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Economics, Politics and Public Policy in East Asia and the Pacific
Vol.12 No.1 January–March 2020 $9.50 Quarterly
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ReGIONAL PERSPECTIVE
picture: PATPICHA TANAKASEMPIPAT / REUTERS
Workers erecting a welcome sign for the 2019 Bangkok ASEAN Summit: the group is responding to increasing tensions between great powers in the region.
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Sustainable Development Goals,
EASTASIAFORUM Quarterly
and broader areas of economic
cooperation.
The AOIP also has a
functional influence on
ASEAN’s external partners have
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of the deal against the AOIP and both China and the United States on evaluate ASEAN’s progress towards
ensure that ASEAN is consistent separate occasions. ASEAN countries the ASEAN Community Vision 2025
with its principles of openness and have always sought to engage with for an integrated, peaceful and stable
inclusivity. This would de-emphasise all and not side with one great power community.
the influence that bilateral donors over another. But in other areas of The AOIP does not promise any
receive over national and regional cooperation, such as connectivity and new mechanism, nor are its principles
plans. Prioritising bilateral deals infrastructure development, more new. It will act as a lens through which
from one particular donor could have direction and clarity is needed. the principles it espouses can be
consequences that affect the whole The coming months will bring viewed. In the example of connectivity
region. This could distort national occasion to look at the AOIP and infrastructure, it can bring about a
development plans or affect ASEAN in relation to connectivity and new perspective that can lead to a new
integration. infrastructure and determine whether way of prioritising actions. EAFQ
Looking ahead, the AOIP should its principles can be increasingly
be used as a lens for regional influential. Indonesia, an AOIP Simon Tay is Chairman of the
development to enable ASEAN enthusiast, will take the lead because Singapore Institute of International
to implement its priority areas of it will hold the World Economic Affairs.
cooperation. Some aspects of the AOIP Forum on ASEAN and Indo-Pacific
are already embedded in ASEAN’s Infrastructure and Connectivity in Jessica Wau is Assistant Director
activities. For example, ASEAN has July. Another signpost will be the (ASEAN) at the Singapore Institute of
had joint military exercises with ASEAN mid-term review that will International Affairs.
China’s Foreign Minister, Wang Yi, at the 2019 ASEAN–China Ministerial Meeting: He says China has maintained a constructive attitude to regional cooperation.
picture: ATHIT PERAWONGMETHA / REUTERS
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A NEW GEOPOLITICS
India’s pivot to
the United States
C. Raja Mohan with China has become unsustainable. decades. Along with growing volumes
It is being replaced by the of bilateral trade (US$160 billion in
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picture: leah millis / reuters
Indian Prime Minister Narendra Modi and US President Donald Trump at the Ahmedabad rally which ‘celebrated the special relationship’ with the United States.
during 2005–08. If Manmohan Singh States had always been far more the ‘quad’ framework with the United
was hobbled by opposition to a US critical and negative than of any other States, Japan and Australia to signing
partnership from the Communists relationship and tended to oppose the so-called foundational military
and much of the Congress Party itself, Modi’s significant departures from the agreements with Washington, Modi
Modi had to cope with the deeply presumed foreign policy canon. took steps that were previously
held wariness about the United States Multiple levels of opposition inconceivable.
among Hindutva ideologues. meant even the simplest elements of It was one thing to move forward
Substantive opposition to cooperation with the United States with the United States but entirely
engagement with the United could not be advanced during the another to publicly flaunt the
States came from the bureaucratic United Progressive Alliance (UPA) bonhomie with Washington. In two
establishment. Large sections of years (2004–14). large rallies—one in Houston with
the Ministry of External Affairs, It is quite evident now that Modi the Indian American community in
the armed forces, the Defence and came into power in 2014 with September 2019 and one in a massive
Home Affairs ministries, and the a determination to change this public reception for President Donald
science bureaucracy were sceptical situation. From inviting a US president Trump in Ahmedabad in his home
of collaboration with the United (Barack Obama) as the honoured state, Gujarat, in February 2020—Modi
States and had argued against any guest at India’s annual Republic celebrated the special relationship and
major change of policy that would Day celebrations to flipping India’s proclaimed the United States to be
strengthen ties with Washington. position on climate change to work India’s most important partner.
India’s public discourse on the United with the United States, from reviving Back in the summer of 2016, Modi
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declared in his address to the US this time is the depth of India’s will always be tempted to arrive at
Congress that India had put behind security cooperation with the United some mutual accommodation that
‘historic hesitations’ in its engagement States and the intensity of the political might not always be in the interests
with the United States. In making leadership’s commitment in Delhi to of China’s neighbours. As he copes
the United States the very anchor of the partnership. with China’s rise and hedges against
India’s great-power relations, Modi As it draws closer to Washington, US unpredictability, the Indian Prime
has demonstrated that those were not Delhi is unlikely to become a London Minister is also eager to develop
empty words. or Tokyo to the United States. Modi is stronger ties with other middle
On the face of it, Delhi’s acutely aware of the pitfalls of relying powers like France, Japan, Vietnam,
enthusiastic embrace of Washington too much on the United States for Indonesia and Australia. Today India
to counter China might seem like India’s security. He is conscious of the is more open to minilateral as well as
a surprising exception to India’s current turbulence in US domestic multilateral security cooperation.
international relations, as defined by politics and the prospect for quick Modi’s departure from the past
non-alignment. Yet the originator of shifts in US external orientation. relies on Delhi discarding traditional
non-alignment, Jawaharlal Nehru, Therefore Modi is eager to retain the inhibitions it once held in all its
turned to the United States for support traditional security partnership with dealings with Washington and instead
when war broke out with China in Moscow and carefully manage the seizing the possibilities to strengthen
1962. While President John F. Kennedy difficult and increasingly asymmetric India’s own position among the great
responded with vigour, his successor, relationship with Beijing. powers. EAFQ
Lyndon Johnson, did not follow India has no option but to compete
through. Nehru’s successors turned to with China without locking itself into C. Raja Mohan is Director of the
Moscow and signed a security treaty a costly confrontation. Modi is also Institute of South Asian Studies at the
with Russia in 1971. What is different aware that Washington and Beijing National University of Singapore.
A street artist puts the finishing touches to a mural on the route that President Trump and Prime Minister Modi were to take in Ahmedabad in February 2020.
picture: AMIT DAVE / reuters
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FADING OPTIMISM
The illusion of a
middle power moment
Andrew Carr example—so much the better. notable efforts sought to liberalise
Norm entrepreneurs then need trade, secure the non-proliferation
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picture: KAZUHIRO NOGI / reuters
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ORDER OR DISORDER?
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picture: TOMOHIRO OHSUMI / reuters
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FLAWED ASSUMPTIONS
Australia’s incrementalist
hedging in a fractured order
Nick Bisley Organization trade regime. Australia of domains and involving multiple
also prospered in an international great powers is becoming the defining
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also focusses on maintaining difficulty of maintaining effective how Australia can advance its interests
strong, positive relations with all relations with the major powers to in a world where great-power rivalry
of Asia’s major powers. Another see the flaws of this assumption. In and geopolitical instability is the
aim is to advance regional just under five years, Australia and norm, where power is shifting both its
multilateralism through activist China have moved from establishing locus and form, and liberal values and
diplomacy. Multilateral engagement an annual premiers’ dialogue and a institutions are in free fall. Assuming
seeks to increase Australia’s influence free trade agreement to their relations the neverending dominance of the
and reinforce the status quo. It has also reaching their lowest point since United States in Asia and functioning
embraced the Indo-Pacific as a novel the Tiananmen Square massacre. liberal institutions will not do.
geostrategic construct guiding its Worryingly, this frigid state of affairs The times demand bigger and
international engagement. has become the new status quo. This more creative strategic thinking than
Based on these actions, the core change in Australia–China relations is incrementalist hedging. Whether that
assumption of its incrementalist not just a function of a more assertive means Australia should move out
hedging approach is that major and confident China or ineffective of the US orbit, join a muscled-up
changes to its policy are not needed. diplomacy from Canberra, it reflects military coalition to push back against
In the face of a fundamental the limits of incrementalism in a time China’s ambitions or work with a
transformation of the strategic, of radical change. Australia cannot whole raft of countries to reconstitute
ideational and economic environment, pursue policy as if it is still 2004. the international order is far from
Canberra has determined that the Given the changes to great power clear. But small changes during times
course on which the ship of state is relations, the nature of power and the of massive transformation will ensure
travelling needs only to be adjusted rapid shift in how the United States a diminished Australia. EAFQ
somewhat. Australian decision-makers views its interests and global role, the
believe that the nation’s interests can return on Australia’s investment in its Nick Bisley is Dean of Humanities
ultimately align with that of the key incrementalist approach will continue and Social Sciences and Professor of
regional powers. to decline. International Relations at La Trobe
One only needs to look at the The challenge thus is to determine University.
A leaders’ line-up at the Osaka G20 Summit in June 2019: Australian decision-makers believe the nation’s interests can align with those of key regional powers.
picture: JACQUES WITT / ABACAPRESS.COM / reuters
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ASIAN REVIEW: OPPORTUNITIES AND OBSTACLES
picture: antara foto / reuters
Building
Indonesia’s
new capital
Lex Rieffel and reflecting on Indonesia’s urban vis-à- Indonesian President Joko Widodo and the
Michael Castle-Miller vis its rural population. According to Governor of East Kalimantan, Isran Noor, look over
the United Nations, the urban share the location of Indonesia’s planned new capital.
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ASIAN REVIEW: OPPORTUNITIES AND OBSTACLES
opportunities to create better policies element is the most controversial but affordably priced rental housing for the
and administrative institutions, which goes the furthest towards meeting the millions of rural-to-urban migrants
may be more difficult with existing goal of ‘fair’ compensation. that moved into Shenzhen.
government arrangements. Implementation will be an immense A people-centred approach to
One can assume that Jokowi’s challenge not only because of budget building the new capital could be
advisors are well acquainted with these constraints but because there are the key to avoiding mistakes made
advantages, that they have examined no good precedents in Indonesia, by other countries that have built
potential locations for a new capital, because of budget constraints, and new capitals, such as the Myanmar
and concluded that East Kalimantan because land rights and land titling government’s controversial move
is best. in Indonesia are exceptionally to Naypyidaw. Civil servants, who
Implementation then becomes the complicated matters. are expected to experience the bulk
crucial issue and this is where some The history of Shenzhen, China, of disruption, will develop positive
early descriptions of Jokowi’s project provides an interesting example of attitudes toward the project if they
raise concerns, particularly in three what is theoretically possible for a are consulted and see steps taken to
areas: people, land-value capture, project of this kind. When the Chinese address their concerns. Construction
and governance. In each of these government established the Shenzhen workers and other government service
areas, measures can be taken to make Special Economic Zone in 1980, it providers will also do their jobs
the project more successful, reduce recognised local fishing villagers’ right more effectively if they are treated as
costs and create an attractive urban to collective ownership of pockets partners and not as soldiers simply
environment for residents. of land in the area. The villagers taking orders.
Implementing many of these steps, held their land in corporations and Perhaps Jokowi was already
however, may exceed the Indonesian distributed shares among themselves. thinking along these lines when he
government’s ability to challenge Shenzhen experienced explosive spoke in mid-January about changing
deeply entrenched vested interests. growth in the decades that followed, the ‘mindset’ of the Indonesian people
Official government statements becoming a city of over 14 million in the process of building the new
about the new capital city project people. The original villagers profited capital.
have emphasised the infrastructure from this growth by turning their Jokowi’s announcement put the
and the buildings. Not much has been land into ‘urban villages’ with dense, cost of building the new capital at
said about people—neither the people US$33 billion. This figure was quickly
who will be displaced in the process criticised as an underestimate.
of building the new capital nor those
Allowing the new capital But both perspectives view the
who will become residents because project in the wrong way. If the
government functions are relocated
to become a political project is designed well, it will be a
or because they anticipate a better life money-maker, not a black hole. To
there and move voluntarily.
football will kill the project achieve this, the government can
Fair compensation for people use ‘land value capture tools’ that
displaced by development has been
by creating uncertainty other countries have implemented
a policy challenge for democratic successfully in the past 20–30 years.
governments for centuries. Indonesia
that discourages The concept is simple. It’s hard
can achieve favourable results by to grow up anywhere in the world
adopting a compensation policy with
private investment and without witnessing increases in land
three elements: cash compensation values associated with development.
for moving to new housing freely
encourages inefficient, Most visibly, the rise in value is
selected and designed by those linked to infrastructure construction,
displaced, guaranteed employment by
partisan investment of the classic case being the erection
infrastructure and building developers, of shopping malls at highway
and some form of equity in the project
budget resources intersections. Rises in value also
so that displaced people can receive a come with creeping urbanisation or
financial benefit if it succeeds. The last gentrification.
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asian review: OPPORTUNITIES AND OBSTACLES
picture: DARREN WHITESIDE / reuters
Motorcyclists crowd an arterial road in Jakarta. The planned new capital has the prospect of reducing the manifold frustrations of urban congestion.
For generations everywhere, to finance further improvements. capture is how Indonesia’s new capital
this value increase has mostly been This form of financing infrastructure can be built without being a budget
captured by rich and powerful people, through land value capture has been buster, especially if governance of the
commonly labelled as ‘speculators’. used successfully in a number of cities capital is designed to encourage and
They buy the land at a low price before around the world, including Canberra facilitate private investment.
the construction and then sell again in Australia and Ahmedabad in India. Perhaps the biggest threat to
at a high price when construction is Alternatively, Indonesia could building the new capital successfully
complete, having done nothing else implement a land value tax (LVT) for is obstruction from political parties.
in the meantime to produce the value the new capital. Unlike a property tax, In a country like Indonesia, where
increase. They pocket the profit. an LVT is imposed on the underlying political parties care more about
It doesn’t have to be this way—the value of land on a parcel. It does not personal power than social issues,
increase in value as Indonesia’s new tax the value of improvements made allowing the new capital to become a
capital is built can be captured in upon the land, such as buildings. political football will kill the project by
various ways. Economists view an LVT as the creating uncertainty that discourages
One option is for the government optimal form of taxation because it private investment and encourages
to retain land ownership in the can be taxed at up to 100 per cent inefficient, partisan investment of
new capital. This would allow the without any harm to the economy, budget resources.
government to lease parcels of land it is relatively easy to administer and One sign of danger is already
to occupants and gradually increase it aligns the government’s financial visible with regard to governance.
rents as infrastructure improves and incentives with good governance. Current Defence Minister Prabowo
the land becomes more valuable. The Whether by retaining ownership of Subianto and his brother Hashim
growing rent income can then be used land or establishing an LVT, land-value Djojohadikusumo reportedly own
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ASIAN REVIEW: OPPORTUNITIES AND OBSTACLES
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ASIAN REVIEW: CULTURAL DIPLOMACY
picture: ANDREW HARNIK / reuters
A Farewell to Arms on
the Ho Chi Minh Trail
James Borton It was under the jungle canopy and a page straight out of Washington’s
within hidden bunkers and caves that practice of cultural diplomacy and the
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ASIAN REVIEW: cULTURAL DIPLOMACY
opportunity to read more works by Ten years ago the late US Senator
Hemingway and other great American For Vietnamese Richard Lugar—a former chair of the
authors. US Foreign Relations Committee—
At this event, former major intellectuals and writers, stressed the need for the United
general Le Van Cuong from Vietnam’s States to interact with the world if it
Ministry of Public Security also South Vietnam’s wished to change how it is perceived
asserted that ‘Americans have not by other countries. Hemingway’s work
really understood Vietnamese people surrender on 30 April demonstrated his understanding of
and we should put our past behind this. He was involved in three major
us’. With the war over and history 1975 marks not just the conflicts, both World Wars and the
marching forward, the United States’ Spanish Civil War, and wrote about
relations with Vietnam have been fall of a country and the each of them.
deeper and more diverse since former Loss was inevitable for Hemingway
US president Bill Clinton announced exodus of citizens but also and he knew firsthand that war claims
the formal normalisation of relations lives, innocence and truth. These
in 1995. the fall of literature universal truths were also examined
Ironically, the Vietnamese by Vietnam’s Bao Ninh’s The Sorrow of
appreciation of Hemingway originated War who, like Hemingway, connects
because the United States Information the tragedy of war to the loss of
Agency forbade the distribution of his Catherine Barkley reveal lives caught youth. Hemingway’s Soldier’s Home
works through its centres during the up in the chaos and confusion of war. deals with the alienated soldier and
Cold War. Officials deemed his work— His novel illustrates the complexities his displacement from society. Both
especially The Sun Also Rises, The Old of patriotism and unreliable writers evoke the language of war
Man and the Sea and A Farewell to international alliances. as a burden. Many scholars contend
Arms—as not being hostile enough to Others believe there were many that war marked the loss of American
communism. details of Hemingway's life that innocence and the bell continues to
There are many reasons why the attracted Vietnamese readers, toll for all still engaged in combat.
Vietnamese are reading Hemingway including his participation in For Vietnamese intellectuals and
and it may have more to do with the the Spanish Civil War, his close writers, South Vietnam’s surrender
craft than the author’s politics. Carl connection to Cuba (an ally of on 30 April 1975 marks not just the
Eby, a Hemingway scholar, suggests Vietnam) and his suicide, which could fall of a country and the exodus of
that ‘Hemingway’s stylistic preference have been used by North Vietnam citizens but also the fall of literature.
for simple, direct sentences, and his as evidence that he was tired of US ‘Saigon would be renamed Ho
disdain for inflated diction make him politics and society. Chi Minh City, its boulevards,
ideal for second language learners’. It was largely the United States’ avenues and streets also renamed
Hemingway’s lean, disciplined hubris and naivety that caused it to commemorate revolutionary
prose made writing and living seem to get stuck in the tragic Vietnam figures, events and slogans. So too,
simple. His spare sentences—with few quagmire. While it may not be feasible Vietnamese literary history would be
adverbs or adjectives—make it easy for to rebrand or recreate the ‘American eventually dismantled, systematically
foreign readers to access his stories. Corners’ program, there is need to rewritten, or outright erased; books
Catherine Cole from the University of revisit some parts of it. The Trump would be banned, confiscated and
Wollongong suggests that Vietnamese administration’s misguided foreign burned; writers silenced, censored and
audiences favour such word usage, policy shows disdain for allies and imprisoned,’ writes Hai-Dang Phan,
and the enigma and reflection in embrace of dictators like Kim Jong-un author of Reenactments.
Hemingway’s work. and Vladimir Putin. The ‘America First’ Frank Stewart, the founding editor
Few readers dispute that A campaign slogan has set the United of Manoa, tells a story that after
Farewell to Arms strongly captures States on an isolationist path—it’s no the war, a veteran from the United
Hemingway’s criticism of war, as wonder that some foreign leaders are States and one from Vietnam meet
the story of Frederick Henry and reshaping alliances. and discuss their experiences. The
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ASIAN REVIEW: CULTURAL DIPLOMACY
Vietnamese veteran reveals that he into a pluralised culture that validates writer Nguyen Quang Than. Both
likes American literature, and he individual experiences captured in the were members of the Vietnam Writer’s
names a number of his favourite novels of more Vietnamese authors. Association in Hanoi before relocating
authors, such as Steinbeck and Many Vietnamese writers, such to Ho Chi Minh City in 2008.
Hemingway. He tells the American as Phan Hon Nhien and Vo Thi Hao, She left her family to join the War
that his government sent troops into have been fellows at the International at the age of 14. Her father was a
battle with copies of many American Writing Program at the University member of the national resistance
novels so that they could get to know of Iowa. The Bureau of Educational organisation called the Viet Minh
the Americans better. and Cultural Affairs at the US State and was imprisoned in Con Son—
Since Vietnam’s renovation— Department supports this cultural notorious for its penal facilities during
referred to as Doi Moi—began in 1986, initiative. the French colonial era—where he
the nation’s literature has reflected This cultural diplomacy had an died. In 1968 she went to U Minh
changes in political liberalisation, impact on several Vietnamese writers. in Cau Mau province to write for
economic transformation and Da Ngan is a 69-year-old author newspapers where there was a library
globalisation. Vietnam’s writers and former resistance fighter who for ‘war warriors’. ‘I was dazzled by the
previously adhered to the uniform wrote her career-defining novel An novels of Hemingway, John Steinbeck
Communist Party revolutionary Insignificant Life about the travails and Jack London,’ she claims.
culture of socialist realism with its of war, hardships, poverty and Le Minh Khue, who fought against
collective ethos. It has now evolved perseverance. She married fellow American troops from 1965 to 1969,
Pham Quang Vinh, Vietnam’s Ambassador to the United States, with the late Senator John McCain, who was a prisoner of the North Vietnamese during the
Vietnam War. Vietnam’s cultural diplomacy strategy is designed to promote ‘mutual understanding with other countries, especially the United States’.
picture: JAMES BORTON
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ASIAN REVIEW: CULTURAL DIPLOMACY
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ASIAN REVIEW: SHAPING BETTER POLICY
picture: OLIVIA HARRIS / reuters
A construction
worker walks past a
1MDB billboard. The
government-run
company has been
implicated in financial
scandals.
Malaysia’s middling,
misdirected
economic management
Stewart Nixon and adapted to prioritise influence following the historic power transition
over ownership, innovation over of 2018 appear increasingly dim.
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ASIAN REVIEW: SHAPING BETTER P[OLICY
dissatisfaction is growing. Concerns Malaysia’s tax-to-GDP ratio—at the government’s policy response,
about rising living costs remain 11.5 per cent—is about a third that of complementing social protection
prevalent despite populist measures OECD countries and declining, while reforms.
to abolish the goods and services fewer than 17 per cent of individuals The pension system is another
tax (GST) and reintroduce petrol and 5 per cent of companies pay tax. contributor to living cost concerns.
subsidies. Significant regional That’s a major concern. A paucity of Mandatory contribution rates at
inequality and limited income growth payers means a rarity of recipients: the 23–24 per cent of wages are high
for less educated and young people rich keep their money and drive up even by developed country standards
are major problems, as a recent World prices while the rest struggle to make and extreme by regional standards.
Bank report highlighted. ends meet. That such a large share of the
Living cost pressures are destined Abolishing the GST—a policy remuneration package is deferred,
to continue as policy responses target triumph in improving revenue when it is needed for essential current
symptoms rather than underlying sustainability and system capture—and expenses, contributes to inflated
problems. Treating symptoms is often levying Petronas and Bank Negara household debt, informal employment
the tool of choice for governments that dividends to fund the shortfall, both and underinvestment in education
have an aversion to difficult reforms. exacerbated this problem. The recent and healthcare. High pension rates
The development of a social stimulus package showed how little reflect and compound transfer system
protection system has been impeded fiscal policy space remains for times of inadequacies by reducing take-home
by the fear that it will create a lazy, crisis, while also introducing measures income and lowering progressivity.
welfare-dependent population. that will further erode the tax base. Not only do Malaysia’s outdated tax,
Comprehensive and targeted social Tinkering with sin taxes and the transfer, pension and social protection
protection remains an aspiration, marginal tax rate for the uber-rich is systems exemplify symptom-oriented
with cash handouts guided by no substitute for the systemic overhaul policies, but they also highlight a
political expediency not genuine needed to reinforce and redirect middle-income mindset among
need. The former Barisan Nasional the government’s fiscal footprint. policymakers at odds with its high-
government’s handouts have been Recognising that living cost anxieties income aspirations. Such a mindset
curtailed and more narrowly targeted are a symptom of the absence of has been emboldened by the success
but the absence of a transformative redistribution from Malaysia’s tax and of earlier policies that picked low-
replacement only worsens transfer system, and instituting a more hanging reform fruit but resist
disadvantage. progressive tax system should headline exploring the deeper reform path
A first step to implementing of advanced economies. Malaysians
effective policy involves more clearly should rightfully be sceptical of
identifying the problem and the
The recent focus on political leaders who insist on the need
expected role of social protection. for ‘more time’ or claim that certain
Social protection is not a replacement
anti-corruption policing, policies aren’t suited to ‘Malaysian
for an effective tax, transfer and conditions’. Thinly veiled excuses and
welfare system, nor a holistic poverty
while beneficial, addresses reform lethargy are the hallmarks of
reduction mechanism. It is a means governance caught in a middle-income
of supporting the temporarily
the symptoms of trap.
unemployed by helping with The chief indicator of a middle-
immediate living costs, retraining and
corruption and not the income mindset mindset is the large
redeployment. It reduces the risk of role of government in economic
unemployment shocks for workers and
institutions that make activity. Liberalising trade and
improves the functioning of the labour investment in sectors where there was
market through increased mobility and
corruption possible little government involvement was
negotiation. Considered in this light, the easy part. Relinquishing control
social protection is less controversial of government-linked companies
and a better fit for the Malaysian (GLCs) and turning off the dividend
political context. tap has proven much harder. Malaysia
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ASIAN REVIEW: SHAPING BETTER POLICY
picture: OLIVIA HARRIS / reuters
has few peers in terms of government ideas and diversify the economy.
ownership. Government-owned firms Phasing out policies favouring
represent around half the local share the Bumiputera is the key in this
market and involve many of its most process, as a unified and harmonious
iconic firms. Effectively regulating— national identity is impossible while
not running—the economy is the institutionalised discrimination
purview of governments in high- persists. Social mobility and poverty
income economies. eradication measures that are blind
Malaysia’s unsuccessful privatisation to ethnicity and religion can build
experience during the 1990s—which cohesion and more effectively harness
was undermined by crony contract the contributions of Malaysian
awards and ethnic favouritism— citizens.
highlights the importance of open, Embracing diversity would also
competitive processes. A robust mean that fewer innovative ideas
competition framework, including an would leave via emigration, while
end to the regulatory role of sector- citizens abroad would be encouraged
specific departments and GLCs, is to return to a Malaysia that they
essential. The Malaysia Competition can more readily identify with. The
Commission needs to be legally and bureaucracy, policy-development
financially resourced to regulate all and frontline services would also be
sectors. Government procurement Former Prime Minister Mahathir Mohamad, who led enhanced by a more representative
and approval processes need to be the Pakatan Harapan government. The promises of workforce. While their removal
sharpened to remove discrimination the party’s manifesto ‘remain largely unfulfilled’. requires careful handling, retaining
against non-Bumiputera and foreign discriminatory measures that are well
bidders and prevent individual although graduates’ technical skills past their use-by date is a prescription
civil servants from making large are satisfactory, they lack soft skills, for continuing mediocrity.
procurement decisions unchecked. initiative and drive. Several aspects A middle-income mindset, treating
Institutionalised corruption results of the education system contribute symptoms rather than underlying
from incestuous links between to this. Foremost is a culture that problems, and overt discrimination
government agencies and companies. requires strict obedience to superiors, form an unholy trinity in two key
The recent focus on anti-corruption mechanistic learning centred on areas of international engagement:
policing, while beneficial, addresses memorisation, and a herd approach migration and foreign investment
the symptoms of corruption and not that ignores individual learning needs. policies. Despite its colonial history
the institutions that make corruption Intellectual curiosity is suppressed by a providing first-hand evidence
possible. The severity of this problem reluctance to question educators. and around half its population at
is well documented, whereas a The education system also independence being composed of
willingness for government action is effectively segregates students on former migrants, Malaysia’s policies
dispiritingly absent. ethnic lines from an early age. Instead now show a profound disregard
Another prime example of of promoting cultural exchange, only for what motivates migrants.
Malaysia’s middle-income problem a privileged minority mix with people There is misguided belief in its
is education policy, or more outside their ethnic groups. Education temporariness—that immigration fills
accurately, education politics. policy divided along ethnic lines is a short-term need that diminishes over
Despite Malaysia’s extraordinary inherently politicised, with reforms time.
achievements in providing basic that would address common student But development and increasing
education to practically all citizens, needs thwarted by national identity relative labour scarcity raise a
it has stumbled on the next step of arguments. Education policy remains country’s immigration potential,
generating skilled graduates ready an instrument of identity politics. making permanent settlement
for the global workforce. A common Embracing and championing desirable. Malaysia’s failure to provide
complaint among investors is that diversity would help to spread different formal pathways to permanent
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ASIAN REVIEW: sHAPING BETTER POLICY
picture: THOMAS WHITE / reuters
2 6 E A S T A S I A F O R U M Q U A R T E R LY J A N U A R Y — M A R C H 2 0 2 0
ASIAN REVIEW: SHAPING BETTER POLICY
any of the policy reforms discussed Bank of Malaysia, and living costs first mass-produced hybrid vehicle
earlier would make them redundant. increasing household budgetary to hit the road. It was 66 when it
Dismantling GLCs and government stress, the sustainability of robust listed on the London and New York
competition is the most obvious of consumption growth appears Stock Exchanges during a period
these, but education, migration and doubtful. While unfavourable external when a Toyoda family member was
anti-discrimination reforms would conditions partly explain growth not the CEO. As circumstantial as
be equally beneficial to investment weakness, the medium-term risks are this comparison may be, there is an
competitiveness. home-grown. uncanny parallel in the timing and
A demonstrated commitment to Something also has to give on need for dynastic regeneration.
structural reform would secure more the fiscal front. Fiscal consolidation As evident to restless Malaysians,
investment diverted by the US–China reliant upon expenditure cuts soon a change of government is merely a
trade war than raising investment hits a point where further sacrifices change of driver, not a new model
incentives. become too great. Many would car. A new driver unwilling or
These issues scrape the surface of argue that point has already passed, unable to upgrade the old car faces
Malaysian economic management as infrastructure crumbles, hospital a deteriorating driving experience,
approaches frozen in time. Centralised waiting times lengthen and education watching others overtake and
governance with limited local or facilities await repairs and upgrades. replacement parts become obsolete.
popular participation persists, the And this ignores the need to introduce Malaysia’s economic engine still runs
most benign government deliberations social protection and tax transfers but is sputtering more than before and,
and data remain concealed from befitting an upper-middle-income as the months pass, fewer mechanics
public consumption, while the political nation. There is simply no avoiding the support forestalling essential upgrades.
leadership remains sentimentally need to reinforce the revenue base and As Malaysia prepares to showcase
driven to build cars and to make improve the social compact around itself as the host of the Asia-Pacific
agriculture ‘sexy’ again. taxation. Economic Cooperation (APEC)
Malaysia finds itself in a precarious, Malaysia the independent nation meetings in 2020, it must give thought
middling position of its own making turns 63 this year. Toyota’s automobile to the image it hopes to project. It
in an uncertain and competitive business was 56 when it launched the is yet to be seen whether it will be a
global economy. Year-on-year growth Lexus as its successful luxury product nostalgic tribute to traditions and past
remained below 5 per cent in every and 64 when its Prius became the successes meticulously polished for
quarter since the Pakatan Harapan maximum shine, or an aspirational
government took office, falling admission that it must learn from the
to a low of 3.6 per cent in the last
As Malaysia prepares to reform experience of its regional peers.
quarter of 2019. The palm oil sector There is no shortage of economic
is reeling from India’s import ban,
showcase itself as the policy priorities Malaysia could
imposed in response to Mahathir’s highlight and no better opportunity
weighing in on India’s Kashmir and
host of the Asia-Pacific to leverage international endorsement
citizenship politics. Export-oriented for challenging reforms. If it can grasp
manufacturing growth has also eased
Economic Cooperation the opportunity, 2020 could be a
amid civil unrest in Hong Kong and watershed year ending ‘old’ Malaysia’s
trade war and COVID-19 disruptions
(APEC) meetings in 2020, middling economic trajectory. EAFQ
to global value chains. Meanwhile,
Malaysia’s heavy reliance on
it must give thought to Stewart Nixon is a Research Scholar at
consumption expenditure mirrors the the Crawford School of Public Policy,
fragile short-term nature of the policy
the image it hopes to The Australian National University. He
framework, with investment declining is currently stationed at the University
in every quarter of 2019 and annual
project of Malaya on a research visit.
exports 1.7 per cent lower than 2018.
With household debt levels
‘elevated’, according to the Central
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gREY ZONES
picture: JAPAN SELF-DEFENSE FORCE / REUTERS
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Defense Treaty for both sides. actors on the frontlines—cannot be amid great power competition.
Therefore, many were surprised countered using the old tools that This could explain why Duterte
when the Duterte administration defence alliances have in their arsenals. invokes the need to end dependence
served the US government notice of For the Philippines, losing control of on the United States as a justification
termination of the VFA on 11 February Scarborough Shoal despite the Obama for terminating the VFA. Interestingly,
this year, to take effect after 180 days. administration’s role in the 2012 ending the VFA reinforces the
While the move has been justifiably negotiations, as well as subsequent Trump administration’s preference
criticised by many as whimsical, US inaction while China embarked on for minimising alliance obligations
reckless and untimely, it has taken major island construction activities and comes at a time when China’s
place in a context worth examining. in the South China Sea, brought assertiveness is making the
Both internal factors—improved home hard truths about what one can Philippines’ neighbours far more
confidence buttressed by a growing realistically expect from an ally. jittery. In this sense, the decision is
economy, winding down of the President Duterte is the first creating more instability, not less.
longstanding Muslim separatist Filipino leader to publicly acknowledge Middle powers also seek to do
movement and a declining communist this. This does not mean that US more with other middle powers. The
insurgency—and external factors—an support is no longer needed or Philippines, for example, is cultivating
improvement in bilateral relations with wanted—only that Washington’s defence and security partnerships with
China, the worrisome trajectory of willingness to get involved cannot be a variety of players, including Japan,
great power competition, the Trump presumed, and that its support carries South Korea, Australia, Indonesia,
administration’s credibility issues and its own risks and uncertainties. Malaysia, Vietnam, some European
the greater security efficacy of other Many countries in Asia are coming states and Russia.
middle powers—are helping to push to terms with a strategic environment Multilateral institutions such as
the Philippines out of path-dependent where China expects a louder voice ASEAN and its extended dialogue
defence reliance on the United States. in regional affairs. The challenge for networks remain attractive platforms
Like other countries in the these countries is binding China to for middle powers to shape their
region, the Philippines fears getting a rules-based order to ensure that it strategic communities. But these
caught in the crossfire should US– respects the rights of its neighbours as institutions must be strengthened to
China animosity lead to conflict. sovereign if not equal states. remain relevant. As the concept of the
China’s effective use of carrots In Southeast Asia, the preferred ‘Indo-Pacific’ continues to be debated
and sticks—economic incentives order is one that is inclusive rather in terms of what it can contribute to
alongside coercive diplomacy than exclusionary, where larger regional stability and security, ASEAN
and economic statecraft—has left powers engage constructively. Weak ‘centrality’ will be challenged.
countries ambivalent about their own or small states usually have little Will the Philippines gradually
priorities. The prospect of economic influence in these processes and are transform from a secondary power
connectivity with China via the often pressured into taking sides or supportive of, and dependent on, US
so-called Belt and Road Initiative is remaining silent. But middle powers primacy into a middle power pursuing
one that the pragmatic elites of the may act to preserve their autonomy its own autonomous interests through
region do not lightly dismiss. This more inclusive diplomacy? So far,
has led most regional governments no such vision has been articulated.
to adopt hedging strategies on China,
In Southeast Asia, the But by moving farther away from
rather than balancing or containment the United States, Duterte is taking a
behaviour.
preferred order is one gamble that may force him down this
At the same time, the security path. Otherwise, the only remaining
challenges that China presents expose
. . . where larger powers alternative is alignment with China.
the inadequacy and sometimes EAFQ
irrelevance of traditional security
engage constructively Aileen Baviera was a Professor of
approaches. ‘Grey zone’ attacks— China Studies and International
including coercive actions short of Relations at the University of the
war or using civilian and paramilitary Philippines.
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DUTERTE’S SHADOWS
picture: PETER BLAZA / reuters
Student activists protesting against Chinese influence during President Duterte’s State of the Nation address in Manila in July 2019.
3 0 E A S T A S I A F O R U M Q U A R T E R LY J A N U A R Y — M A R C H 2 0 2 0
several key officials seek to maintain Unlike his China-sceptic a climate of fear, entrenched
the VFA, while the Philippine Senate, predecessor Benigno Aquino—who political patronage and historically
dominated by Duterte allies, has took China to international court over high approval ratings to push
challenged the constitutionality of the South China Sea disputes—Duterte the Philippines’ ‘presidential
Filipino president’s unilateral decision made it clear that Beijing is a preferred bandwagoning’ system to its logical
at the Supreme Court. The result is a national development partner. He limit. As a result, he swiftly colonised
bifurcated foreign policy with various also proudly told the Chinese media different branches of the state, creating
elite factions nurturing competing that the United States is an unreliable an imperial presidency for the first
strategic patrons. This leaves the partner, hence his preference for time since the fall of the Marcos
Philippines in a strategic twilight zone. a ‘meek’ and ‘humble’ relationship dictatorship. The ‘authoritarianisation’
There are two competing schools with Beijing. This signals a largely of the Philippines allowed Duterte—
of thought on Duterte’s impact on transactional approach towards the similar to other strongmen populists
Philippine foreign policy. The first great powers. such as Recep Tayyip Erdogan and
posits that Duterte’s grievous rhetoric This dramatic shift in foreign policy Vladimir Putin—to radically recast his
should be taken seriously, but not marks a convergence of several factors. country’s foreign policy.
literally. After all, he has yet to act It’s partly an upshot of Duterte’s brand Duterte also exploited an acute
on his repeated threats to eject US of proto-nationalism (or ‘Dutertismo’), credibility gap in US commitment to
soldiers stationed in the country—it with his presidential campaign serving the Philippines, which was fully on
remains to be seen how the latest VFA as a referendum on the Philippines’ display during the Scarborough Shoal
decision affects this. Ironically, this West-leaning liberal oligarchy. crisis, the Obama administration’s
view is common among observers Duterte’s decisive victory against his ambiguous stance on the bilateral
from diametrically opposed camps— two US-trained rivals, Manuel Roxas alliance, and its tepid support after
old hands in the American defence III (Wharton) and Grace Poe (Boston the landmark arbitration award at The
establishment as well as close Duterte College), served as a partial rejection Hague.
advisors who repeatedly downplay the of the country’s US-centric foreign In stark contrast, China offered
President’s incendiary language. policy. a clear matrix of costs—including
The second school argues that Duterte also adroitly exploited military escalation—and benefits,
Duterte’s presidency is inflicting namely large-scale investments.
significant damage on the Philippine– Former president Gloria Macapagal
US alliance amid a determined The Trump administration Arroyo, who ushered in a brief ‘golden
so-called ‘pivot to China’. Duterte age’ of bilateral relations with China,
scrapped earlier plans to preposition is also doubling-down has also been among Duterte’s chief
US weapons in strategic bases across foreign policy advisors. Still, Duterte
the Philippines, especially in airfields on pushing back against faces concerted pushback from other
close to the disputed features in the centres of power in the Philippines,
South China Sea. China, expanding especially the defence establishment.
This school of thought effectively Philippine Defense Secretary Delfin
portrays the Philippines under Duterte defence aid and Lorenzana, a former defence attaché
as China’s latest satellite state in in Washington, openly criticises
Southeast Asia—or, using Duterte’s clarifying the parameters China’s ‘bullying’ of the Philippines.
own colourful rhetoric, ‘a province of On multiple occasions, the Armed
China’. of its commitment to Forces of the Philippines (AFP) leaked
In reality, Philippine foreign policy information to the media about
under Duterte is a mixture of change regional allies China’s aggressive actions in the South
and continuity. The element of change China Sea, while openly calling on the
is relatively significant following government to take a tougher stance
almost a century-long alliance with the against China.
United States and, correspondingly, Trained and equipped by the
lukewarm to hostile ties with China. Pentagon for decades, the AFP
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picture: MARK R. CRISTINO / reuters
3 2 E A S T A S I A F O R U M Q U A R T E R LY J A N U A R Y — M A R C H 2 0 2 0
WHITHER THE ‘GOLDEN LAND’?
Thai domestic
training, surveillance drones and high-
grade weapons during the Marawi
siege by ISIS-affiliated elements;
expanded defence aid; and expanded
joint war games and drills in the South
China Sea.
politics threatens
By unilaterally abrogating the deal,
Duterte risks emboldening Chinese
adventurism within Philippine
to derail its
waters, including the prospective
militarisation of the contested
Scarborough Shoal, which lies just
diplomacy
over 100 nautical miles from strategic
bases in Subic and Clark. He also risks Gregory V. Raymond democracy crusades.
weakening the country’s ability to deal But the monarchy, top echelons of
with a whole host of non-traditional
security threats. Still, the two allies can
negotiate interim measures to preserve
T HAILAND has been a treaty ally
of the United States since 1954,
but its political direction since 2006—
the Thai military and the aristocracy
retain a preference for some sort of
Western alignment. Few send their
their alliance, not to mention negotiate amid warming strategic ties with children to school in China but many
a new and more mutually favourable Beijing—indicates there are serious still enrol their children in the US and
deal in the near future. One can’t cracks in the alliance. British education systems. The current
rule out another plot twist, namely Rumbles from within the United army chief, fervent royalist Apirat
a reversal of Duterte’s VFA decision States about the relationship have Kongsompong—despite his distaste
before its finalisation in August amid become louder in recent times. for Thailand’s liberal political parties—
concerted internal and external Some policymakers say that the looks to the US military for friendship,
pushback by the Philippine defense two countries no longer share any doctrine and equipment. King
and political establishment. Nor is strategic interests. A rupture is not Vajiralongkorn still remembers fondly
there any credible momentum towards imminent and the military-to-military his time at Australia’s military college,
securing comparable agreements with relationship remains strong—the two Duntroon, and was engaged in active
the US rivals, Russia or China despite countries hold more than 60 bilateral combat against Thai communists in
all the talk of Duterte’s ‘pivot to the exercises a year and Thailand co- the 1970s.
East’. hosts the region’s largest multilateral Thailand’s foreign relations have
The upshot is a strategic stalemate, exercise, Cobra Gold. However, it is become increasingly entwined in its
whereby the Philippines is neither worth asking: what if the United States domestic politics since the coup of
developing a new alliance with China, decided to end the 66-year-old treaty 2006, which unleashed a period of
nor fully abandoning its defence alliance? mass protest and political contest
cooperation with the United States. The possibility arises because bereft of rules. Thai voters were
Despite his best efforts to revolutionise domestic influences are pulling Thai divided on whether sovereignty
Philippine foreign policy, Duterte foreign policy in different directions. resided with the people or with the
has—at best—ushered in an era of On the one hand Thailand’s Sino-Thai monarchy.
strategic despondency. EAFQ business families would welcome a Subsequent US censure of Thailand
more overt move into China’s orbit. over its slide towards authoritarianism
Richard Javad Heydarian is a Manila- They led the charge for economic has affected the way the middle
based scholar, columnist and author integration with China after the ranks of the Thai military see the
of, among others, The Rise of Duterte: economic reforms implemented United States. In a survey of 1800
A Populist Revolt Against Elite under former Chinese President Deng Thai military officers conducted by
Democracy, and The Indo-Pacific: Xiaoping, but were scarred by the John Blaxland and I (see our Centre
Trump, China, and the New Struggle Red Shirt protests in 2010 and have of Gravity publication, Tipping the
for Global Mastery. become critical of the United States’ Balance In Southeast Asia?) between
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2015 and 2017, respondents rated the economy in ASEAN and as the largest vision was first enunciated, Thailand
United States as the ‘Great Power’ economy by far in mainland Southeast was in a relatively strong economic,
most likely to threaten Thailand. Asia helped to realise this vision. diplomatic and military position.
Misgivings over continuing US Its geographical position between Now, although Thailand remains
commitment have played a part in southern China, mainland Southeast an important investor for Myanmar,
changing Thai thinking. Thailand Asia and Malaysia also helps. Laos and Cambodia, it is no longer
has prepared for life without a trans- Thailand continues to pursue the the economic partner of choice. Since
Pacific alliance for decades. The Suvarnabhumi vision by developing the Belt and Road began in 2013,
departure of US troops from mainland industrial parks and ports on the China’s Southeast Asian infrastructure
Southeast Asia in 1976 was a profound eastern seaboard. Industrial policies projects such as dams, roads and
strategic shock for Thai policymakers. like the Eastern Economic Corridor power stations, as well as its special
Thailand adapted by coming to a also link three airports via high- economic zones, have proliferated.
rapprochement with China and speed rail. It shows a country whose There are signs that Thailand
eventually Vietnam. national identity is now far different is beginning to feel strategically
When the Cold War ended, from the Cold War mindset in which constricted and is subtly pushing
Thailand pushed ahead with a liberal it saw its neighbours as threats rather back. It is resisting China’s push to
foreign policy aimed at turning than opportunities, and which saw it blast the remaining rapids from the
battlefields into market places, in part enter in to a military alliance with the Mekong and is ignoring its push for
through deeper investment in ASEAN. United States. a canal through the Isthmus of Kra.
Thailand’s sense of ownership of These policies are an attempt by the While China is rapidly building the
ASEAN stems partially from its central authoritarian regime to gain legitimacy high-speed rail link from Kunming
role in founding the bloc. It also by stimulating economic growth to Vientiane, Thailand is delaying its
subscribes to the notion that ASEAN amid the fallout from the US–China leg from Nong Khai to Bangkok amid
helps Southeast Asian countries to trade war. The military-dominated tough negotiations with Beijing.
balance their interests against various regime also enjoys cosy relations with Thailand is also moving to shore up
great powers, including through its counterparts in Myanmar, Laos the Ayeyawady–Chao Phraya–Mekong
ASEAN’s combined economic weight and Cambodia, all of which have Economic Cooperation Strategy as
and role as a strategic convenor. cooperated across their borders to an alternative subregional forum to
But ASEAN is also a vehicle for repress dissent. China’s Lancang Mekong Cooperative.
Thailand’s own aspirations for sub- But the Suvarnabhumi vision is Thailand’s strategic culture invests
regional leadership. Thailand’s good now coming up against a competing great stock in 19th century monarch
fortune to be the only mainland regional vision—China’s. When the Chulalongkorn’s heroic diplomacy
Southeast Asian country not ravaged with colonial powers. Its elite see
by colonialism, proxy wars or genocide parallels with the current era of
in the twentieth century, as well as the Although Thailand supposed ‘great power’ competition
assistance of the United States during and US–China antagonism.
the Cold War, gave it a head start on remains an important But as Thailand succumbs to
its neighbours. authoritarianism and expands its
In the 1990s, as Thailand investor for Myanmar, security ties with China, it risks its
experienced double-digit economic treaty alliance with the United States.
growth, it sought to entrench itself as Laos and Cambodia, it is EAFQ
the logistical and economic hub for
mainland Southeast Asia, and as the no longer the economic Gregory V. Raymond is a Lecturer
link between mainland and maritime in the Strategic and Defence Studies
Southeast Asia. This vision of Thailand partner of choice Centre at The Australian National
as a Suvarnabhumi, or ‘Golden Land’, University and the author of Thai
has remained part of Thai national Military Power: A Culture of Strategic
identity. Accommodation, NIAS Press, 2018.
Thailand’s rank as the second largest
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SEOUL’S ‘VIRTUOUS CYCLE’
picture: KIM KYUNG-HOON / reuters
Members of the South Korean boy band BTS at the MAMA Awards in Nagoya in December 2019: pop culture exports mark the nation as an international player.
E A S T A S I A F O R U M Q U A R T E R LY J A N U A R Y — M A R C H 2 0 2 0 3 5
was divided along the lines of great- deferential approach to its powerful
power rivalry after World War II. South Korea can respond neighbour and largest trading
While a middle power cannot partner, informed by a belief that the
dominate its region, Seoul looks creatively to US diplomatic road to Pyongyang runs
to shape Asia’s future with pro- through Beijing. This leads South
social norms and institutions. burden-sharing pressures Korea to abstain from criticising
The New Southern Policy is the human rights conditions in Xinjiang
Moon administration’s strategy for in ways that do not and Hong Kong, and from advocating
connecting North and Southeast for North Korean escapees, who
Asia with physical and digital antagonise China or North are often exploited in China or
infrastructure and intersocietal repatriated to the torture chambers
linkages. As a beneficiary of economic Korea of the Kim regime. Seoul also tends
interdependence, South Korea wants to stay mum on China’s maritime
to avoid trade wars and military force Japan sentiment to be more salient expansionism in the South China Sea,
as means of resolving disputes. In than middle-power identity on issues on questions of WTO compliance, and
the words of Foreign Minister Kang of wartime compensation, symbols on international standards for China’s
Kyung-wha, ‘by preemptively offering of incomplete reconciliation, and regional economic strategy, the Belt
to cooperate with all neighbouring disputed islets. South Korean media and Road Initiative.
countries, we intend to create a routinely exaggerate the threat of Third, domestic political
virtuous cycle where expanded Japanese militarism and undervalue polarisation—which in many countries
cooperation with one country leads to cooperation with Tokyo. All this involves ideological divisions on
enhanced cooperation with another’. impedes Seoul’s ability to contribute economic and social issues—extends
Of course, identity is not just to regional security via intelligence deep into South Korean foreign policy.
a function of circumstance and sharing, ballistic missile defence, US President Trump’s impeachment
calculation, but a matter of pride addressing sanctions evasion and trial and the populism around Brexit
and recognition. International actors export control violations, dealing look tame compared with the South
increasingly recognise South Korea with growing submarine threats, Korean partisan context, where the
as a player, for convening summits ensuring freedom of navigation, and past two presidents were sent to
to bridge developed and developing coordinating humanitarian assistance prison and the National Assembly is a
nations, for global brands like and disaster relief. physical battleground for contentious
Samsung and Hyundai, and for pop Second, the liberal values of South legislation. Single five-year presidential
culture exports like the band BTS and Korea’s democracy often come into terms and an unstable political party
the movie Parasite. South Koreans friction with its realist foreign policy landscape produce pendulum swings
take pride in this growing soft power. pragmatism in dealing with China. in policies toward North Korea and
But while Seoul is making meaningful Seoul’s middle-power role in Asia greater Asia. South Korea’s internal
global contributions—including sometimes takes a back seat to a divisions leave it susceptible to
on technological standards, official wedging tactics by other countries
development assistance (ODA) and and cause a generally well-run
UN peacekeeping—it faces three major
challenges in maintaining a productive EASTASIAFORUM Quarterly
government to engage in inefficient
and inconsistent resource allocation
middle-power role in Asia’s contested for foreign policy initiatives.
regional order. our next issue . . . Rising above this polarisation will
Immunising
First, South Korea’s historical require enlightened leadership with
disagreements with Japan periodically political restraint, and following the
short-circuit its middle-power rule of law rather than weaponising
Asia
diplomacy. The Moon administration it against ideological rivals. South
pledged to keep history separate from Korean foreign policy needs more
security cooperation, but ongoing transparency to demonstrate
feuds with Tokyo have allowed anti- democratic legitimacy and strategic
3 6 E A S T A S I A F O R U M Q U A R T E R LY J A N U A R Y — M A R C H 2 0 2 0
picture: Kim KYUNG-HOON / reuters
A protester wearing an anti-Terminal High Altitude Area Defense (THAAD) mask in Seoul. South Korea’s internal divisions leave it susceptible to wedging tactics.
thinking about national interests. This sharing pressures in ways that do not underusing the MIKTA (Mexico,
will help Seoul avoid policy fantasies antagonise China or North Korea. In Indonesia, South Korea, Turkey
like decoupling from Japan to pursue particular, rather than think of their and Australia) grouping of middle
a ‘peace economy’ with North Korea. contributions to global public goods powers in the G20, and has yet to fully
Principled policies are needed to deal as ‘alliance dues’, South Koreans can incorporate India in its New Southern
with North Korean nuclear weapons, take pride in picking up the slack Policy. Seoul’s free trade agreement
missiles and human rights abuses, in areas where the superpower is and ODA policies could be better
as well as non-traditional risks like underperforming, such as promoting coordinated with those of Japan and
the Covid 19 pandemic. Domestic free trade and mitigating climate the European Union. South Korea
unity is also important for responding change. Such global governance can also work more with like-minded
to China’s economic coercion—as contributions will be appreciated by partners Australia and ASEAN on
witnessed during the dispute over the United States and many other regional capacity building. Such
deployment of the Terminal High nations. middle-power diplomacy will provide
Altitude Area Defense (THAAD) Seoul can unshackle its foreign positive reinforcement for Korean
system. policy from ideology and history by national identity and persuasively
Middle-power principles will help doubling down on building institutions demonstrate to other states the value
Seoul to dispel perceived zero-sum in Asia. This will encourage economic of international cooperation. EAFQ
trade-offs between strengthening and great-power stability in the region
its alliance with Washington and and eventually provide leverage Dr Leif-Eric Easley is an Associate
managing its relations with Beijing towards a peaceful and rules-based Professor in the Division of
and Pyongyang. South Korea can unification on the Korean peninsula. International Studies at Ewha Womans
respond creatively to US burden- The Moon administration is University, Seoul.
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DENUCLEARISATION
Lauren Richardson
3 8 E A S T A S I A F O R U M Q U A R T E R LY J A N U A R Y — M A R C H 2 0 2 0
the two Koreas along the 38th parallel Many governments and would-be As progress with North Korea
is another structural manifestation of coalition partners in the region do appears to be lagging—and even
this hostility. indeed regard North Korea’s nuclear backtracking—on many fronts, the
In accordance with this conception weapons program as a discrete threat. Moon government may need to
of inter-Korea relations, Moon’s There is also a salient belief in the consider the possibility of there being
approach emphasises the need to region that signing a peace agreement a missing factor in the North Korean
formally end the Korean War through and strengthening economic ties security equation: Japan. As long as
the conclusion of a peace treaty. It with North Korea would constitute Pyongyang remains in an antagonistic
is assumed that this will serve as a unwarranted concessions. In light of relationship with Tokyo—its historical
confidence-building measure that these circumstances and the strategic and contemporary adversary—it is
will induce North Korea to take steps reasoning of the Moon administration, difficult to envision that the Kim
towards reversing its nuclear program. it is unsurprising that Seoul has opted regime will be willing to let down
This policy essentially characterises for a bilateral top-down approach its defences. Since the structures
security on the peninsula as a in preference to middle-power of hostility that Moon wishes to
precondition to denuclearisation. diplomacy. dismantle extend beyond the peninsula
A second objective of Moon’s By establishing a new incentive to North Korea’s surrounding
engagement strategy is to deepen structure that economically rewards environment, it would be worthwhile
bilateral economic ties with North Korea for rolling back its for Moon to incorporate Tokyo into
Pyongyang. It is assumed that market belligerence, Moon is attempting to his coalition of engagement.
interests will mitigate against hostile establish a new logic for inter-Korean The Moon administration’s
intentions in the north, and also relations. In his strategic thinking, reluctance to build coalitions with
improve the security environment on rapprochement between the two sides neighbouring states, like Japan, is
the peninsula and its surrounds. This will provide a solid foundation for partly premised on a belief that such
approach recasts North Korea from the security of the peninsula, and this states have contributed to, benefitted
an adversary to a potential market. It will have ripple effects for regional from and even exploited the divided
is based on the logic that increasing security. state of the peninsula. But it is
economic interdependence between Moon also continues to view the becoming increasingly apparent that
the two Koreas will disincentivise the role of the United States as central to security assurances from Seoul and
Kim regime from further developing resolving the North Korean security Washington alone will be insufficient
its nuclear arsenal. In other words, the dilemma. Although Moon has yet to to elicit change in the Kim regime’s
Moon government anticipates that a convince Washington that a peace behaviour. The task of facilitating a
shared market will have a stabilising regime on the peninsula is a necessary rapprochement between Pyongyang
effect on relations. precondition for denuclearisation, and Tokyo and incorporating Tokyo
South Korea’s approach to the Trump has been relatively obliging of into a coalition of engagement
North Korea foreign policy challenge Moon’s calls for sustained engagement would undoubtedly be fraught with
does not readily lend itself to middle- with Kim. challenges. But if Moon could manage
power diplomacy. In the Six-Party such a feat with Trump, anything is
Talks process, a previous attempt possible.
at multilateral negotiation with Moon continues to view Assurances provided by Tokyo,
Pyongyang, it became clear that there Seoul and Washington, in the form of
was great variance in the ordering of the role of the United minilateral diplomacy, might just hold
priorities among the member states. the key to realising Moon’s objective of
Based on this experience, Seoul has States as central to changing the Kim regime’s assessment
little confidence in the possibility of of its security environment. EAFQ
building a coalition that prioritises resolving the North
the establishment of a peace regime Lauren Richardson is Director of
on the peninsula, and one that would Korean security dilemma Studies and Lecturer at the Asia Pacific
regard this as a precondition to College of Diplomacy, The Australian
denuclearisation. National University.
E A S T A S I A F O R U M Q U A R T E R LY J A N U A R Y — M A R C H 2 0 2 0 3 9
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