Deeper ASEAN-Russia ties could see free trade deal

Significance Co-chaired by Moscow and ASEAN's 2016 chair, Vientiane, President Vladimir Putin presided with new Laotian Prime Minister Thongloun Sisoulith. Impacts ASEAN states will warm to greater Russian regional involvement, using this to balance Chinese and US advances. Russia will not materially weigh in on South-east Asian geopolitical disputes. Deeper ASEAN-Russia economic ties would help develop Russia's Far East. China and Japan face increasing Russian investment competition in South-east Asia. Tourism between Russia and South-east Asia is likely to grow.

Subject Singapore-US relations. Significance On April 30, Prime Minister Lee Hsien Loong spoke with US President Donald Trump. For Trump, the call was an initial move to strengthen ties with Washington’s partners in South-east Asia amid the North Korean crisis. Lee accepted an invitation to Washington. For Singapore, the call was about gauging a new, thus far mercurial US administration which, to Singapore’s concern, has expressed protectionist trade sentiments and relatively limited detail about its foreign policy aims in East and South-east Asia. Impacts The current lack of a US ambassador to Singapore is not unprecedented and will not greatly affect bilateral relations. China-Singapore ties are warmer, but any overly assertive Chinese efforts to gain South-east Asian influence could change this. Singapore will push for a reworked version of the TPP to be devised, with Japanese leadership.


Subject The outlook for Indian naval engagement with South-east Asian countries and ASEAN. Significance At the ASEAN summit in mid-November, India's Prime Minister Narendra Modi underlined India's 'Look East' policy, pledging to cultivate diplomatic, economic and security relationships with South-east Asia. One manifestation of Delhi's willingness to undertake a more strategic regional role is the Indian navy's growing portfolio of partnerships with South-east Asian navies. Amid concerns over China's maritime assertiveness, India's navy has been welcomed in the region as a security partner. Impacts India will avoid South-east Asian undertakings that may provoke China. Delhi will need to define 'Look East' policies concretely to convince South-east Asia fully of Indian strategic utility. Modi will expand bilateral naval exercises, humanitarian aid and counter-piracy/smuggling efforts in South-east Asia.


Significance The Mekong flows through China and the five mainland South-east Asian states -- Myanmar, Thailand, Cambodia, Laos and Vietnam. Earlier this month, China belatedly informed the downstream Mekong countries of reduced water flow because of power-line maintenance at one of its dams on the river. Impacts US partners India and Japan will look to strengthen economic ties with the South-east Asian Mekong states. Climate change and low rainfall will exacerbate droughts in mainland South-east Asia. The China-led Lancang-Mekong Cooperation initiative will dominate management of the Mekong, overshadowing the Mekong River Commission.


Subject The implications of judicial politicisation in South-east Asia. Significance A Malaysian court on February 10 upheld Pakatan Rakyat opposition leader Anwar Ibrahim's sodomy conviction. This has widely been interpreted as being politically motivated, although Malaysia's government has denied this. Such cases ignite public calls across South-east Asia for the independence of judiciaries, which have become deeply involved in national politics. Impacts Lese majeste and corruption cases will increase as the Thai junta suppresses former Prime Minister Thaksin Shinawatra's allies. Aquino could pursue constitutional changes to limit the judiciary's power. Elite polarisation after 2014's presidential election will test the Indonesian Constitutional Court's independence. Increasingly, social media will be used for political dissent, which governments will resist.


Significance It is the only country in South-east Asia with a large-scale nuclear plant, although this was never loaded with fuel. Other countries in the region have tentative plans to develop nuclear power programmes. Impacts The current absence of nuclear power programmes will help avert the diversion of capital from renewable energy development in the region. South-east Asian countries with small, non-power reactors, built for research, will try to maintain these facilities. Across the region, the need for electricity grid investment will increase as more decentralised generation sources are deployed.


Subject Crowdfunding in South-east Asia. Significance Regulatory reforms have made possible a range of alternative financing initiatives that raised almost 84 million dollars for small businesses in the past three years from South-east Asian platforms alone. Crowdfunding is the fastest-growing segment, though amounts are still small. Impacts Further industry-specific regulatory reforms will be required to support South-east Asian crowdfunding. Facing competition, more banks will be forced to offer online crowdfunding-related products. However, low product returns could be a disincentive to large investor interest in crowdfunding.


Subject South-east Asian tax bases. Significance Indonesia's tax amnesty programme enters its third phase in 2017. The amnesty will generate short-term revenue, but it is not a solution to a wider problem of limited tax bases found across the ASEAN core economies of Indonesia, Malaysia, the Philippines, Singapore and Thailand. Impacts Bilateral tax treaties may change following OECD reforms, even if South-east Asian states are not party to the initiatives. Compliance costs for country-by-country reporting for multinational companies under the OECD initiatives could be substantial. More efficient tax collection and wider tax bases could benefit ASEAN states' development such as infrastructure.


Subject Online radicalisation. Significance On May 25, the Indonesian parliament unanimously passed stringent anti-terrorism laws allowing the military to be directly involved in counterterrorism operations. The vote followed a string of suicide bombings attributed to local jihadist networks that have pledged allegiance to Islamic State (IS). Jakarta joins other South-east Asian governments -- notably those of Malaysia, the Philippines and Singapore -- in attempting to counter a new push in the region by IS, as it loses territory in Iraq and Syria. Impacts Rising anti-Shia sentiment in the region, a by-product of increased Saudi influence, will likely give IS new issues to exploit. The Rohingya crisis gives IS a regional boost, especially in terms of operations in Myanmar and more likely in Yangon than Rakhine State. Non-ideological, low-wage overseas workers, particularly from the Philippines and Indonesia, are most susceptible to IS.


Significance Inbound and outbound Asian tourism has exploded over the last 20 years, especially in East and South East Asia. However, the sector faces challenges. Impacts Supporting tourism, Asia hosts three Olympics in a row -- South Korea 2018 (winter games), Tokyo 2020 (summer) and Beijing 2022 (winter). Tourism is a key source of exports and dollars; if Cambodia is hit by sanctions after its disputed election, tourism could cushion GDP. In ten years the UN sees India's population overtaking China's, making Indian travellers key to East and South-east Asian tourism.


Subject South-east Asian defence budgets. Significance The pressure of responding to the COVID-19 pandemic is prompting many South-east Asian governments to cut defence spending and postpone or cancel new arms acquisitions. Meanwhile, China and the United States continue to vie for influence in the region. Impacts Piracy attacks will increase across the region as socio-economic distress rises and budgets for navies and coast guards fall. ASEAN unity will fracture as tensions among member states increase. Economic problems will cause political instability across South-east Asia, possibly even leading to military coups in certain countries.


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