Southeast Asian Affairs 2021

Southeast Asian Affairs 2021
Date of publication:  2021
Publisher:  ISEAS – Yusof Ishak Institute
Number of pages:  427
Code:  SEAA21
Hard Cover
ISBN: 9789814951180
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About the publication

“Southeast Asian Affairs, first published in 1974, continues today to be required reading for not only scholars but the general public interested in in-depth analysis of critical cultural, economic and political issues in Southeast Asia. In this annual review of the region, renowned academics provide comprehensive and stimulating commentary that furthers understanding of not only the region’s dynamism but also of its tensions and conflicts. It is a must read.” 
 – Suchit Bunbongkarn, Emeritus Professor, Chulalongkorn University 

“Now in its forty-eighth edition, Southeast Asian Affairs offers an indispensable guide to this fascinating region. Lively, analytical, authoritative, and accessible, there is nothing comparable in quality or range to this series. It is a must read for academics, government officials, the business community, the media, and anybody with an interest in contemporary Southeast Asia. Drawing on its unparalleled network of researchers and commentators, ISEAS is to be congratulated for producing this major contribution to our understanding of this diverse and fast-changing region, to a consistently high standard and in a timely manner.” 
 – Hal Hill, H.W. Arndt Professor of Southeast Asian Economies, Australian National University

Contents

  • Southeast Asian Affairs 2021
    [Whole Publication, ISBN: 9789814951753], by Daljit Singh, Malcolm Cook, editors
  • Preliminary pages
  • THE REGION
  • Southeast Asia in 2020: Economic and Social Hardship, and Strategic Strain, by Lavina Lee, author
    In 2020 the COVID-19 pandemic hit Southeast Asian states hard. From a health perspective, the region has managed the pandemic comparatively well, with fewer reported cases and deaths as a percentage of the population than other parts of the world. But measures applied to stem the spread of the disease have caused a deep economic contraction in the region, seen rises in unemployment and poverty, strained already fragile governmental institutions, and in some cases created political instability. Beyond these domestic coronavirus challenges, in 2020 ASEAN member states have experienced a sharp deterioration in their external strategic environment as the already tense relationship between the United States and China became even more hostile and confrontational. From March 2020 onward, the Trump administration accelerated its campaign against a range of Chinese Communist Party (CCP) policies and diplomatic narratives. The escalation of tension, and in some instances hostility, between the United States and China has placed even greater pressure on Southeast Asian states and tested the long-standing hedging strategies they have used to manage relations with the two great powers. It is becoming more difficult to avoid making a choice between the two in one way or another—as the contradiction between their security and economic interests are becoming more acute. Indirectly, both the United States and China have been asking Southeast Asian states to “choose” between two alternative orders: a liberal rules-based order on the one side and a hierarchical China-centric order on the other. Some have shown a propensity to “push back” against Chinese aggression in the South China Sea in limited ways—such as Vietnam, Indonesia and, more recently, Malaysia—whilst others remain passive, seeking to avoid Beijing’s ire. The countries of Southeast Asia could be described as adopting a crouch, brace and hold position while they attempt to lead their domestic populations through the worst of the health and economic crisis, and while delaying any firmer response to the deteriorating regional security environment.
  • Economic Outlook for Southeast Asia: From Containment to Recovery, by Sithanonxay Suvannaphakdy, author
    The COVID-19 pandemic has pushed the Southeast Asian economies into a lockdown to contain the virus and save lives. Although doing nothing was not an option and would itself have disrupted economic activity, several weeks of strict lockdowns have triggered a recession in the region. This study reveals that the decline of real gross domestic product (GDP) in Southeast Asian countries hit the bottom in the second quarter of 2020 and would gradually improve in the rest of 2020 and 2021. Real GDP in the region is expected to expand by 5.7 per cent in 2021, after an estimated contraction of 2.8 per cent in 2020. The prospects of economic recovery are supported by four dynamics. First, COVID-19-related restrictions in part of the region have continued to be loosened gradually. Second, there is room to further reduce the policy rate and reserve requirement ratio for stimulating bank lending, and hence support the production of goods and services in countries with limited fiscal space. Third, strong economic growth in China and to a lesser extent in the United States and Japan in 2021 would boost demand for goods and services from Southeast Asia. Finally, implementing the Regional Comprehensive Economic Partnership and streamlining non-tariff measures are likely to boost trade and investment in the region in the medium term.
  • Trade Disrupted: Global Tensions, US-China Trade War and COVID-19 Impact, by Deborah Elms, author
    In the trade world, the word of the year for 2020 may have been “disruption”. This chapter considers three different sources of tension in trade that have created significant disruption: a continuing collapse of the global trading system, the stressors caused by the unfolding US-China trade war, and the impact of the COVID-19 pandemic, with its associated lockdowns and quarantines.
  • BRUNEI DARUSSALAM
  • Brunei Darussalam in 2020: Enduring Stability of a Small Monarchical State in a Turbulent Year, by Mustafa Izzudin, author
    As one of the smallest states in Asia, Brunei Darussalam has demonstrated an enduring stability amidst a turbulent global pandemic in 2020. Though the COVID-19 pandemic proved to be Brunei’s sternest test in decades, the country appears to have come through it relatively unscathed, and at the end of 2020 was preparing for a post-pandemic period, including assuming the ASEAN chairmanship in 2021. Brunei in 2020 illustrated a resilient monarchy of a small state supported by a largely contented society, with the domestic social compact between the government and its people intact.
  • CAMBODIA
  • Cambodia in 2020: Regime Legitimacy Tested, by Chheang Vannarith, author
    The year 2020 was one of survival for Cambodia as the livelihoods of millions of Cambodians were affected by multiple crises. This chapter discusses the economic, social and political implications of the COVID-19 pandemic, flash floods, and economic sanctions imposed by the European Union and the United States. It argues that Cambodia’s regime legitimacy—chiefly measured in terms of economic performance, public service delivery and infrastructure development—is under pressing challenges as the economy suffered its worst contraction since 1993 and which has caused an additional eight per cent of the population to be pushed into poverty. These unprecedented downward socio-economic pressures have affected the development trajectory of the kingdom, including efforts to realize the United Nations Sustainable Development Goals. Within such a context, the Cambodian government has invested more resources in social protection, the healthcare system and skills development, has improved the business and investment climate, and has accelerated its hedging and economic diversification strategy. Down the road, the speed and scope of economic recovery will define the performance legitimacy of the state, which will be facing mounting challenges from both within and outside.
  • Cambodian Foreign Policy in 2020: Chinese Friends and American Foes?, by Sovinda Po, Lucy West, authors
    For small authoritarian states like Cambodia, regime survival is a key driver of foreign policy towards great and regional powers. In the wake of increasing geopolitical rivalry between the United States and China, Cambodia increasingly finds its foreign policy shaped by these power play dynamics. A review of Phnom Penh’s foreign policy to date shows that Cambodia has steadily disengaged from Washington and moved closer to Beijing on a number of key issues—nowhere more notably so than in the economic and defence realms. Looking ahead, it is likely that Cambodia’s ‘ironclad’ friendship with China will remain intact, but relations with the United States are unlikely to improve, with the Cambodian government already showing signs of unease towards the Biden administration and associated expectations regarding democracy and human rights.
  • INDONESIA
  • Indonesia in 2020: COVID-19 and Jokowi’s Neo-liberal Turn, by Marcus Mietzner, author
    As for most countries around the world, the year 2020 for Indonesia was dominated by the outbreak of COVID-19 and its massive social, economic and political consequences. Among Southeast Asian nations, Indonesia recorded the highest number of infections and fatalities. This was partly a result of the government’s inactivity at the beginning of the outbreak, while other countries in the region—such as Vietnam and Thailand—responded quickly. Once President Joko Widodo (or “Jokowi”) acknowledged the seriousness of the threat in March, the pandemic had already taken a firm hold in the country. Subsequently, Jokowi refused to impose lockdowns, allowing the virus to spread further. Instead of lockdowns, Jokowi placed his trust in the development of a vaccine, on which he cooperated with China. He also hoped to mitigate the economic impact of COVID-19 through a massive deregulation package that he pushed through parliament at the end of the year. Contrasting sharply with some of his earlier economic positions, the new initiative reduced, among others, workers protections and environmental licensing procedures. In the international arena, Indonesia largely succeeded in balancing the two great powers China and the United States, sending signals to both that it would refuse to align with one party in the worsening economic and political conflict between the two.
  • Repositioning Indonesia in the Post-COVID-19 Global Value Chains, by Andree Surianta, Arianto A. Patunru, authors
    As global value chains (GVC) struggle to restructure around COVID-19 transport restrictions and their economic fallout, Indonesia faces an uphill battle to restart its economy and stave off ballooning unemployment. With stagnant economic growth now turning into recession, President Joko “Jokowi” Widodo is pushing for the biggest regulatory reform in recent history through the passage of the Omnibus Law on Job Creation. Many have hoped that the amendment to thousands of articles in old laws will finally remove barriers to foreign direct investment; however, this legislation seems to have morphed from one seeking to bolster inward investment into one extending massive support to micro and small enterprises. In a rudimentary nod to the GVC model, the law urges supply chain partnerships between small businesses and large corporations. However, an overreaching implementing regulation may turn this partnership push into a new investment barrier for large multinationals, undermining the goal of deeper integration in global production networks.
  • LAOS
  • Lao PDR in 2020: Pandemic, Debt and Resource Extraction, by Kearrin Sims, author
    Four key, interrelated, themes mark Laos in 2020. First is COVID-19 and its socio-economic effects. With just twenty-three reported cases and no reported deaths, Laos has performed exceptionally well in its containment of COVID-19. However, the social and economic effects of policies implemented to respond to the pandemic have been stark. Included among them is Laos’s surging debt, which is not solely a consequence of the pandemic but has been significantly accelerated by the closure of national borders and slowed economic growth. This debt, and particularly its ties to Laos’s infrastructure-led and resource-extractivist development model, is the second key theme discussed in this chapter. In Laos and elsewhere, COVID-19 represents a critical moment for rethinking national development priorities and practices. Third, is China’s continued growing presence within Laos, and the role of Chinese investment and development financing in contributing to Laos’s infrastructure projects, and its debt. While the party-state has a long history of maintaining positive diplomatic relations with a wide diversity of partners, its economic dependency on China is, arguably, pulling it into uncharted territory. Finally, the fourth key theme of 2020 is the party-state’s continued oppression of and violence against those that contest the harmful effects of extractivist development. Particularly important here is continued party-state efforts to prevent online dissent via intimidation and arrest. These are critical challenges for future development.
  • MALAYSIA
  • Malaysia in 2020: Political Fragmentation, Power Plays and Shifting Coalitions, by Johan Saravanamuttu, author
    The Pakatan Harapan (PH) government began 2020 with persistent political splits caused by the issue of the future premiership transition from Mahathir Mohamad to Anwar Ibrahim. When pressured to do so in February, Mahathir unexpectedly resigned as prime minister, thus sparking the Sheraton Move that ended with the PH government deposed. Muhyiddin Yassin, the minister of home affairs under Mahathir, emerged in March to become the new premier after the king made the extraordinary decision to personally determine that Muhyiddin had the majority support in Parliament. Backing Muhyiddin is the Perikatan Nasional (PN) coalition, which has within it three other coalitions: the Muafakat Nasional (the alliance between the United Malays National Organisation and Parti Islam Se-Malaysia), the Gabungan Parti Sawarak (a coalition of Sarawak-based parties) and the Gabungan Rakyat Sabah (a coalition of Sabah-based parties). On the Opposition side of developments, the PH Plus parties continued to unravel after the implosion of the Sheraton Move. The Azmin Ali camp left Anwar’s Parti Keadilan Rakyat (PKR). Mahathir’s camp departed Parti Pribumi Bersatu Malaysia (now led by Muhyiddin) and formed yet another party called Parti Pejuang Tanah Air (Homeland Fighters’ Party), which became an independent group in Parliament. Muhyiddin’s PN has held on to power despite many forecasts of its impending collapse because of its precarious grip on the federal government, which is thought to be a majority of two parliamentarians. Crucially, the PN ruling coalition emerged victorious in the Sabah state election of 26 September, defeating the alliance of parties led by incumbent chief minister Shafie Apdal of Warisan (Heritage Party). The PN government has also survived a number of crucial hurdles and, most of all, avoided a no-confidence vote and got its 2021 Budget passed with a three-vote majority in Parliament. Malaysia is currently in an unenviable situation when the crisis of the COVID-19 pandemic with its deleterious economic and social ramifications is coupled with an unstable ruling coalition. The splintering of political parties and the political transition of coalitions has been the leitmotif of the politics of 2020.
  • One Year on, the Centrality of Politics in Malaysia’s COVID-19 Crisis, by Eugene Mark, Jose Ricardo Sto. Domingo, Nawaljeet Singh, authors
    The COVID-19 pandemic has had profound implications on Malaysia’s public health and economy. At the same time, the political crisis that engulfed Putrajaya in early 2020 has served only to compound the nation’s health and economic woes. This chapter argues that the response to the pandemic has been stifled by the Perikatan Nasional (PN) government’s need to remain in control of federal politics. Specifically, managing the crisis has been a means to an end—the need to gain and bolster political legitimacy. The centrality of politics in Malaysia’s COVID-19 response remains, as evidenced by Budget 2021 deliberations. As the PN coalition continues to operate on an uneasy and tenuous arrangement, all eyes are on a possible snap election, which would further exacerbate pandemic effects and the subsequent response.
  • MYANMAR
  • Myanmar in 2020: Aung San Suu Kyi Once More Triumphant, by Robert H. Taylor, author
    Hit by an increasing death toll from the COVID-19 pandemic, Myanmar faced a difficult year. Economic growth collapsed while the peace process made no further gains. In fact, the level of violence in the country increased during the year, particularly in Rakhine state. Myanmar held its third general election since 2010 in November, which saw an overwhelming win for Aung San Suu Kyi and her National League for Democracy. However, this meant problems again for ethnic minorities to gain representation in the national parliament.
  • Myanmar’s Foreign Policy under the NLD Government: A Return to Negative Neutralism?, by Andrea Passeri, author
    This chapter sheds light on the foreign policy record of the NLD administration (2016–20) by looking at the ways Myanmar’s first-ever progressive government handled a series of paramount issues such as the diplomatic spillovers of the Rohingya crisis, the resulting ‘divorce’ from the West, and the ongoing tilt towards China’s orbit. Building upon deep-rooted historical trends related to Naypyidaw’s peculiar practice of non-alignment, the analysis argues that the Aung San Suu Kyi cabinet reacted to mounting international scrutiny by resorting to the traditional playbook centred on the notion of ‘negative neutralism for group survival’, while visibly departing from the active and omnidirectional diplomatic platform pursued during the previous quinquennium. As a result, compared to the international outlook inherited five years ago from the Thein Sein administration, Myanmar currently appears more isolated in its foreign policy positioning amidst great powers, increasingly diffident vis-à-vis multilateral institutions, and confronted by growing ethnic rifts that have unleashed a powerful impact on its already tarnished image.
  • THE PHILIPPINES
  • The Philippines in 2020: Continuity despite Crisis, by Malcolm Cook, author
    The year 2020 was one of crisis for the Philippines, and one that was exacerbated by corruption, limited state capacity and by President Duterte himself. COVID-19 hit the Philippines harder than any other Southeast Asian country, and the first wave of COVID-19 infections were yet to subside by the end of the year. Despite these clear government failings, President Duterte ended the year in a stronger political position, while those he deemed as opponents suffered more. The year was one of political continuity in the face of a historic public health and economic crisis, underlining the steady-state nature of Philippine politics, and the social and economic costs of this.
  • The Populist Brand is Crisis: Durable Dutertismo amidst Mismanaged COVID-19 Response, by Cleve Arguelles, author
    As with the rest of Southeast Asia, the coronavirus outbreak took the entire Philippines by surprise in early 2020. But the response by the Philippine government was quite distinct compared to those of its neighbours. It placed the entire country in a highly securitized lockdown—one of the longest and strictest in the world. Yet, close to the end of the year it become clear that the harsh measures taken by the government had failed to keep the outbreak from turning into a full-blown economic, health, political and social crisis. But rather than being a curse for the populist president Rodrigo Duterte, the pandemic turned out to be a gift. Despite leading one of the worst-managed responses in the region to the outbreak, the crisis gave Duterte an opportunity to renew the public mandate for his illiberal agenda. The series of spectacular failures by his administration in curbing the spread of the virus did not dent his popularity. Using the lens of comparative populism, this chapter draws attention to the populist nature of Duterte to explain the basis and dynamics of his enduring favour. Populist leaders emerge from, manufacture, and thrive in crises. Crises create social conditions of widespread anxiety and insecurity that are particularly conducive for populist support. As a populist, Duterte mobilized support by capitalizing on anxieties, securitizing the pandemic, and polarizing Philippine society. In short, the populist brand is crisis. Unpacking Duterte’s populist nature is key to understanding how he used a slow-moving disaster like the COVID-19 pandemic to his advantage. While 2019 in the Philippines saw the successful political consolidation of the Duterte regime, 2020 proved how durable Dutertismo has become. Duterte is now the most powerful and popular Philippine president since the country’s return to democracy in 1986.
  • SINGAPORE
  • Singapore in 2020: The “Crisis of a Generation” – Challenges, Change and Consequences, by Eugene K B Tan, author
    The year 2020 was a trying one, with the full ramifications of the crisis indeterminate for the country’s politics, economy and society. Singapore’s Prime Minister Lee Hsien Loong described the COVID-19 global pandemic as the “crisis of a generation” for Singapore and Singaporeans. The imperative to keep Singaporeans safe and to mitigate the severe economic downturn preoccupied the government for much of the year in review. It saw the government roll out within a span of a hundred days four budgets worth S$93 billion specifically as fiscal countermeasures to the pandemic. Singaporeans also went to the polls in July 2020. Despite the economic crisis unleashed by the pandemic, they voted for more political diversity and competition. Although the ruling People’s Action Party won a clear mandate, it also lost a second multi-member constituency and three office-holders in the process. To compound matters, the uncertainty as to who will become the fourth premier resurfaced again in 2020 turning the well-planned leadership renewal and succession on its head. Foreign relations remained on an even keel even as the pressing priorities globally were on domestic concerns. Singapore sought to keep supply lines open and ensure food security as the world became drenched with fear, panic and trepidation. The pandemic underlined the city-state’s continuing vulnerabilities. With the public health situation under control by the end of the third quarter of 2020, the focus shifted towards “emerging stronger” in the post-pandemic world. The pandemic may well be the catalyst for wide-ranging changes to Singapore’s political economy, society and politics.
  • The Role of Digital Media in Singapore’s General Election 2020, by Carol Soon, Neo Yee Win, authors
    Digital media played an important role during Singapore’s general election in 2020. To curb the community spread of COVID-19, the government introduced a slew of social-distancing measures that affected political participation and campaigning during the election. Political parties leveraged social media for their outreach efforts, and voters took to the online space to seek information on political parties, candidates and hot-button issues. A survey conducted by the Institute of Policy Studies showed that digital platforms, including social media and the websites of Singapore’s print and broadcast media, were steadily gaining in popularity, replacing once-popular traditional forms of media like print newspapers. Voters were also found to use social media more to connect with others rather than to express their opinions. In this chapter, we examined the types of content produced and shared by voters during the election. There were five types of citizen-produced content: general explainers, issue-specific explainers, opinion expression, calls for action, and entertainment. Such citizen-generated content is a positive development for Singapore. However, there are risks from trends such as “cancel culture” and online falsehoods. With online citizen engagement set to increase in the future, greater digital literacy efforts are necessary to ensure that citizens are able to be discerning online.
  • THAILAND
  • Thailand in 2020: A Turbulent Year, by Supalak Ganjanakhundee, author
    Thailand faced a perfect storm of political unrest, a sluggish economy and the COVID-19 pandemic in 2020. While the economic downturn challenged the government’s performance legitimacy and caused hardships for the people, the street demonstrations led by student and youth protestors set a historical precedent in challenging not only the political elites but also the revered institution of the royalty, which is regarded as the source of ideological legitimacy for the Prayut government.
  • Thailand and the COVID-19 Pandemic in 2020, by Chris Baker, Pasuk Phongpaichit, authors
    In January 2020, when Thailand reported the first COVID-19 case outside China, the country was predicted to be among the worst hit by the pandemic. In November, the head of the WHO praised Thailand as an “excellent example” of containing the virus. The death toll was sixty. Almost no deaths or domestic transmissions had occurred since June. The economic and social impact, however, was brutal, and the future prospects are uncertain. This article has four parts. The first summarizes the course of the pandemic. A lockdown over March to June choked off domestic transmissions, and a fortress strategy of closed borders prevented a subsequent wave. In the second part, we attribute this relative success in controlling the virus to the public health system developed over four decades by activism within the medical community. In the third part, we describe the economic impact. The lockdown was severe because around half of the workforce remains in the informal sector with little social protection, and because the fortress strategy inflicted severe pain on an economy highly dependent on exports, foreign investment and tourism. Recovery over the second half of the year was partial and patchy. The final section looks at prospects for the future. As the global recovery will be slow, the tourist industry and parts of manufacturing will suffer permanent damage. Thailand’s outward-dependent economic model, which has been faltering for several years, is due for a makeover.
  • VIETNAM
  • Vietnam in 2020: The Year in Transition, by Hai Hong Nguyen, author
    Vietnam had much to tell in 2020. This chapter takes stock of the developments in 2020 in Vietnam’s domestic politics and foreign relations. On the domestic front, the chapter canvasses three outstanding issues in addition to the country’s successful response to COVID-19 and impressive economic growth. The three issues relate to the party congress, the anti-corruption campaign known as furnace blazing, and Vietnam’s human rights records. In terms of foreign relations, the general impression is that Vietnam successfully fulfilled the “double task” of being the ASEAN chair and a non-permanent member in the United Nations Security Council (UNSC). Despite COVID-19, Vietnam’s conduct of diplomacy in 2020 has substantially contributed to its elevated influence and reputation in the global arena. This chapter concludes by highlighting five major challenges facing the country in 2021, including the ramifications of personnel change at the top level, the continued response to COVID-19, the anti-corruption campaign, the South China Sea issue, and Vietnam-US relations given the Biden administration’s focus on human rights.
  • Vietnam’s Economic Prospects in the Wake of the US-China Trade Conflict and COVID-19, by Nguyen Duc Thanh, author
    The Vietnamese economy has grown steadily over the past few decades and its dynamism was not interrupted even in 2020. Vietnam remains a rare positive exception in the year of “twin storms”—the tense economic confrontation between the United States and China and the uncontrolled COVID-19 pandemic shaking both global health and the economy. The country has tried over most of 2020 to keep its domestic affairs relatively stable and the daily lives of her citizens uninterrupted.

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