Saudi Arabia-South-east Asia trade will grow

Significance He arrived in Malaysia on February 26 and Indonesia on March 1. The tour also includes the Maldives, Brunei and China, and is intended to increase Saudi religious, political and economic influence in the region. Impacts Saudi Arabia-South-east Asia trade will likely diversify. The transnational crime MOU with Indonesia could accelerate Jakarta's drafting of new anti-terrorism laws proposed in 2016. Improved Indonesia-Saudi ties will somewhat insulate Jakarta from tensions over Pertamina’s Iranian oil field investments. Closer Malaysia-Saudi ties could help Malaysia’s Prime Minister Najib Razak politically ahead of the next election.

Subject India's foreign policy in South and South-east Asia. Significance Prime Minister Narendra Modi last month visited the Maldives and Sri Lanka, shortly after his election victory and reinauguration. Leaders of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) had been invited to his swearing-in ceremony. When Modi came to power in 2014, invitations to his inauguration were sent to leaders of all countries in the South Asian Association for Regional Cooperation (SAARC). Impacts India will try to improve infrastructure in its north-eastern states to facilitate integration with mainland South-east Asia. Delhi will seek support from Tokyo and Washington to execute development projects in the region. Pakistan in its diplomacy will turn more pronouncedly towards China and Saudi Arabia.


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 India's response to violence in Myanmar's Rakhine State. Significance India last month deployed additional troops along its border with Myanmar, as Myanmar’s military continues operations against the ethnic insurgent Arakan Army in Rakhine State. Meanwhile, Prime Minister Narendra Modi’s ‘Act East’ policy for greater engagement with South-east Asia features increased infrastructure investment in Myanmar, including in Rakhine. Impacts Myanmar’s military will intensify operations against the Arakan Army. The Arakan Army may align tactically with the Arakan Rohingya Salvation Army, but such a tie-up would not endure for long. Bangladesh could come to view the Arakan Army as a useful proxy to push back on Myanmar’s military for the Rohingya crisis.


Headline SAUDI ARABIA-SOUTH-EAST ASIA: Trade ties set to grow


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 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 Saudi oil investments in South-east Asia. Significance Saudi Arabia sees the South-east Asian downstream sectors as a key frontier for investment in the energy industry, with the region being one of the most promising in terms of growing oil demand. As the global oil glut intensifies competition between oil-exporting countries, Saudi Arabia aims to forge stronger energy links with growing South-east Asian economies in order to safeguard its demand security in the long run. Impacts Saudi Aramco is likely to face competition for investment in the region from other oil-exporting countries, such as Russia. An IPO of Saudi Aramco could see revisions to some of the projects it is pursuing in South-east Asia. Saudi investments in South-east Asia could be downscaled if fiscal pressures continue.


Subject Outlook for India-ASEAN ties. Significance Speaking at the ASEAN-India and East Asia summits in Vientiane in September, India's Prime Minister Narendra Modi singled out South-east Asia as central to India's 'Act East' policy, referring to the "common strategic priorities of securing our societies and bringing peace, stability and prosperity to the region". India has also upgraded defence links with Vietnam, signalling that it seeks a more proactive stance against China's economic influence and territorial assertiveness in South-east Asia. Impacts Regional transport corridors would help ASEAN manufacturers develop supply chains and attract South Asian investment. However, such corridors face security constraints, especially around border areas. India's deepening security ties with the United States, Japan and Australia will help it advance defence relations in South-east Asia.


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.


Significance She addressed two key issues during her trip: tensions in post-coup Myanmar and China’s growing regional footprint. Shortly after she left the region, the United States announced that it would donate unused COVID-19 vaccines abroad, including to South-east Asia. Impacts Washington will tighten its sanctions on the Myanmar military while supporting ASEAN’s five-point plan to ease the country’s crisis. The National Unity Government, a parallel administration to Myanmar’s junta set up by its opponents, will try to attract greater US backing. Manila and Washington may extend negotiations over renewing their Visiting Forces Agreement to prevent the pact expiring in August.


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