Policy gaps to test South-east Asia-US security ties

Significance Both documents will reflect Trump’s emphasis on military solutions to foreign policy problems, which has also been evident from his appointment of several former high-ranking military officers to top national security posts. This trend will likely strengthen traditional US security partnerships in South-east Asia: with Thailand and the Philippines, the two US allies, and with Singapore. However, it could complicate US counterterrorism cooperation with South-east Asian governments, which relies more on partnerships with police and intelligence agencies. Impacts Trump needs to manage Duterte’s suspicion of Washington to build a stronger Philippines-US relationship. This would support a greater US naval presence in the South China Sea. It will also be crucial to tackling IS in South-east Asia given the southern Philippines’ vulnerability to terrorists. Washington will need further to warm ties with other IS-vulnerable South-east Asian countries such as Myanmar.

Subject Development of South-east Asian coastguards and their geopolitical implications. Significance Senior coastguard officers from Australia, Japan, the Philippines and the United States will meet later this year to discuss cooperation and capacity-building -- and the assertive actions of China's coastguard in littoral waters. With external partners' support, South-east Asian states are developing their coastguards to fight crime and assert maritime territorial claims. Impacts Fishing activities will probably trigger spats between South-east Asian and China's coastguards. Gradually, inter-operability between South-east Asian coastguards will expand. Tokyo and Washington will use coastguards to deepen ties with South-east Asian countries. There could be frictions between Indonesia's and Malaysia's coastguards over waters around Ambalat.


Subject South-east Asia's relations with Russia. Significance Russia’s ties with the West are deteriorating. South-east Asia offers Moscow important diplomatic and economic opportunities. Impacts As Russia-China strategic alignment strengthens, Moscow and Beijing will increase coordination and cooperation in South-east Asia. Advanced Russian defence technology will further strengthen Beijing against South-east Asian claimants in the South China Sea dispute. Washington will try to encourage South-east Asian countries to buy US rather than Russian weapons.


Significance The announcement came days after an international ruling under the UN Convention on the Law of the Seas (UNCLOS) dismissing China's maritime claims and island-building in the South China Sea -- a ruling that Beijing has rejected. This will affect an aspect of China-South-east Asia relations that has gone under-noticed amid the maritime controversies: security and defence cooperation. Impacts Despite growing Chinese interest, Thailand will still seek security ties with Washington. As a beneficiary of competing Chinese and US diplomacy, Myanmar will try to balance the two powers' advances. The further China pushes defence interests and ties in ASEAN, the harder ASEAN will find reaching common security positions. South-east Asian countries will stay ready for maritime skirmishes; they will need Western military and technological support.


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 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.


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.


Subject The South China Sea dispute. Significance China and the United States increased their military activities in the South China Sea in January and February, with US ‘freedom of navigation operations’ (FONOPs) pushing back on Chinese maritime jurisdictional claims in the area. The Philippines before June 2016 contested China’s expansive claims. Increased rivalry between Beijing and Washington in South-east Asia raises the risk of a dangerous naval confrontation. Impacts The Philippines will continue to solicit investment from China. China is unlikely to undertake actions in the South China Sea that would seriously irk the Philippines. South-east Asian countries will emphasise the importance of the region not becoming a theatre for China-US rivalry.


Significance The ADMM-Plus is primarily a confidence-building forum, but Esper will need to navigate various issues that will affect US security relations in South-east Asia for the remainder of President Donald Trump’s current term. Impacts The forthcoming US election could further diminish Trump’s attention towards multilateral meetings. US defence ties with Singapore and Vietnam will grow more easily than with Thailand and the Philippines. US counterterrorism cooperation with South-east Asian states will likely grow.


Significance The preferential US trade programme faces renewal or lapse by December 31. South-east Asia’s economies are structured to take advantage of the GSP and many of the products exported to the United States under GSP (such as light manufactures and seafood) are important for South-east Asia’s supply chains. Impacts Vietnam may make another application for inclusion in the US GSP programme. The more authoritarian South-east Asian countries could find it easier to gain US GSP preferences under Trump. The Trump administration could use the GSP as a bargaining chip in trade negotiations or renegotiations.


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