posed to Dr Anies focused on the extent that Reformasi has been attained. Dr Anies elaborated that, out of the six items on the Reformasi agenda, Indonesia had already fulfilled what it had set out to do. In fact, Dr Anies highlighted that Indonesia had done very well in achieving regional autonomy. The upcoming challenge would be to increase the involvement of civil society at the local level and to reduce the occurrence of dynastic politics. He also shared his observations on electoral behaviours among the Indonesian population. Dr Anies suggested that there could be some sort of collective voting behaviour among Generation Z voters, in which the family’s political preference could influence these young voters’ decisions. There are also signs of mixed messages from the people, with some indicating that they will vote based on policies while others will be swayed by ideology and identity politics.
The next batch of questions addressed whether Dr Anies would support the move to the new capital city, Nusantara, should he become President. Dr Anies clarified that the relocation of the capital and the construction of the new city were two separate issues. He acknowledged that the building of the new capital city would be a challenge for Indonesia and that its completion would take a long time. He also highlighted that there was a lack of public engagement on this issue. Having said that, he also emphasized that future presidents were obliged to continue with this project since the relocation of the capital has been enacted into law.
The two panellists were also asked about the potential backsliding of Indonesian society into radicalism. Ms Wahid expressed her optimism that Indonesia would not backslide into an Islamic state in the future. However, she cautioned that there could be situations when the Indonesian people are swayed by race, religion, and identity politics, causing societal friction. Meanwhile, Dr Anies highlighted the need to prevent the conditions which would allow such extremism to grow in the first place. He stated that the next administration should ensure that there was social justice for all, including being tolerant of all religions. This would create a just and equal environment that can help to maintain peace and prevent extremism from occurring.
The panellists also discussed ways to reach out to youth voters in the 2024 elections. According to Ms Wahid, the younger generation was more inward-looking in the sense that they cared more about issues concerning them and less about being loyal to certain political parties. However, she cautioned that Indonesians tended to vote in an emotional way and could thus be easily persuaded by identity politics. Potential presidential candidates must know how to manoeuvre around these diverse needs and curate an identity that can resonate effectively with these young voters. The effective use of social media would be an additional boost in reaching out to such voters. Dr Anies agreed on the need to engage the youths on social media platforms such as TikTok. He however argued that traditional means of engaging voters through television remain necessary since social media was not necessarily reflective of the broader Indonesian society.
Related links:
1. Welcome Remarks by Mr Choi Shing Kwok
2. Media Coverage
3. More Event Photos
4. Event Recordings