Regional Outlook Forum 2008: Summary Report 9789812307934

Table of contents :
CONTENTS
PREFACE
1 OPENING REMARKS
2 KEYNOTE SPEECH: GLOBALIZATION AND THE FUTURE OF EU-EAST ASIA RELATIONS
3 STRATEGIC TRENDS IN EAST ASIA
5 LUNCHEON SPEECH: RECONCILING ISLAMIZATION WITH A DEMOCRATIC SOCIETY IN MALAYSIA
6 THE ECONOMICS OF ENVIRONMENTAL DISASTER: THE SOCIO-CULTURAL IMPACT
7 POLITICAL TRENDS IN MALAYSIA, THAILAND, INDONESIA AND VIETNAM
8 SURVEYING ECONOMIC ENVIRONMENTS AND THEIR CHALLENGES IN SOUTHEAST ASIA
9 VIOLENT MOVEMENTS IN INDONESIA AND THAILAND
10 CONCLUDING NOTES
11 CLOSING REMARKS
FORUM PROGRAMME
SPEAKERS AND PANELLISTS
RAPPORTEURS OF THE REGIONAL OUTLOOK FORUM 2008: SUMMARY REPORT

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REGIONAL

outlook forum 2008 Summary Report

The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). ISEAS Publications, an established academic press, has issued more than 1,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publications works with many other academic and trade publishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world.

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REGIONAL

~

outlook

forum 2008

Summary Report

Institute of Southeast Asian Studies Singapore

First published in Singapore in 2008 by ISEAS Publishing Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Road Singapore 119614 Internet e-mail: [email protected] World Wide Web: All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior consent of the Institute of Southeast Asian Studies. © 2008 Institute of Southeast Asian Studies, Singapore The responsibility for facts and opinions expressed in this publication rests exclusively with the contributors and their interpretations do not necessarily reflect the views or the policy of the Institute, or its supporters. ISEAS Library Cataloguing-in-Publication Data Regional Outlook Forum (11th : 2008 : Singapore) Regional Outlook Forum 2008 : summary report. 1. Economic forecasting—Southeast Asia—Congresses. 2. Terrorism—Southeast Asia—Congresses. 3. National security—East Asia—Congresses. 4. Environment policy—Economic aspects—Southeast Asia—Congresses. 5. Southeast Asia—Politics and government—21st century—Congresses. 6. Southeast Asia—Economic conditions—21st century—Congresses. 7. Asia—Strategic aspects—Congresses. I. Institute of Southeast Asian Studies. II. Title. DS526.7 R331 2008 2008 ISBN ISBN

978-981-230-792-7 (soft cover) 978-981-230-793-4 (PDF)

The Regional Outlook Forum 2008 received generous support from:

Typeset by International Typesetters Pte Ltd Printed in Singapore by Seng Lee Press Pte Ltd

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CONTENTS Preface

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1.

Opening Remarks K. Kesavapany

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Keynote Speech: Globalization and the Future of EU-East Asia Relations Norbert Lammert

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Strategic Trends in East Asia Takashi Inoguchi, C. Raja Mohan, Yang Jiemian and Rikki Kersten

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ASEAN Integration: Progress and Challenges Ong Keng Yong, Tommy Koh and Surin Pitsuwan

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Luncheon Speech: Reconciling Islamization with a Democratic Society in Malaysia Datuk Seri Anwar Ibrahim

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The Economics of Environmental Disaster: The Socio-cultural Impact Euston Quah and Herminia A. Francisco

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Political Trends in Malaysia, Thailand, Indonesia and Vietnam Lim Teck Ghee, Thitinan Pongsudhirak, Vedi R. Hadiz and Carlyle A. Thayer

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Surveying Economic Environments and Their Challenges in Southeast Asia Pridiyathorn Devakula, Le Dang Doanh, Joseph F.P. Luhukay, and Rajah Rasiah

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Violent Movements in Indonesia and Thailand Sidney Jones and Duncan McCargo

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10. Concluding Notes Chin Kin Wah

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11. Closing Remarks K. Kesavapany

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Forum Programme

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Speakers and Panellists

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Rapporteurs of the Regional Outlook Forum 2008: Summary Report

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PREFACE Asia is in constant flux. The rise of China and India, and the U.S.’s uncertain role in the region continue to affect the balance of power in the wider region. As the rest of Asia watches the steady ascendance of China as an economic and military power, it cannot help but contrast this against Japan’s protracted reconsideration of its place in the international order. Against this backdrop, the U.S.’s wavering attention to East Asia and, more acutely, Southeast Asia, courtesy of Iraq, exposes the diplomatic and global strategic limitations of the world’s only superpower. Within Southeast Asia, the much awaited ASEAN Charter was unveiled at the 13th ASEAN Summit in November of 2007, coinciding with Singapore’s succession to the ASEAN chair. Early January of 2008 also saw Surin Pitsuwan take over from Ong Keng Yong as ASEAN Secretary-General. The ASEAN Charter is a watershed not only because it endows the association with legal character but also because it signifies a shift from a consensual approach of engagement that has attracted more attention for its ineffectiveness and lethargy, towards a more rules-based approach. How the Charter will impact the Southeast Asian landscape remains to be seen. The Regional Outlook Forum (ROF) 2008 strives to help make sense of this dynamic geostrategic landscape. ROF is the Institute of Southeast Asian Studies’ (ISEAS) annual flagship event that is now into its 11th year. It examines regional strategic, political and socio-economic trends and seeks to provide the outlook for the year ahead. Speakers are eminent scholars and professionals who are able to provide high quality insight and perspectives of the issues at hand. In recent years, we have consistently attracted a 500-strong audience comprising people from the business and financial sectors in Singapore, the academic community, the public sector, the diplomatic community, and the domestic and foreign media. 2008 is also special for ISEAS as it marks the Institute’s 40th anniversary. Together with its Gala Dinner on 7 January, ROF signals the start of a year of seminars and publications that will commemorate forty years of regional research.

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1 OPENING REMARKS •

Ambassador K. Kesavapany Director, Institute of Southeast Asian Studies

Ambassador Kesavapany began by welcoming the many distinguished guests and friends present at the Forum. He noted that the Gala Dinner the night before marked the start of ISEAS’s 40th year and hoped that those who had attended the dinner had a good time. Today however, he went on to say, was time to get down to serious work. As the rich Forum programme attests, there was a lot of ground to cover. Ambassador Kesavapany proceeded to say a few words about the morning’s Keynote Address. He recounted that, at the Forum in 2006, one of the participants from the floor had commented that ISEAS did not appear to pay enough attention to Europe. Instead, it was concentrating more on the United States and China. Ambassador Kesavapany revealed that he had personally promised that there would be a European speaker at the 2007 Forum. Unfortunately, the speaker could not make it at the last minute. This year, with special thanks to the Konrad Adenauer Foundation and Colin Duerkop ISEAS Director Ambassador K. Kesavapany in particular, ISEAS had the pleasure of having Dr Norbert Lammert. Dr Norbert Lammert is the President of the German Parliament. He studied political science, sociology, modern history and social economics at the University of Bochum and the University of Oxford. He has served as the Deputy Chairman of the Konrad Adenauer Foundation since March 2001. Dr Lammert has been a member of the German Bundestag since 1980. He has served as Parliamentary State Secretary at the Federal Ministry of Education and Science, the Federal Ministry of Economics, and at the Federal Ministry of Transport. He has been President of the German Bundestag since 18 October 2005.

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Ambassador Kesavapany then turned to a special feature of the Forum — the presence of two ASEAN Secretary-Generals. Mr Ong Keng Yong and Dr Surin Pitsuwan would speak on ASEAN’s past and future challenges. Ambassador Kesavapany took the opportunity to congratulate Khun Surin on his assumption of duty yesterday in Jakarta. Surin, Ambassador Kesavapany explained, flew in early this morning from Jakarta and came straight to the Shangri-La. This would mean that this Forum was his first public engagement as ASEAN Secretary-General. ISEAS also had the pleasure of presenting Professor Tommy Koh who was chairman of the High Level Task Force, the group tasked with writing the ASEAN Charter. Professor Koh had very kindly agreed to share his expert opinions and insider views at the Forum. Ambassador Kesvapany noted that at lunch we would have the company of Datuk Seri Anwar Ibrahim, former Deputy Prime Minister and Finance Minister of Malaysia. Datuk Seri Anwar continues to make his presence felt both in his country and abroad. Ambassador Kesavapany said that he had the personal pleasure of knowing Datuk Seri Anwar and his charming wife Dr Wan Azizah Ismail when he served as High Commissioner to Malaysia. When ISEAS invited him to speak at the Forum he readily agreed to speak on “Reconciling Islamization with a Democratic Society in Malaysia”. This topic is of great importance to the region. Ambassador Kesavapany concluded by saying that he was confident that the variety of expert speakers ISEAS had lined up for the Forum would intellectually challenge the audience on a number of topics. Some of them had been with ISEAS at past forums. Others were welcome new additions. He then thanked the audience for their presence and said he looked forward to their continued support.

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2 KEYNOTE SPEECH: GLOBALIZATION AND THE FUTURE OF EU-EAST ASIA RELATIONS •

Dr Norbert Lammert President, German Bundestag

The intriguing dynamics of globalization, its implications for international relations and world order, and its role in shaping the future of Europe and Southeast Asia were discussed by Dr Lammert at the Keynote speech for the Regional Outlook Forum 2008. Dr Lammert opened his address by congratulating ISEAS on its 40th Anniversary. He expressed his respect for the Institute’s work, which has produced an ‘astonishing’ number of research works and publications. He also emphasized his appreciation of the role of Southeast Asia and noted its importance for the future. Globalization, Dr Lammert believed, has aroused much controversy, as to whether it is a truly new phenomenon, or whether it was an old and continuing process. These debates aside, there is no doubt, he opined, that it is taking place and is indeed unavoidable. Dr Lammert emphasized two factors — modern accesses to information and modern types of mobility — that have been of critical importance in making this dynamic significantly different and distinct. The easy access of knowledge and information, and the unprecedented ability to be mobile had made a fundamental difference to today’s world. The rapid changes wrought by globalization had also put several theories to rest. Dr Lammert alluded to the famous theoretical position of the “end of history” developed by Asian-American political scientist, Francis Fukuyama, at the end of the Cold

Dr Norbert Lammert

Globalization, Dr Lammert believed, has aroused much controversy, as to whether it is a truly new phenomenon, or whether it was an old and continuing process.

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War which argued the final triumph of the market economy and liberal democracy over all other forms of political-economic organization. However, globalization and its pressures over the recent years has demonstrated how far we are from an ultimate triumph of democracy and the market. Dr Lammert pointed to the rise of what he described as ‘authoritarian capitalism’ in the recent political experience of countries like China, Russia and other states in South America and Central Asia. The rise of authoritarian capitalism he added has been the general trend in recent years. Dr Lammert went on to highlight the implications of globalization in the shaping of a different world order. He pointed out that in the second half of the twentieth century, three out of five major economies in world came from Europe — Germany, France and the United Kingdom. However, by the first half of the twenty-first century, Asian economic giants will displace all these European economic powers. He argued that Europe’s movement towards integration and the European Union was in a way a response to the deepening perception among European countries that their ‘time was over’, and that the situation warranted a major reordering of their structure. While Germany began to reconcile itself to this perception after WWII, France has been dealing with a more complicated perception of In the coming century neither Europe the status of its power while the United Kingdom, nor any single Southeast Asian state Dr Lammert added, has taken longer to come to will be able to play a significant terms with this. Thus, in the coming century neither role in the international politics of Europe nor any single Southeast Asian state will be the century without formulating new able to play a significant role in the international processes and methods to gain politics of the century without formulating new collective weight through integration. processes and methods to gain collective weight through integration. It is this realization that spurred moves for change and reform and which has led to the major developments such as the EU integration and the ASEAN Charter. Looking to the future, Dr Lammert stated that there were no clear definitive answers to the future of Europe and Southeast Asia relations. However, he emphasized that there is a strong interest in Europe about Southeast Asia. He argued that it was necessary for Southeast Asia, like Europe, to build reliable structures for cooperation between countries of the region to enable it to effectively deal with the challenges of the future.

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3 STRATEGIC TRENDS IN EAST ASIA Panellists: • Professor Takashi Inoguchi Graduate School of Public Policy, Chou University, Japan

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Professor C. Raja Mohan S. Rajaratnam School of International Studies

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Professor Yang Jiemian President, Shanghai Institute for International Studies

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Professor Rikki Kersten Research Professor, Department of Political and Social Change, Research School of Pacific and Asian Studies

Introduction This session cast its attention towards East Asia and its major players — China, India, Japan and the United States. Professor Inoguchi offered some insights into the U.S.’s foreign policy with regards to East Asia and the factors that would influence this policy. Professor Mohan spoke about India’s desire for a strong ASEAN and the fact that its lack of ideological agendum made it less threatening in comparison to China. Professor Yang presented China’s forward-looking policy that entailed creating a friendly environment that would foster economic development and international cooperation. Last but not least, Professor Kersten explained how Japan was struggling with its international role and the desire in some quarters for a more assertive foreign policy.

Presentation by Professor Takashi Inoguchi The U.S.’s Relations with East Asia In analysing the prospects for U.S. presence and behaviour in East Asia, Professor Inoguchi’s addressed three issues: the upcoming U.S. presidential elections, the current East Asia policies of the United States, and the prognosis for U.S. relations with East Asia for the next few decades. While the outcome of the Presidential elections was impossible to predict with certainty, Professor Inoguchi suggested two indicators that

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could give a sense of the relative success for the candidates from the Democratic and the Republican parties. The first indicator was combat casualties sustained by U.S. forces in the course of their involvement in Iraq, and the second one was the net per capita income levels and the spending power of the U.S. consumers. In order for the Republican Party to regain popular support, the casualties sustained in Iraq would have to decrease drastically, and the standard of living and spending power of the average Two indicators that could give a American, negatively affected by the sub-prime crises, sense of the relative success for would have to improve. If the two improvements did the candidates from the Democratic not occur quickly enough, a Democratic candidate and the Republican parties. The first would likely be favoured in the elections. indicator was combat casualties Moving on to analyse the current U.S. involvesustained by U.S. forces in the ment in East Asia, and that of the immediate future, course of their involvement in Professor Inoguchi pointed out that with the sub-prime Iraq, and the second one was the crisis affected the spending power of domestic U.S. net per capita income levels and consumers, the dependence of the U.S. economy on the spending power of the U.S. external markets has grown. The vast market potential of Japan, China and India was important to the U.S. consumers. economy. These markets were also friendlier to the weakening U.S. dollar than the European markets. As a result, the United States was very interested in strengthening and growing its trade ties with East Asian countries, and was likely to ask for more freetrade space in the region. China had to create more opportunities for U.S. foreign direct investment if it were to take advantage of the growing U.S. interest in East Asia. The implementation of the free trade agreement which has been signed between the United States and the Republic of Korea was still problematic and needed ironing out. The U.S. military presence in Asia remained robust. Professor Inoguchi pointed to the incident of the U.S. aircraft carrier passing through the Taiwan Straits on the way to its home port in Japan in November– December 2007 when China did not allow it to dock at Hong Kong. This was an example of the United States asserting its ability to do as it will in the region. The six-party talks were alluded to by Professor Inoguchi. He predicted that, despite the tensions Professor Takashi Inoguchi

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Strategic Trends in East Asia

between the parties, an agreement would be reached that satisfies both the United States and North Korea. Moving on to the issue of the future prospects for U.S. involvement in East Asia, Professor Inoguchi spoke of U.S. hegemony in three fields: the country’s military hegemony, the hegemony of its currency, and U.S. demographic hegemony. In With regards to East Asia, U.S. terms of military might, the United States was set to dominate the security issues in Asia for the next hegemony in three fields will fifteen to thirty years. In the future, even after the be crucial: the country’s military decline of U.S.’s hard power in the region, U.S. hegemony, the hegemony of its currency would continue to play an important role currency, and U.S. demographic in regional and global economics. Lastly, on the hegemony. point of population size, Professor Inoguchi pointed out that the United States remained one of the few developed countries with a healthy population growth rate, due in part, to continuous heavy migration. Thanks to the country’s strengths in the above three areas, Professor Inoguchi summarized, the United States will remain an important presence on the radar or regional political, economic and security issues. Its relations with the nations of the region would remain good, barring extreme provocation in the arenas of security and the economy.

Presentation by Professor C. Raja Mohan India’s Changing Strategic Profile in East and Southeast Asia Professor Mohan began by saying that regionalism is complicated by the fact that the concept of a “region” Regionalism is complicated by the is an elusive one. The important question was not fact that the concept of a “region” whether the country lies within the region’s geographic is an elusive one. boundaries, but whether the country matters to the region. India, by virtue of its military and economic power, mattered very much to East and Southeast Asia. Professor Mohan explained what India’s policy with regards to East Asia and Southeast Asia would be by outlining eight things India did not want to happen: 1. No leadership. India had no intention of claiming a leading role in the region. 2. No grand theory. India had no specific and elaborate cultural and political agenda that it wanted to project onto other countries. Professor

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Mohan alluded to Mentor Minister Lee Kuan Yew pointing out that many Asian countries did not feel as threatened by a stronger India as they did by a stronger China. The absence of ideological agenda in India’s involvement in the region was one of the reason for that. 3. No alliances. India intended to establish and maintain friendly relations with all other major powers. It had no intent of becoming an exclusive ally of any one nation. 4. No fragmentation of ASEAN. A strong ASEAN is in India’s best interests. It therefore had no desire to upset the balance of power in the region and to cause the disintegration of the ASEAN grouping. 5. No collective security. Professor Mohan pointed A strong ASEAN is in India’s best out that countries like India and China would interests. never agree to cede part of their sovereignty to an international body or a grouping. India would therefore not favour efforts at collective security. Instead, it favoured collaborative security, whereby all the countries of the region played their part in ensuring overall stability and peace. 6. No exclusion of anyone. Building a community often entailed a strict exclusion of those outside it in the name of self-definition. Professor Mohan said that India wanted East and Southeast Asia to try and engage important powers not strictly belonging to the region, such as, for example, Japan, Korea and New Zealand. 7. Not the antithesis of the West. Defining Asia as simply the opposite of the West was dangerous. India wished for a holistic and therefore more accurate understanding of what belonging to a region entailed. 8. No over-ambitious agenda for community building. India did not believe at over-ambitious efforts at strengthening and empowering the ASEAN. Gradual integration was more suited for the Asian Professor C. Raja Mohan grouping, and Europe’s raid integration should not be emulated.

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Strategic Trends in East Asia

Presentation by Professor Yang Jiemian International System in Transition: China’s Forward-looking Strategy and Policy Professor Jiemian pointed out that while China was doing its best and would continue to do its best to adapt to a rapidly changing world, the country continued to be riddled by many problems. Even a relatively small problem, multiplied by the magnitude of China’s population, would make for a considerable challenge, he mused. Peaceful development in relation to its neighbours had to be the way forward for China. Thus, China’s global strategy and its strategy in East and Southeast Asia would be guided by the following principles: 1. Creating a favourable environment to form and strengthen bilateral and multilateral ties, and for mutually-beneficial economic opening up of the different countries in the region. 2. The pursuit of peace, development and cooperation among the countries of the region, as well as with Australia, Japan, India, Russia and New Zealand. To forward this aim, China was an important party in the six-party talks, and also shared its economic wealth with the region through trade and investment. 3. Support for the East Asia collective security initiative. 4. A forward-looking vision for the region in tackling traditional and non-traditional challenges of international nature, for example, terrorism, piracy, and poverty. 5. Recognizing that the region is not harmonious, and that many tensions exist and cannot be overlooked lightly.

Peaceful development in relation to its neighbours had to be the way forward for China.

Professor Yang Jiemian

China seeks a forward-looking vision for the region in tackling traditional and non-traditional challenges of international nature, for example, terrorism, piracy, and poverty.

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Presentation by Professor Rikki Kersten Japan’s Asian Century: The Politics of being Second Fiddle Japan has adopted a noticeably more assertive foreign policy. Professor Kersten believed that this was not a Japan has adopted a noticeably response to an actual or perceived threat, such as the more assertive foreign policy. nuclear program in North Korea. Rather, it reflected a systemic change in Japan’s domestic policy. The “Koizumi Revolution” in domestic policy resulted in, firstly, the concentration of policy-making power in the Prime Minister’s office, and secondly, the political streamlining of the policy-making process in Japan. In addition, incredible developments in other fields took place. Japan had begun exporting weapons. Japan was actively involved in developing an independent intelligence unit. There had been discussions of revising Article 9 of Japan’s Constitution, which limited Japan’s military potential in the wake of WWII. There had also been discussions of a nuclear program for Japan. These domestic changes were reflected in Japan’s foreign policy. On the whole, Japan’s foreign policy has moved from a strictly economic focus to include political and security concerns. Furthermore, in dealing with other powers in the region, Japan was showing impatience with parties alluding to Japan’s Professor Rikki Kersten involvement in WWII. Professor Kersten pointed out that increased security capability and an increased commitment to security issues need not necessarily translate into aggressive leadership in the region. Productive and strategic contributions to multilateral fora would be an alternative indicator to watch out for in relation to Japan’s future involvement in the region. The final part of the presentation highlighted two There had been discussions current tensions and how they affected Japan’s policy of revising Article 9 of Japan’s in East Asia. First, Japan’s need to establish closer links Constitution, which limited with the United States versus its desire for greater policy Japan’s military potential in the autonomy. The second tension was inherent in the fact that, wake of WWII. from the point of view of the United States, a Japan-ChinaU.S. alliance strove to contain both Japan and China.

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4 ASEAN INTEGRATION: PROGRESS AND CHALLENGES Panellists: • Mr Ong Keng Yong Former Secretary-General, ASEAN Secretariat

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Professor Tommy Koh Chairman, High Level Task Force for the ASEAN Charter

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Dr Surin Pitsuwan Secretary-General, ASEAN Secretariat

Introduction ASEAN marked forty years of achievements in 2007, and now faces a fifth decade of new challenges. Having weathered instability at its inception and the turbulence of the Asian financial crisis, ASEAN has to manage a new set of challenges as it moves forward. At the second session, panellists reviewed the progress of ASEAN and weighed the challenges of regional integration that it will face in the future. With a newly minted Charter, ASEAN is at a turning point in its evolution as a regional organization. ASEAN finds itself on the cusp — between the “talk” that led up to the institutional maps laid out by the ASEAN Charter and the “action” that is expected to follow. Former Secretary-General of ASEAN, Mr Ong Keng Yong, Professor Tommy Koh, Chairman of the High Level Task Force on the ASEAN Charter, and Secretary-General of ASEAN, Dr Surin Pitsuwan assessed ASEAN’s agility in adapting to the exigencies of regional integration.

Presentation by Mr Ong Keng Yong ASEAN Community Building: 2015 is Possible The core of ASEAN member countries’ efforts to develop a regional identity is captured by the adoption

Mr Ong Keng Yong

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of the ASEAN Charter in November 2007. In his examination of ASEAN’s progress towards regional integration, Mr Ong Keng Yong asserted that key ingredients were already in place, and what remained was for the regional organization to consolidate political will. His confidence in the pace of integration stemmed from meetings with the region’s political leadership. He added that although acceptance of the idea of integration was far from universal and that understanding of what integration meant was far from widespread, his enthusiasm remained buoyed by his sense that the regional leadership is ready to commit to the process. Mr Ong Keng Yong reminded the audience that many incremental steps towards regional integration had already been taken. The ASEAN Financial Ministers Meetings have made remarkable advances towards the implementation of a common currency, one of the more technical and difficult issues. Countries have also begun to review taxation policy, with the twin-pronged goal of strengthening domestic taxation architecture and coordinating future regional designs. In the area of customs clearance, many procedures have been streamlined to benefit the development of In the area of customs clearance, ASEAN businesses and the establishment of ASEAN many procedures have been as a single window. Other initiatives Mr Ong noted streamlined to benefit the included those that have facilitated cross-border travel development of ASEAN businesses and bolstered intra-ASEAN tourism. Cooperation to promote cohesiveness, transparency, and uniformity and the establishment of ASEAN within ASEAN on travel and customs had been aimed as a single window. at building a collectively agreed upon framework of procedures that will unite the region. If the momentum generated from the drafting of the Charter can be sustained and translated into concrete action, an ASEAN Community can be a reality by 2015. Another major element of ASEAN integration had been the Free Trade Agreements (FTAs) that it had been negotiating with major partners such as China, Japan, India, the Republic of Korea, Australia and New Zealand, and the United States. As a significant component of international economic diplomacy, such arrangements structure and determine the tone of economic relations in the fields of investment, services, and trade. Trade liberalization had been the pulse of the web of bilateral, subregional, and FTA-plus arrangements. As ASEAN stepped deeper into the fray of negotiating FTAs, it has developed an “ASEAN position” on a variety of economic issues. This suggests that ASEAN functions as a hub, which will in turn prompt member countries to strengthen and accelerate its efforts to realize its vision of becoming an economic community.

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Asean Integration: Progress and Challenges

As ASEAN works to develop a common framework in its external economic relations, ASEAN also nurtures its identity as a community. ASEAN is ready to be a community by 2015. The galvanization of public opinion to support a regional endeavor is pivotal to its success. With the broad brushstrokes of the ASEAN Community picture already in place, Southeast Asia now turns to the implementation of the elements to reach its potential and its aspirations.

As ASEAN works to develop a common framework in its external economic relations, ASEAN also nurtures its identity as a community.

Presentation by Professor Tommy Koh The ASEAN Charter: How will It Transform ASEAN? In an optimistic assessment, Professor Tommy Koh outlined the factors that underpin his robust support for the ASEAN Charter and the gradual formation of an ASEAN identity. The Charter sets the foundation for ASEAN to enhance the existing mechanisms and to align its decision-making process with the values of efficiency and implementation consistency. A historic agreement among the ten member states, the ASEAN Charter represents the first step in the consolidation of the regional organization. Despite reservations from some quarters over the perceived dilution of democratic values and human rights principles, Professor Koh affirmed his belief in the potential of the Charter to transform ASEAN. Not only will the ASEAN Charter lay the legal Professor Tommy Koh foundation for ASEAN to restructure its existing mechanisms, it will also improve its decision-making processes and enhance its efficiency. The Charter will bring about an ASEAN predicated on rule-based interaction. The new modus operandi

A historic agreement among the ten member states, the ASEAN Charter represents the first step in the consolidation of the regional organization.

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of ASEAN will be a departure from the “ASEAN Way” of consultation, consensus, and avoidance of The new modus operandi of open confrontation that has defined the timbre of ASEAN will be a departure from ASEAN’s first forty years. New challenges, Professor the “ASEAN Way” of consultation, Koh stated, will require a different set of tools, which consensus, and avoidance of open the Charter has amply provided. confrontation that has defined the Among the key tools which the Charter focuses timbre of ASEAN’s first forty years. on is the institutionalization of ASEAN as a regional grouping. ASEAN was tested during the tumultuous episodes of the Asian financial crisis and the haze, and was found wanting. The deficit of institutional frameworks has been addressed by the Charter, and ASEAN will likely be more coherent for it. Professor Koh also highlighted how the ASEAN Charter would enable ASEAN to develop a culture where the obligations associated with its agreements would be taken seriously. Procedures of monitoring compliance and a system of dispute settlement have been at the centre of recommendations put forth by the Eminent Persons Group and drafted into the Charter. Professor Koh asserted that ASEAN’s disquieting record of only 30 per cent rate of compliance and follow-through of commitments looks set to be reversed. The organizational structure of ASEAN is also poised to be streamlined and tailored towards fostering the three ASEAN communities — security, economic, and socio-cultural. Each ASEAN member country will appoint a Permanent Representative with clear decisionmaking powers to the Secretariat in Jakarta. This will be buttressed by an empowered Secretariat, where Each ASEAN member country will the Secretary-General will be aided by four deputies appoint a Permanent Representative recruited (two of which will be recruited by the with clear decision-making powers basis of merit). The Secretariat will also be given the to the Secretariat in Jakarta. requisite financial and human resource support. Professor Koh also underscored the attention that the Charter paid to ASEAN’s relations with external powers. The deepening and widening of regional integration is geared towards priming ASEAN to compete in the global economy with a rising India on one hand, and a rising China on the other. The ASEAN economic blueprint equips the region with the ability to compete and to continue to attract investment. In addition, the Charter also enables ASEAN to continue to occupy the driver’s seat in its interaction with its dialogue partners. Professor Koh also observed that the Charter did not overlook the importance of creating a people-centric regional community that

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transcends boundaries of young versus old, public versus private sectors, and urban versus rural. Finally, Professor Koh concluded by underlining the achievement of signing the ASEAN Charter, particularly given regional diversity and history of discord. From a history fraught with disagreement and tension to a miscellany of governmental forms, the cards are not stacked in favour of regional unity for ASEAN. That the Charter has committed ten diverse countries to principles such as democracy, human rights, and fundamental freedoms is no small achievement. Although the terms of reference for the human rights body have yet to be determined and other obstacles remain, the meeting of minds embodied by the ASEAN Charter is a reminder that the “art of the possible” can take Southeast Asia very far.

Presentation by Dr Surin Pitsuwan The ASEAN Charter: Strategy for Consolidation for Future Challenges The 40th Anniversary of the establishment of ASEAN has prompted a reflective climate of re-centering, recalibration, and re-engineering. The newly installed Secretary-General of ASEAN, Dr Surin Pitsuwan examined the set of challenges that are rising on ASEAN’s horizon. Forged in the crucible of Cold War rivalries and post-colonial instability, ASEAN’s past beasts of intramural discord have given way to trials of remaining competitive and communitybuilding. With the flattening of the world after the end of the Cold War, Southeast Asia’s competitiveness has waned. The stability that used to guarantee the region’s competitiveness has evaporated. Instead, ASEAN has found itself grappling with an awkward embrace of emerging values of transparency, good Dr Surin Pitsuwan governance, democracy, and human rights. The impetus to adapt is reflected in ASEAN’s attempts to reinvent its ASEAN has found itself grappling with an awkward role while still occupying “the driver’s embrace of emerging values of transparency, good seat”. Dr Pitsuwan focused on the governance, democracy, and human rights. importance of efforts to strengthen the regional core in order to make

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ASEAN’s relationship with key partners resilient to the pressures of the post-Cold War era. In order for Southeast Asia to continue to serve as the fulcrum of power play, Dr Pitsuwan stressed that ASEAN must continue to engage its dialogue partners and demonstrate its relevance. Dialogue partners that used to employ ASEAN as an intermediary for conversations with difficult partners have since learned to speak directly to each other. As a result, ASEAN’s relevance hangs in the balance. Against this backdrop, the ASEAN Secretariat will need to be a more effective nerve centre for Southeast Asia. To better conduct relations with important partners, Dr Pitsuwan encouraged the region to capitalize on its inherent strategic value. With 80 per cent of East-West energy supply shipped through the sea lanes of Southeast Asia, ASEAN can leverage on its position to accentuate its relevance. Another regional asset is the burgeoning middle class. This increasingly robust stratum of society appeals to external powers as a market with impressive possibilities. ASEAN also hosts large populations of modern Muslims that are a bastion of stability and moderation. Other countries can take a page from the Southeast ASEAN also hosts large populations Asian book of examples with educated and integrated of modern Muslims that are a Muslim populations. Dr Pitsuwan cited Malaysia bastion of stability and moderation. and Indonesia as success stories in the management Other countries can take a page of Muslim populations, which other countries can from the Southeast Asian book emulate. of examples with educated and Dr Pitsuwan observed that Southeast Asia has integrated Muslim populations. a wealth of resources at its disposal. The ASEAN Charter consolidates the region’s assets pools ASEAN’s resources to position Southeast Asia advantageously to endure competitive conditions and meet the challenges of communitybuilding. The new Secretariat with a fresh mandate stands prepared to tackle the obstacles of the future.

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Comments from Mr Jusuf Wanandi Senior Fellow, Center for Strategic and International Studies (Indonesia) In his brief comments, Mr Jusuf Wanandi acknowledged that the ASEAN Charter would go some way in towards improving the effectiveness of the regional grouping. However, he expressed his disappointment that the provisions of the Charter were not taken as far as they could have been. In the reconsideration of decision-making in ASEAN, the adherence to the old model of consensus baffled Mr Wanandi. He questioned how ASEAN could move forward if the old benchmark of the relying on unanimity was still in place. Secondly, he said that the small budget allocated to the Secretariat would be a handicap to achieving the ambitious objectives of the Charter. In conclusion, Mr Wanandi articulated his concern over the ability of ASEAN to be truly inclusive. With the people’s participation largely excluded in the drafting stages, Mr Wanandi noted that little had changed in ASEAN’s conventional top-down mode of decision-making. Without clear mechanisms to ensure involvement from a wide spectrum of people in the project of building an ASEAN Community, Mr Wanandi cautioned that the future may not look much different from the present.

The provisions of the Charter were not taken as far as they could have been.

Mr Jusuf Wanandi

Without clear mechanisms to ensure involvement from a wide spectrum of people in the project of building an ASEAN Community, the future may not look much different from the present.

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5 LUNCHEON SPEECH: RECONCILING ISLAMIZATION WITH A DEMOCRATIC SOCIETY IN MALAYSIA •

Datuk Seri Anwar Ibrahim Former Deputy Prime Minister and Finance Minister of Malaysia

Datuk Seri Anwar began his presentation by noting that there is a perception of a great divide between Islam and democracy. It is perceived as a zero-sum game because democracy’s gain is seen as Islam’s loss, while Islamization and democratization are perceived to be mutually exclusive. In fact, the word ‘Islamization’ is viewed as a negative imposition on society as seen by recent events in Malaysia that has led to state-sanctioned intrusions into the religious practices of citizens who profess other faiths. Unlike the word ‘Islamization’, democratization immediately suggests positive associations with notions of elections, populism, human rights, rule of law and fundamental liberties. However, democracy is also about maintaining and protecting the sanctity Datuk Seri Anwar Ibrahim of constitutional principles which are the crowning glory of human achievement, and this is also Islam’s moral imperative as evident by the term ijtihad (creative thinking). But Datuk Seri Anwar intimated that internal debate still continues within Muslim society as claimed by Dr Fazlur Rahman who believes that Islamic intellectualism has ‘remained truncated’. Datuk Seri Anwar

The word ‘Islamization’ is viewed as a negative imposition on society as seen by recent events in Malaysia that has led to state-sanctioned intrusions into the religious practices of citizens who profess other faiths.

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Luncheon Speech: Reconciling Islamization with a Democratic Society in Malaysia

also offered a caveat against the assumption that Malaysia is a democratic society. He noted that the thousands who marched in Malaysia to demand for free and fair elections; the thousands of Indians who were drenched in water by cannons fired by the police; and the hundreds of peaceful citizens who were violently dispersed for holding a candlelight vigil to protest against the Internal Security Act would not think that such a society exists. Neither Islam nor Islamization has anything to do with this. Datuk Seri Anwar proceeded to put things into perspective about Islam in Southeast Asia. He noted that while Muhammad Abdul and his modernism project in the Arab world lost steam in the second half of the last century, it was more readily embraced into mainstream Islam in Southeast Asia, avoiding the intra-civilizational clash unfolding in the Middle East. Modernity and Modernity and moderation came moderation came hand-in-hand in the region. Scholars like Nasir and Hamkah advocated an Islamic worldview hand-in-hand in the region. which included the love of knowledge, promotion of democratic values, and inclusiveness. Ideas about modernizing the education system were accepted while outright adoption of western ways was rejected. This has enabled Indonesia recently to make its quantum leap from dictatorship to democracy. According to Datuk Seri Anwar, during the formative period of independence and nation-building, emphasis was placed on constitutionalism with Islam being given its pride of place in the private realm, recognizing its multicultural and multi-religious society, and Malaysia’s Muslim leaders were generally seen as inclusive. But today, this sense of inclusiveness is under serious threat because a combination of chauvinism, religious But today, this sense of bigotry, and irresponsible politicians has exploited inclusiveness is under serious public sentiments in order to garner electoral support. threat because a combination Datuk Seri Anwar termed this “state-sponsored Muslim of chauvinism, religious bigotry, Puritanism” born more out of racist sentiments than and irresponsible politicians has religious principles. Such a theology has led to the exploited public sentiments in order rejection of constitutional freedom of other faiths to garner electoral support. (practise religion in the manner they so wish) since it preaches an exclusivist doctrine that Muslims must constantly prevail over non-Muslims. This has also culminated in the breaking up of families for purposes of religious rehabilitation, the tearing down of places of worship and labelling of individuals like Datuk Seri Anwar as being pro-Hindu because he chose

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to support the legitimate demands of the Hindus and, in particular, the preservation of the temples. Datuk Seri Anwar then quoted a passage from the Qur’an: “Oh Mankind, we have created you male and female and we have made you into nations and types so that you may know and appreciate one another. Know the noblest of you in the sight of God who is the one that is the most righteous.” What this means is that not only Muslims have the birthright to be noble in the sight of God but also non-Muslims as well since mankind is one (‘ummatan wahida’) and the heart of the Islamic message is one of love and understanding, compassion, tolerance, peace and justice. Even the debate of appropriating the word Allah for the use of Muslims, and that the other religious faiths are not allowed to use it, a quick check with the Qur’an would inform the government that God’s command here is unequivocal. Datuk Seri Anwar then asked what the rationale for this overzealous display of intolerance was. For him, the answer was desperate politicians who are Datuk Seri Anwar Ibrahim not averse to exploiting religious sentiments for political mileage. Datuk Seri Anwar feels that it is the belief of the present administration in Kuala It is the belief of the present Lumpur that the puritanical card would be the best administration in Kuala Lumpur that bet for the UMNO-dominated ruling coalition to the puritanical card would be the secure electoral success in the coming elections in best bet for the UMNO-dominated 2008. In fact, significant shifts have already taken ruling coalition to secure electoral place among non-Malay electorate, leaving the ruling success in the coming elections in party to refocus their strategy on the Malay/Muslim 2008. heartlands. In being perceived to be the staunchest defenders of Islam, UMNO hopes to garner greater support from conservative Muslims. This would be carried out in tandem with superbly orchestrated government-controlled media campaigns as well as incessant character assaults on Muslim leaders who preach the message of moderation and inclusiveness. In his concluding remarks, Datuk Seri Anwar discussed the higher objectives or the Maqasid (goals) of the Shar’iah — sanctity of life and property; freedom of conscience and freedom of expression; and respecting the dignity and honour of men and women. These are universally-accepted

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principles. Thus these aberrations heard today would certainly be a cause for alarm for all those who cherish freedom and democracy. Even many Malaysian Muslims, according to Datuk Seri Anwar, are equally appalled by the reckless display of narrow-mindedness and intolerance. During the question-and-answer session, Datuk Seri Anwar was asked whether he had abandoned for all time any hope of rejoining UMNO, and thus his long-held dream of becoming Prime Minister, given the way he has spoken today and in recent times where he is seen to be inimical to UMNO’s policies. In response, Datuk Seri Anwar labelled UMNO an obsolete party since it continues to harp on the issues of the past such as Malay UMNO is an obsolete party because supremacy and the New Economic Policy despite the it continues to harp on the issues of fact that Malaysia has lost its competitiveness to its the past such as Malay supremacy neighbours, especially Singapore. He noted that while and the New Economic Policy Malaysia and Singapore in the 1970s started from despite the fact that Malaysia the same base, Singapore’s economy has surpassed has lost its competitiveness to its Malaysia by about five times. He then asserted that neighbours, especially Singapore. this was not due to Chinese leadership but to issues of governance, responsibility and incorruptibility where Singapore has done well and Malaysia has lost out. Datuk Seri Anwar maintained that he would continue to support Keadilan on its multiracial and multi-religious platform and its reform agenda. Scandals in the judiciary have led to multinational companies preferring Singapore and Hong Kong as destinations for arbitration. While such governance issues are not widely known because of UMNO’s control over the local media, one should not underestimate the wisdom of the masses. Datuk Seri Anwar was then asked about his vision of the kind of Malaysia he would want and whether that would be a secular Malaysia. In response, Datuk Seri Anwar noted that he deliberately avoided the terms ‘Islamic state’ and ‘secular state’ since they mean many things to many people. For example, secularism in the experience of Kemal Ataturk in Turkey could mean anti-religion and not just the separation of state and religion. Such a definition of ‘secularism’ in many Muslim countries could be perceived to be a transgression of their belief and faith. An alternative would be to spell out what one means by clearly stating or restating the constitutional guarantees — freedom of conscience, freedom of expression, sanctity of life and property and respecting the honour and dignity of men and women — which is both in the Maqasid of Sha’riah and in universal principles. This would be better because when one addresses

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Muslims or Chinese or Hindus in Malaysia, one could tell them that this is what is required and standing by that requirement. In response to the final question on whether more needs to be done to bring the moderate Muslims onto the frontline of Islamic society, Datuk Seri Anwar replied positively and provided two reasons for this. One, within Muslim societies themselves, the moderates should assert themselves with greater courage and conviction. For instance, while Muslims are permitted to condemn the Danish cartoon controversy since the media must not be used to denounce religious personalities, holding massive demonstrations, burning buildings and destroying property all run contrary to More forum and space should religious precepts since it challenges the sanctity of be given by institutes like ISEAS life and property. Moderate Muslims must have the for more moderate voices to be courage to address this. Two, more forum and space amplified. should be given by institutes like ISEAS for more moderate voices to be amplified.

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6 THE ECONOMICS OF ENVIRONMENTAL DISASTER: THE SOCIO-CULTURAL IMPACT Panellists: • Associate Professor Euston Quah Head, Division of Economics; and Associate Chair (Research), School of Humanities and Social Sciences, Nanyang Technological University

•

Dr Herminia A. Francisco Director, Economy and Environmental Programme for Southeast Asia, International Development Research Centre

Introduction Environmental concerns and climate change have become important issues for many governments. The consequences of environmental degradation and climate change are trans-boundary, effecting not only the location in question but also surrounding countries. However, efforts to address environmental issues continue to be unbalanced and ad hoc. Economic growth and industrial development remain priorities for many developing countries, especially in Southeast Asia. Professor Quah and Dr Francisco offer their expert opinions and insights into the issues at stake.

Presentation by Associate Professor Euston Quah Environmental Security and the Pursuit of Sustainable Economic Growth: What must Asian Governments Do? In terms of environmental security issues and sustainable economic growth, Associate Professor Quah shared with the audience four key environmental issues facing Asia and Asian Governments. These were the NIMBY (not in my backyard) syndrome, waste accumulation and disposal concerns, trans-boundary pollution issues, and the neglect of measuring environmental intangibles in public decision-making. With continuing growth, there has been an increasing demand for sustainable energy sources by industries and consumers in Asia. As such, conflicts between demands for economic growth and demands for a higher quality of life have arisen. Demand for a better quality of life

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in Asia has arisen because of rising affluence, higher education and literacy rates, a wider information With industries and consumers dissemination through the internet, globalization, and demanding sustainable energy a distrust of governments and private corporations sources, conflicts between demands over some projects. There is also now a greater public for economic growth and demands participation and awareness of projects that may be for a higher quality of life have detrimental to human health and the environment. arisen. Globalization has also meant that, with the arrival of the Internet generation, extensive and investigative media coverage, governments are pressured into becoming more transparent and accountable for their decisions, while firms or businesses are pressured into becoming more responsible for their actions. For example, the need to fuel Asia’s growth and prosperity has resulted in conflicts over the siting of environmentally unfriendly facilities like landfills, incinerators, chemical plants, dams, and nuclear plants. Costs of such siting are asymmetrical, they impact negatively on the communities living in the vicinity of these areas which hosts these facilities, while the rest of the populace gains from the establishment of such projects. There is a need for countries in Asia to learn from the experiences of North America and Associate Professor Euston Quah Europe in facility siting and public policy research should aim to reduce such intra-social conflicts by innovating new conflict resolution instruments. Recent examples of conflicts in siting include local protests over the location of an incinerator at Puchong and Semenyih in Selangor, the location of a chemical plant project in Xiamen, China, and the proposed location of a future nuclear power plant at Balong, near Mount Muria in Central Java. Problem of trans-boundary pollutant has become serious as illustrated by the haze episodes resulting from forest fires in Indonesia in 1997 and 2008. Another example of trans-boundary pollution would be acid rain from sulphur dioxide from chemical factories in China. Last but not least would be the issue of water pollution and contamination issues in the great Mekong river basin and inter-provincial Chinese rivers. Such trans-boundary issues will become more important with the pursuit of further economic growth and Asian governments must devote more attention to such issues. Another concern arising from fuelling Asia’s growth and prosperity included the generation of wastes. Rising consumption has resulted in

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the difficult issue of dealing with waste disposal. The issue of building more landfills is becoming an Rising consumption has resulted acute problem in Asian countries, especially those in the difficult issue of dealing with limited land space like Singapore. Incineration is with waste disposal. The issue of not a complete solution for waste disposal, as not all building more landfills is becoming waste matter can be disposed in this manner. Again, an acute problem in Asian countries, this is a NIMBY issue. especially those with limited land Waste recycling is still not cost-effective. All in space like Singapore. all, waste management will continue to be an issue that will loom larger and larger as mass consumption continues over time. Associate Professor Quah then pointed out that waste reduction is the solution and requires an optimal combination of technological advancement, education, a willing and caring public, use of a variety of economic instruments and volume pricing, control regulations, and benefit-cost analysis. Associate Professor Quah then highlighted the issue of climate change and global warming. In terms of climate change, there was a need to properly measure the magnitude of impacts over time. There was also the question of net benefits, and the issues at stake for the various interested groups. Last but not least, there was a need to consider the short-run versus long-run welfare concerns, notably the issue of inter-generational valuation, and the balancing of concerns to meet the needs of the present generation versus that of future generations. Reducing and mitigating global warming is not cheap and requires a willingness on the part of society today to make sacrifices for the benefit and protection of future generations.

Presentation by Dr Herminia A. Francisco The Economics of and Institutions for Adaptation to Climate Change Impacts: A Regional Outlook for Asia Dr Francisco began by situating economic costs in the context of climate change impacts. Over 75 per cent of economic losses between 1980 and 2005 were related to hydro-meterological hazards. Such economic losses were also rising over time. A 40 centimeter rise in sea levels by In Asia, increasing weather disturbances have 2080 could displace as many as 21 been felt everywhere. Between 1975 and 2000, about million people in Southeast Asia. 3.68 billion people in the Asia-Pacific were affected by extreme climate events, accounting for 88 per cent

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of the total affected worldwide. A 40 centimeter rise in sea levels by 2080 could displace as many as 21 million people in Southeast Asia. A World Bank study reported that a one metre rise in sea level would displace 60 million people in developing countries. In Vietnam alone, 11 per cent of its population would have to relocate. Citing a study, Dr Francisco said that a 1 to 5 metre rise in sea levels could affect between 2 to 10.2 per cent of Vietnam’s GDP. Dr Francisco then divided the discussion into the economics of adaptation (net benefits, financial needs and funding available), reducing costs/sharing the burden of adaptation, and suggestions on the ways to move forward. Institutions, as defined by Dr Francisco, included practices, relationships, organizations, markets or networks that help communities pursue goals of importance in their lives. It therefore pays to adapt. The economics of adaptation Dr Herminia A. Francisco included technological transformation, managerial changes, and modifications in behaviour. For example, adaptation measures could include shifts in the planting calendar or changing crops. The Global Vulnerability Assessment (GVA) in several countries showed that coastal adaptation could reduce the number of people at risk from flooding by almost 90 per cent at an annual cost of around 0.06 per cent of GDP. For agriculture, studies have shown that adaptation could result in avoided yield loses of as much as 30 per cent. Such figures represented disproportionate gains from minor adaptation costs. In terms of the monetary costs needed to fund adaptation, World Bank estimates have reported that developing countries would require between US$10 to US$40 billion for the construction of new infrastructure alone. The UNDP Human Development Report estimated that developing countries would need around US$86 billion per year for adaptation by 2015, a value that corresponds to about 0.02 per cent of the rich nations’ GDP. Oxfam, in turn, had estimated costs of adaptation to be around US$50 billion per year. Funding sources are available from the UNFCCC and the Kyoto Protocol through the Global Environmental Facility (GEF) which supports adaptative initiatives in developing countries. For example, there was the Special Climate Change Fund with over US$62.1 million utilized as at

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April 2007, the Least Developed Countries Fund with US$115.8 million utilized, the Strategic Priority on Adaptation Fund with US$50 million used, and the Adaptation Fund with an estimated US$450 million that can be utilized by 2002. The Adaptation Fund was formulated in Bali in December 2007 at the UN Climate Change Conference, to be financed by a 2 per cent levy on Clean Development Mechanism (CDM) projects. Dr Francisco pointed out that such funds, however, accounted for a very small percentage of what developing countries would need for adaptation (1 to 2 per cent). The challenge was to reduce the burden of adaptation and this would take two forms. Risk sharing which is community-based adaptation initiatives in disaster management, and risk transfer which took the form of weather-index based micro-insurance schemes and catastrophe bonds or “cat bonds”. Efforts to risk share are currently ongoing in various parts of Southeast Asia. These efforts are often made part of the bigger risk of training communities in disaster management. Dr Francisco cited the example of a successful community-based adaptation project in Vietnam. Community participation included project development, financial participation, management monitoring, and training in awareness raising. Two important lessons were learned from this study. The community-based approach was very effective in developing the appropriate adaptation strategies for vulnerable communities. Local participation enhanced enthusiasm from the community to support the project. The necessity to have external support to push the process of adaptation is clear and there were Governments must generate several international agencies supporting pilot cases in additional resources domestically various parts of the region. However, such cases pale from various sources, including in comparison to needs in the region. Governments private funding by encouraging must generate additional resources domestically collaboration with the private sector from various sources, including private funding by to develop weather insurance encouraging collaboration with the private sector to scheme for the region. develop weather insurance scheme for the region. ASEAN can liaise with organizations like the World Bank and the ADB for support.

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7 POLITICAL TRENDS IN MALAYSIA, THAILAND, INDONESIA AND VIETNAM Panellists: • Professor Lim Teck Ghee CEO, Centre for Policy Initiatives

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Dr Thitinan Pongsudhirak Director, Institute of Security and International Studies, Thailand

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Associate Professor Vedi R. Hadiz Department of Sociology, National University of Singapore

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Professor Carlyle A. Thayer Inaugural Frances M. and Stephen H. Fuller Visiting Professor, Centre of Southeast Asian Studies, Ohio University

Introduction The national political landscapes within Southeast Asia have been the sites for change and upheaval. Professor Lim delved into the ill-effects of Malaysia’s New Economic Policy such as heightened ethnic consciousness and marginalization, and the inability of the current Abdullah Administration to address these woes. Dr Thitinan surveyed Thailand’s complex political terrain and explained the significance of the People Power Party’s populist victory at the elections and the resistance it will face from Bangkok. Associate Professor Hadiz explored the continuities between the New Order and the post-Suharto era, and posited that the reformasi movement had failed, thus explaining the growing dissatisfaction with the SBY Administration. Lastly, Professor Thayer presented a Vietnam that was undergoing incremental change and liberalization, as well as the increasing presence of civil society in the national arena.

Presentation by Professor Lim Teck Ghee Malaysia’s Prospects: Rising to or in Denial of Challenges? Professor Lim began by providing a review for the year 2007. In contrast to 2006 where the main controversies broke out over the New Economic Policy (NEP) and corporate equity, 2007 was focused on issues of race,

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religion and identity. Events such as the protest marches were not surprising since they were related to an increase in distrust and long-standing concerns over racial and religious prejudice aggravated by poor leadership. Professor Lim proceeded to address the causes for the widening of Malaysia’s fragile social cohesion. While many factors played a role on this issue, Professor Lim argued that the single most important factor is the NEP and its ill-management by the United National Malay Organization (UMNO) government over the years. For instance, the NEP has divided Malaysians on racial and religious fronts by encouraging a Malay sense of entitlement and special privilege, resulting in growing polarization and disillusionment amongst large segments of minority ethnic groups. The NEP has also resulted in economic Professor Lim Teck Ghee distortions and inefficiencies (wealth concentration and income inequality); led to patronage, corruption and abuse of power; and Malay dominance of the civil service, judiciary, police, media and other key The NEP has divided Malaysians institutions. on racial and religious fronts by The consequence of the NEP is the unravelling of encouraging a Malay sense of social cohesion. There is tension primarily between entitlement and special privilege, Malays and non-Malays as well as Muslims and resulting in growing polarisation non-Muslims. Class differences have also converged and disillusionment amongst large along ethnic lines. Meanwhile the rise of ethnic consegments of minority ethnic groups. sciousness has resulted in a ‘us versus them’ mentality. The most significant event in 2007 was sparked by a sense of religious (and racial) marginalization and discrimination from the Indian community. More than any other community, there is a heightened feeling of neglect within the Indian community especially those displaced from the plantation economy. So despite Malaysia recording impressive economic growth, the Indian plantation communities were not just left behind but had become victims of national development. Overall, Professor Lim argued that the combination of socio-economic exclusion and deprivation together with repeated disrespect of Hindu religious rights by state authorities in demolishing Hindu temples and shrines has become a rallying point for Indian activists. These activists

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have lost faith in the Malaysian Indian Congress (MIC) under the Barisan Nasional (BN). The HINDRAF The combination of socio-economic grouping drew support from a large cross section of exclusion and deprivation together the Indian community by challenging Malay/Islamic with repeated disrespect of Hindu hegemony while also addressing the grievances of the religious rights by state authorities Indian community. Faced with a wall of silence from in demolishing Hindu temples and the government, HINDRAF took its grievances to shrines has become a rallying point an international audience. Still the government paid for Indian activists. little attention. This then culminated in a rally of about 40,000 protestors in November 2007. Protesters marched to deliver a memorandum to Queen Elizabeth II through the British High Commission in Kuala Lumpur. In response the government enacted the Internal Security Act (ISA) on HINDRAF leaders while selectively prosecuting their supporters. Though many in Malaysia did not agree fully with HINDRAF’s demands, they believed that the government had overreacted and failed to address issues such as the series of religion-related controversies involving converts, demolition of temples and the perceived Islamization policy. While the larger ripple effects of the HINDRAF protest campaign would probably not be discernable until the results of the country’s elections (expected in March 2008) are tallied and its impact on Indian and other voters in the country assessed, one most important outcome of the HINDRAF incident is the way it has opened the public space to close examination of the ideology of Malay dominance and its equivalent Islam-dominated ideology in the religious sphere, and the impact of divisive policies on rights of minorities. Professor Lim also noted that the “Lingam tape” affair was another source of discomfort to the government. The disclosure of alleged interference in judicial appointments at the highest level raised doubts over the independence, impartiality and integrity of the system of justice in Malaysia over the past two decades. Related to this was the BERSIH march to the royal palace to urge for electoral and political reforms. The ability of these largely civil society organizers to mobilize so many protestors despite being refused a permit indicated a growing body of citizenry concerned about the integrity and fairness of the electoral process and who were willing to take to the streets to stand up for their basic rights of assembly and expression. This led to a more engaged monarchy (compared to its traditionally low key presence in the body politic) in Sultan Azlan Shah calling for major reforms to the judiciary in view of disturbing reports touching on its integrity.

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Looking ahead in 2008, Professor Lim presented the upsides and downsides in Malaysia’s outlook. In The government still has an terms of its downsides, there would be the prevalence enormous political reach, ensuring of sycophancy (“bodekism”) with its attendant rise compliance and passivity through its of professional apologists for the system. Further, spin machinery, cronyism, handouts the fear and apathetic culture would remain deeply and subsidies, and of course embedded in the system of ‘soft’ authoritarianism. coercive instruments like the ISA. In addition, the government still has an enormous political reach, ensuring compliance and passivity through its spin machinery, cronyism, handouts and subsidies, and of course coercive instruments like the ISA. It can also count on the subservient and manipulated media to provide a favourable view of the government. An evaluation of Prime Minister Abdullah Badawi’s leadership also reveals that he is an incompetent and not-so-nice guy who has pulled the wool over Malaysians and external political observers with his promise of reforms. Professor Lim labelled him a conventional and Machiavellian old school UMNO politician who is adept at spinning a public image of tolerance, compromise and good sense but in reality remains committed to the dominance of Malay dominance “Ketuanan Melayu” and Islam. But there are upsides which provide hope for Malaysia’s outlook in 2008 such as increasing concern from royalty; the tenacity of NGO groups in taking up reform issues; and the rise of citizen journalism and alternative news websites that challenges the status quo on subjects that resonate with the larger population such as bread-and-butter issues and governance issues. The potential gains by the opposition in the 2008 elections could also provide a stimulus to liberal voices for reform and change. Professor Lim also commented that while dissident voices might be ignored in the short-run, it would be foolish for the government not to recognize public restiveness on the imperfections of the BN system of government and culture of opportunism; and on the need for wide ranging reforms for Malaysia to move ahead. What remains unforeseeable is UMNO’s readiness to move to a more nuanced pluralistic or multicultural agenda that could possibly restore confidence amongst non-Malays and non-Muslims.

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Presentation by Dr Thitinan Pongsudhirak Thailand’s Transformation Dr Pongsudhirak began his presentation by outlining the roots of Thailand’s political crisis. At the heart At the heart of the crisis is a deepof the crisis is a deep-seated and irreconcilable conseated and irreconcilable conflict flict between the older, more traditional Thailand between the older, more traditional and a new Thailand; a tussle between establishment Thailand and a new Thailand forces revolving around its bureaucracy, military and monarchy on one hand and Thaksin Shinawatra and his crew on the other. While Thaksin represented an agent of change in the age of globalization, the post-coup establishment has turned back the clock, back to the old days of fractious struggles in coalition government, weak political parties undermined by unruly factionalism, and unwieldy administrations that never lasted a full term. Dr Pongsudhirak pointed out that the post-coup administration of Prime Minister Surayud Chulanont have been inept and ineffective with its two-pronged platform of sufficiency economy and national reconciliation making little headway in Thailand. Further, the military has been unable to put Thaksin away for good since they have also eroded their own legitimacy as seen by its intent to institute a new Internal Security Act which would provide the military with wide-ranging powers at the expense of basic civil liberties enshrined in the constitution. Polarization persists in Thai politics. Dr Pongsudhirak then commented on the type of democracy seen in post-coup Thailand. He observed that the return of Thai democracy was in fact a custody of establishment forces. He termed this a ‘custodial democracy’ which is in stark contrast to the liberal democratic order the 1997 Charter attempted to forge but fell short in the face of ‘Thaksinism’. While the new Constitution was passed by a margin Dr Thitinan Pongsudhirak of 57–42, Dr Pongsudhirak reminded the audience of the persistence of “internal regionalization” with the northeast rejecting the Charter as overwhelmingly as the south and Bangkok voted in favour of it.

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Dr Pongsudhirak discussed the role of the military in pre-succession politics. He noted the significance of General Anupong Paochinda’s role to restore order in the event that political volatility did spiral out of control after the elections. Given that the army views itself as the self-appointed guardian of Thailand’s political future and that there is a pressing need to address the daunting question of royal succession with the ageing of King Bhumibol Adulyadej, Dr Pongsudhirak predicted that the army would stay for a long haul rather than return to the barracks. Dr Pongsudhirak proceeded to provide a brief synopsis of the 23 December 2007 Thai elections. Following the dissolution of the Thai Rak Thai (TRT) party, it was reincarnated to three main columns — People Power Party (PPP), Puea Pandin, and Ruamjaithai Chartpattana and Matchima Thipataya. The Democrat Party and Chart Thai Party rounded off the major contesting cast for these elections. With PPP’s comfortable victory by capturing 233 of 480 MP seats, this, in a way, vindicated Thaksin and TRT’s resilient populist platform that catered to the demands and grievances of the country’s rural majority as well as a win for performance over integrity. Despite this victory, Dr Pongsudhirak outlined several hurdles in PPP’s quest to head the incoming coalition government. First is that while it would be rightful and legitimate, the PPP’s leadership of the new government would be problematic if it reversed the last fifteen months of Thai politics since it would go against everything the putsch stood for. That said, Thaksin could return to clear his name, and the politicallybanned executives of the former TRT could be given a new lease of political life while the PPP could seek to marginalize the army’s resurgent role in politics. Hence while the army would not simply accept a PPP-led government without a tussle, it cannot outmanoeuvre PPP’s post-election parliamentary strength and is also constrained by international norms. In essence, unless the PPP can construct a deal that is acceptable to the military, its coalition leadership is not a foregone conclusion. Second is that despite PPP’s resounding victory, it was trounced by the Democrat Party in Bangkok where Thailand’s movers and shakers reside. This overwhelming loss in Bangkok renders the PPP’s mandate incomplete and missteps could Despite PPP’s resounding victory, it again bring demonstrators back on the streets. was trounced by the Democrat Party in This could play into the hands of the Democrats Bangkok where Thailand’s movers and who could claim a basis of legitimacy in the shakers reside. event it ends up enjoining a non-PPP coalition but this would only intensify Thailand’s social

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polarization as well as allow small parties to over-leverage themselves in hogging prime portfolios. PPP’s weakness was further evident in its failure to win party-list results convincingly — winning only one out of a forecasted three. Third is that a PPP-led coalition would be a frontal assault on the establishment, pitting the forces and interests of the majority of the electorate against those of a significant minority that includes Bangkok as a consequence of decades of wilful neglect of the majority by the minority. Since PPP’s advantage is that it only needs 2–3 smaller parties for a coalition while a Democrat Party would have to weave a government virtually from all non-PPP parties, such a collision course between the Establishment and Thaksin and his supporters are inevitable. Dr Pongsudhirak then opined that whatever party ends up in the lead, the post-election coalition government is unlikely to last a full term due to factional fighting. Yet the new government would be more effective than the interim government with clearer albeit not comprehensive policy directions. GDP prospects would be brightened since public investment would be given a boost and consumer confidence would be significantly revived in view of favourable macroeconomic fundamentals. Yet Thai political dynamics would remain fluid — this presupposes an emergence of a new Thailand. In his concluding remarks, Dr Pongsudhirak observed that the overlooked winner of the 23 December polls was the populism that underpinned TRT. While abused and exploited, populism has remained resilient since it has given the neglected grassroots electorate an undying voice whereby the electorate would opt for contesting parties that would most cater to their needs and grievances. Hence, the challenge for Thailand would be how to cultivate something like TRT and its populism that would cater to the majority without Thaksin. And The challenge for Thailand would be an even greater challenge would be how to entice the powerful Bangkok-anchored minority to go along how to cultivate something like TRT these populist lines. Since the rural beneficiaries of and its populism that would cater to populism represent the majority in Thai democracy, the the majority without Thaksin. onus would be on the urban minority to take the first step. Therefore, to bridge the disparity and heal rifts from a political crisis and confrontation of the last two years and counting, Dr Pongsudhirak frankly pointed out that the opponents of Thaksin must learn to accept and accommodate the populism under his TRT (or its offshoots). With accommodation, only then would there be a reconciliation (a grand one according to Dr Pongsudhirak) in this new Thailand.

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Presentation by Associate Professor Vedi R. Hadiz Indonesia a Decade after Reformasi: Continuity or Change? Associate Professor Hadiz began by stating that Indonesia was now recognized as one of the most vibrant, albeit flawed, democracies in Southeast Asia. The move from centralized authoritarianism in the New Order rule to decentralized democracy in the post-Suharto era is a great achievement in which Indonesians can take great pride. But while Indonesia’s democracy is characterized by free elections, political party competition, national and locallevel parliaments, and a lively free press, it continues to be marred by the proliferation of money politics and by ‘decentralized corruption’. Indonesia’s reformasi was in fact rather half-hearted in its execution. Associate Professor Hadiz thus argued that in spite of these dramatic changes in Indonesia, there have also been significant continuities with the New Order that affect the way in which Indonesia’s democracy works today and in the foreseeable future. The result has been profound disappointment with the reformasi drive within sections of Indonesian society largely because of the ‘decentralization of corruption’ through electoral politics and localization of power, stalled judicial reforms, and the rise of communal conflict. Associate Professor Hadiz also pointed out that the strong mandate given to Susilo Bambang Yudhoyono (SBY) by the electorate reflected the hope that Indonesia would finally get a President that “could get things done”. But these hopes quickly dissipated despite achievements of general political stability and general economic stability in the aftermath of the 1997 Asian financial crisis. The SBY Government could be rightly criticized for the lack of results in overcoming the proliferation of corruption, failing to contain the power of vested business and political interests, inability to produce legal reforms and not fully controlling the military.

Indonesia is now recognized as one of the most vibrant, albeit flawed, democracies in Southeast Asia.

Associate Professor Vedi R. Hadiz

The SBY government could be rightly criticised for the lack of results in overcoming the proliferation of corruption, failing to contain the power of vested business and political interests, inability to produce legal reforms and not fully controlling the military.

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As a consequence of this, Associate Professor Hadiz observed that the Indonesian political public is characterized by the presence of two diametrically opposed components, though with a large middle ground between them. First is the component that includes critical NGOs, representatives of social movements including workers and peasantry, and some intellectuals who collectively feel that too little has been achieved during reformasi. Second is the component that comprises sections of business, urban middle class and some of the poor who display nostalgia for the ‘orderliness’ of Suharto’s New Order. They yearn for a ‘strong’ leader that they remember as having guaranteed political stability and economic growth instead of the apparent rise of crime and violence and the stalling economy. But Associate Professor Hadiz reminded us that these problems associated with the Asian financial crisis were also due to rapacious cronyism and lack of institutionalism during the Suharto period. Associate Professor Hadiz proceeded to discuss the issue of terrorism and Islamic radicalism in Indonesia. An oft-stated assumption is that the rise of radical Islam is aligned with the erratic and unpredictable nature of Indonesian democracy; and thus can really only be stymied by Suharto-style iron-fisted rule where anti-terror laws are strengthened and the position of the Indonesian army enhanced. Associate Professor Hadiz proposed that the strengthening of Indonesia’s democracy would in fact better serve the purpose of keeping radical Islamists Since the message of radical Islamists from mainstream society. Since the message of is profoundly anti-democratic, any radical Islamists is profoundly anti-democratic, disenchantment with democracy any disenchantment with democracy especially especially from Indonesia’s millions of from Indonesia’s millions of young and poor young and poor would only reinforce would only reinforce the appeal of the radical the appeal of the radical call for social call for social justice through the establishment justice through the establishment of an of an Islamic state. Just as important would be to Islamic state. enhance the legitimacy of Indonesia’s democracy especially among the unemployed and poorlyeducated youths with bleak futures who have no cultural or ideological resource outside of Islam with which to articulate their anger and disgust. With respect to Chinese-owned conglomerates which were very powerful in the Suharto era and hurt very badly during the Asian financial crisis, they would continue to play a significant role in the actual governance of Indonesia since money politics had become the norm

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because of the ever-rising cost of electoral campaigns. And because no political group can afford not to deploy populist strategies that identified foreign scapegoats to distract from domestic abuses of power, international investors would continue to remain on the sidelines and play a prolonged wait-and-see game. Associate Professor Hadiz explained why SBY has not turn out to be the President who could get things done. Firstly, SBY had to cobble together a coalition cabinet made up of representatives of a range of political parties that were eager to have access to the spoils of state power. Specifically, since SBY came from a small party, his coalition has relied heavily on Golkar for its superior organizational capacities, and access to resources and political machinery. And if its leader Jusuf Kalla decides to run for the 2009 Presidential elections, this would mean that SBY would likely govern in an even less effective manner from at least one year (in 2008) before the next polls take place. In conclusion, Associate Professor Hadiz believed that the problems of Indonesia stemmed from the way power relations were structured from the New Order rule. It is evident that the political forces opposed wide-ranging reforms — as defined by notions of ‘good governance’ or by democracy activists — remained strongly entrenched in Indonesian state and society despite the New Order’s demise. Therefore any President of Indonesia in the near future would have to deal with the same problem because reformasi had failed to purge such powerful political forces from Indonesian social and political life.

Presentation by Professor Carlyle A. Thayer Vietnam: One-Party Rule and the Challenge of Civil Society Professor Thayer presented Vietnam’s significant political developments in 2007 by critically assessing its one-party rule and the challenge of civil society as well as outlining its accomplishments. Professor Thayer opined that three major decisions were made during the 4th Plenum held by the Vietnam Communist Party (VCP)’s Central Committee in January 2007. Firstly, it reduced the number of Central Committee commissions from eleven to six so as to reduce the “chaotic overlap” between party and state structures. Secondly, in the wake of Vietnam’s membership in the WTO and its attendant new requirements on Vietnam, the Central Committee directed that the party, army, police and regime-approved mass organizations divest themselves of commercial

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enterprises that they presently own and operate. And thirdly, the Plenum focused on drawing up a coherent and integrated national “Maritime Strategy towards the Year 2020” as there was currently no coherent plan to integrate the economic development of coastal areas with the exploitation of marine resources in Vietnams’ territorial waters. Such a maritime strategy would also help to integrate environmental protection and national defence and security. Professor Thayer proceeded to discuss the National Assemble Elections that took place in May 2007. While most outside observers concluded that the elections were much ado about nothing, Professor Thayer instead believed that a closer examination would suggest that Vietnam has actually embarked on a gradual process of political liberalization of its one-party state. Following the adoption of a new state constitution and a new electoral law, the central Professor Carlyle A. Thayer organs of government were restructured and the National Assembly revitalized by empowering its deputies. The Soviet-era Council of Ministers were replaced by a Cabinet headed by a Prime Minister; Vietnam has actually embarked collective leadership was replaced by ministerial on a gradual process of political responsibility; deputies were empowered by giving liberalization of its one-party state. them responsibility to approve legislation, vote on important issues and supervision of the government; the new electoral law required that every seat be contested, and this law made provisions for self-nomination by independent candidates. However, Professor Thayer noted that a highly contrived system of candidate selection was imposed in order to ensure that the process of political liberalization was kept at a gradual pace and did not get out of control. Although it was planned that the majority of candidates were members of the VCP, non-party members such as ethnic minorities, religious minorities, and women, were also co-opted to stand for election. As a result, a hybrid system incorporating top-down and bottom-up political change was established. For example, in the May 2007 elections, 887 candidates (reduced from 1,323 candidates after a selection process) including 154 non-party members and 30 independents ran for elections. In essence, a revitalized National Assembly would enable VCP to ‘rule by

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law’ while at the same time acting as a safety valve for pressures from below for more rapid political change. Professor Thayer discussed the Cabinet reshuffle in July 2007 which revealed that the real power continues to rest with the VCP and not organs of state. Significantly, with seventeen persons holding Ministerial ranks retiring in 2006, this presented an opportunity to restructure the government apparatus and to push generational change by bringing younger and better qualified individuals into government such as the current Prime Minister Nguyen Tan Dung. Professor Thayer observed that there were three significant features of the current reshuffle. Firstly, Dung has succeeded in increasing the number of Deputy Prime Ministers from three to five while also winning an important bureaucratic battle in getting endorsement for his nomination of two western-trained younger officials for these top posts — Nguyen Thien Nhan and Hoang Trung Hai. Secondly, Dung succeeded in reducing the number of ministerial portfolios in Cabinet from 26 to 22. While this was a modest triumph, reformers in the Vietnamese political system felt the cuts should go deeper (less than 20 portfolios) when they looked overseas at cabinets in comparable countries. Thirdly, Dung has been able to restructure a number of ministries. For instance, the break-up of the Ministry of Culture and Information is a key development because of its unsavoury reputation as a watchdog for regime censorship. Another major restructure involved dissolving the Ministry of Fisheries and transferring its functions to a more powerful Ministry of Agriculture and Rural Development with the reason being that Vietnam had prioritized the developing of a comprehensive maritime strategy. Despite these changes, Vietnam still had to untangle the chaotic overlap of party and state institutions. Professor Thayer proceeded to present the challenge In 2006, a major new of civil society to the VCP-led government. Over the past development emerged in two years, a large number of groups have been formed domestic Vietnamese politics in Vietnam. In 2006, a major new development emerged with the coalescence of proin domestic Vietnamese politics with the coalescence of democracy advocates into an pro-democracy advocates into an identifiable group. In identifiable group. In the past, the past, political dissidents and religious activists acted political dissidents and religious individually or in small cliques isolated from each other. activists acted individually or in In particular, Bloc 8406, representing a diverse network of small cliques isolated from each professionals such as teachers, Catholic priests, engineers, other. intellectuals, was established after 118 persons issued a Manifesto on Freedom and Democracy in Vietnam.

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Professor Thayer highlighted that the police harassed many of the signatories of this Manifesto to the extent that it provoked a public protest from these pro-democracy networks. This included a letter issued by Bloc 8406 condemning police actions signed by 178 people. Even websites were utilized to organize discussions within Vietnam as well as overseas. Further, Bloc 8406 publicly announced a four-phase proposal for democratization — the restoration of civil liberties, establishment of political parties, drafting of a new Constitution and democratic elections for a representative National Assembly. In response to Bloc 8406’s open letter to APEC leaders asking for help to promote democracy in Vietnam, the police restricted the movements of their leading dissidents during the APEC Summit. After the Summit, Bloc 8406 was repressed with some of its members arrested and put on trial. In addition, Vietnam also experienced a continuation of labour agitation with wildcat strikes in foreign invested companies over pay and working conditions. The government swiftly diffused these protests by imposing a 40 per cent rise in the minimum wage paid by foreign companies. In conclusion, Professor Thayer noted that Vietnam’s accomplishments after twenty years of doi moi are undeniable. Vietnam would emerge as a major regional power as it had intentions to play a more proactive role on the international stage, particularly towards North Korea, and its advent as a non-permanent member of the UN Security Council. But despite Vietnam’s political and economic accomplishments, the emergence of a diverse and geographically dispersed pro-democracy network that receives external political and financial support will pose a challenge to Vietnam’s one-party state. If the discontent of urbanites over rising prices, pollution and corruption could ever be linked to the pro-democracy campaign, this combination could prove combustible for the one-party state in the years to come.

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8 SURVEYING ECONOMIC ENVIRONMENTS AND THEIR CHALLENGES IN SOUTHEAST ASIA Panellists: • M.R. Dr Pridiyathorn Devakula Former Central Bank Governor and Finance Minister of Thailand

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Dr Le Dang Doanh Member of the Board and Senior Fellow, Institute of Development Studies, Vietnam

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Dr Joseph F.P. Luhukay Partner of IndoConsult, Indonesia

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Professor Rajah Rasiah Faculty of Economics and Administration, University of Malaya

Introduction To face the economic challenges from a rising China and India, Southeast Asian economies have embarked on the journey towards a single market and single production base. This session provided an overview of both regional and national economic landscapes. Dr Devakula offered a perspective of the region at large and spoke of financial institutional changes needed in order for the region to be more competitive. Dr Doanh explored Vietnam’s economy and noted that while it had registered significant growth, more needs to be done in terms of efficiency, corruption and market institutions. Looking at the Indonesian economy, Dr Luhukay warned that inflation may rise further, together with unemployment. Lastly, Professor Rasiah examined the historical structural change in Malaysia with a view towards explaining the direction the economy has taken.

Presentation by M.R. Dr Pridiyathorn Devakula The Needed Changes in the Region’s Financial Markets As ASEAN is undergoing the process of economic integration, certain changes in the region’s financial markets are also needed. It is observed that the intra-regional trade has grown rapidly. But this is primarily driven

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by the final demand from the G3 economies. Hence it is very important to strengthen the intra-regional trade and final demand from the Asian countries. However, to maximize such potentials, certain trade infrastructure needs to be improved. Firstly, according to Dr Devakula, trade financing facility should be readily available in the region. And under this, short-term trade financing becomes more important. ASEAN already has a good network of local and foreign banks, all of which provide U.S. dollar trade financing. But most of these are in the financial markets of advanced countries. If these banks shift the trading of trade-financing instruments to financial markets in Asia, this could also facilitate the intra-regional trade. The key pre-requisite for this to happen is to have the infrastructure for the payments and settlements of regional financial flows or some form of an Asian dollar clearing system. Overtime, there could be more use of local currencies, Dr Pridiyathorn Devakula thereby helping businesses to better manage foreign exchange risks. Second point, Dr Devakula opined, is related to The last three years witnessed the movements of currencies in the region. The last weakening of U.S. dollar which three years witnessed weakening of U.S. dollar which forced foreign investors to diversify forced foreign investors to diversify their portfolio their portfolio to Asian assets. to Asian assets. This caused huge capital flows from United States into the Asian markets and is expected to continue in the future on the back of inherent weakness of the U.S. economy. Consequently, the Asian currencies will appreciate further. In the past one year, the normal market mechanism would have strengthened the Asian currencies by more than their current values, but Asian central banks have not allowed so as they felt that this would have dented the economies export performances. This, on the other hand, has helped maintain the resiliency of the economies. During 2005–2007, most of the Asian currencies have appreciated at a reasonable pace. But the degree of currency appreciation differs across countries depending on the degree of capital account convertibility. The country with the highest degree of liberalization also faces the highest degree of exchange rate volatility. More importantly, the one whose capital account is most liberalized has been more affected and less able

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to cope with the adverse impacts of problems in the major economy than other economies in the region, whose capital accounts have not been as liberalized. Nevertheless, all economies in the region are affected because of close financial and trade linkages within the region. Given this, Dr Devakula suggested that the region would benefit by having some kind of linking mechanism that may contain the degree of volatility of currencies in the region. This raises the question of the kind of linking mechanism that should bring about an alignment of currency movements in the region. The options could range from having: (1) a common currency, (2) a snake system that was implemented in the European Community, or (3) a basket of currencies with the flexibility that allows each country to adjust its own basket periodically. The first two options are not feasible at the moment as the Asian economies are at various stages of development. Hence that leaves the option of basket of currencies among some key economies in the region. Major export-led economies already have the similar trade-weighted currencies. For example, China, Hong Kong, Malaysia and Thailand share similar trading patterns and partners, thus implying the potential for adopting a basket of currencies using similar trade weights. As for other currencies, their respective patterns of trade are not much different among economies. The important factor is that each economy must have the flexibility to devalue or revalue its currency or adjust the weights periodically so as to mitigate the adverse effect as a result of either currency over- or undervaluation and, or the shifting of trade patterns out of line with the basket trade weights. However, this would be disciplined by two factors: (1) the indication of economic problem or adverse economic performance, and (2) an appropriate formula to ensure that such an adjustment would not compromise the competitiveness of other countries in the region. Dr Devakula concluded by stating that the rapid increase in intraregional trade and final demand in Asia has improved the resiliency of Southeast Asian economies. To strengthen it further, certain changes in the financial markets are needed. The emergence of an Asian dollar clearing system would support short-term trade financing within the region and a more active secondary market for trade-financing papers would facilitate further integration of regional production and trade. The other change is to introduce an alignment of currency movements in the region. Under this, a system of similar basket of currencies with an allowance for each country to adjust its own basket periodically seems to be a feasible option.

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Presentation by Dr Le Dang Doanh Vietnam’s Economy in the Globalizing World

Dr Le Dang Doanh

According to Dr Doanh, Vietnam was expected to grow by 8.5 per cent in 2007, the highest growth rate in the last ten years. While the primary sector grew by only 3 per cent due to losses caused by flooding and typhoons, the industry rose by 10.2 per cent and services by another 8.7 per cent. Competition and new international actors contributed strongly to the dynamism of the finance and banking sector in 2007. Besides, the real economy, Vietnam also thrived in terms of financial market. Vietnam’s stock market which constituted a market capitalization of a mere 1.2 per cent of GDP at the end of 2005 rose to 50 per cent of GDP by the end of 2007. A big jump came in 2006, when nearly one hundred firms were listed on the two securities trading centres of Ho Chi Minh City and Hanoi. Since 2006, foreign portfolio investors have shown great interest to invest in Vietnam and strong economic growth with accession to the WTO further improved the flows. Looking at the banking sector, it grew impressively with competition from foreign banks. It is one of the fastest growing sectors in the AsiaPacific region. In Vietnam, Dr Doanh continued, the private sector played an important role in driving up the GDP. Since the entry into the WTO, forty-three new enterprises with US$2.1 billion capital have already registered. Again the domestic private sector created the lion share of new employment and hence contributed significantly to reduce poverty. Another important component of Vietnam’s growing economy is the dramatic rise in foreign direct investment (FDI). Till December 2007, the committed capital reached US$19 billion as foreign investors wanted to benefit from the young, skillful, fast learning labour force. There was also change in composition of FDI with bigger projects coming in technology sector. In geographic terms, FDI is moving into Central Vietnam with the share rising from 8 per cent of total flow to 22 per cent in 2007. Despite the increase in FDI flows, disbursement remained slow because of red tape, unprofessional officials, and difficulties in land clearance. As for trade, Vietnam’s economy is a very open one as exports constitute 77 per cent of GDP. While the WTO-membership has facilitated

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the access to international markets, the advantages of labour-intensive industries have helped to boost the export. On the other hand, imports grew more rapidly, leading to record high trade deficit of US$11 billion. Thanks to the strong inflow of foreign capital, foreign reserve had been growing strongly in 2007 and reached around US$24 billion or twenty weeks of imports. Looking at the monetary indicators, inflation remained high in 2007 as CPI reached 10 per cent and for the first time since the beginning of the reforms it surpassed the GDP growth rate. There are multiple reasons for the rise in CPI — price of food rose during the year due to flooding and Avian flu, high crude oil price further pushed gasoline and transportation costs up, asset prices also moved up resulting in Vietnam having the highest real estate price in the region. According to IMF, fiscal expansion, increasing credit and liquidity have also contributed to the inflation. Vietnam’s business environment has been slowly but steadily improving in the last couple of years. UNCTAD ranked Vietnam the sixth most attractive location for FDI. However, Global Competitiveness Report 2007 ranked Vietnam quite low compared to other economies in the region. While Singapore ranked at 7th, Malaysia at 21st, Vietnam was positioned at 68th. This indicates that other economies are more efficient in the region. Dr Doanh concluded by noting that Vietnam is on the crossroads. If reforms are deepened, Vietnam could continue with its high-growth path and may eventually become a middle-income country. On the other hand, the country faces severe If reforms are deepened, Vietnam challenges too: inadequate technical infrastructure, could continue with its high-growth under-developed market institutions, rising income path and may eventually become a inequality and environment degradation. Hence the middle-income country. country needs to overcome these challenges to grow on its path of sustainable development.

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Presentation by Dr Joseph F.P. Luhukay Finance for the Unfinanceable: An Approach for Microfinance in Indonesia

Dr Joseph F.P. Luhukay

Employment possibilities may shrink by at least 1 million jobs. The hardest hit sectors would be timber, textile, chemicals, transportation and trade.

Dr Luhukay began by noting that oil prices play an important role in Indonesia’s economy. With crude hitting a record of US$100 billion, inflation may reach 7.5 per cent. Employment possibilities may shrink by at least 1 million jobs. The hardest hit sectors would be timber, textile, chemicals, transportation and trade. According to Dr Luhukay 2008 will also see the start of political campaigns for the 2009 general elections. Parliamentary and senatorial elections are scheduled for April 2009, followed by the presidential election in September 2009. This will slow down new economic activities by the government and business community and a lot of money will be diverted into politics. Given this, achieving the 6.2–7.0 per cent growth per annum for 2008 and beyond will depend strongly on how fast Indonesia can grow its grassroots economy which include micro-, small- to medium-scale enterprises. Most Indonesian business players are micro-, small- or medium-scale enterprises. Currently there are several microfinance players in Indonesia, but not all are under the Central bank. While state/private banks serves the SMEs and rural community, rest generally the local surroundings, members or village community. Compared to other countries in the region, financial services in Indonesia has a long way to go. For example, in case of Indonesia in 2007, bank deposit/GDP ratio is only 39 vis-à-vis 89 for Malaysia and 104 for Singapore.

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Surveying Economic Environments and Their Challenges in Southeast Asia

Presentation by Professor Rajah Rasiah Where is the Malaysian Economy Headed? Professor Rasiah examined the structural change in Malaysia with a view towards explaining the direction the economy has taken. Trade has always played an important part in Malaysia’s economic growth story. GDP experienced a slowdown only in 1975 (first oil crisis), 1985 (aggravated by a serious savings-investment imbalance following a buildup in government expenditure and global recession in key export-oriented industries), and 1998 when the contagion effects of the Asian financial crisis destabilized the economy. Along with this, Malaysia’s industrial sector also underwent a significant technological change which had several underpinnings like industry characteristics, competition, and institutional support. While technical progress was important for economic growth, its relationship is difficult to measure with certainty. Professor Rasiah distinguished four policy-trade regimes used to promote industrialization in Malaysia. Initially while the primary sectors created the demandsupply conditions for the emergence of manufacturing Professor Rajah Rasiah until the early 1980s, the dominance of manufactured exports since the mid-1980s subsequently became a propellant for further expansion in demand supply conditions for other sectors. As for the policy-trade regimes, Malaysia pursued an import substitution strategy till 1970 and gave way to an export-oriented strategy during 1970–80. Then there was a brief period (1980–85) of import substitution. From 1985 onwards, a consistent policy of trade liberalization and export-oriented industrialization has been pursued. Professor Rasiah further evaluated the impact of these policy regimes on employment, value added, trade and productivity. Trade and foreign direct investment (FDI) played a critical role in Malaysia’s growth process in the post-1985 period. The export-GDP ratio, already high at around 50 per cent in the mid-1980s, exceeded 100 per cent by the end of the 1990s. The share of manufactured exports in total exports increased from around 30 per cent in the mid-1980s to around 85 per cent by the mid-1990s. FDI accounted for between 10 and 25 per cent of annual investment

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during the period. The pattern of specialization that emerged is rather interesting; exports came to be dominated simultaneously by outsourced high-technology products on the one hand and domestically generated lowtechnology products on the other. During 1985–97, manufacturing output recorded a growth of around 15 per cent per annum. That this growth was export-led in character can be seen from a simple fact: the share of exportoriented industries in total manufacturing value added increased from 57 per cent in 1985 to 64 per cent in 1997. The employment and wage effects of this growth were very positive. Manufacturing employment grew at an annual rate of nearly 10 per cent and the real wage in manufacturing grew at an annual rate of 3.5 per cent. Most remarkably, moreover, both employment and real wages grew faster for unskilled and semi-skilled workers than for skilled workers so that labour market inequalities declined. Professor Rasiah observed that contribution of manufacturing to employment, exports and value-added in the Malaysian economy expanded in trend terms between 1958 to 2005. However, eclectic and uncoordinated policies coloured by ethnic considerations have restricted the capacity of a widening manufacturing sector to record industrial deepening. While comparing the impact of these developments against the growth gradients enjoyed by selected East and Southeast Asian economies, Professor Rasiah remarked that a serious slowdown in labour productivity growth in the key export-oriented manufacturing sectors in 2000–2005 underlines the threat Malaysia faces against newly emerging industrializers such as China and Vietnam. Whereas agriculture has undergone falling importance in GDP and employment levels, productivity level have continued to rise in Unless efforts are taken to drive the successful latecomer industrializers such as Korea institutional change to stimulate and Taiwan. Malaysian agriculture has failed to upgrading in industry, the per capita achieve significant levels of productivity increments. GDP gap with Korea, Taiwan and In conclusion Professor Rasiah warned that unless Singapore is expected to widen efforts are taken to drive institutional change to further and China and Vietnam are stimulate upgrading in industry, the per capita GDP expected to overtake Malaysia’s in gap with Korea, Taiwan and Singapore is expected to the next two decades. widen further and China and Vietnam are expected to overtake Malaysia’s in the next two decades.

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9 VIOLENT MOVEMENTS IN INDONESIA AND THAILAND Panellists: • Ms Sidney Jones Senior Adviser, Asia Programme, International Crisis Group

•

Professor Duncan McCargo Professor of Southeast Asian Politics, School of Politics and International Studies, University of Leeds

Introduction Indonesia and Southern Thailand remain volatile sites where struggles occasionally erupt into violent conflict. These struggles are a complex combination of Islamic ideology and militant jihadism in the case of Indonesia, and separatist movement and state marginalization in the case of Thailand. Ms Jones presents the case of Indonesia while Professor McCargo explains the situation in Southern Thailand.

Presentation by Ms Sidney Jones Transition Time for Indonesian Jihadism Ms Jones began by identifying two factors that may determine the path that Indonesian jihadism would take in the next few years. The first was how the ongoing fracturing of existing groups may create new, potentially lethal realignments. The second was whether one or two of the country’s major salafi pesantrens can be converted to a salafi jihadi stance. In assessing security risks in Indonesia, there was hence a need to look beyond existing groups to networks and alliances now in formation that could grow into more structured organizations over time. Ms Jones observed that Jihadist groups were divided as never before. One of the oldest splits was between those committed to the al-Qaeda line and Jihadist groups were divided as those who believed that bombing Western targets never before. was counterproductive. Another fissure was between those who maintained that military training and

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jihad experience were essential for leadership and those who maintained that religious knowledge, particularly expertise in tauhid, or oneness of God, was sufficient. Finally there was the division between those who accepted police assistance, as part of a deradicalization program, and the “purists”, who rejected it. The result of this was bored or resentful mujahidin available for plucking by a new leader. Adding to this, Ms Jones observed, the potential for isolated radicalization of salafi schools must be taken seriously. Over the last three years the dispute between salafis and salafi jihadists had deepened. One of the examples of a salafi “purist” embracing jihadism was Oman Abdurrahman. The potential for isolated A brilliant legal scholar and Arabic linguist, Oman radicalization of salafi schools must apparently became radicalized through his own be taken seriously. Over the last reading of jihadi tracts, particularly those by Abu three years the dispute between Muhammed al-Maqdisi, the mentor of the late leader salafis and salafi jihadists had of Al-Qaeda in Iraq, Abu Musab al-Zarqawi. The main deepened. conclusion Oman drew from al-Maqdisi was that the biggest threat to Islam came from Muslim rulers who refused to implement Islamic law, thus making them tantamount to apostates. Through his translation of jihadist tracts, Oman was in touch with some of the most militant members of Jema’ah Islamiah, including those affiliated to Noordin Mohammed Top. Oman’s prestige as a writer and teacher had made him a pivot around which a number of groups revolved. He was the node of a communication network that may be facilitating links between salafis and jihadis in ways that would not be possible without him. If Oman, a solitary salafi scholar without institutional backing confined to specific areas of Bandung and one Jakarta neighbourhood could have as much influence as he did, the impact of wholesale radicalization of one or two major salafi pesantrens in Java could be enormous. How the two phenomena, the fraying of old groups Ms Sidney Jones and salafi radicalization intersected was uncertain. It did not mean that Jema’ah Islamiah had become irrelevant or that Oman’s movement would necessarily gel into a new terrorist organization. One thing was clear: one needed to look beyond existing organizations to understand developments in salafi jihadism.

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Violent Movements in Indonesia and Thailand

Presentation by Professor Duncan McCargo What’s Really Happening in Southern Thailand? Professor McCargo raised the issue of the Thai state’s political legitimacy or rather its lack of it in A common but troubling reading of the violence-ridden south. By April 2007 the violence the Southern Thai conflict is the use in Southern Thailand had killed 2,200 people. A of tropes like “Islamic violence” and common but troubling reading of the southern Thai the global “war on terror” to frame conflict is the use of tropes like “Islamic violence” the violence within larger notions of and the global “war on terror” to frame the violence a civilizational clash between Islam within larger notions of a civilizational clash between and the West. Islam and the West. Professor McCargo contended that the conflict was rooted in Thailand’s persistent failure to establish legitimate participatory rule in the Malay-Muslim majority provinces of Patani, Yala and Narathiwat. Islam was a rhetorical resource selectively invoked by militant groups in the Thai South, rather than the source of their core motivation. Since the Prem initiatives of the early 1980s, Bangkok had approached the deep south with two simple interlocking strategies: co-opt and control Islamic leaders and teachers, and co-opt and control the Malay-Muslim political elite. Bangkok has sought to use representative politics to relegate Malay-Muslims to permanent marginality within the Thai state, while lionizing the virtuous tokenism of individual leaders. Yet these strategies of co-optation were fraught with danger, since the co-opted elites gradually became alienated from the ordinary people of the region. As the Prem-era social compact unraveled, Patani militant groups began to prepare for a fresh attempt to discredit the Thai state. When Thaksin Shinawatra abolished the Southern Border Provinces Professor Duncan McCargo Administrative Centre and a series of violence confrontations ensued in 2004, much was revealed about the scope, depth and determination of the resurgent military movement on the one hand and the complacency and incompetence of the Thai military on the other. The militants were now in the ascendant. In many parts of the three provinces, the Thai state had little authority; local leaders such as

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village headmen lived in constant fear of the movement, with which they sometimes also sympathized. Professor McCargo described the movement as a “liminal lattice”; not so much an organization as a set of intangible connections with no real masterminds. With their incompetence and lack of stomach for fighting exposed, the Thai military sought to subcontract and privatize the conflict, delegating front-line security duties to rangers, volunteers and militias wherever possible. In conclusion, Professor McCargo highlighted his two “negative findings”. Firstly, the Southern Thai conflict was not centrally about Islam. The primary emphasis of the militants was on historical and political grievances, not religious ones. Their cause centred on local questions of legitimacy; Conflict was not really part of a they want to regain control of territory they believe global conflict or a global jihad. The to be theirs and doing so involved rejecting the claims prime movers in the recent fighting of the Thai state upon that territory. Secondly, the were firmly based in Southern conflict was not really part of a global conflict or a Thailand itself and did not solicit global jihad. The prime movers in the recent fighting much support from outsiders. were firmly based in Southern Thailand itself and did not solicit much support from outsiders.

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10 CONCLUDING NOTES •

Dr Chin Kin Wah Deputy Director, Institute of Southeast Asian Studies

The globalization theme of the keynote address usefully reminded us of a dominant influence in the regional environment. The information revolution, the new mobility especially of skilled labour, the manufacturing chain and marketization across borders underscore the great interconnectedness between peoples and states across the regional landscape driving and transforming in the process the East Asian economic dynamics. The resurgence of China and India addressed in the following session as well as the new impetus given to regional integration as a means inter alia towards attaining regional competitiveness should be appreciated in this context. Globalization may not as Dr Lammert saw it, spell the ultimate triumph of democracy in a post-Cold War region but the ready embrace of capitalism by authoritarian states which he considered a major trend could also be said in a different context to reflect a new restlessness to achieve and hunger for economic growth that hold out hopeful expectations despite economic and domestic political uncertainties. One continuing, positive trend observed in previous ROFs is the generally stable strategic environment that favours enhanced regional cooperation and community building efforts. The review of strategic trends in East Asia took account of the interests and policies of the major players namely, the United States, India, China and Japan. Whatever might be the domestic concerns of the United States (the looming presidential elections and a ballooning sub-prime mortgage crisis being major preoccupations in 2008) the fact remains that the growing interdependence between the U.S. economy and external markets serves to underline rather than diminish the significance of U.S.’s engagement in East Asia. But if Professor Inoguchi’s reading of the sustainability in the foreseeable future of U.S. “hegemony” in the military, demographic and currency realms (despite growing worries over the depth of the sub-prime crisis and anxiety over the effects of a deepening recession in the United States) is right — one could optimistically expect the United States to remain a robust factor in the wider security equation of the region.

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To Professor Mohan, the “no’s” in India’s policy towards the region (in particular, no desire for a leadership role, no grand organizing theory or ideological agenda, no wish for alliances or collective security, no exclusivity in regionalism, no over-ambition in the agenda for community building) would translate into a big “yes” for ASEAN remaining as a core building block in the regional architecture. Professor Yang in turn emphasized China’s stake in a peaceful regional environment for its development. He reiterated an official view that China cannot develop in isolation of the rest of the world, nor could the rest of the world develop without China. And since China could not choose its neighbours, it would need to live with them. Such was the message of pragmatism for the rest of East Asia. Although Professor Kersten explored mainly the nexus between domestic politics and foreign policy formulation in Japan, her expectation of a more autonomous role in Japan’s foreign policy was qualified by the conclusion that it does not have to result in a dominant leadership role in the region. The challenge is for ASEAN to adroitly position itself between China’s and Japan’s influence and avert an exclusive embrace of any of the major players. One conclusion that could be drawn from the respective measures taken of the roles of the major powers is that there is now a perceptible tide in the affairs of East Asia that could lead to greater fortunes if only ASEAN could get itself organized to catch it at the flood. Indeed this consideration lies behind the impetus for accelerating and enhancing ASEAN integration. Both Mr Ong and Dr Surin (respectively the immediate past and recently installed Secretaries-General of ASEAN) acknowledged the pressures of growing competitiveness from the outside that has raised the stakes for ASEAN which now has to re-engineer and recalibrate itself. While a change of mindset is evident much more needs to be done. Support from all levels was needed. The ensuing exchanges between Professor Koh and Mr Wanandi, a respondent from the floor, highlighted the differences between those like the former who saw the great transformative potentials of the Charter that calls out for ratification, and the latter who questioned its effectiveness and adequacy. It can be said that the Charter manifested the art of the possible given prevailing political constraints. The marshalling of domestic support, so necessary in some ASEAN countries for the ratification of the Charter as well as the exercise of political will so crucial for the implementation at the national level of Charter provisions, also remind us of the need to take account of the domestic political trends in some key ASEAN countries.

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Concluding Notes

In Thailand, one of the countries assessed, there is no clear resolution to the political crisis which was unfolding at the time of ROF 2007. To Professor Pongsudhirak a new Thailand is in the making but the new political order remains unknown. Indeed, persisting contradictions, tensions, inconsistencies and incompatibilities thrown up by the general elections added to a distressful and inconclusive outcome. In Indonesia after ten years of Reformasi there is no rolling back of democracy, the economic situation has improved and the country has not broken up. But Professor Hadiz wondered whether with an indecisive leadership at the top and a new domestic pluralism and entrenched forces below, a reformist agenda could be truly implemented. While one-party rule has not been eroded in Vietnam, bottom-up pressures are nevertheless evidenced by civil society movements, recent labour agitation and strikes. Despite the stresses and strains from within and without, Vietnam with a growing economy can in Professor’s Thayer’s view, contribute to a positive role in ASEAN if it can put its domestic house in order. Professor Lim’s review of the Malaysian situation highlighted the growing stresses on Malaysia’s fragile social cohesion and the re-emergence of racial and religious fault lines, aggravated by poor leadership. Datuk Seri Anwar for his part observed in his luncheon speech that the hitherto inclusiveness of Malaysia’s Muslim leaders is also coming under increasing stress. Hanging heavily over the four country presentations were concerns over issues of leadership, political competence, political legitimacy and governance. Indeed weak governance has, in Datuk Seri Anwar’s view also undermined the country’s economic performance and competitiveness. Governance issues coupled with growing concerns over inflation and a weakening U.S. dollar also overhung the assessments of the regional economic environment as well as the economic performance of Vietnam, Indonesia and Malaysia. The need for financial institutional changes to underpin regional economic competitiveness was recognized (Dr Devakula) while an upbeat review of the high-growth Vietnamese economy was predicated by a call for a deepening of reforms (Dr Doanh). For Indonesia concerns centred on the negative impact of rising crude oil prices. But Dr Luhukay chose to focus on the need to energize and grow the grass-roots economy. Malaysia too with the increasing loss of economic competitiveness is badly in need of institutional change and industrial upgrading to stimulate productivity (Professor Rasiah). Even as the region as a whole seeks to gear up in the face of economic competition from

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China and India, the growth-focused ASEAN states are also concerned about their respective placement in the regional economic hierarchy. The need to address governance as well as capacity-building issues was reflected in the presentations on environmental degradation, transboundary pollution and sustainable development (Professor Quah) and the problems brought on by climate change (Dr Francisco). Alleviation strategies rested not only in effective intergovernmental cooperation but also local participation and community support. The final session which provided an update on the complex splintering of Jihadist groups in Indonesia (Ms Jones) and separatist violence in Southern Thailand (Professor McCargo) also served to underline the challenges posed to political legitimacy of the state as well as saliency of responsive governance to highly nuanced local developments. Finally, it can be surmised that as the region transits 2008, the continuing benign strategic environment will be counter-weighed by growing concerns over the downside of globalization and the magnitude of the economic fall-out from the sub-prime mortgage crisis in the United States, growing inflation and rising oil prices. But a de-coupling of the region’s economic fortunes from the domestic economic turmoil in the United States will serve to underline not only the resilience but also the growing dependence of other regional economies on the new “growth engines” of China and India. The year will also witness renewed efforts at regional integration within ASEAN (with the priorities focused on ratification of the Charter and implementing the AESAN Economic Community road-map). But attention will also be drawn to national capacities, regional leadership and political will to pursue the regional community building agenda. Invariably attention will be drawn to the quality of leadership and the prospect of domestic political turbulence which could undermine such efforts at the national level.

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11 CLOSING REMARKS •

Ambassador K. Kesavapany Director, Institute of Southeast Asian Studies

Ambassador Kesavapany concluded the Regional Outlook Forum (ROF) by expressing his appreciation to various speakers who had made important insights into the politics and economy of the region for the coming year. He also took the opportunity to announce that the Regional Outlook Forum for 2009 will be held on 7 January. Ambassador Kesavapany closed by saying that the ISEAS 40th Anniversary dinner and the ROF was only the beginning of a range of other activities and events and that there would be much more to look forward to from ISEAS in the coming year.

Ambassador K. Kesavapany

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FORUM PROGRAMME REGIONAL OUTLOOK FORUM 2008 Tuesday, 8 January 2008 Island Ballroom, Shangri-La Hotel Singapore

PROGRAMME 8.30 am – 9.00 am

Registration

9.00 am – 9.05 am

OPENING REMARKS Ambassador K. Kesavapany Director, Institute of Southeast Asian Studies

9.05 am – 9.25 am

KEYNOTE SPEAKER Dr Norbert Lammert President, German Parliament GLOBALIZATION AND THE FUTURE

9.25 am – 10.40 am

Session I: Chair:

OF

EU-EAST ASIA RELATIONS

STRATEGIC TRENDS IN EAST ASIA: Professor Wang Gungwu Chairman, ISEAS Board of Trustees; and Chairman, Management Board, East Asian Institute

Panellists: (1) Professor Takashi Inoguchi Graduate School of Public Policy, Chou University, Japan THE U.S.’S RELATIONS WITH EAST ASIA (2) Professor C. Raja Mohan S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore INDIA’S CHANGING STRATEGIC PROFILE IN EAST AND SOUTHEAST ASIA (3) Professor Yang Jiemian President, Shanghai Institute for International Studies INTERNATIONAL SYSTEM IN TRANSITION: CHINA’S FORWARD-LOOKING STRATEGY AND POLICY

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(4) Professor Rikki Kersten Research Professor, Department of Political and Social Change, Research School of Pacific and Asian Studies JAPAN’S ASIAN CENTURY: THE POLITICS OF BEING SECOND FIDDLE 10.40 am – 10.55 am

Coffee

10.55 am – 12.10 pm

Session II: ASEAN INTEGRATION: PROGRESS AND CHALLENGES Chair: Ambassador K. Kesavapany Director, Institute of Southeast Asian Studies Panellists: (1) Dr Surin Pitsuwan Secretary-General, ASEAN Secretariat THE ASEAN CHARTER: A STRATEGY FOR CONSOLIDATION FOR FUTURE CHALLENGES (2) Mr Ong Keng Yong Former Secretary-General, ASEAN Secretariat ASEAN COMMUNITY BUILDING: 2015 IS POSSIBLE (3) Professor Tommy Koh Chairman, High Level Task Force on the ASEAN Charter THE ASEAN CHARTER: HOW WILL IT TRANSFORM ASEAN?

12.10 pm – 1.40 pm

1.40 pm – 2.20 pm

LUNCH Distinguished Luncheon Speaker Datuk Seri Anwar Ibrahim RECONCILING ISLAMIZATION WITH A DEMOCRATIC SOCIETY

IN

MALAYSIA

Session III: THE ECONOMICS OF ENVIRONMENTAL DISASTER: THE SOCIO-CULTURAL IMPACT Chair: Mr Tan Keng Jin Head, Public Affairs Unit, Institute of Southeast Asian Studies Panellists: (1) Associate Professor Euston Quah Head, Division of Economics; and Associate Chair (Research), School of Humanities and Social Sciences, Nanyang Technological University ENVIRONMENTAL SECURITY AND THE PURSUIT OF SUSTAINABLE ECONOMIC GROWTH: WHAT MUST ASIAN GOVERNMENTS DO?

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(2) Dr Herminia A. Francisco Director, Economy and Environmental Programme for Southeast Asia, International Development Research Centre THE ECONOMICS OF AND INSTITUTIONS FOR ADAPTATION TO CLIMATE CHANGE IMPACTS: A REGIONAL OUTLOOK FOR SOUTHEAST ASIA 2.20 pm – 3.35 pm

Session IV: POLITICAL TRENDS IN MALAYSIA, THAILAND, INDONESIA, AND VIETNAM Chair: Dr David Koh Fellow, Institute of Southeast Asian Studies Panellists: (1) Professor Lim Teck Ghee CEO, Centre for Policy Initiatives MALAYSIA’S PROSPECTS: RISING TO OR IN DENIAL OF CHALLENGES? (2) Dr Thitinan Pongsudhirak Director, Institute of Security and International Studies, Thailand THAILAND’S TRANSFORMATION (3) Associate Professor Vedi R. Hadiz Department of Sociology, National University of Singapore INDONESIA A DECADE AFTER REFORMASI: CONTINUITY OR CHANGE? (4) Professor Carlyle A. Thayer Inaugural Frances M. and Stephen H. Fuller Visiting Professor, Centre of Southeast Asian Studies, Ohio University VIETNAM: ONE-PARTY RULE AND THE CHALLENGE OF CIVIL SOCIETY

3.35 pm – 3.50 pm

Tea

3.50 pm – 5.05 pm

Session V: Chair:

SURVEYING ECONOMIC ENVIRONMENTS AND THEIR CHALLENGES IN SOUTHEAST ASIA Dr Denis Hew Senior Fellow, Institute of Southeast Asian Studies

Panellists: (1) M.R. Dr Pridiyathorn Devakula Former Central Bank Governor and Finance Minister of Thailand THE NEEDED CHANGES IN THE REGION’S FINANCIAL MARKETS (2) Dr Le Dang Doanh Member of the Board and Senior Fellow, Institute of Development Studies, Hanoi, Vietnam VIETNAM’S ECONOMY IN THE GLOBALIZING WORLD

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(3) Dr Joseph F.P. Luhukay Partner of IndoConsult, Indonesia FINANCE FOR THE UNFINANCEABLE: THE CASE FOR MICROFINANCING IN INDONESIA (4) Professor Rajah Rasiah Professor of Technology and Innovation Policy, Faculty of Economics and Administration, University of Malaya WHERE IS THE MALAYSIAN ECONOMY HEADED? 5.05 pm – 5.45 pm

Session VI: VIOLENT MOVEMENTS IN INDONESIA AND THAILAND Chair: Ambassador Barry Desker Dean, S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore Panellists: (1) Ms Sidney Jones Senior Adviser, Asia Programme, International Crisis Group INDONESIAN JIHADISM: REGROUPING AND REALIGNING (2) Professor Duncan McCargo Professor of Southeast Asian Politics, School of Politics and International Studies, University of Leeds WHAT’S REALLY HAPPENING IN SOUTHERN THAILAND?

5.45 pm – 5.50 pm

Concluding Remarks

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SPEAKERS AND PANELLISTS Anwar Ibrahim Datuk Seri Anwar Ibrahim was Deputy Prime Minister of Malaysia from 1993–98. He served as Minister of Finance for Malaysia from 1991–98. Anwar is also viewed as one of the forefathers of the Asian Renaissance and a leading proponent of greater cooperation among civilizations. He is an ardent supporter of democracy and is an authoritative voice bridging the gap between East and West. Anwar was invited to join the United Malays National Organization (UMNO), the ruling political party in Malaysia, and the government in 1982, by then Prime Minister Mahathir Mohamad. His rise in the party and in the government was meteoric. He was elected in 1984 as Leader of UMNO Youth and in 1986, became a Vice-President of UMNO. He served as Minister of Culture, Youth and Sports in 1983; Minister of Agriculture in 1984; and Minister of Education in 1986, prior to his tenure as Finance Minister and Deputy Prime Minister in the 1990s. Anwar was also Chairman of the Development Committee of World Bank and International Monetary Fund in 1998. During his tenure he strongly endorsed the initiatives of debt cancellation and reprieve for poor countries, particularly those in Africa. During his tenure as Finance Minister, Malaysia enjoyed unprecedented prosperity and economic growth and joined the ranks of other Asian countries as an “Asian Tiger”. Anwar’s impact on the economy was immediate. Shortly after becoming Finance Minister, Euromoney named him one of the top four finance ministers and in 1996, Asiamoney named him Finance Minister of the Year. He was also Newsweek International’s “Asian of the Year” in 1998. Since 2004 he has held lecturing positions at St Anthony’s College at Oxford, the School of Advanced International Studies at Johns Hopkins University and at the School of Foreign Service in Georgetown University. Anwar was recently appointed as Honorary President of the London-based group AccountAbility as well as Chairman of the Beirut-based Foundation for the Future. Anwar is also currently advisor to the People’s Justice Party (Keadilan), Malaysia. He resides in Malaysia with his wife and six children.

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Speakers and Panellists

Chin Kin Wah Chin Kin Wah was appointed Deputy Director of ISEAS with effect from 3 May 2005. He is a Singaporean who joined ISEAS as Senior Fellow in the Regional Strategic and Political Studies Programme in 2002. Prior to that he was an Associate Professor in Political Science at the National University of Singapore. Chin obtained his B.Sc. (Econ) and Ph.D. in International Relations from the London School of Economics and Political Science. He has held visiting appointments at Harvard University; the Centre for International Studies as well as the Asia Research Centre of the London School of Economics; and the Centre for International Studies, University of Toronto. He has published widely on Asia-Pacific strategic and regional security issues, major power policies towards Southeast Asia, ASEAN regionalism and institution building among others. His duties at ISEAS include assisting the Director in the development and overall coordination of research programmes. Pridiyathorn Devakula M.R. Pridiyathorn Devakula is a graduate of Wharton School, MBA Class of 1970. He started his career as a commercial banker in 1972. After almost twenty years working with Thai Farmers Bank (now called Kasikorn Bank), he entered politics as a government spokesman for few months and later became Deputy Minister of Commerce later for one and a half years. In 1973, he was appointed the first President of Export-Import Bank of Thailand where he worked for eight years before he was appointed Governor of The Bank of Thailand in 2001. He resigned from The Bank of Thailand in October 2006 to join the new government then as Deputy Prime Minister and Minister of Finance. He voluntarily resigned from the cabinet at the end of February 2007. Herminia A. Francisco Dr Francisco has a Ph.D. in Agricultural Economics with specialization in environment and natural resource issues. She taught for more than ten years at the University of the Philippines in Los Banos where she actively pursued research work and published on the economics of soil erosion, valuation and pricing of environmental services, and impact assessment, among others. After serving as Deputy Director of the Economy and Environment Program for Southeast Asia (EEPSEA) for several years, she took over as

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Director in January 2007. EEPSEA provides research and training support to the application of economic tools in analysis of environmental problems and natural resource management. It has been providing funding and capacity-building support to researchers and governments in developing countries in the region for about fourteen years now. Last year, the Program supported a number of studies on the economics of adaptation to climate change impacts. She will be presenting the findings of those studies in this forum. Vedi R. Hadiz Vedi R. Hadiz is an Associate Professor at the Department of Sociology, National University of Singapore. He is a political sociologist of Indonesia/ Southeast Asia. Among his books are: Workers and the State in New Order Indonesia (1997), Re-organising Power in Indonesia: The Politics of Oligarchy in an Age of Markets, co-authored, (2004) and Empire and Neoliberalism in Asia (2006). He recently completed a single-authored book manuscript entitled The Localization of Power in Post-Authoritarian Indonesia: A Southeast Asia Perspective. He has published as well in international journals such as Development and Change, Pacific Review, Third World Quarterly, Journal of Development Studies, Indonesia, Journal of Contemporary Asia, Critical Asian Studies, and Democratization. Takashi Inoguchi Professor Takashi Inoguchi is a well-known Japanese political scientist specializing in political theory, comparative politics, Japanese politics, international relations and international security in the Asia-Pacific region. He was the Senior Vice-Rector of the United Nations University (UNU) at the rank of Assistant Secretary-General from April 1995 to 1997, and was President of Japan Association of International Relations (2000–2002). Professor Inoguchi received his Bachelor’s and Master’s degrees in International Relations from the University of Tokyo in 1966 and 1968 respectively. He obtained his Ph.D. in Political Science from the Massachusetts Institute of Technology (MIT) in 1974. From 1974 to 1977, he served as Associate Professor at the Institute of International Relations, Sophia University, Tokyo, and in 1977 joined the Institute of Oriental Culture, where he has been Professor of Political Science since then until 2005. Professor Inoguchi has also held research and teaching positions outside of Japan, including at the Universite de Geneve (1977–78), Harvard University (1984), Australian National University (1986), University of

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Speakers and Panellists

Delhi (1989), Aarhus University (1990), Johns Hopkins University (1990), Universitas Gadjah Mada (1990), the University of California, Berkeley (1993), and Beijing University (1993). He is currently Professor of Political Science at Chuo University in Japan. Professor Inoguchi has served on the editorial or advisory boards of journals such as Japanese Journal of Political Science, International Relations of the Asia-Pacific, Journal of Conflict Resolution, European Journal of International Relations, American ASIAN Review, Journal of East Asian Studies, and Review of International Studies. He is also a member of the Government’s Economic Council, the Council for Stabilization of National Life and the Academic Council. Some of his more recent publications include: Federalism in Asia (2007), The Uses of Institutions: The U.S., Japan and Governance in East Asia (2007), and Political Cultures in Asia and Europe: Citizens, States and Societal Values (2006). Sidney Jones Sidney Jones is Senior Adviser to the Asia programme of the International Crisis Group (ICG), based in Jakarta. From 2002–2007, she was Director of ICG's Southeast Asia office. Before assuming her appointment with ICG she spent fourteen years as Asia Director of Human Rights Watch. Sidney’s expertise is on Indonesia, terrorism in Southeast Asia and Islam in Southeast Asia. She works on the sources of conflict and violence in the region, with particular focus on Indonesia, and has examined separatist conflicts (Aceh and Papua, Mindanao), communal conflicts (Poso, Moluccas), and ethnic conflict (Kalimantan). She and her team have also worked on Islamic radicalism, producing a series of reports on the Jemaah Islamiyah and its operations in Indonesia and the Philippines. Prior to joining Human Rights Watch, Sidney was the Indonesia and Philippines researcher at Amnesty International in London. From 1977 to 1984, she was a programme officer with the Ford Foundation, first in Jakarta, later in New York. During this time, she also studied Islam and politics in Indonesia, living in a traditional Muslim boarding school in East Java. She holds degrees in Oriental Studies and International Relations from the University of Pennsylvania and spent a year at Pahlavi University in Shiraz, Iran. Rikki Kersten Rikki Kersten is a graduate of Adelaide and Oxford universities, where she majored in modern Japanese history. After serving in the Australian diplomatic service for five years (including a posting to the Australian

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embassy in Tokyo), Rikki moved to the History Department at the University of Sydney where she was Lecturer and subsequently Senior Lecturer in Modern Japanese History. She also spent several years as Research Manager and later Director of the Research Institute for Asia and the Pacific, a think-tank and consulting arm of Sydney University. In 2001, Rikki became Professor of Modern Japan Studies at the University of Leiden in the Netherlands. Her current research interests include political thought in modern Japan (especially democracy and fascism), debates over war apologies and war guilt in Japan, Japanese policy towards North Korea, and contemporary Japanese politics. Her latest publication is The Left in the Shaping of Japanese Democracy, edited by R. Kersten and D. Williams (2006). She is the series editor of the Leiden Series on Modern East Asian Politics and History for Routledge, and the editor of the Japan Series of Oriental Handbooks for Brill. From January 2008, Professor Kersten joins the Department of Political and Social Change in the Research School of Pacific and Asian Studies as a Research Professor. Her area of specialization will be Modern Japanese Political History. K. Kesavapany Ambassador K. Kesavapany began his term as ISEAS Director from 1 November 2002. Prior to his appointment to ISEAS, Ambassador Kesavapany was Singapore’s High Commissioner to Malaysia from March 1997. In his 30-year career in the Foreign Service, he served as Permanent Representative to the United Nations in Geneva (December 1991–March 1997) and held key staff appointments in MFA, including Director of ASEAN, Director of Directorate II (North America and Europe) and Director of Directorate IV (International Organizations and Third World). Ambassador Kesavapany was an active participant in the final phase of the Uruguay Round negotiations. He was unanimously chosen as the first Chairman of the WTO’s General Council in 1995. Subsequently, he played a key role in securing Singapore as the venue for the first WTO Ministerial Meeting in 1996. Ambassador Kesavapany, a Singaporean, is married to Padmini and has two sons. Tommy Koh Tommy Koh is Ambassador-At-Large at the Ministry of Foreign Affairs, and Chairman of the Institute of Policy Studies and the National Heritage

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Board. He was formerly Dean of the Law Faculty at NUS. He had served as Singapore’s Permanent Representative to the UN in New York and Ambassador to the United States of America, Canada and Mexico. He was also the President of the Third UN Conference on the Law of the Sea and chaired the Earth Summit. He was the founding Chairman of the National Arts Council and the founding Executive Director of the AsiaEurope Foundation. He had served as the UN Secretary-General’s Special Envoy to Russia, Estonia, Latvia and Lithuania. He was also Singapore’s Chief Negotiator for the U.S.-Singapore Free Trade Agreement. He has chaired two dispute panels for the WTO. Norbert Lammert Dr Lammert is President of the German Bundestag. He studied political science, sociology, modern history and social economics at the University of Bochum and the University of Oxford (England) from 1969 to 1975; graduated in 1972 and obtained doctorate in social sciences in 1975. He worked as a lecturer of political science at the universities of Bochum (economics department) and Hagen (public administration). Dr Lammert has also published on party research as well as on issues relating to economic and social-policy problems. He has been Deputy Chairman of the Konrad Adenauer Foundation since March 2001 and Member of the German Bundestag since 1980. Dr Lammert served as Parliamentary State Secretary at the Federal Ministry of Education and Science from 1989 to 1994, at the Federal Ministry of Economics from 1994 to 1997, and at the Federal Ministry of Transport from 1997 to 1998. He was also Vice-President of the German Bundestag from October 2002 to 18 October 2005, and President of the German Bundestag since 18 October 2005. Le Dang Doanh After retired from Government duties in July 2007, Le Dang Doanh joined the first private, independent Institute of Development Studies in Hanoi in November 2007. He served as Advisor of the Minister of Planning and Investment from 2001 to 2007, from 1993–2001 as President of CIEM, as Member of the Advisory Premier Minister Research Commission from 1993–2006. He was Senior Expert in the Office of General-Secretary of the Communist Party of Vietnam, Nguyen Van Linh in the period 1998–90. Le Dang Doanh graduated from Technical University Leuna-Merseburg in 1967 and holds a Ph.D. from the University of National Economics in Hanoi.

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Lim Teck Ghee Lim is currently CEO of the Centre for Policy Initiatives as well as a Professorial Fellow with the University College of Sedaya International (UCSI). Prior to this, he was a Regional Advisor with UNESCAP (1994–99) and Senior Social Scientist at the World Bank, Washington D.C. (1999–2005). On return to Malaysia, he was Director of the Centre for Public Policy Studies, ASLI in 2005–2006 and coordinator of the report “Proposals for the Ninth Malaysia Plan”. He has a Ph.D. from the Australian National University and has taught in various universities in Malaysia, Australia and the United States. He has written extensively on socio-economic development issues in Malaysia and Southeast Asia. He can be reached at: Center for Policy Initiatives . Joseph F.P. Luhukay Jos Luhukay has a Ph.D. in Computer Science from the University of Illinois at Urbana Champaign, where he stayed on as Visiting Professor. He returned to Jakarta in 1983 and helped start a school of Computer Science at the University of Indonesia, and left the university in 1989 to join Bank Niaga as Vice President of Information Technology. His last executive position was as Senior Vice President of Systems and Operations, which he held until 1994. After that, he served as member of the Bank’s Advisory Committee until 1995. In September 1997, Dr Luhukay was recruited by the Government of Indonesia to serve as COO of the Jakarta Initiative Task Force, a unit set up to help mediate private sector debt restructuring. In February 2000, Jos joined Ernst & Young as Partner. Dr Luhukay was appointed President Director of PT Bank Lippo in April 2003. During his tenure, Bank Lippo underwent a thorough change in governance and performance turn-around which brought it back into profitability. It changed ownership twice in his first thirty months with the bank, during which time shareprice increased more than 700 per cent. The bank was awarded the Presidential Award in IT Governance in August 2003. For his role in Bank Lippo, SWA, the largest business magazine in Indonesia, named Jos the “Best CEO 2006” with the highest ratings ever achieved in the seven years of the award’s history. Since 1 October 2006, Jos Luhukay served as Partner in IndoConsult, a 38 years old consulting firm in Indonesia. On 13 November 2006, he was appointed by a presidential decree to serve as a member of the National Council on Information & Communications Technologies, an advisory

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body tasked with advising the President of the Republic of Indonesia in policy and strategy matters. Duncan McCargo Duncan McCargo is Professor of Southeast Asian politics at the University of Leeds, and a leading specialist on contemporary Thailand. He has authored or edited eight volumes, including studies of the Thai press, and the 1997 political reform process. Committed to fieldwork-based research, McCargo spent the 2005–2006 academic year in Pattani, Southern Thailand. He then held a 12-month Senior Fellowship at the National University of Singapore’s Asia Research Institute, writing up his findings into a book on the Southern Thai conflict which is now forthcoming from Cornell University Press. Ong Keng Yong Mr Ong Keng Yong was the Secretary-General of ASEAN (Association of Southeast Asian Nations) from 1 January 2003 to 31 December 2007. Mr Ong joined the Singapore Ministry of Foreign Affairs (MFA) in June 1979 and served in diplomatic posts in Saudi Arabia, Malaysia and the United States of America from 1984 to 1994. Mr Ong was the Ambassador of Singapore to India and Nepal from 1996 to 1998. He was the Press Secretary to the Prime Minister of Singapore and concurrently the Deputy Secretary in the Ministry of Information, Communications and the Arts from September 1998 to December 2002. Between 1999 and 2002, he was also the Chief Executive Director of the People’s Association, a grassroots-based community development organization in Singapore. Mr Ong graduated from the University of Singapore and Georgetown University (Washington D.C., USA). Surin Pitsuwan Dr Surin Pitsuwan is Secretary-General of the Association of Southeast Asian Nations (ASEAN). He earned his Ph.D. in Political Science and Middle Eastern Studies from Harvard University. He had some teaching experiences at Thammasat University in Bangkok and the American University in Washington, D.C., where he taught Southeast Asian Affairs. He then entered Thai politics and has been elected as MP of his hometown, Nakorn Si Thammarat, for eight times since 1986. He was appointed Minister of Foreign Affairs from 1997 to 2001. He served as Chair of the ASEAN Ministerial Meeting and the Chair of the ASEAN Regional Forum (ARF) in 1999–2000. Upon leaving the foreign affairs portfolio

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in mid-2001, Dr Surin was appointed a member of the Commission on Human Security of the United Nations until 2003. He has also been on the Advisory Board of a number of international organizations such as UN Human Security Trust Fund, the International Crisis Group (ICG) and the Council on Foreign Relations in New York. He has been involved in several peace-creating situations including in East Timor, Aceh and also the southern part of Thailand. As Secretary-General of ASEAN, Dr Surin will be in this capacity until 31 December 2012. Thitinan Pongsudhirak Dr Thitinan Pongsudhirak is Director of Chulalongkorn University’s Institute of Security and International Studies (ISIS) in Bangkok. He has authored a host of articles and book chapters on Thailand’s politics, political economy, foreign policy, and media as well as ASEAN and East Asian security and economic cooperation. He is frequently quoted and his op-eds have regularly appeared in international and local media outlets, including a column in the Bangkok Post. Dr Thitinan earned his Ph.D. from the London School of Economics where his work on the political economy of the Thai economic crisis in 1997 was awarded the United Kingdom’s Best Dissertation Prize. His recent publications include: “The Malay-Muslim Insurgency in Southern Thailand” in Andrew T.H. Tan (ed.), Handbook of Terrorism and Insurgency in Southeast Asia (2007); “Thaksin’s Political Zenith and Nadir” in Southeast Asian Affairs 2006 (2006); “World War II and Thailand After 60 Years: Legacies and Latent Side-Effects” in David Koh (ed.), Legacies of World War II in South and East Asia (2007); and a co-authored Thai-language book, Thailand’s Trade Policy Strategy and Capacity (2007). Euston Quah Professor Euston Quah is Head of Economics, and Associate Chair of Research in the School of Humanities and Social Sciences at the Nanyang Technological University (NTU). Prior to this, he was Vice-Dean, Faculty of Arts and Social Sciences at the National University of Singapore (NUS); Deputy Director of the Public Policy Programme (now called the Lee Kuan Yew School of Public Policy); Founding Director of the Singapore Centre for Applied and Policy Economics (SCAPE); and headed the economics department at NUS. He is a prolific writer with more than forty peer reviewed publications in international journals such as Applied Economics; World Development; Environment and Planning; International Review of Law and Economics;

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Journal of Public Economic Theory; Journal of Environmental Management; American Journal of Economics and Sociology; and some five books including Cost-Benefit Analysis, 5th edition with E.J. Mishan (2005); Siting Environmentally Unwanted Facilities, with K.C. Tan (2002) and Economics and Home Production (1993). He has a forthcoming book entitled Principles of Microeconomics (to be published in early 2008) with Gregory Mankiew (former Chairman of U.S. Council of Economic Advisors and Harvard Professor). His work on measuring non-market goods has received good reviews in prestigious international journals such as Economic Journal, Journal of Economic Literature, and Journal of Labour Economics. Professor Quah had published some first Singapore studies relating to the environment such as the first cost of air pollution study of Singapore; the first study on the trans-boundary haze problem and its costs (published as an individual researcher); and the first study on the social cost of smoking in Singapore (published in the Singapore Medical Journal). He is an advisor to many government ministries and had contributed to a number of key public projects. Professor Quah is Editor of the Singapore Economic Review, Co-Editor of International Gambling Studies (edited at Australian National University), past Associate Editor of the Asian Economic Journal (edited at Chinese University of Hong Kong), and on the editorial board of the ASEAN Economic Bulletin (edited at ISEAS). He had served on the Board of Trustees of ISEAS, Council Member of SIIA, Adjunct Senior Research Fellow of IPS, and presently a VicePresident of the Economic Society of Singapore. C. Rajah Mohan C. Raja Mohan is currently a Professor at the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. Earlier, Mohan was Professor of South Asian Studies at the Jawaharlal Nehru University in New Delhi. He also served as the Strategic Affairs Editor of the Indian Express in New Delhi, and the Diplomatic Editor and Washington Correspondent of The Hindu. Mohan has a masters degree in Nuclear Physics and a Ph.D. in international relations. He was a member of India’s National Security Advisory Board during 1998–2000 and 2004–2006. Mohan was a Jennings Randolph Peace Fellow at the U.S. Institute of Peace, Washington D.C., during 1992–93. His recent books include Crossing the Rubicon: The Shaping of India’s New Foreign Policy (2004) and Impossible Allies: Nuclear India, United States and the Global Order (2006).

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Rajah Rasiah Rajah Rasiah is currently Professor of Technology and Innovation Policy at University of Malaya, and is also distinguished honorary Professorial Fellow at the Maastricht Economic and Social Research and Fraining Centre on Innovation and Technology (MERIT), United Nations University. He obtained his doctorate in Economics from Cambridge University in 1992 and his research specialization includes science and technology policy, learning and innovation, foreign investment, cluster mapping and designing technology roadmaps with fieldwork research experience in Brazil, Cambodia, China, Costa Rica, India, Indonesia, Japan, Germany, Kenya, Korea, Lao, Malaysia, Mexico, Namibia, Philippines, Sri Lanka, South Africa, Taiwan, Thailand, Uganda, Netherlands, and the United States. He has published over 100 internationally refereed articles in journals and books. Among his research books include: Foreign Capital and Industrialization in Malaysia (1995), Industrial Technology Development in Malaysia, edited with Jomo K.S. and Felker G. (1999), Foreign Firms, Technological Capabilities and Economic Performance: Evidence from Africa, Asia and Latin America (2004), Multinationals, Technology and Localization, edited with Yuri Sadoi and Rogier Busser (2008), and Information Hardware Innovation Systems: Uneven Paths in Asia and Africa (2008). He has also undertaken consultancies for UNCTAD, World Bank, UNIDO, UNDP, Harvard Institute of International Development (HIID), Asian Development Bank (ADB), UNESCAP, JETRO, FES and Stanford Research International (SRI). As one of the globally recognized experts on technology, foreign investment and development, he has been one of the commentators of World Investment Report for UNCTAD since 2001 and the Least Developed Economies Report for the UN since 2005. Carlyle A. Thayer Carlyle A. Thayer was educated at Brown University and holds an M.A. in Southeast Asian Studies from Yale and a Ph.D. in International Relations from The Australian National University. He served in Vietnam from 1967–68, conducted field work in South Vietnam in 1972, and has been a regular visitor to Hanoi since 1981. Professor Thayer joined the academic staff at The University of New South Wales in 1979. He has spent his entire career teaching in a military environment, first at The Royal Military College-Duntroon (1977–85) and then at the Australian Defence Force Academy (1986–present). In recently years, Professor Thayer has been seconded to the Asia-Pacific Center for Security Studies in Hawaii

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(1999–2001); Centre for Defence and Strategic Studies at the Australian Defence College (2002–2004); and Australian Command and Staff College (2006–2007). In 2005, Thayer was appointed C.V. Starr Distinguished Visiting Professor in Southeast Asian Studies at the School of Advanced International Studies, Johns Hopkins University, Washington, D.C., where he taught a graduate course on ‘Vietnam in Transition’. Professor Thayer regularly provides commentary on Vietnam to a wide variety of media outlets including the Vietnamese language press. He is the author of over 370 publications including “Political Dissent and Political Reform in Vietnam, 1997–2002”, in Claudia Derichs and Thomas Heberer, eds., The Power of Ideas: Intellectual Input and Political Change in East and Southeast Asia (2006), and “Vietnam’s Regional Integration: Domestic and External Challenges to State Sovereignty”, in Stephanie Balme and Mark Sidel, eds., Vietnam’s New Order: International Perspectives on the State and Reform in Vietnam (2007). Professor Thayer is currently the Inaugural Frances M. and Stephen H. Fuller Visiting Professor at the Centre of Southeast Asian Studies, Ohio University. Yang Jiemian Dr Jiemian Yang was born in Shanghai on 6 October 1951. He received his B.A. at the Shanghai Teachers’ University, M.A. at the Shanghai Institute for International Studies (SIIS), M.A. at the Fletcher School of Law & Diplomacy, and Ph.D. at the Shanghai International Studies University. Currently he is Senior Fellow and President at the SIIS. Concurrently, Dr Yang is on the boards of the Chinese People Institute of Foreign Affairs, the National Association of China-U.S. Friendship, the National Association of American Studies, Shanghai Association of International Relations, Shanghai Association of Taiwan Studies and many other organizations. Dr Yang is also a guest professor/fellow at the PLA National Defense University, Fudan University, Shanghai International Studies University and Soochow University. His honours include National Special Awards, Shanghai Outstanding Talent Award and several Shanghai Awards in Social Sciences. Dr Yang has published many papers or books on international relations and American foreign policies. His most recent books include: Sino-US Relations in Post-Cold War Era: Elaboration and Exploration (1997), SinoUS Relations in Post-Cold War Era: Comparative Studies on Foreign Policies (2000), The Taiwan Issue and the World Configuration of Powers: Changes and Challenges, co-authored (2002), International Terrorism and Contemporary

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International Relations: Impacts and Influence of the “9.11” Attacks, coauthored (2002), International Cooperation on Anti-Terrorism: Thinking Beyond Geopolitics, co-authored (2003), Sino-US Relations in Post-Cold War Era: Crisis Management Comparative Studies (2004), Grand Cooperation: The Changing World and China’s Global Strategy (2005), Grand Matching-up: China-U.S. Mutual Strategies and Policies (2007), Grand Integration: Trends of Asian Economic Cooperation (2007). Dr Yang’s mailing address is Shanghai Institute for International Studies, No.1, Lane 845, Julu Road, Shanghai 200040, China; Telephone number is 86-21-5403-2403(o); Fax number is 86-21-5403-0272(o), and e-mail address is [email protected].

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RAPPORTEURS OF THE REGIONAL OUTLOOK FORUM 2008: SUMMARY REPORT Terence Chong — Summary Report Editor and Coordinator of ROF 2008 Terence Chong is Fellow at the Institute of Southeast Asian Studies. Emillia Amin — Rapporteur Emillia Amin is a Research Associate at the Institute of Southeast Asian Studies. Sanchita Basu Das — Rapporteur Sanchita Basu Das is a Research Associate at the Institute of Southeast Asian Studies. Mustafa Izzuddin — Rapporteur Mustafa Izzuddin is a Research Associate at the Institute of Southeast Asian Studies. Stanislava Kostetskaia — Rapporteur Stanislava Kostetskaia is an Intern at the Institute of Southeast Asian Studies. Lee Poh Onn — Rapporteur Lee Poh Onn is Fellow at the Institute of Southeast Asian Studies. Deepak Nair — Rapporteur Deepak Nair is a Research Associate at the Institute of Southeast Asian Studies. Karyn Wang — Rapporteur Karyn Wang is a Research Associate at the Institute of Southeast Asian Studies.

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