South East Asia in 2012

South East Asia in 2012
South East Asia largely avoided major shocks and instability in 2011, but there were plenty of significant political developments to consider. Among them, the return of a populist government in Thailand, poor election results for the ruling party in Singapore, and political reforms in Myanmar and Malaysia. The four countries may diverge in many ways but they share a persistent common trait: the refusal of traditional elites or long-term ruling parties to truly share power or abandon authoritarian impulses. All four hold elections, but levels of good governance and democratisation are variable. Recent years have shown there is appetite for reform (of varying depths and significance) in all. How elites choose to manage these changes will be a key influence on stability in 2012. Thailand: after the floods The deep political polarisation between traditional elites and populist democrats has caused disruptive and often violent instability in recent years and continues to define the country’s political landscape. Despite Prime Minister Yingluck Shinawatra’s promises of reconciliation, these divisions are unlikely to improve over the coming year. The same grievances that saw conservative monarchists and populist democrats repeatedly take to the streets of Bangkok have not gone away, even if they have not produced street protests since the bloody Red Shirts protests in 2010. Conservative monarchists – including the middle class and elite that supported the 1992 democracy movement – resent the continuing influence of Thaksin Shinawatra, the not-so-hidden hand behind the ruling Pheu Thai party, and the perceived threat his naked populism poses to the monarchy. Thaksin, a former PM and Yingluck’s older brother, was overthrown by a 2006 military coup and has lived abroad since 2008 to avoid a jail term for a corruption conviction. But there is no ambiguity over his role in exile – as one 2011 electoral slogan had it, ‘Thaksin thinks, Pheu Thai acts’. Supporters of Thaksin in turn resent the establishment efforts to subvert democracy following the 2006 military coup, as well as Thailand’s serious and growing economic inequality. Both sides are also keeping their eyes on the horizon, preparing for the royal succession – the issue that is the elephant in the room of Thai politics. Both are jockeying for position to be the strongest influence in the difficult transition period when the aging but hugely popular King Bhumibol dies. As Thailand enters 2012, on the back of the country’s worst floods in half a century, the situation resembles a stalemate, with neither side in a strong enough position to dominate the political agenda. After sweeping to power in July, the Yingluck government saw the floods wash away a good deal of its political capital, as a lacklustre emergency response undermined the confidence of foreign investors and domestic voters alike. At the same time, the anti-Thaksin military rebuilt much of the popularity it lost through political interventions in recent years with its wide-ranging flood response. And so, despite a large parliamentary majority, Yingluck is being careful to balance relations with the military and the elite. It is a simple arrangement: Yingluck will do nothing to undermine the military or the royal family, and in exchange, the elite establishment will allow her to rule unimpeded. As a result, it is reported that the government plans to delay an expected rewrite of the constitution and efforts to bring Thaksin back to Thailand, as well as rejecting reforms that the army opposes. But one measure that has not been ruled out is an amnesty law for those involved in the political instability of recent years – members of the Red Shirts, the anti-Thaksin Yellow Shirts and military alike. The government would want such a law to cover Thaksin. The former premier’s impatience to return and inability to keep a low profile raises questions about how long the current détente can last. Traditionalist hardliners remain implacable in their opposition to the former prime minister, and any move to rehabilitate Thaksin this year could trigger a renewed political crisis. He may be a wily political operator but Thaksin’s return will be hard to orchestrate without undermining the government or causing destabilising protests. The only question is how big the backlash is likely to be. It is not clear whether the Yellow Shirts or other establishment groups are capable of mobilising the protesters on the scale of the 2008 protests that closed the capital’s international airport. But this time the Red Shirts exist as a ready-made force to confront anti-Thaksin elements, the possibility of an even more violent outbreak of unrest cannot be ruled out. With these groups facing off, the military and other conservative elites may even accept that, although the divisions run deep, allowing Thaksin back in the country – in exchange for the continued protection of the monarchy – is a price they are willing to pay to avoid yet more years of coups, protests and violence on the streets of Bangkok. It is a compromise that might not guarantee stability, but it might at least give the two sides one less thing to fight about. Managed reform In contrast to the intransigence of traditionalists in Thailand, the elite in Singapore is again showing the adaptability that has helped preserve the People’s Action Party (PAP) in power over the 49 years since independence. Following the party’s worst general election result in 2011 since independence, and an extremely narrow victory for the party’s favoured candidate in presidential elections three months later, the PAP is now trying to make itself more in touch with the people. It is doing so without altering its policies or relaxing the city state’s tight social controls. In Malaysia, the ruling Barisan Nasional (BN) coalition is trying to mimic the superficial flexibility of its tiny southern neighbour. For a country unaccustomed to political protest, the pro-reform Bersih 2.0 rally in July 2011 was a shock. The rush by Prime Minister Najib Razak to announce reforms to antiquated electoral and security laws after Bersih, as well as releasing a highly populist budget for 2012, shows a leader working hard to appear responsive. But the electorate does not appear wholly convinced – the reforms have been underwhelming, and there is deep cynicism about the pervasion of corruption among a sclerotic ruling class. With the government expected to call elections this year, perhaps as soon as next month, BN’s electoral dominance no longer seems assured – even if opposition leader Anwar Ibrahim’s prediction of a ‘Malaysian Spring’ is unlikely to fully materialise. The unexpected acquittal of Anwar on sodomy charges in January is a boost for the opposition. Yet any near-term polls will still likely return the ruling coalition to power, but by what margin is less clear. After its worst electoral performance in 2008 since independence, a close poll this time could fundamentally alter the balance of Malaysian politics. A BN weakened by a narrow victory would likely face further calls for reform – this time not on its terms. But it is in Myanmar that the biggest changes in the region over the past twelve months have undoubtedly come. After two decades of political stasis, the nominally civilian government of President Thein Sein is reforming in a hurry, attempting the high wire act of managing political and economic change without surrendering power. Despite support for the military-backed government’s political reforms from the United States, Britain and the ASEAN regional bloc, they remain limited. By-elections in April are likely to send pro-democracy leader Aung San Suu Kyi and some colleagues to parliament – a legitimate, but tiny, opposition minority. And a well-placed diplomatic contact tells us that a state that has previously bloodily crushed anti-government demonstrations will react forcibly if it feels it is losing control. Economic reforms – including foreign investment laws – are attracting the interest of foreign businesses with a high tolerance of risk. The country needs investment and development in all sectors, and interest has been piqued around potential openings in a market previously sealed shut. But options are partially curbed by continuing US and EU sanctions, and the military still has control over many sectors. Global exposure For all their inward looking political calculations, the governments of South East Asia face one potent source of instability: vulnerability to a global economic slowdown. A focus on partisan politics is not a useful way to protect export-based economies and dominance of power does not equate to good governance. It is impossible for South East Asia to remain sheltered from Europe’s sovereign debt struggles and the limping economic recovery of the United States. Towards the end of last year, the Asian Development Bank cut its regional growth forecast by 0.3% to 7.2%. It is the kind of growth a European state would kill for, but may be enough to worsen underlying social and economic discontent in the region. For elites hoping that limited reforms can maintain their traditional power there may be rough times ahead, both from within and without. Tim Powdrill Senior Associate, Intelligence & Analysis
Published: 13th January 2012