2022/60 “The Endangered Malaysian Artisanal Fisherman: Battered by Climate Change and Covid-19” by Serina Rahman
EXECUTIVE SUMMARY
- Malaysia’s artisanal fishermen are beginning to suffer the impacts of climate change, which include more frequent extreme weather, changes in fish species availability and behaviour, and rising sea-levels.
- These climate change impacts come on top of harmful effects arising from coastal development, reclamation, transboundary pollution and run-off from land, which damage marine habitats that are breeding and feeding grounds for fish species.
- Covid-19 management measures further disrupted supply chains and market access for customers. Rural fishing communities were also infected as younger residents brought the virus home from surrounding factories and other work clusters. With rampant misinformation on vaccine efficacy, some lives were lost due to Covid-19 complications. Nevertheless, some innovations such as the launch of online sales platforms and civil society initiatives to redistribute unsold fish helped to mitigate their plight.
- More needs to be done to protect endangered artisanal fishermen and their intangible heritage as they are key to Malaysia’s long-term marine environmental sustainability and food security.
*Serina Rahman is Visiting Fellow at the Malaysia Studies Programme at the ISEAS – Yusof Ishak Institute.A conservation scientist and environmental anthropologist, she is fascinated with all facets of Malaysia’s rural outskirts.
ISEAS Perspective 2022/60, 9 June 2022
INTRODUCTION
Malaysia’s artisanal or small-scale fishermen are symbolic of the nation’s long-standing fisheries heritage. With a total coastline of 4,675 km, nearshore fishing has been the backbone of its coastal communities throughout the ages, but is now a traditional natural resource-based livelihood that stands to be lost.
Any analysis of the fisheries sector, especially with regards to changes in fish landing volumes or environmental and other impacts must differentiate between the myriad types of fishermen. Conditions, complications and obstacles faced are varied and unique.
After a brief immersion into the world of artisanal fishers, this paper will examine the impact of both climate change and the recent Covid-19 pandemic on Malaysian artisanal fishermen, citing in particular, observations of a fishing community in southwest Johor.[1] A brief analysis of efforts to help these communities overcome these challenges concludes the discussion.
UNDERSTANDING MALAYSIA’S ARTISINAL FISHERS
In the past, artisanal fisherfolk (both men and women) would only need to row out in small wooden boats, with or without sails, to nearby fishing spots as there was little need to go very far out to get a substantial catch. Today, they use mostly fiberglass vessels of less than 22 feet (6.7 metres) with small outboard engines of less than 40 horsepower, and fish within five nautical miles from shore.[2] They fall under the Fisheries Department’s classification of inshore and nearshore fishermen who extract resources within Zone A. Their equipment includes fish traps, floating gill nets, cast nets, scoop nets, traditional long-lines (rawai) and the basic rod and line.
Depending on the tide, wind and weather, these fishermen spend a total of between five to nine hours at sea, including the time required to catch bait fish, often heading out late at night or just before the break of dawn. The rest of their day is spent onshore making and repairing nets, engines and boats. They do not stay out at sea for extended periods of time like the purse seiners and trawlers which fish further away.
It is often assumed that fishermen are the main cause of fish stock depletion, but artisanal fishers do little damage compared to large-scale fisheries which are known to use large weighted trawl nets of more than two kilometers in length that are dragged across the seabed, destroying everything in its path, and do not discern between target species and bycatch.[3]
The importance of small-scale fishermen in terms of coastal community food security and incomes is hugely underestimated (Teh, L.C.L. and Pauly, D., 2018). Seafood is the most consumed protein for Malaysian families; almost double that of Thailand and China (Teh, E. 2012). While the government tends to support and invest in large-scale commercial fisheries (Lim, T.G. and Valencia, M.J., 1990), small-scale fisheries actually make up 65 percent of all Malaysian fishermen (Shaffril et al., 2017). However, their combined impact is minimal compared to the extent of damage that can be incurred with a single trawl net.[4]
Climate change is already beginning to have a severe impact on these marginalised and vulnerable communities. In Malaysia, most artisanal fishermen fall under the bottom 40 percent (B40) economic percentile, suffering multi-dimensional poverty ranging from insufficient income to education, healthcare and human insecurity (Solaymani, S. and Kari, F. 2014; Zainudin, L.M. et al., 2019; Dzulkifly D., 2019). While they make up the majority of the sector, they often earn the least,[5] given their high equipment maintenance costs (nets, boats, engines), low fish landing prices paid by middlemen, and debts owed to those same middlemen.[6]
While already beginning to suffer the impacts of climate change, coupled with natural habitat damage from coastal development, fisheries communities then had to suffer the consequences of the recent Covid-19 pandemic. Distribution channels were scuttled during myriad movement lockdowns, buyers could not reach seafood markets and the economy as a whole was debilitated. This is in addition to the onslaught of the virus itself, which managed to reach and infect rural fishing communities who initially disbelieved its severity and the necessity and safety of vaccines.
CLIMATE CHANGE IMPACTS ON MALAYSIAN FISHING COMMUNITIES
The link between climate change and induced sea-level rises on the whole of Malaysia has already been documented (Zubaidi, 2010; Md. Din et al., 2012), and also observed in the area of focus, Mukim Tanjung Kupang, between 2013 and 2022.[7] This has multiple effects on fishing communities; not only on displacement as coastal erosion endangers homes and physical safety, but it also results in saltwater damage to subsistence crops which adds to food insecurity (Shaffril et al. 2017; IPCC, 2019). A 2015 National Coastal Erosion Study reported that 15 percent of Malaysia’s shoreline is eroding, with one-third in critical condition.[8]
Poor fishing communities often live in homes with poor structural integrity, leaving them more vulnerable to strong winds and extreme weather. Warming sea surface temperatures increase the frequency of severe storms and typhoons; extreme wind speeds are already occurring (Razali, A.M. et al. 2010) and the number of days of extreme rainfall is more than the 90th percentile at a number of meteorological stations since the 1980s (Wan Azli, W.H. 2010).
Studies on the east coast of Peninsular Malaysia have recorded a 20 percent drop in catch over the monsoon season (Jafar-Sidik, M. et al. 2012), but west coast fishermen have noted that monsoon seasons and wind directions have changed noticeably over the past few decades.
Fishermen in Mukim Tanjung Kupang have reported more frequent and severe storms, and that while in the past, winds remained consistent and predictable over a day, but would now change over the span of a few hours. This adds severe risks to their work conditions. It also reduces their ability to head out to sea as their small boats are unable to overcome high waves and heavy rainfall.[9]
The loss in fishing days directly affects fishermen’s livelihoods through reduced fish landing incomes, which then affects their ability to provide food and cash for their families.[10] The extreme weather also negatively impacts those who depend on supplementary incomes through tourism and agriculture.
Marine habitats are also greatly affected by changes in temperature, severe storm surges and shifts in monsoonal patterns (Cheung, W. et al. 2016). More frequent rainstorms can lead to harmful algal blooms which affect fisheries species availability (van der Lingen et al. 2016), as well as spawning patterns and fish migration (Ottersen, G. et al. 2009). Studies have shown that myriad coastal locations across Malaysia have recorded significant increases in both daytime and night-time temperatures (Kwan, M.S. et al. 2011).
These studies are corroborated by reports from Mukim Tanjung Kupang, where unusually cool or unusually warm waters have adversely affected crab catch and created unseasonably high volumes of algal growth, which has hampered fishing efforts and destroyed nets.
Seasons for catching specific species have also changed, and it is no longer possible to predict the onset of prawn or squid catches as they no longer follow past patterns.[11] As mangrove coasts and even seagrass meadows erode under severe wave and storm impacts, fish species’ habitats are lost, affecting their natural movements and presence within the seascape, as well as feeding, breeding and nursery grounds. There is now less fish to catch – even if they can be caught.
Unfortunately, climate change impacts do not occur in isolation. Many fishing communities are already suffering natural habitat damage as a result of coastal development, sand-mining, dredging and reclamation. Narrow channels such as the Johor Strait, suffer the consequences of development on both coasts, as well as transboundary pollution, including industrial, agricultural and waste run-off from land.[12]
As shorelines expand, seas become smaller. Artisanal fishermen struggle to get to sea as marine areas are carved out for private or industrial use. They either lose access completely or have to travel a long way around new islands, adding to petrol costs even as they have to navigate new, often unmarked, shallows and dumped construction waste.
Seagrass meadows are a key habitat in estuaries especially along the coasts that artisanal fisherfolk depend on; where, in tandem with coastal mangroves, fisheries species breed, feed, and mature to adulthood and reproductive stages. Coastal development that damages seagrass meadows stands to incur an ecosystem services value loss of at least USD$57,531 per hectare per year.[13] This is but a fraction of the overall costs that can result in rampant and unsustainable development in fisheries areas (Sahabat Alam Malaysia, 2020).
As marine habitat damage occurs all along the coastline, fishermen from other areas move to the remaining healthy areas to garner a catch, collectively adding pressure onto an already limited resource, further compounded by global decreases in fish stock. Climate change impacts are one of the very last straws that can break the traditional fishermen.
COVID-19 IMPACTS ON MALAYSIAN FISHING COMMUNITIES
In 2020, a new unexpected calamity arrived in the form of the Covid-19 pandemic. Fishermen’s fortunes across the country floundered. With movement control restrictions (MCO) in place, supply chains were disrupted, and many jetty-based fish markets lost customers as people could not travel more than 10 km from their areas of residence. Larger central markets were forced to shut as workers became infected, especially as global studies suggested that the original source of the virus was a seafood market.
Border closures had a severe impact on fishermen in Johor and Selangor. In the early days of the border closures (March-May 2020), as export processes were being sorted out, much of the fish produce that was meant for export to Singapore were left stranded. This was in addition to oversupply due to domestic travel restrictions and Malaysians’ inability to travel to fish markets.
On the east coast of Peninsular Malaysia, some fishermen were forced to dump their catch at sea, while others resorted to giving it away.[14] While this was helpful for those in need, the fishermen themselves had little to no income. Fish that were sold suffered drastically lower prices given the oversupply. In Mukim Tanjung Kupang, seafood prices fell by at least 15 to 30 percent during this period, and initially much was left unsold.[15]
Between July and September 2021, just as exports to Singapore were returning to relatively acceptable levels, the Jurong Fisheries Port and several other smaller seafood markets were forced to close as a result of Covid infections.[16] This meant that stocks from Selangor and the east coast of Peninsular Malaysia were stuck in Johor, resulting in excess supply. With restaurants and other F&B outlets in Johor used to a Singaporean clientele still closed, there was very little demand for seafood beyond those needed for local personal consumption.
In southwest Johor, a similar scenario occurred. The fisherfolk in Mukim Tanjung Kupang struggled for most of 2020, as their location is more than 22km from the nearest town and affected primarily by movement restriction orders. Pre-Covid, their market had buyers from Johor Bahru, Masai, Pontian, Kluang and Singapore, areas more than an hour’s drive or an immigration crossing away. Much of their catch was therefore unsold and the community suffered.[17]
INNOVATIONS TO OVERCOME COVID-INDUCED OBSTACLES
In light of these difficulties, the seafood market studied (Pasar Pendekar Laut) raised funds to support fishermen, then donated the seafood to those in need in Johor Bahru (JB). This was a timely collaboration between civil society groups as many Johor residents had lost jobs due to border closures.[18] The JB homeless who were relocated to a camp in Gunung Pulai also received this seafood.[19] In this way, donors were able to provide some fishing income to the community, the seafood was not wasted and the poor got their necessary protein. The fishermen were also empowered by their ability to help others in more difficult situations than themselves.
Other innovations included applications that brought seafood and farmers’ markets online, with many stepping forward to help rural community groups overcome technical hurdles, including inconsistent internet access, and the handling of orders and delivery.[20]
Fishing became a safety-net for villagers who lost jobs during the first MCO. In Mukim Tanjung Kupang, several residents headed out to sea to bring home food and any available cash income. However, this also added pressure to already limited resources.
Covid-19 was initially thought to only occur in town centres, and would not reach the rural fringes. During subsequent MCOs, many fringing rural communities were severely affected by the virus. This was primarily because younger residents worked in factories which were the main pandemic clusters at the time. They then infected others at home, including the elderly and unvaccinated. In early 2021, much of the vaccination focus was in Selangor and Sarawak. Vaccinations only began to roll out beyond the Klang Valley as case numbers rose in more rural states.
At its worst, Mukim Tanjung Kupang had more than 500 new infections daily. Several, including elderly fishermen, died of Covid-19 complications. While this encouraged some to get vaccinated, it has been hard for these communities to ‘rest’ post-vaccination, as is the recommended procedure. Work at sea or in farms cannot stop. Uncorroborated reports of post-vaccination complications and deaths have since dissuaded many from taking booster shots.
While civil society organisations were often the first to provide assistance to fishermen,[21] official financial aid was available at both the state and federal levels. However, fishermen struggled to access these for lack of information and technological know-how (many of the application processes were done through online applications and websites), unsupportive village heads, and limited means to head into town centres to deal with administrative processes.[22]
Most fishermen are not registered under the Employment Provident Fund (EPF), the Social Security Organisation (SOCSO) or the Inland Revenue Board (LHDN), the mechanisms through which much of the promised Covid-19 aid was distributed. This made it harder for them to access assistance. Long-term observations in Mukim Tanjung Kupang have shown that associations meant to represent the fishermen have not been transparent or fair in their assistance and distribution of promised aid.[23]
THE WAY FORWARD
There are multiple difficulties facing the small-scale traditional fisherman.[24] In the case of those in Mukim Tanjung Kupang, the halt in coastal development during Covid-19 lockdowns proved that climate change impacts had hit home.[25] While past reductions in fish landings could be blamed on reclamation, dredging and other issues, none of this existed during the first year of the pandemic. Yet, catch volumes fell drastically. Increasingly frequent extreme weather phenomena and changes in fisheries species availability and behaviour were observed between March 2020 and March 2022.
Ongoing efforts by the authorities to help fishermen in light of global decreases in fish catch include the provision of fishing equipment and supplies to licensed fishermen, facilitating the learning of alternative skills and developing supplementary sources of income such as aquaculture and community farming. The aquaculture and community farming programmes were strengthened during the Covid-19 recovery period.[26]
However, not all of these opportunities will work, especially for older fishermen. While aquaculture seems similar to fishing, it is a vastly different occupation, and requires capital. Most fishermen cannot do the required paperwork, nor have the financial credibility to garner grants or loans to start alternative businesses. While subsistence farming might be common, a lack of land titles complicates the possibility of shifting to larger-scale farming. Garnering access to markets for farmed produce is an arena completely alien to those who live, work and breathe by the sea.
Purported aid and suggested alternative livelihoods must be stratified to meet the needs and abilities of different types of fishermen. While some existing initiatives may be relevant and applicable to fishermen with more access to capital or to those at higher economic levels within the fisheries industry, they may not apply to small-scale low-income fishing communities.
The key to artisanal fishermen’s success is access to and ownership of boats, engines and equipment; many fishermen are in severe debt. Capacity-building needs to revolve around more relevant sectors such as boat and engine repair and passenger boat captain training and licenses. The provision and maintenance of jetties and the protection of fishing grounds are necessary for fishermen’s long-term health and well-being. It is also important to ensure fishermen’s navigational safety, which is always compromised when coastal developments occur.
The biggest issue that artisanal fishermen face, however, is fishing licenses. These have traditionally been limited in order to ensure resource viability, but cronyism, at association and other levels, means that licenses are not held by those who actually head out to sea. A fishing license not only enables a fisherman to fish legally, but also gives him access to subsidised petrol and other financial assistance schemes. Many fishing licenses are currently held by individuals who hold positions of power but do not actually spend time at sea. Existing processes for the issue and renewal of licenses need to be revamped and made more transparent.
Ground-up initiatives such as those mentioned earlier are growing across Malaysia, and the Fisheries Department is actively promoting the Fisheries Community concept (MyKomuniti Perikanan) to support fishermen directly through business development, diversification and access to market in addition to grants, training, licenses and other support. Initiatives that provide help directly to fishermen, and which can sidestep entities that try to redirect assistance and opportunities to cronies are vital for the survival of artisanal fishermen.
Grassroots sustainable fishing programmes, community-managed habitats and efforts to improve fish stock or release fry are also essential. Endangered species law enforcement and coastal development environmental impact monitoring must be done effectively. Fisherfolks’ knowledge, climate change observations and input into assistance and training schemes must be taken into consideration when new policies or programmes are devised.
Malaysia’s artisanal fishermen, as well as their craft, skills and knowledge, are an invaluable intangible heritage that stands to be lost if nothing is swiftly done to protect it. Fisherfolk are not ‘lazy’ because they cannot transition to other sectors or jobs. Theirs is work that requires a deep understanding of the sea, an ability to read the weather and an intuitive connection with marine resources. It is difficult work under the harshest of elements that puts their lives at risk, even as they ensure that millions get the seafood that they crave.
These communities are vital for Malaysia’s long-term marine environmental sustainability and food security, and should be accorded the attention and assistance that they deserve and require.
REFERENCES
Cheung, W., Jones, M., Reygondeau, G., Stock, C., Lam, V., and Fröhlicher, T. 2016. Structural uncertainty in projecting global fisheries catches under climate change. Ecological Modelling 325, 57–66. DOI: 10.1016/j.ecolmodel.2015.12.018
Dzulkifly D. 10 Feb 2019. “With many still in the B40 group, minister says previous govt failed farmers, fishermen,” Malay Mail.
IPCC, 2019: Summary for Policymakers. In: Intergovernmental Panel on Climate Change (IPCC) Special Report on the Ocean and Cryosphere in a Changing Climate [H.-O. Pörtner, D.C. Roberts, V. Masson-Delmotte, P. Zhai, M. Tignor, E. Poloczanska, K. Mintenbeck, A. Alegría, M. Nicolai, A. Okem, J. Petzold, B. Rama, N.M. Weyer (eds.)]. Cambridge University Press, Cambridge, UK and New York, NY, USA, pp. 3–35. https://doi.org/10.1017/9781009157964.001.
Jafar-Sidik, M., Aung, T, and Singh, A. 2012. Sensitivity of fish landings to some meteorological parameters: a case study. American Journal of Environmental Sciences 6(2): 177-183.
Kwan, M.S.; Tanggang, F.T. and Juneng, L. 2011. Projected changes of future climate extremes in Malaysia. Paper presented at the National Symposium on Climate Change. 16-17 November, Putrajaya, Malaysia.
Lim, T.G. and Valencia, M.J. (Eds.) 1990. Conflict over Natural Resources of South-East Asia, Oxford University Press, New York, US.
Md Din, A.H.; Mohd Omar, K.; Naeije, M. and Ses, S. 2012. Long-term sea level change in the Malaysian seas from multi-mission altimetry data. International Journal of Physical Sciences 7(10): 1694-1712. DOI: 10.5897/IJPS11.1596.
Ottersen, G.; Kim, S.; Huge, G.; Polovina, J.J. and Stenseth, N.C. 2009. Major pathways by which climate may force marine fish populations. Journal of Marine Systems 79: 343-360.
Razali, A.M.; Sapuan, M.S.; Ibrahim, K. and Sopian, K. 2010. Mapping the annual extreme wind speed analysis from 12 stations in Peninsular Malaysia. Proceedings of the 9th WSEAS International Conference on System Science and Simulation in Engineering (ICOSSSE’10). 4-6 October, Iwate Prefectural University, Japan.
Solaymani, S. and Kari, F. 2014. Poverty evaluation in the Malaysian Fishery Community. Ocean & Coastal Management 95: 165-175.
Shaffril, H.A.M.; Abu Samah, A.; and D’Silva, J. L. 2017. Adapting towards climate change impacts: Strategies for small-scale fishermen in Malaysia. Marine Policy, 81: 196-201.
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Teh, L.C.L. and Pauly, D. 2018. Who Brings in the Fish? The Relative Contribution of Small-Scale and Industrial Fisheries to Food Security in Southeast Asia. Frontiers in Marine Science, 5: 1-9. DOI: 10.3389/fmars.2018.00044.
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ENDNOTES
[1] For more information on this fishing community, refer to: Rahman, S. 2017. The Socio-Cultural Impacts of Forest City. Perspective 2017/42. ISEAS-Yusof Ishak Institute.
[2] Artisanal fishermen usually fish within Zone A as determined by the Fisheries Department (Ministry of Agriculture) which includes nearshore and inshore (estuary and riverine) areas. Refer to: http://www.seafdec.org/fisheries-country-profile-malaysia/
[3] Refer to Bourscheit, A. 18 August 2021. “Trawling bycatch increases risk of marine life extinction,” Earth Journalism Network. https://earthjournalism.net/stories/trawling-bycatch-increases-risk-of-marine-life-extinction; and Steadman, D.; Thomas, J.B.; Villanueva, V.R.; Lewis, F.; Pauly, D.; Deng Palomares, M.L.; Bailly, N.; Levine, M.; Virdin, J.; Rocliffe, S. and Collinson, T. 2021. New perspectives on an old fishing practice: Scale, context and implications of bottom trawling. Flora & Fauna International. https://www.fauna-flora.org/app/uploads/2021/12/FFI_2021_New-perspectives-on-an-old-fishing-practice.pdf.
[4] Refer to Shah, A. 1 September 2021. Depleting fish stocks on Malaysian coast force small-time fishers further into sea. Rappler.com. https://www.rappler.com/environment/depleting-fish-stock-coast-malaysia-forcing-small-time-fishers-further-sea/ and Alam, M.F.; Ishak, H.O. and Squires, D. 2002. Sustainable fisheries development in the tropics: Trawlers and licence limitation in Malaysia. Applied Economics (34(3): 325-327.
[5] Refer to Table 4. Characteristics of Fishing Operations, Selected Boats by Fishing Zones. In Lee, W.C. & Viswanathan, K.K. 2019. Subsidies in the Fisheries Sector of Malaysia: Impact on Resource Sustainability. Review of Politics and Public Policy in Emerging Economies. 1(2) p.83.
[6] Personal observation of artisanal fishermen over the past decade.
[7] The change in king tide height was visible and documented through photographs over the past decade, corroborated by tide table records (of Tuas monitoring station) between 2013 and 2022 (as published by Maritime and Port Authority of Singapore).
[8] Department of Irrigation and Drainage Malaysia. 2015. National Coastal Erosion Study (NCES). http://nces.water.gov.my
[9] Ethnographic observation and reporting by local fishermen in Mukim Tanjung Kupang, especially over the last few years (2020-2022).
[10] The author’s extensive ethnographic observations in this community have revealed that the fishermen here embody the Malay saying “kais pagi, makan pagi;kais petang, makan petang” – scrape [income] in the morning, eat that morning; scrape income in the evening to eat that evening; their daily expenses rely entirely on what they are able to catch and earn on that day. Many are heavily in debt, hence climate change and any other threat to their natural habitats and subsequent fish catch severely affect their ability to meet their basic needs.
[11] Ethnographic observation and reporting by local fishermen in Mukim Tanjung Kupang, especially over the last few years (2020-2022).
[12] Ethnographic observation over the past decade in Mukim Tanjung Kupang as the fishermen coped with changes in the Johor (Tebrau) Strait with the development of Forest City and the Tanjung Piai Maritime Industrial Park which have led to myriad increased difficulties for the local fishermen, as well as accidents and loss of life. Refer to: Rahman, S. 2017. The Socio-cultural impacts of Forest City. Perspective 2017/42. ISEAS – Yusof Ishak Institute. And Rahman, S. 2017. Johor’s Forest City faces critical challenges. Trends in Southeast Asia 2017/3. ISEAS – Yusof Ishak Institute, Singapore.
[13] Rahman, S.A. and Yaakub, S.M. 2020. Socio-economic valuation of seagrass meadows in the Pulai River Estuary, Peninsular Malaysia, through a well-being lens. Marine and Freshwater Research 71: 877-891.
[14] D’Silva, V. 26 October 2021. “Doctor turned fish wholesaler brings Deepavali cheer for the less fortunate,” New Straits Times. https://www.nst.com.my/news/nation/2021/10/739770/doctor-turned-fish-wholesaler-brings-deepavali-cheer-less-fortunate
[15] These findings are part of raw data still being processed for publication by the author in an ongoing study on fish landing volumes and values. Also refer to: Tan, V. 8 August 2021. “As movement curbs persist, Malaysian fishermen and farmers grapple with lower demand and logistics issues,” Channel News Asia. https://www.channelnewsasia.com/asia/malaysia-nrp-fishermen-farmers-logistics-covid-19-2096726
[16] Refer to: Channel News Asia, 18 July 2021. “Fresh fish and seafood stalls ordered to stop operating; stallholders to undergo COVID-19 test.” https://www.channelnewsasia.com/singapore/covid-19-nea-fresh-fish-seafood-stalls-operations-testing-moh-2050646; and Ang, S. 12 September 2021. “Covid-19 cluster’s impact on sales still felt at wet market stalls, Jurong Fishery Port,” The Straits Times. https://www.straitstimes.com/singapore/consumer/covid-19-clusters-impact-on-sales-still-felt-at-wet-market-stalls-jurong-fishery.
[17] Also refer to: Rahman, S. 21 February 2021. “Johor city dwellers hit hard by MCO but rural communities fare worse,” Channel News Asia. https://www.channelnewsasia.com/commentary/johor-mco-extended-impact-rules-new-restrictions-fishing-village-365781
[18] Refer to: Devi, V. 29 July 2021. “Fair market for fishing community,” The Star. https://www.thestar.com.my/news/nation/2021/07/29/fair-market-for-fishing-community. And Rahman, S. 2021. Borderland without Business: The Economic Impact of Covid-19 on Malaysia’s Southernmost State of Johor. Perspective 2021/65. ISEAS-Yusof Ishak Institute, Singapore.
[19] Refer to: Rahman, S. 18 August 2021. “When all else fails, the people mobilize: The Sea Warriors of Johor, Malaysia, act to survive Covid-19 and climate change impacts,” Heinrich Böll Stiftung. https://th.boell.org/en/2021/08/18/sea-warriors-johor.
[20] Refer to: Harper, J. 2 June 2020. “Asia’s fishermen and farmers go digital during virus,” BBC.com. https://www.bbc.com/news/business-52767227
[21] Refer to: Rahman, S. Overcoming the odds and filling the gaps: Malaysian civil society responses to Covid-19. ISEAS-Yusof Ishak Perspective 2020/44.
[22] Refer to: Rahman, S. 25 September 2020. “Covid-19 in Malaysia: Economic Aid or Further Fallout?” Fulcrum, ISEAS-Yusof Ishak Institute. https://fulcrum.sg/covid-19-in-malaysia-new-economic-aid-or-further-fallout/
[23] For more information on issues with some fishing associations, refer to: Rahman, S. 2017. Johor’s Forest City faces critical challenges. Trends in Southeast Asia 2017/3. ISEAS-Yusof Ishak Institute, Singapore.
[24] Refer to: Musa, Z. 3 March 2022. “Fishermen in south Johor beset by challenges at every corner,” The Star. https://www.thestar.com.my/metro/metro-news/2022/03/03/fishermen-in-south-johor-beset-by-challenges-at-every-corner.
[25] Refer to: Musa, Z. 3 March 2022. “Fishermen in choppy waters,” The Star. https://www.thestar.com.my/metro/metro-news/2022/03/03/fishermen-in-choppy-waters.
[26] Refer to: The Star, 15 July 2021. “Fishermen urged to take up aquaculture, fish farming.” https://www.thestar.com.my/metro/metro-news/2021/07/15/fishermen-urged-to-take-up-aquaculture-fish-farming. And The Star, 15 July 2021. “South Johor fishermen want state govt to develop agro-tourism products.” https://www.thestar.com.my/metro/metro-news/2021/07/15/south-johor-fishermen-want-state-govt-to-develop-agro-tourism-products. Note that with regards to the second article, the author’s interviews on the ground indicate that this request is put forward by the South Johor Fishing Association with little to no input from artisanal fishermen. Those interviewed were not entirely comfortable with switching their traditional income source to farming as it required completely different skill sets, land titles that many did not have and myriad other investments and financial capital that they did not have. These fishermen were also not able to apply for grants nor seek assistance due to difficulties dealing with the government bureaucracy; many are also illiterate.
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2022/59 “Foreign Policy & Disinformation Narratives in the 2022 Philippine Election Campaign” by Aries A. Arugay
EXECUTIVE SUMMARY
- President Rodrigo Duterte is leaving with a mixed record of foreign policy accomplishments where he attempted to shift the focus of the country’s foreign relations away from Western countries despite the lack of solid support from the public and the bureaucracy.
- While domestic issues dominated the 2022 presidential elections, one foreign policy issue that emerged during the campaign was the Russia-Ukraine conflict where the presidential candidates weighed in on the neutrality position adopted by President Rodrigo Duterte.
- The Russia-Ukraine conflict became a flashpoint for campaign disinformation as narratives of Duterte’s affinity with Putin as a “strong man” and a decisive leader were heavily promoted.
- Disinformation networks also praised the neutral stance of presidential candidate Ferdinand “Bongbong” Marcos Jr. while it negatively targeted the supposedly pro-Ukraine and pro-Western position of opposition candidate Vice President Leni Robredo.
- Given the 2022 election results, future foreign policy issues in the Philippines will likely be influenced and distorted by disinformation networks and pro-Marcos propaganda.
* Aries A. Arugay is Visiting Fellow at the ISEAS – Yusof Ishak Institute where he manages its Philippine Studies Project. He is also Professor of Political Science at the University of the Philippines-Diliman.
ISEAS Perspective 2022/59, 6 June 2022
INTRODUCTION
As Philippine President Rodrigo Duterte finishes his six-year term, he leaves a mixed record of accomplishments in the country’s foreign policy. His pursuit of an “independent” foreign policy changed the otherwise consistent and predictable approach to the country’s foreign relations. While the republic maintained its sole military alliance with the United States (US), the Duterte administration has explored security cooperation with countries like China, Russia, Israel, Japan and India. The firebrand leader almost abrogated the Visiting Forces Agreement with the US in an effort to bolster the Philippines’ standing as a “free agent” to other possible regional security partners. It took the COVID-19 pandemic and renewed assurances from the Biden administration to save the US-Philippines alliance.[1]
Of all Duterte’s foreign policy “adventures”, his apparent pivot to China is considered the major change in the country’s international position. The populist president expressed confidence and trust in China despite lingering maritime and territorial disputes in the South China Sea and his country’s victory in the Permanent Court of Arbitration against China.[2] Yet, after almost six years of propping China to his domestic audience, Duterte was unable to convince the Filipino public to trust China. In a July 2020 survey, Filipinos’ trust towards China was at its lowest since 2016, the year that Duterte became president. China’s net trust of -37 points is far from how the public positively views the US at +42 net trust rating.[3]
There is also scant anecdotal evidence that Duterte’s foreign policy positions are adopted by the country’s defence and security establishment. This section of the Philippine bureaucracy has remained loyal to traditional allies like the US, Japan, and other Western countries, and is not entirely convinced that veering totally away from established operating practices would be in the country’s interests. In a 2020 survey of more than 600 members of the Philippine security establishment, particularly security sector officials and civilian bureaucrats, their preferred top three security partners were Japan, US, and Australia. China was the least preferred partner, with Russia not far ahead.[4]
It was expected that Duterte’s foreign policy manoeuvres would be a major campaign issue in the 2022 elections. The main question was whether these positions will be maintained by the new presidential administration. Historically, foreign policy issues have never mattered to the Filipino electorate’s making of choices,[5] and that remained true in this electoral cycle. However, the Russia-Ukraine war that started at the beginning of the electoral campaign period in February 2022 made it possible for presidential candidates to express their own stances on this issue. The two major presidential candidates, Bongbong Marcos Jr. and Leni Robredo, expressed opposing positions on this international conflict. While Marcos Jr. agreed with Duterte’s position of neutrality, Robredo adopted a more nuanced position that respects multilateralism, democracy, and human rights.[6]
This paper argues that disinformation narratives that were pro-Russian, anti-US, and pro-China played a role in propping up the “strong man” image of Marcos Jr., attacking Robredo as a “puppet” of Western powers, and stoking fears that a pro-Ukraine position by the government would likely prompt China to be more aggressive towards the Philippines. These disinformation narratives became an important source of campaign capital that benefitted certain candidates while they also distorted and oversimplified complex foreign policy issues and historical facts. As disinformation has most likely played a vital role in the outcomes of the 2022 elections,[7] it can be expected that these narratives about Philippine foreign policy issues will likely not go away in the coming years.
THE RUSSIA-UKRAINE CONFLICT & THE 2022 ELECTION CAMPAIGN
When Russia mobilised its forces to attack Ukraine in February 2022, the initial stance of Duterte was to adopt neutrality,[8] despite the fact that Russia’s invasion was a blatant violation of the United Nations (UN) Charter and the principles of national sovereignty and territorial integrity which the Philippines has historically defended with vigour and consistency. As the chief architect of foreign policy, Duterte strived to foster partnerships with non-traditional partners such as Russia and the populist leader has not hidden his admiration of Russian President Vladimir Putin. In fact, Duterte visited Putin in Russia twice, in May 2017 and February 2019.[9] Duterte’s neutral stance regarding the conflict was aligned with his desire to deepen relations with Putin’s Russia. This policy position was extolled by the Russian ambassador in Manila, stating that this reflected the close personal relationship between the two leaders.[10]
Discussions about the conflict were then transposed to the presidential campaigns and it became a hot topic for the major candidates in the 2022 elections. Duterte’s neutral stance was adopted by Marcos Jr. who said that “I don’t think there is a need to take a stand. We are not involved except for our nationals.”[11] This was supported by his running mate and the president’s daughter Sara Duterte who insisted that her position on the conflict is not even important. On the other hand, opposition presidential candidate and incumbent vice-president Robredo took a different stand by categorically condemning Russia when she said: “I stand in admiration of the Ukrainian people’s courage and resilience, and am proud of their efforts to defend freedom and a rights-based order – ideals that the Filipino people share.”[12]
As expected, these contradictory positions became the object of attention for the mainstream media and the public. However, it was in the realm of social media that these policy positions became interwoven with disinformation narratives. These pieces of fake news ran contrary to established facts, oversimplified complicated historical positions and prior policies, and exaggerated features of politicians to make them appear clever and qualified as the country’s next head of state.
There were three major disinformation narratives that linked the Russia-Ukraine conflict with the 2022 Philippine elections: the pro-Putin-Duterte-Marcos frame; the anti-US-Robredo frame; and the fear of China frame. All of these came from sources that have professed strong support for the Marcos Jr.-Duterte ticket or are loyal supporters of the Duterte administration.[13]
After President Duterte and Marcos Jr. manifested their common neutral stance, social media posts that lauded their position proliferated in the virtual world. In a nutshell, social media influencers and their supporters started massively sharing posts that depicted Putin, Duterte, and Marcos as “strong men” capable of making decisive and swift action when confronted with an existential threat. A critical part of this narrative is that these leaders share the conviction to flex one’s muscles in order to crush one’s enemies.[14] A few fringe academics also provided scholarly scaffolding to this narrative by justifying the position to attack Ukraine as a brilliant move guided by realpolitik.[15] This implied that Marcos Jr. is the rightful successor of President Duterte given their common position on the conflict and their ability to forge good relations with strong leaders like Putin. This also added to the notion that because Marcos Jr. is the direct scion of the country’s former dictator and ally of Duterte, he taps into the extant “authoritarian nostalgia” felt by many Filipinos.[16]
The pro-Russian sentiments among select Filipino politicians, policymakers, and prominent personalities have been embedded in the Philippine political system for several years. News website Rappler has uncovered links between Russia’s disinformation agents, pro-Putin news organisations, with their counterparts in the Philippines. In fact, President Duterte’s visit to Moscow in 2017 included a pledged partnership on “information dissemination” between the communication offices of both governments. It is also noteworthy that works of pro-Russia geopolitical experts such as Adam Garrie were being extensively used by pro-Duterte and pro-Marcos journalists in their writings about Philippine foreign policy issues.[17]
The second disinformation narrative painted the US as a weak country and an unreliable military ally and projected Vice-President Robredo as a US lackey. This two-part allegation has deep historical roots in the country given the colonial and neo-colonial experience of the Philippines under the US. And while the US is highly trusted by the Filipino public in general, the bitter feelings of colonial exploitation and neglect in light of China’s increasing regional aggression have some resonance with Filipino elites and the middle class. Social media posts by supporters of Marcos Jr. and Duterte engaged in negative campaigning that depicts the US as an unreliable ally, given its refusal to send troops to Ukraine.
To further galvanise support for the narrative that Washington cannot be trusted, videos of former dictator Ferdinand Marcos Sr. criticising the US went viral on social media platforms like Facebook. An example is a video of a press conference where Marcos Sr. stated that the US would not be able to immediately help the Philippines in case it invoked the Mutual Defence Treaty since such an act requires approval by the US Congress. According to Vera Files, one of the deputised fact checkers of Facebook in the Philippines, the video posted on Facebook on 28 February received more than 7 million interactions with the late dictator heard saying “What does that mean? That means delay, while we are dying there.” Pro-Marcos social media supporters immediately praised the late dictator for standing up to the US and having the foresight that the superpower is not a dependable ally of the Philippines. Marcos Jr. then is expected to share the political skills of his father in foreign policy.[18]
The more concerning part of this narrative is the allegation that Robredo can never be a viable president who can defend the country’s national interests given her proximity to the US as claimed by pro-government media practitioners.[19] There is no compelling evidence to support this claim. In a perniciously polarised political climate, it is easy to reduce positions to a dichotomy. Since Robredo is the leader of the opposition against Duterte and does not share the president’s anti-US bias, she is therefore a possible “puppet” of the West. Wild speculations even included the claim that Robredo will allow US military bases in the country’s territory.[20] Therefore, this disinformation narrative questions the credibility of Robredo as a possible head of state given her American connections and her lack of nationalist credentials, unlike Duterte and Marcos.
The third disinformation narrative revolved around the implications of the Russia-Ukraine conflict for the Philippines’ own security challenges, notably its ongoing territorial and maritime disputes with China in the South China Sea. This narrative tended to justify Duterte’s defeatist position that the Philippines cannot push against China since it will not win in a war with China.[21] This jived well with the current position of the Duterte administration to accommodate China and allow Beijing a free rein in the country’s maritime regions. Viral social media posts spread Duterte’s own claim that the Philippines must not assert itself against the neighbouring superpower as China might then invade the Philippines, just like what Russia is doing to Ukraine.[22] This China threat therefore must be met with pragmatism rather than by upholding the country’s strategic interests as provided for by international law and norms. The narrative concluded that only Marcos Jr. has the sobriety to prevent a possible conflict with China, unlike his opponent Robredo, who has vowed to use the Arbitral Award as leverage in dealing with China.
DISINFORMATION ON THE FUTURE OF PHILIPPINE FOREIGN POLICY
As the Philippines increasingly felt the adverse impact of the Russia-Ukraine conflict, given the presence of overseas Filipino workers in Ukraine and the higher prices for oil and basic goods, President Duterte soon changed his stance. He condemned Russia’s alleged violations of human rights in Ukraine, and the Philippines voted against Russia in the UN General Assembly and, surprisingly, the UN Human Rights Council as well.[23] With the government adopting a more robust policy position against Russia, however, the Marcos Jr. campaign – and the massive disinformation network behind him – was not able to capitalise further on the conflict. In fact, Marcos Jr. changed his stance by supporting Ukraine, thereby diluting the anti-Robredo narratives by trolls and other agents of disinformation.[24]
Foreign policy positions of presidential candidates were not a major determinant of how the Filipinos voted in the 2022 presidential elections. The landslide victory of Marcos Jr. and Sara Duterte as president and vice-president respectively, however, opens questions about the future of Philippine foreign policy under their government. As the new chief architect of foreign policy, Marcos Jr. will now have to decide on whether to continue the path of Duterte or recalibrate the country’s foreign relations back to its more traditional and predictable mode.
If recent history is a reliable indicator, all previous Philippine presidents except Duterte initially attempted to strike a balance in its foreign policy towards the US and China.[25] For example, president Gloria Arroyo maintained equidistance between the two superpowers until she had to withdraw the Philippine contingent from the US-led war in Iraq. After this decision, she initiated closer relationships with Beijing which included an economic partnership with some dubious and anomalous dealings. Duterte’s predecessor, president Benigno Simeon Aquino, also initially strove to hedge between the US and China. However, a series of events culminating in the Scarborough Shoal standoff led him to be less cordial to China and at the same time rely more on the US for security through the Enhanced Defence Cooperation Agreement (EDCA).[26]
The 2022 elections revealed that foreign policy issues can be used to promote electoral campaigns with the aid of massive and systematic disinformation. This paper looked into the various disinformation narratives embedded in the major foreign policy issue confronting the Philippines, namely how to navigate between the lingering and intense US-China rivalry. Rearing its ugly head, disinformation has wantonly oversimplified the otherwise complicated nature of foreign policy, falsely dichotomised positions on international issues, and emphasised posturing and superficial displays as policy competence and political savvy.
This does not bode well for the future of Philippine foreign policy under the incoming Marcos Jr. administration. Rather than deal with tough foreign policy decisions, the new government aided by a robust disinformation infrastructure might merely rely on a performative foreign policy that lacks substance, credibility and political will.
ENDNOTES
[1] Idrees Ali and Karen Lema, “Philippines’ Duterte fully restores key U.S. troop pact,” Reuters, July 30, 2021. https://www.reuters.com/world/asia-pacific/us-aims-shore-up-philippine-ties-troop-pact-future-lingers-2021-07-29/
[2] Aries A. Arugay, “Dutert’s Pivot to China,” Australian Outlook, October 27, 2016, https://www.internationalaffairs.org.au/australianoutlook/dutertes-pivot-to-china/
[3] Net trust is the percentage difference between much trust and little trust. In Social Weather Stations, “SWS July 3-6, 2020 National Mobile Phone Survey – Report No. 4: Net trust of Filipinos is “Good” +42 for the United States, “Moderate” +27 for Australia, and “Bad” -36 for China,” July 19, 2020. https://www.sws.org.ph/swsmain/artcldisppage/?artcsyscode=ART-20200719141007
[4] Amador, Julio, Aries Arugay, Charmaine Misalucha-Willoughby, and Justin Keith Baquisal, National Security Priorities and Agenda in the Philippines: Perceptions from the Filipino Security Community. Quezon City: Amador Research Services, Inc., 2020, https://www.amadorresearchservices.com/publications/national-security-priorities-and-agenda-in-the-philippines.
[5] Aileen S.P. Baviera and Aries A. Arugay, “The Philippines’ Shifting Engagement with China’s Belt and Road Initiative: The Politics of Duterte’s Legitimation,” Asian Perspective, 45(2): 277-300, 2021.
[6] Neil Arwin Mercado, “Marcos on Ukraine-Russia conflict: ‘No need to make a stand’,” Philippine Daily Inquirer, March 1, 2022, https://newsinfo.inquirer.net/1561904/marcos-on-ukraine-russia-conflict-no-need-to-make-a-stand.
[7] Camille Elemia, “In the Philippines, a Flourishing Ecosystem for Political Lies,” New York Times, May 6, 2022, https://www.nytimes.com/2022/05/06/business/philippines-election-disinformation.html.
[8] “Duterte on Ukraine-Russia war: In the end, we have to take sides,” CNN Philippines, March 4, 2022, https://www.cnnphilippines.com/news/2022/3/4/Duterte-neutral-Ukraine-Russia-war.html.
[9] Darryl John Esguerra, “Duterte off to 2nd Russia visit, to meet ‘favorite hero’ Putin,” Philippine Daily Inquirer, October 2, 2019, https://globalnation.inquirer.net/180528/duterte-off-to-2nd-russia-visit-to-meet-favorite-hero-putin.
[10] Michaela del Callar, “Russian envoy praises Duterte neutrality on Ukraine war,” GMA News Online, March 21, 2022, https://www.gmanetwork.com/news/topstories/nation/825772/russian-envoy-praises-duterte-neutrality-on-ukraine-war/story/.
[11] Lian Buan, “Marcos and Duterte want to be neutral on Ukraine invasion,” Rappler, March 1, 2022, https://www.rappler.com/nation/elections/ferdinand-bongbong-marcos-jr-sara-duterte-want-neutral-ukraine-invasion/.
[12] Rambo Talabong, “Robredo condemns Russia’s invasion of Ukraine,” Rappler, March 6, 2022, https://www.rappler.com/nation/leni-robredo-condemns-russia-invasion-ukraine/.
[13] Manuel Enverga III, “The Philippines as disinformation battleground in the Ukraine War,” Rappler, April 10, 2022, https://www.rappler.com/voices/thought-leaders/opinion-philippines-disinformation-battleground-ukraine-war/.
[14] Jonathan Corpus Ong, “Pro-Marcos, Duterte accounts weigh in on Ukraine invasion, praise Putin and Duterte,” PCIJ, March 4, 2022, https://pcij.org/article/7833/pro-marcos-duterte-accounts-ukraine-invasion-putin-duterte.
[15] “Huwag maliitin si Russian President Vladimir Putin!,” Radyo Agila, March 1, 2022, https://www.radyoagila.com/huwag-maliitin-si-russian-president-vladimir-putin/.
[16] Rebecca Ratcliffe and Loran Bayani, “Authoritarian nostalgia’: Philippines seems set to return Marcoses to power,” Guardian, May 4, 2022, https://www.theguardian.com/world/2022/may/04/authoritarian-nostalgia-philippines-seem-set-return-marcoses-to-power-ferdinand-marcos-jr.
[17] “Russian disinformation system influences PH social media,” Rappler, January 22, 2019, https://www.rappler.com/newsbreak/investigative/221470-russian-disinformation-system-influences-philippine-social-media/.
[18] “Vera Files Fact Check: Old Marcos video on military alliance with U.S. Needs Context,” Vera Files, March 9, 2022, https://verafiles.org/articles/vera-files-fact-check-old-marcos-video-military-alliance-us.
[19] Rigoberto Tiglao, “Do not vote for a US puppet!” Manila Times, May 6, 2022, https://www.manilatimes.net/2022/05/06/opinion/columns/do-not-vote-for-a-us-puppet/1842546.
[20] Ong, “Pro-Marcos, Duterte accounts weigh in on Ukraine invasion, praise Putin and Duterte”.
[21] Richa Noriega, “China could hit PH, Taiwan amid Russia-Ukraine conflict, Duterte warns,” GMA News Online, May 4, 2022, https://www.gmanetwork.com/news/topstories/nation/830558/china-could-hit-phl-taiwan-amid-russia-ukraine-conflict-duterte-warns/story/
[22] Li Kaisheng, “Be wary of US instigating conflict in the South China Sea amid Ukraine crisis,” Global Times, March 28, 2022, https://www.globaltimes.cn/page/202203/1257035.shtml.
[23] “Philippine President Duterte slams Putin for Ukraine killings,” Al Jazeera, May 24, 2022, https://www.aljazeera.com/news/2022/5/24/philippines-president-duterte-slams-putin-for-ukraine-killings.
[24] Lian Buan, “Marcos flips, now stands for Ukraine; reversal messes anti-Leni messaging,” Rappler, March 4, 2022, https://www.rappler.com/nation/ferdinand-bongbong-marcos-junior-flips-now-stands-ukraine-reversal-messes-anti-leni-robredo-messaging/.
[25] Barnaby Lo, “How will Ferdinand ‘Bongbong’ Marcos Jr. taking power in the Philippines change U.S. relations?” CBS News, May 13, 2022, https://www.cbsnews.com/news/philippines-election-2022-ferdinand-bongbong-marcos-jr-us-relations-china/.
[26] Aries A. Arugay, “Charmed and weakened: China’s diplomatic overtures and democratic erosion in the Philippines,” in Hsu Szu-chien & J. Michael Cole (eds.), Insidious power: How China undermines global democracy. Manchester: Eastbridge Books, 2020.
| ISEAS Perspective is published electronically by: ISEAS – Yusof Ishak Institute 30 Heng Mui Keng Terrace Singapore 119614 Main Tel: (65) 6778 0955 Main Fax: (65) 6778 1735 Get Involved with ISEAS. Please click here: /support/get-involved-with-iseas/ | ISEAS – Yusof Ishak Institute accepts no responsibility for facts presented and views expressed. Responsibility rests exclusively with the individual author or authors. No part of this publication may be reproduced in any form without permission. © Copyright is held by the author or authors of each article. | Editorial Chairman: Choi Shing Kwok Editorial Advisor: Tan Chin Tiong Editorial Committee: Terence Chong, Cassey Lee, Norshahril Saat, and Hoang Thi Ha. Managing Editor: Ooi Kee Beng Editors: William Choong, Lee Poh Onn, Lee Sue-Ann, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
“Muslim Sectarianism versus the De-escalation of Sectarianism in Malaysia” by Mohd Faizal Musa
2022/58 “The G20: The Last Defence of Multilateralism?” by Maria Monica Wihardja and Suryaputra Wijaksana
EXECUTIVE SUMMARY
- The G20 Summit was created to garner political support and commitment to coordinate monetary and fiscal policies, address global economic challenges, and deliver global public goods, which are goods whose benefits affect all citizens of the world.
- But, the G20 Summit has shown signs of withering partly because it has traded off its focus on ‘inclusivity’. It now consists of stupefyingly confounding auxiliaries (T20, B20, etc.) and ever-growing mandates. Meanwhile, it sweeps under the rug some of the more difficult, politically sensitive commitments and reforms, including those on financial regulations, the international monetary system, and governance of international financial institutions. When put to the test, such as at the start of the COVID-19 pandemic, the G20 failed to step up decisively. Moreover, this year is not the first time the G20 looks more like an arena for power tussles than an international economic forum.
- The G20’s effectiveness can be revived if it prunes itself massively, in substance and organization, while keeping its core elements and focus such as monetary and fiscal policy coordination, as well as financial regulatory reforms. Most importantly, the G20 must rise above geopolitical conflicts among its member countries. If increasing geopolitical power infighting continues to plague the G20, its promise to manage the global economic crisis and deliver global public goods the world needs so badly, will remain pie in the sky.
- After the Indonesian Presidency, the next two G20 Presidencies – India and Brazil – like Indonesia, could use political and economic diplomacy as ‘middle-power’ countries to help pull the crumbling G20 away from the increasing geopolitical tensions existing between its big-power members.
* Maria Monica Wihardja is an Economist and Visiting Fellow in the Indonesia Studies Programme and the Regional Economic Studies Programme at ISEAS – Yusof Ishak Institute. Suryaputra Wijaksana is a Master of Public Policy (MPP) Candidate at the Lee Kuan Yew School of Public Policy. Before joining the Lee Kuan Yew School of Public Policy, Surya was an economist at Bank Central Asia, the largest privately-owned bank in Indonesia.
ISEAS Perspective 2022/58, 3 June 2022
INTRODUCTION
The zero-sum paradigm – a paradigm that the progress of some stymies the progress of others – is seemingly becoming more entrenched in an increasingly multipolar world. This notion, often adopted in the military and security fields, has exacerbated the security dilemma[1] and transcended a whole gamut of economic areas. It cripples our ability to build global economic cooperation that is so much needed for addressing the multi-sided global economic crises and global public good crises the world is facing today. Indonesia’s G20 Presidency’s theme, ‘Recover Stronger, Recover Together’, echoes the cooperative, positive-sum paradigm on which the G20 was founded. But increasing geopolitical tensions might render the G20 ineffective in delivering its goal.
The G20 and its Leaders Summit were initiated in 1999 and 2008 respectively against the backdrop of world economic crises. By 2009, the G20 Summit was recognized as the premier forum for international economic cooperation to coordinate monetary and fiscal policies as well as address major strategic issues related to the global economy. Its leverage to the leaders’ level, involving not only major economic powers but also emerging and developing economies, shows that the G20 is expected to deal with extraordinary and strategic global economic issues that have global spillovers and that affect the global population. Since the G20 Summit is held at the leaders’ level, the G20 gives opportunities to garner political support and commitment on politically sensitive issues that need commitment and coordination at the highest level.
The G20 was a (belated) recognition of not only the shifting of economic power to emerging economies and developing countries, but also the need for more and better global public goods, i.e., goods whose benefits affect all citizens of the world. These include internationally agreed rules to standardize and stabilize the financial markets, or to avert cross-border tax evasion. A rule-based multilateral system is needed for an increasingly convoluted global economy, which is now increasingly interlinked by digital technologies, and not just by global trade, global value chains, or international capital flows.[2] In fact, since the Global Financial Crisis 2008-9, world trade over world GDP, international global value chains over world trade, and international capital flows (foreign direct investment and portfolio investment) as share of world GDP have either stagnated or declined.[3] A rule-based multilateral system is also key for smaller countries to function, flourish and prosper since a rule-based multilateral system gives these countries standards, certainty and protection against possible erratic and detrimental behaviours from big-power countries.
The concerted policy actions born out of the G20 Summit during the Global Financial Crisis 2008-9, especially the 2009 commitment to concertedly inject US$5 trillion worth of fiscal stimulus into the global economy to keep and create jobs, were successful in staving off the global economic depression. Once a highly influential and regarded forum, G20’s solidarity may have waned because of the increasing geopolitical tensions while its ever-growing mandates and auxiliaries stupefy its ability to focus, stifling G20’s effectiveness to manage global economic crises and deliver global public goods.
WITHERED SOLIDARITY AND LOST FOCUS?
The G20 has many achievements, the most recent being the ground-breaking OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting to tax global corporations, including big tech giants, a minimum of 15%, and to redistribute 25% of the largest companies’ residual profits to market jurisdictions. At the same time, however, there is evidence of ‘withering’ in the international forum.
First, it has lost focus. The G20 is becoming like a Christmas tree with an ever-expanding mandate, discussing everything under the sun, with each rotating presidency being keen to leave a legacy. The G20 has also become an alphabet soup with confounding G20 auxiliaries, for example, B20 for business, T20 for think tanks, and C20 for civil society. Although the causality of the G20 losing focus and getting ‘obese’ can go both ways, its ever-growing mandates and auxiliaries can be partly blamed on its rotating presidency. For example, Civil20 Summit was first introduced by Russia’s G20 Presidency in 2013 while South Korea’s G20 Presidency in 2010 added the development agenda and Mexico’s G20 Presidency threw in the food security agenda. Some of these agendas were multi-year action plans meant to be carried over to later presidencies.
Unfortunately, there is a trade-off between being inclusive and being focused.
Moreover, some critical financial regulatory reforms achieved in the early G20 summits, such as the 2010 Dodd-Frank law, were also reversed although that reversal was more of a national choice during the Trump administration than anything else.[4] Political commitments on trade openness by the G20 leaders, which are needed especially in the face of a failing WTO, have not been strong enough to ward off increasing protectionist sentiments (even among G20 members), especially at the heights of the COVID-19 pandemic, and in the face of declining global trade as share of global GDP since the Global Financial Crisis 2008-9.[5]
Meanwhile, the G20 sweeps under the rug some of the more difficult, politically sensitive reform commitments, including those on financial regulations (especially in regulating non-bank financial intermediaries), the international monetary system, and international financial institutions (IFIs) governance reforms.
As an example, as reiterated at the G20 London Leaders Declaration in 2009[6] that ‘the heads and senior leadership of the IFIs should be appointed by using an open, transparent, and merit-based selection, not based on nationality, leaders of some IFIs are still political appointees of the largest-shareholding countries in the institutions. Non-borrowing member countries still hold the majority of votes in some IFIs, leaving little space for emerging economies and developing countries in the global economic order (see also Basu, 2002).[7] [8] Although most decisions such as loan approvals are based on a simple majority rule, the United States remains the only member country of the IMF[9] and the World Bank[10] with veto power over major decisions such as organisational structural changes that need a supermajority vote (85%), putting the multilateralism spirit into question. But, IFIs reforms need to go beyond voice and quota reforms. The US Secretary of the Treasury, Janet Yellen, recently asserted the need for a major reboot in IFIs mandates[11] for better capability in the delivery of global public goods.
Second, when put to the test, such as at the start of the COVID-19 pandemic, the G20 failed to step up decisively. While the economic crisis caused by the Covid-19 public health crisis was deeper and more widespread than that of the Global Financial Crisis 2008-9, the G20 has disappointed many ardent and articulate academics and observers.[12] A public health crisis constitutes a positive-sum game where “no one is safe until everybody is safe”, but when medical supplies and vaccines were in short supply, countries reverted to a zero-sum game. Countries, including G20 members like the EU, reversed globalization by banning exports of medical supplies and decoupling supply chains.[13] In December 2020, South Africa and India called for the WTO to suspend Intellectual Property Rights related to COVID-19 vaccines and medicines to control the pandemic but it was rejected by some high-income countries, including the US, UK, and EU.[14] All these countries are G20 members. In its extraordinary G20 leaders’ meeting held on March 26, 2020, G20 leaders were committed to injecting the same US$5 trillion into the global economy as it did during the Global Financial Crisis 2008-9 despite the growth of the global economy since 2009 (which means a lower share of support out of the global GDP), the deeper and more widespread economic crisis the world was facing, and the more dire threat to human lives the COVID-19 pandemic entailed.[15]
Third, power fighting transcends economic rationales. This year is not the first time the G20 looks more like an arena for power tussles than a forum for international economic cooperation. In 2011, the G20 was overshadowed by geopolitical division over the authorization of military strikes to enforce the no-fly zone in Libya. The walk-out of the US Secretary of Treasury and other Finance Ministers in the second Finance Ministers and Central Bank Governors Meeting this year dimmed the prospect of having a meaningful discussion among the world’s largest economies to manage global challenges.
More than ten years after the G20 Summit started, we are entering into a more divided, more bifurcated world than was the case in 2008. We are seeing an erosion – not strengthening – of the international, rule-based order since 2008. However, the world cannot afford to make a meal out of it.
GLOBAL ECONOMIC AND GLOBAL PUBLIC GOODS CRISES
First, the international monetary system needs some rethinking. It is dominated by the US dollar as the global currency, but the US dollar is also being ‘weaponized’ through the use of sanctions.[16] The US dollar as the global currency is no longer neutral nor sustainable as originally intended.[17] The system was initially set up after the Second World War to provide the world with an efficient and neutral payment system. However, sanctions on Russia and Iran in the past clearly belie its lofty aspirations.[18] The system was not set up for an increasingly multipolar world.
For the US itself, its status as the world’s reserve currency is subject to national debate as to whether it is desirable and sustainable. There is a strategic leverage but there are also economic costs. It supplies the world with dollars, even if it could mean reducing the competitiveness of its own domestic economy. The Federal Reserve must also take foreign markets into account when making decisions. Although there is no immediate alternative to the US dollar as a global currency on the horizon, the ‘weaponization’ of the US dollar could increase the use of digital currencies and the creation and expansion of non-dollar-based payment systems such as the BRICS’ de-dollarization initiative.[19] [20] However, digital currencies are very volatile with differing rules regulating the sector across the world, while a bifurcated financial services system will stifle business efficiency. The G20 is the forum to discuss reform of the international monetary system.
Second, the Russian-Ukrainian conflict exacerbates the already dire global condition. As both countries are major producers and exporters of natural gas, fertilizers (ammonia, urea, process phosphate) and wheat, the conflict has caused a massive increase in food and energy prices across the world. This shock is made worse with the uptick in demand due to the ongoing recovery from the pandemic and more recently, with major food producers and exporters such as Indonesia and India temporarily banning exports of food commodities including palm oil in the case of Indonesia and wheat in the case of India, due to rising food inflation at home. The result is the return of the “thought-to-be-extinct” stagflation (see Figure 1). Central bankers are taken aback as they know monetary policy cannot solve supply side problems[21] and there is no conventional solution to manage stagflationary shocks. For many economies, central banks are also faced with a dilemma: either to increase interest rates to slow down inflation but risk a full-blown global debt crisis and recession, or to not increase rates and risk hyperinflation. On the other hand, the Russia-Ukraine war is also stifling global economic growth this year, with the forecast being lowered by 1.3 percentage points since October 2021 by the IMF.[22]
Recently there has been a push to restructure debts of developing and least developed economies (LDCs) and to figure out the “sustainable” level of sovereign debt of developed economies. Around 60% of low-income countries are now in or at high risk of debt distress.[23] When an economy is close to the zero lower bound on its nominal interest rate (so that it is not possible to use monetary policy to stimulate growth by further lowering the interest rate), it is still possible for a country to sustainably finance a level of government debt that is substantial enough to overcome weak demand in the economy. But, this so-called fiscal ‘free lunch’ is possible only if the nominal interest rate on debt is below the GDP growth rate.[24] However, with rising interest rates increasing the cost of borrowing, and slowing GDP growth rates, the current global economic environment may not allow for this to continue (see Figure 2). In other words, the only way out may be through fiscal austerity.
But even this may not work as the global economy is not yet out of the woods from the COVID-19 pandemic. As history has taught us (e.g. the European debt crisis in 2009, or the Asian Financial Crisis in 1997-8), austerity during a recovery or crisis will only worsen the situation. Simply put, there are not enough fiscal and monetary policy instruments to solve the multi-sided economic issues many countries are facing today. In addition, debt re-structurization for developing and LDCs will largely depend on China (see Figure 3), a G20 member, which has not yet committed on any debt forgiveness or restructuring.[25]
Again, coordination of fiscal and monetary policies to manage multi-sided economic shocks is something that could be best achieved at the G20 level.
WHAT THE G20 CAN DELIVER
The G20 was in the first place established to coordinate monetary and fiscal policies, and manage world economic crises with global spillovers. To be effective, it needs a lot of pruning, both in terms of substance, and organization-wise. The G20 Leaders Declaration should not consist of 61 articles like that of the G20 Rome Leaders’ Declaration in 2021, but perhaps less than 20 articles which are more detailed and binding, rather than being full of rhetoric. The G20 might want to transition back to its pre-G20 Summit’s leaner structure by focusing on fiscal, monetary and financial policy coordination, with a few exceptions being extraordinary and strategic global economic issues with potential global spillovers.
The core G20 mandate must be continued. First, in the immediate term, the G20 could continue to coordinate possible ‘unconventional’ fiscal and monetary policies that countries around the world might take to respond to global stagflationary shocks, or any other economic shocks and crises in the future. In the same context, this could help accelerate the re-structurization of burgeoning sovereign debts especially among LDCs, under the G20 Debt Service Suspension Initiative. In particular, it could help convince China, as the world’s largest creditor, to step up its debt restructuring process.
Second, in the medium term, the G20 could complete its commitment of the G20 financial regulatory reforms agreed upon after the Global Financial Crisis 2008-09, especially with regard to non-bank financial intermediaries.
Third, in the long term, it could help reform the international monetary system and international financial institutions. The transition from the British Pound to the Dollar as the international reserve currency was cemented through the Bretton Woods Agreement in 1944, pushed by the dominant superpower and economic position of the US and its deep and liquid financial system at that time. The US was also the only country without any capital controls after the Second World War. Today, the world needs a more stable and neutral international monetary system with perhaps a supernational currency, such as the SDR.[26] However, without IMF quota reform, the prospect of the IMF turning into a quasi-central bank for issuing a supernational currency and eroding the US’s privilege of printing the global currency is dim.
CONCLUSION
The world has been in a global public goods crisis. Multilateralism is failing to deliver them. The world of the future will not be one of pure altruism where all countries altruistically invest in global public goods. Nor will it be a world where all countries resort to national interests and abandon the idea of multilateralism and global cooperative spirits altogether. It will place itself between national interests and multilateralism.
To ensure its existence, the G20 could step back, consider pruning itself, and focus on global economic policy coordination, just as it used to be prior to the G20 Summit in 2008 and in the early years of the G20 Summit. Perhaps, most importantly, it must rise above geopolitical conflicts among its member countries. A leaders’ forum like the G20 needs a level-headed conversation to reach commitments on politically difficult issues, but today, leaders have allowed issues to be conflated together. The G20 member countries should be reminded that it is their privilege and responsibility in the exclusive ‘G20 club’ to be representing the world and should not use it to only advance their national interests. Instead, they should be thinking about how to make their contribution to global issues, even if it comes at some costs to their national interest.
With increasing geopolitical tension among big-power countries who are members of the G20, middle-power countries and emerging economies – who happen to be hosting and will be hosting the next two G20 Summits, namely India and Brazil – could use its political and economic diplomacy to steer the forum in this direction. If they fail, any hope that the G20 can meaningfully contribute to the global public goods and the global economy will remain pie in the sky.
ENDNOTES
[1] Rodrik, Dani. 2022. “A better globalization might rise from hyper globalization’s ashes.” Project Syndicate. May 9. Available at: A Better Globalization Might Rise from Hyper-Globalization’s Ashes by Dani Rodrik – Project Syndicate (project-syndicate.org), https://www.project-syndicate.org/commentary/after-hyperglobalization-national-interests-open-economy-by-dani-rodrik-2022-05
[2] ibid
[3] Antràs, Pol. 2022. “De-globalization? Global Value Chains in the Post-COVID-19 Age.” National Bureau of Economic Research Working Paper. Available at: https://www.nber.org/papers/w28115
[4] Rappeport, Alan, and Emily Flitter. 2018. “Congress approves first big Dodd-Frank rollback.” The New York Times. May 22. Available at: Congress Approves First Big Dodd-Frank Rollback – The New York Times (nytimes.com), https://www.nytimes.com/2018/05/22/business/congress-passes-dodd-frank-rollback-for-smaller-banks.html
[5] Source: World Bank’s World Development Indicators, available at: https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS
[6] The G20 London Summit – Leaders’ Statement, 2 April 2009. Available at: G20 Communique: London Summit – Leaders’ Statement; 2 April 2009 (imf.org), https://www.imf.org/external/np/sec/pr/2009/pdf/g20_040209.pdf
[7] Basu, Kaushik. 2002. “The Retreat of Global Democracy.” Project Syndicate. April 29. Available at: The Retreat of Global Democracy by Kaushik Basu – Project Syndicate (project-syndicate.org), https://www.project-syndicate.org/commentary/the-retreat-of-global-democracy
[8] Also see Singapore’s Prime Ministers Lee Hsien Loong (https://www.youtube.com/watch?v=4in2dk5qb80) and its 4G leader Lawrence Wong (https://www.youtube.com/watch?v=YZHQ-eG7pUU) talked about the need to give more space to China in the global economic order including IFIs.
[9] Congressional Research Service. 2022. “The International Monetary Fund.” In Focus. March 7. Available at: IF10676.pdf (fas.org), https://sgp.fas.org/crs/misc/IF10676.pdf
[10] World Bank website: United States Overview: Development news, research, data | World Bank, https://www.worldbank.org/en/country/unitedstates/overview#1
[11] Lawder, David, and Andrea Shalal. 2022. “U.S. Treasury’s Yellen, White House say World Bank needs major ‘reboot’.” Reuters. April 22. Available at: U.S. Treasury’s Yellen, White House say World Bank needs major ‘reboot’ | Reuters, https://www.reuters.com/world/us-treasurys-yellen-says-imf-world-bank-not-designed-tackle-global-crises-2022-04-21/
[12] See, for example, “G20 leaders fail to step up”, https://www.eastasiaforum.org/2020/03/30/g20-leaders-fail-to-step-up/) by Editorial Board of East Asia Forum, Australian National University.
[13] Gyngell, Allan. 2020. “Australia in a post COVID-19 world.” East Asia Forum. March 29. Available at: Australia in a post-COVID-19 world | East Asia Forum (https://www.eastasiaforum.org/2020/03/29/australia-in-a-post-covid-19-world/)
[14] Usher, Ann Danaiya. 2020. “South Africa and India push for COVID-19 patents ban.” The Lancet. Available at: https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)32581-2/fulltext#:~:text=South%20Africa%20and%20India%20have%20called%20for%20the,other%20new%20technologies%20needed%20to%20control%20the%20pandemic.
[15] The WHO has estimated that there were 14.9 million excess deaths (https://www.who.int/news/item/05-05-2022-14.9-million-excess-deaths-were-associated-with-the-covid-19-pandemic-in-2020-and-2021) associated with the COVID-19 pandemic in 2020 and 2021.
[16] Sen, Julius. 2019. “The weaponization of the dollar. Policy options for small countries.” London School of Economics (LSE) Ideas. Available at: LSE-IDEAS-Weaponisation-Dollar.pdf (https://www.lse.ac.uk/ideas/Assets/Documents/updates/LSE-IDEAS-Weaponisation-Dollar.pdf)
[17] Sheng, Andrew, and Xiao Geng. 2022. “The International Monetary System is more unfit than ever.” April 29. Project Syndicate. Available at: The International Monetary System Is More Unfit than Ever by Andrew Sheng & Xiao Geng – Project Syndicate (project-syndicate.org) (https://www.project-syndicate.org/commentary/us-dollar-dominance-unsustainable-international-financial-reform-by-andrew-sheng-and-xiao-geng-2022-04?utm_source=project-syndicate.org&utm_medium=email&utm_campaign=authnote&)
[18] See also Subramanian, Arvind. 2022. “The US has got its Russia sanctions wrong.” Project Syndicate. May 10. Available at this link (https://www.project-syndicate.org/commentary/west-should-change-russia-sanctions-strategy-by-arvind-subramanian-and-josh-felman-2022-05?utm_source=project-syndicate.org&utm_medium=email&utm_campaign=authnote&)
[19] ibid
[20] Liu, Zongyuan Zoe, and Mihaela Papa. 2022. “Can BRICS De-dollarize the Global Financial System?” Cambridge University Press. Available at: https://www.cambridge.org/core/elements/can-brics-dedollarize-the-global-financial-system/0AEF98D2F232072409E9556620AE09B0
[21] Romei, Valentina, and Alan Smith. 2022. “The global stagflation shock of 2022: How Bad could it get?” Financial Times. May 2. Available at: The global stagflation shock of 2022: how bad could it get? | Financial Times (ft.com) (https://www.ft.com/content/d490ef4e-3187-471e-84ff-9c065871a1a5)
[22] International Monetary Fund. 2022. World Economic Outlook: War Sets Back the Global Recovery. April. Available at: World Economic Outlook, April 2022: War Sets Back The Global Recovery (imf.org) (https://www.imf.org/en/Publications/WEO/Issues/2022/04/19/world-economic-outlook-april-2022)
[23] Shalal, Andrea, and David Lawder. 2022. “As dominant creditor, China must ‘step up’ on debt restructuring, Indonesia’s Indrawati says.” Reuters. April 23. Available at: As dominant creditor, China must ‘step up’ on debt restructuring, Indonesia’s Indrawati says | Reuters (https://www.reuters.com/business/finance/dominant-creditor-china-must-step-up-debt-restructuring-indonesias-indrawati-2022-04-22/)
[24] See the Goldilocks theory of debt
[25] Shalal and Lawder (2022)
[26] Sheng and Geng (2022)
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2022/57 “Assessing the Belt and Road Initiative in Southeast Asia amid the COVID-19 Pandemic (2021-2022)” by Wang Zheng
EXECUTIVE SUMMARY
- The year 2021 marked the 30th anniversary of ASEAN-China Dialogue Relations and the elevation of ASEAN-China ties to Comprehensive Strategic Partnership. Economic ties between China and ASEAN have grown stronger despite continuous disruptions by the COVID-19 pandemic and growing tensions in the South China Sea.
- Data analysis from an original dataset tracking major China-financed projects under the Belt and Road Initiative (BRI) in Southeast Asia since January 2021 shows that China remains committed to boosting BRI projects’ progress.
- Overall, the pandemic has accelerated China’s pivot towards “soft” infrastructure such as health services and digital economy as a priority in its economic engagement with the region. This is evident in the increasing prominence of the Health Silk Road (HSR) and Digital Silk Road (DSR) in China’s BRI agenda. These trends are likely to continue in the long run.
- Despite the progress of BRI projects in Southeast Asia since January 2021, China still faces a bumpy road ahead. Negative effects posed by the ongoing pandemic will continue to impact the implementation of BRI projects, especially with the recent surge of COVID-19 cases in China.
- Besides, local concerns about social and environmental costs will likely influence the prospects of BRI projects in the region.
*Wang Zheng is currently the Wang Gungwu Visiting Fellow at ISEAS – Yusof Ishak Institute. He is also a Ph.D. candidate in political science at the University at Albany, State University of New York.
ISEAS Perspective 2022/57, 26 May 2022
INTRODUCTION
The year 2021 marked the 30th anniversary of ASEAN-China Dialogue Relations and the elevation of ASEAN-China ties to Comprehensive Strategic Partnership. Economic ties between China and ASEAN have grown stronger despite continuous disruptions by the COVID-19 pandemic and growing tensions in the South China Sea. According to China’s Ministry of Foreign Affairs, China-ASEAN bilateral trade reached US$789.53 billion and increased by 29.8 per cent in the first 11 months of 2021.[1] China has remained ASEAN’s largest trading partner since 2009; at the same time, ASEAN has been China’s top trading partner since 2020.[2] China’s rising economic impacts in Southeast Asia are reflected in the State of Southeast Asia 2022 Survey Report: over 76 per cent of respondents recognise that China is the most influential economic power in Southeast Asia, although 64.4 per cent of them are worried about China’s economic influence.[3]
As China’s flagship foreign policy, the Belt and Road Initiative (BRI) serves as a major channel through which China has been engaging with ASEAN since its inception in 2013. The COVID-19 pandemic has posed significant challenges to BRI projects worldwide—due to travel restrictions and social distancing measures, about 20 per cent of BRI projects were “seriously affected” as of June 2020, with another 30-40 per cent being “somewhat affected.”[4] Southeast Asia rose to become the top BRI investment destination in 2020, despite a steep decline in China’s overall BRI investments worldwide.[5] As its economy gradually recovered in 2021,[6] China stepped up its efforts to accelerate the progress of BRI projects globally. By the end of 2021, China’s non-financial investments in 57 BRI countries reached US$20.3 billion, with a year-on-year growth rate of 14.1 per cent. Among ten major recipient countries, seven are from Southeast Asia, namely Singapore, Indonesia, Malaysia, Vietnam, Laos, Thailand, and Cambodia, alongside Bangladesh, the Emirates and Kazakhstan.[7]
Given the BRI’s substantial engagement in Southeast Asia during the pandemic, it is necessary to assess the progress of BRI projects in the region. Analysing data from an original dataset tracking major China-financed BRI projects in Southeast Asia since January 2021, this study finds that China remains committed to boosting BRI projects’ progress amid the pandemic. Overall, the pandemic has accelerated China’s pivot towards “soft” infrastructure such as health services and the digital economy as new priorities in its economic engagement with the region. Nevertheless, two key challenges stemming from the ongoing pandemic and local concerns about social and environmental costs are likely to hinder the progress of BRI projects in the region.
DATA ANALYSIS
This study employs data from an original dataset recording major BRI projects in Southeast Asia between January 2021 and March 2022. In general, China’s involvement in foreign projects comprises two parts: 1) investments in the form of financial and technological support and 2) construction contracts financed by local or other foreign sources.[8] Due to the lack of an authoritative definition of what constitutes a BRI project, and to avoid labelling all China-involved projects under the banner of the BRI, this study adopts a narrower definition of BRI projects, which only considers projects meeting the following two criteria as related to the BRI: 1) they must be reported on the official website of the BRI—the Belt and Road Portal run by the Chinese government[9] or undertaken by Chinese companies listed on the website; and 2) they have to be invested in by Chinese sources, indicating China’s position as a key stakeholder. To be more specific, BRI projects recorded in the dataset take four forms: 1) projects financed by loans provided by Chinese financial institutions, either wholly or partially; 2) projects invested in by Chinese companies; 3) projects invested in by joint ventures between Chinese companies and their local partners; and 4) projects as part of China’s foreign assistance programme.
To ensure that the dataset captures BRI projects in Southeast Asia to the best extent possible, this study consulted three sources. The primary source of the dataset is the weekly/bi-weekly reports of BRI projects posted on the Belt and Road Portal. The second source is the websites of Chinese companies undertaking BRI projects which also include certain projects not listed on the Belt and Road Portal. The third source is media reports from platforms including Xinhua, The Strait Times, The Khmer Times, The Phnom Penh Post, The Jakarta Post, The Laotian Times, Reuters, which provide additional details regarding the projects listed in the dataset. It bears mentioning that the dataset is not an exhaustive list of all China-financed BRI projects in Southeast Asia since January 2021 and includes only verifiable sources. Due to the lack of data on project costs, this study mainly analyses three dimensions: project status, project sector, and major players.
Adopting a broader definition of BRI projects—one that includes projects financed by non-Chinese sources, the Belt and Road Portal has reported around 833 China-involved projects worldwide between January 2021 and March 2022, of which roughly 29 per cent take place in Southeast Asian countries. However, according to the narrower definition of BRI projects as mentioned above, the dataset in this study records 95 BRI projects invested in by China in Southeast Asia that have remained active since January 2021.[10] Standing at various stages of development, these projects belong to 87 master projects. These figures signify China’s commitment to BRI projects in the region even during the pandemic.
PROJECT STATUS [11]
Figure 1 below shows the status of major BRI projects in Southeast Asia that have remained activesince January 2021. Chinese companies have won 18 bids of such projects in Southeast Asia since January 2021. Major projects in this category include the Lanxang Culture Park Project in Laos[12] and Xinhai Industrial Park Combined Cycle Power Plant Design Project in Indonesia.[13] Chinese companies have also signed 18 contracts with their local partners, covering projects such as the Upper Stung Tatay Hydropower BOT Investment Project in Cambodia[14] and Golden Jubilee Seaview City Project in the Philippines.[15] Among the 13 projects that started construction are the Huaqing Aluminum Industry Aluminum-Power Integration Project in Indonesia[16] and Thatbyinnyu Phaya Repair Project in Myanmar.[17] At least 22 projects are underway—including mega projects such as the Jakarta-Bandung High-Speed Railway in Indonesia[18] and the MRL East Coast Rail Link in Malaysia.[19] In addition, 24 projects have been completed since January 2021. The completed project that grabbed the most media attention is the China-Laos Railway, a signature BRI project inaugurated on 3 December 2021. The US$6 billion project—costing almost one-third of Laos’ GDP—cuts travel time from Vientiane to the Chinese border by four hours.[20]
Figure 2 depicts country-level variations in the distribution of BRI projects in Southeast Asia since January 2021. Among Southeast Asian countries, Indonesia has hosted 40 projects, ranking top on the list. These projects span multiple sectors, including energy, transportation, construction, chemicals, metals, among others. Cambodia and Laos both have hosted over ten projects. In terms of project status, Chinese companies have won the most bids (13), signed the most contracts (9), and completed the most projects (7) in Indonesia.
PROJECT SECTOR
Figure 3 shows the distribution of BRI projects in Southeast Asia by sector and its national variations since January 2021. Most projects are clustered into five sectors: energy (29%), transportation (23%), metals (18%), construction (8%), and chemicals (6%). The data also show China’s efforts to diversify BRI projects in Southeast Asia by expanding its investment in health services, telecommunication, and education. Also, national variations are apparent: 75 per cent of energy projects are hosted by Indonesia, Laos, and Cambodia; 64 per cent of transportation projects are distributed in Indonesia and Cambodia; and 82 per cent of metals projects are located in Indonesia.
Figure 4 illustrates the distribution of specific types of energy projects at both regional and national levels. Power stations utilising clean energies—including hydropower, solar power and biomass—account for roughly 46 per cent of all energy projects listed in the dataset, indicating ASEAN’s growing need for green energy and China’s expanding role in the renewable energy industry in the region. Nevertheless, the data also demonstrate that China continues to invest in traditional energy sectors, accounting for 39 per cent of all energy projects in Southeast Asia since 2021. In particular, six coal-fired power plants—hosted mainly by Indonesia—are still at initial stages since January 2021, contradicting the China Belt and Road Initiative (BRI) Report 2021’s key finding that “China did not engage in investments or construction projects related to coal in 2021”.[21] Furthermore, there exist national variations in the distribution of energy projects: while most power stations utilising hydropower are located in Cambodia and Laos, power stations fuelled by coal are mostly clustered in Indonesia.
MAJOR PLAYERS [22]
Figure 5 shows the top ten Chinese companies undertaking BRI projects in Southeast Asia since January 2021. Power Construction Corporation of China has undertaken the most projects (12), followed by China State Construction Engineering Corporation Ltd (10), China Energy Engineering Corporation (10), China Communications Construction Company Ltd (10), and China China Metallurgical Group Corporation (9). Figure 6 indicates types of parent companies listed in the dataset—76 per cent of Chinese companies undertaking China-financed BRI projects in Southeast Asia are state-owned enterprises (SOE) and 24 per cent are private companies.
NEW TRENDS
While traditional sectors constitute the majority of BRI projects in Southeast Asia since January 2021, the dataset also reveals some emerging trends that shed light on the BRI’s trajectory in the region. Overall, the pandemic has accelerated China’s pivot towards “soft” infrastructure such as health services and digital economy as new priorities in its economic engagement with the region,[23] as is evident in the increasing prominence of the Health Silk Road (HSR) and Digital Silk Road (DSR) in China’s BRI agenda.[24] These trends are likely to continue in the long run.
Health Silk Road
According to the China Belt and Road Initiative (BRI) Report 2021, China’s global engagement with BRI projects in the health sector surged from US$130 million in 2020 to US$450 million in 2021.[25] This trend is manifested in the progress of BRI projects in Southeast Asia since January 2021. For instance, on 28 December 2021, a China-assisted medical building at the Cambodia-China Friendship Preah Kossamak Hospital in Phnom Penh passed completion inspection. The facility is funded by the Chinese government’s grant aid and is equipped with modern medical technology.[26]
Also, on 16 December 2021, Huawei Technologies (Thailand) Co., Ltd, the Office of the National Broadcasting and Telecommunications Commission (NBTC), and Siriraj Hospital co-launched the “Siriraj World Class 5G Smart Hospital”—the first and largest 5G smart hospital in Southeast Asia.[27] Utilising Huawei’s technologies of 5G network, cloud services, and artificial intelligence, the hospital aims to provide more efficient and accessible health services—especially for those living in rural areas.
These projects are but a few examples of China’s endeavour to participate in the regional health governance via the HSR—a dimension of the BRI that has gained momentum in China’s foreign policy agenda amid the pandemic. While proposed by President Xi Jinping as a joint initiative with the World Health Organization (WHO) in 2017,[28] the HSR was officially associated with the BRI only after the outbreak of the COVID-19 pandemic in early 2020.[29] As part of the HSR diplomacy, China has been actively distributing—and partially donating—medical supplies such as masks and vaccines to Southeast Asia to help regional states combat the pandemic.[30] As of December 2021, China is said to have provided around 600 million doses of vaccines to ASEAN;[31] in addition, China has pledged to donate another 150 million doses to ASEAN and US$5 million to the ASEAN COVID-19 Response Fund.[32] ASEAN countries’ responses to China’s health diplomacy in the region, however, are mixed. As the State of Southeast Asia 2022 Survey Report shows, although over 57 per cent of respondents acknowledge China’s strongest vaccine support to the region, only 18.7 per cent indicate their trust in vaccines produced by Sinopharm/Sinovac,[33] resulting from a combination of factors including general vaccine hesitancy, concerns about Chinese vaccines’ efficacy, and mistrust in China.[34]
Digital Silk Road
The launching of Huawei’s 5G smart hospital in Thailand signifies another trend—the digitalisation of the BRI in the region. Similarly, the notion of the DSR was put forth long before the pandemic outbreak. It first appeared in the Ministry of Industry and Information Technology (MIIT)’s official document in 2014 and was incorporated into the BRI agenda during the First Belt and Road Forum in Beijing in 2017.[35] The core of the DSR is to push leading Chinese tech firms—mostly private companies such as Huawei, ZTE, Tencent, Alibaba—to gain the upper hand in the emerging global digital markets,[36] especially against the backdrop of the intensifying U.S.-China strategic rivalry.
The COVID-19 pandemic has highlighted the crucial role of digital infrastructure in the BRI agenda in two ways. First, it bolsters China’s HSR and DSR diplomacy by providing information technologies to enable BRI countries to battle against the pandemic, such as mass contact tracing, teleconference system, 5G-powered contactless delivery, etc. Second, it allows China to transcend physical barriers aggravated by lockdowns and social distancing measures, reducing damages to BRI projects caused by the pandemic.[37]
As the forerunner of China’s 5G technology, Huawei has been deepening its cooperation with ASEAN in the face of severe pushback from Western countries in recent years. Since January 2021, Huawei has made significant inroads into building digital infrastructure that aims to “excel in both performance and energy efficiency”[38] in the region. Huawei’s AI-assisted solutions and 5G technology have been applied in Thailand and Indonesia to help government hospitals combat the pandemic.[39] Huawei also launched the Customer Solution Innovation Center (CSIC) in Malaysia to “assist the nation in becoming the ASEAN digital hub.” [40] In Singapore, Huawei has partnered with the National University of Singapore Business Analytics Centre (NUS BAC) to “nurture talent and upskill students to help Singapore fill the talent gap in the technology sector.”[41]
Besides Huawei, ZTE is also a major provider of 5G network services in Indonesia, Malaysia and the Philippines.[42] It is worth noting that while private tech companies remain main drivers of the DSR in Southeast Asia, state-owned companies are key stakeholders, too. For instance, in May 2021, China Energy also signed The Philippines Common Cell Tower Contract to build 1,000 cell towers in the country.[43]
CONCLUSION
Despite the progress of BRI projects in Southeast Asia since January 2021, China still faces a bumpy road ahead. Negative effects posed by the ongoing pandemic will continue to impact the implementation of BRI projects,[44] especially with the recent surge of COVID-19 cases in China,[45] which puts to the test China’s zero-COVID policy. Lockdown measures adopted in Shanghai and neighboring provinces have led to production suspension and shipping delays,[46] which are likely to influence global supply chains and limit China’s ability to promptly export goods needed for the BRI projects overseas.
Besides, local concerns about the BRI’s social and environmental costs will persist. Issues such as forced relocation, compensation disputes, and influx of Chinese workers feature prominently in the media coverage of the BRI’s social impacts in the region. In Laos, many villagers displaced by construction of mega projects such as the China-Laos Railway and dams on the Mekong River have not yet received appropriate compensation as promised.[47] The influx of unskilled Chinese workers also gives rise to tensions in Indonesia as these workers are considered to have occupied jobs reserved for local workers.[48] The discussion about BRI’s environmental costs has largely focused on Chinese dams built on the upstream Mekong River, which are correlated to increasingly frequent droughts and loss of fish stocks and farmland in downstream countries.[49] The extent to which these concerns are addressed will influence local perceptions as well as long-term prospects of BRI projects in the region.
ENDNOTES
[1] “中国-东盟合作事实与数据: 1991-2021”,中国外交部，2021年12月31日， https://www.fmprc.gov.cn/web/wjbxw_673019/202201/t20220105_10479078.shtml.
[2] “突破8000亿！东盟保持我国第一大货物贸易伙伴”, 新华丝路，2022年1月4日，https://www.imsilkroad.com/news/p/475336.html.
[3] Sharon Seah, et al., “The State of Southeast Asia 2022 Survey Report”, ISEAS-Yusof Ishak Institute, 16 February 2022, /articles-commentaries/state-of-southeast-asia-survey/the-state-of-southeast-asia-2022-survey-report/.
[4] Reuters Staff, “China says one-fifth of Belt and Road projects ‘seriously affected’ by pandemic, Reuters, 19 June 2020, https://www.reuters.com/article/us-health-coronavirus-china-silkroad-idUSKBN23Q0I1.
[5] Kaho Yu, “The Belt and Road Initiative in Southeast Asia after COVID-19: China’s Energy and Infrastructure Investments in Myanmar”, ISEAS Perspective 2021/39, 6 April 2021, /wp-content/uploads/2021/03/ISEAS_Perspective_2021_39.pdf.
[6] Luna Sun, “China 2021 economic growth ‘expected to exceed target’, despite headwinds” South China Morning Post, 1 December 2021, https://www.scmp.com/economy/china-economy/article/3158004/china-2021-economic-growth-expected-exceed-target-despite.
[7] “2021年我国对‘一带一路’沿线国家投资合作情况”,中国商务部，2022年1月4日，http://fec.mofcom.gov.cn/article/fwydyl/tjsj/202201/20220103239004.shtml.
[8] For instance, many projects contracted to Chinese companies in Singapore fit into this category.
[9] See https://bit.ly/38hg9ya.
[10] Given the lack of data regarding exact financing sources of certain projects, the numbers presented here are based on the author’s estimation.
[11] This dataset only includes projects that have remained active since January 2021 and classifies project status into five categories— “bid awarded”, “contract signed”, “construction started”, “in progress”, and “completed”. Project status is based on the availability of the most up-to-date data. Project status is updated accordingly if there is evidence suggesting further progress. The label “construction started” mainly refers to projects that started after January 2021, while “in progress” describes projects that started before January but have not been completed yet. However, for projects labeled “construction started”, if there is evidence indicating substantive progress since the construction started, they are also treated as “in progress.” Projects are labeled “completed” if 1) the construction is finished, 2) project is handed over to the local partner, or 3) the project is put into commercial use.
[12] “中建四局中标老挝市政工程设计项目”,见道，2021 年4 月19日，https://www.seetao.com/details/77088.html.
[13] 陈语,“ 中国能建西南院中标印尼鑫海工业园区60万千瓦燃机联合循环电站可研、初施设一体化设计”, 国际电力网，2021年7月12日，https://power.in-en.com/html/power-2392417.shtml.
[14] “CHMC Signed Cambodia Upper Stung Tatay Hydropower BOT Investment Project Agreements”, China National Heavy Machinery Corporation, 10 March 2021, http://en.chmc.cc/contents/2786/61304.html.
[15] “面积约22.9万平方米！中建六局签约菲律宾金禧海景城项目”,见道，2022年1月12日，https://www.seetao.com/details/133746.html.
[16] “ 二公司召开印尼华青1×380MW火力发电项目开工会”, 中国化学工程集团有限公司，2021年6月24日，https://www.cncec.cn/articledetail/124919.
[17] “中国政府援助缅甸蒲甘他冰瑜佛塔修复项目正式启动”新华网，2022年1月8日，http://www.news.cn/world/2022-01/08/c_1128244803.htm.
[18] “中铁三局参建印尼雅万高铁最长隧道贯通”, 中国中铁股份有限公司，2022年3月1日，http://www.crecg.com/web/10089492/10091154/10191210/index.html.
[19] “中马合作马来西亚东海岸铁路项目首条隧道贯通”,中国中央人民政府，2021年4月9日，http://www.gov.cn/xinwen/2021-04/09/content_5598742.htm.
[20] Ayman Falak Medina, “The Completed China-Laos Railway: Bringing Opportunities for ASEAN and the Asia Pacific”, ASEAN Briefing, 21 December 2021, https://www.aseanbriefing.com/news/the-completed-china-laos-railway/.
[21] Nedopil 2022.
[22] For the sake of clarity, this study only reports parent companies. If the master project is contracted to different companies, the dataset only records the main contractor as indicated in the project title in the news coverage. While the dataset treats components of a single project as belonging to the same master project, it codes different phases of the same project as separate master projects.
[23] Min Ye, “Adapting or Atrophying? China’s Belt and Road after the Covid-19 Pandemic”, Asia Policy, Vol. 16, No. 1(January 2021), 65-95.
[24] Lee Dong Gyu, “The Belt and Road Initiative after COVID: The Rise of Health and Digital Silk Roads”, Asian Institute for Policy Studies, 15 March 2021, http://en.asaninst.org/contents/the-belt-and-road-initiative-after-covid-the-rise-of-health-and-digital-silk-roads/.
[25] Nedopil 2022.
[26] “China-funded medical building in Cambodia’s capital passes completion inspection”, Xinhua, 28 December 2021, http://www.xinhuanet.com/english/20211228/6045d479390447d2abe2f0e67f39ef95/c.html
[27] “Thailand Launches ASEAN’s First 5G Smart Hospital”, Huawei, 17 December 2021, https://www.huawei.com/au/news/2021/12/smart-hospital-thailand-5g-siriraj.
[28] “Towards a Health Silk Road”, World Health Organization, 18 August 2017, https://www.who.int/director-general/speeches/detail/towards-a-health-silk-road.
[29] Elizabeth Chan, “China’s Vaccine Diplomacy Revamps the Health Silk Road Amid COVID-19”, Jamestown Foundation, 12 November 202, https://jamestown.org/program/chinas-vaccine-diplomacy-revamps-the-health-silkroad-amid-covid-19/.
[30] Ngeow Chow-Bing, “COVID-19, Belt and Road Initiative and the Health Silk Road: Implications for Southeast Asia,” Friedrich Ebert Stiftung, October 2020, http://library.fes.de/pdf-files/bueros/indonesien/16537.pdf.
[31] See “中国-东盟合作事实与数据: 1991-2021”
[32] “Full Text: Speech by Chinese President Xi Jinping at the Special Summit to Commemorate the 30th Anniversary of China-ASEAN Dialogue Relations”, Qiushi, 23 November 2021, http://en.qstheory.cn/2021-11/23/c_683703.htm
[33] See “The State of Southeast Asia 2022 Survey Report”.
[34] Khairulanwar Zaini and Hoang Thi Ha, “Understanding the Selective Hesitancy towards Chinese Vaccines in Southeast Asia.” ISEAS Perspective 2021/115. 1 September 2021, /articles-commentaries/iseas-perspective/2021-115-understanding-the-selective-hesitancy-towards-chinese-vaccines-in-southeast-asia-by-khairulanwar-zaini-and-hoang-thi-ha/.
[35] Ngeow Chow-Bing, “China-ASEAN Information Harbor: The Digital Silk Road from Guangxi to Southeast Asia”, Friedrich Ebert Stiftung, August 2021, http://library.fes.de/pdf-files/bueros/indonesien/18185.pdf.
[36] Paul Triolo et al, “The Digital Silk Road: Expanding China’s Digital Footprints”, Eurasia Group, 8 April 2020, https://www.eurasiagroup.net/files/upload/Digital-Silk-Road-Expanding-China-Digital-Footprint-1.pdf.
[37] See Lee 2021.
[38] “Huawei’s Aaron Jiang: Green Innovation for Low-Carbon 5G”, Huawei, 19 October 2021, https://www.huawei.com/au/news/2021/10/green-low-carbon-5g-4et
[39] “Huawei Thailand Receives Prestigious Prime Minister Award as Digital International Corporation of the Year”, Huawei, 09 March 2021, https://www.huawei.com/au/news/2021/3/thailand-huawei-pm-award; “Indonesia’s Luhut Invites Huawei to Enhance Collaboration in Smart Future and New Energy”, Huawei, 08 December 2021, https://www.huawei.com/au/news/2021/12/indonesia-coordinating-minister-meets-guo-ping.
[40] “Malaysia Prime Minister Launches Huawei’s Customer Solution Innovation Center”, 23 November 2021, https://www.huawei.com/en/news/2021/11/huawei-malaysia-prime-minister-csic.
[41] “Huawei Partners NUS Business Analytics Centre to Nurture Digital Talents for Singapore”, Huawei, 15 December 2021, https://www.huawei.com/au/news/2021/12/huawei-nus-talent-cloud-big-data.
[42] See “中兴通讯菲律宾P3项目荣获2021年度PMI（中国）杰出项目奖”, 中兴， 2022年1月13日，https://www.zte.com.cn/china/about/news/20220113C3.html;“中兴通讯助力印尼运营商Telkomsel 5G商用发布”，中兴，2021年7月2日，https://www.zte.com.cn/china/about/news/20210702C1.html; “中兴通讯助力马来西亚电信构建新一代承载网”， 中兴，2022年3月2日，https://www.zte.com.cn/china/about/news/20220302C3.html.
[43] “中国能建签署菲律宾共享通信铁塔项目”, 走出去导航，2021年5月21日，https://www.investgo.cn/article/yw/alfx/202105/544855.html.
[44] P Prem Kumar and Kenji Kawase, “China-backed Malaysia megacity project struggles to gain momentum”, Nikkei Asia, 14 March 2022, https://asia.nikkei.com/Business/Markets/Property/China-backed-Malaysia-megacity-project-struggles-to-gain-momentum.
[45] “China Covid cases hit two-year high with millions in lockdown as outbreak spreads”, The Guardian, 15 March 2022, https://www.theguardian.com/world/2022/mar/15/china-covid-cases-hit-two-year-high-with-millions-in-lockdown-as-outbreak-spreads.
[46] Che Pan, “Shanghai lockdown: China struggles to maintain key supply chains amid ‘dynamic zero’ Covid-19 policy”, South China Morning Post, 26 April 2022, https://www.scmp.com/tech/big-tech/article/3175541/shanghai-lockdown-china-struggles-maintain-key-supply-chains-amid.
[47] See “Lao Villagers Displaced by Xayaburi Dam Still Lack Farmland, Water”, Radio Free Asia, 29 September 2021, https://www.rfa.org/english/news/laos/displaced-09292021174252.html; “Planned Lao dam raises concerns in Thailand over impacts on shared border”, Radio Free Asia, 21 December 2021, https://www.rfa.org/english/news/laos/dam-12212021155829.html; and “As first Chinese high-speed train reaches Laos, villagers demand overdue compensation”, Radio Free Asia, 19 October 2021, https://www.rfa.org/english/news/laos/high-speed-train-10192021141727.html.
[48] Leo Suryadinata, “New Chinese Migrants in Indonesia: An Emerging Community that Faces New Challenges”, ISEAS Perspective, 2020/61, 11 June 2020, /wp-content/uploads/2020/04/ISEAS_Perspective_2020_61.pdf; and Leo Suryadinata, “A Rising China Affects Ethnic Identities in Southeast Asia”, ISEAS Perspective 2021/74, June 3, 2021, /wp-content/uploads/2021/05/ISEAS_Perspective_2021_74.pdf.
[49] See “Planned Lao dam raises concerns in Thailand over impacts on shared border”, Radio Free Asia, 21 December 2021, https://www.rfa.org/english/news/laos/dam-12212021155829.html; and “Worries in Laos and Thailand as upstream dams drain Mekong River”, Radio Free Asia, 21 January, 2022. https://www.rfa.org/english/news/laos/mekong-water-01212022141419.html;
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2022/56 ““Hit Me Baby One More Time?”—Patriarchalism, Literalism and Androcentrism on the Rise in Malaysia” by Faris Ridzuan and Faizal Musa
EXECUTIVE SUMMARY
- Recent controversial comments made by Siti Zailah Mohd Yusoff, the Deputy Minister of Women, Family and Community Development and Malaysian Islamic Party (PAS) leader, suggesting that husbands could use a gentle but firm physical touch in order to educate recalcitrant wives, set off a furore amongst gender right groups over this apparent condoning of domestic violence.
- The growing dominance of politicians and public servants with conservative, patriarchal and androcentric attitudes within the Ministry of Women, Family and Community Development is a discouraging setback for gender rights groups in the country.
- Gender rights groups suffer from a perceived lack of religious legitimacy and their limited presence in mainstream religious domains. Conservative elements portray them as notoriously liberal.
- Gender rights groups will need to regroup and engage anew with religious elites, especially those from non-traditionalist institutions. They need to cultivate like-minded allies in political and social circles to promote progressive views to counter the conservatives’ narrative. They should work with political parties to boost the selection of women from diverse backgrounds as electoral candidates and subsequently as lawmakers.
* Faris Ridzuan is Research Officer in the Regional Social and Cultural Studies Programme at the ISEAS – Yusof Ishak Institute. Mohd Faizal Musa is Visiting Fellow at ISEAS – Yusof Ishak Institute as well as Associate at Weatherhead Centre Harvard University working on Global Shia Diaspora.
ISEAS Perspective 2022/56, 24 May 2022
INTRODUCTION
The contestation over gender relations, especially evinced by official government narrative and policy, is currently unevenly skewed to favour conservative attitudes as Malaysia lags behind in women issues. This article argues that the appointment of conservative political office holders who hold a patriarchal and androcentric worldview, especially on domestic violence, coupled with the dominance of literalist religious interpretations on gender, strongly inhibit gender equality in Malaysia as a whole.
In mid-February, Siti Zailah Mohd Yusoff, the Deputy Minister of Women, Family and Community Development and Malaysian Islamic Party (PAS) leader, made some controversial remarks in a video about how husbands should treat wives. Husbands, she ventured, should use a “gentle but firm physical touch” that is “educational”, on recalcitrant wives.[1] There has been a groundswell of outrage over this comment. What gender rights activists fear is that the phenomenon reveals the capture by conservative actors of key institutions meant to oversee and support family and gender development and relations.
This is not the first controversy involving public institutions signalling that occurrence. During the initial period of the Covid-19 pandemic in 2020, the Ministry of Women, Family and Community Development under Rina Harun introduced a series of posters that have been described by civil and women’s rights groups as an initiative that “could worsen gender stereotypes and to a certain extent encourage domestic violence”.[2] These posters seemed to emphasise the importance of women’s appearance and advised work-at-home mothers to “groom as usual” and always look neat. Furthermore, they extolled that wives, in educating their husbands on doing household chores, should adopt a “Doraemon-like” tone and giggle coyly, as opposed to “nagging”. This is in order to avoid quarrels.[3] Gender rights groups were shocked and confused by the underlying message of these posters.[4]
While Siti Zailah’s comment angered many, it received support from conservative groups. Sisters in Islam (SIS), a non-governmental organisation well-known for its progressive views, condemned Zailah’s advice for a husband to hit the wife gently to reprimand her, and considered it supportive of “women being treated as subservient, inferior beings who deserve to be disciplined and corrected in their character and behaviour.” [5] Joint Action Group for Gender Equality, a coalition of women’s groups, called for the resignation of Siti Zailah following the comments. Several MPs, such as MP Yeoh Bee Yin from the opposition Democratic Action Party and Nurul Izzah Anwar from the opposition People’s Justice Party, also expressed alarm over the Deputy Minister’s statements and highlighted their concerns over already increasing domestic violence during the pandemic. Meanwhile, conservative groups such as Ikatan Muslimin Malaysia (ISMA), Malay-Muslim NGO, supported Siti Zailah.
With Siti Zailah helming the role of Deputy Minister for Women, Family and Community Development, policies and official government narratives on gender relations are set to become more conservative. It does not help matters that Rina Harun, the Minister, is seen by the public to be lacking in capability, giving Zailah ample space to gain public attention. While Rina was a relative unknown before 2018, Zailah is highly regarded by many in the conservative camp. She was a religious official at the Kelantan Islamic Affairs Department before joining politics. She was responsible for training religious officers in the state for five years. Between 2000 to 2006, she was nominated Senator and in 2008 contested in the parliamentary seat of Rantau Panjang, Kelantan, which she has represented since. She was also PAS’ women’s wing leader from 2011 to 2015.
In 2017, Siti Zailah endorsed child marriages[6] and more recently, she expressed that the government would have to consult the ulama to endorse the national road map to fight child marriage if the policies conflict with the Quran and Hadith.[7] Furthermore, she stated that policies that do not clash with Islam will continue under the new government. Siti Zailah has also asked for flight attendants to dress in a syariah-compliant manner.
There is no space in this article to explore progressive interpretations and hermeneutics of Islamic texts to counteract conservative, androcentric, patriarchal and literalist paradigms and interpretations. But most certainly, the vast majority of religious elites and functionaries in Malaysia’s bureaucracy and courts are conservative, and Siti Zailah is just one among many.
Given the apparent trend, Malaysia sorely needs a counteracting narrative to patriarchal and literalist interpretations of Islamic sources. Women clerics such as Nuridah Mohd Salleh, the leader of PAS’ Women Wing from Terengganu, or Asma Harun, a PAS leader from Selangor, carry the same tone as Zailah’s. Fatin Nur Majdina Nordin from the Islamic NGO, ABIM, or Dr Siti Mariah Mahmud and Aiman Athirah from PAS’ splinter party, Amanah, are no match for Zailah and are often considered to be much less charismatic than her. None of them openly challenged Zailah’s view on the permissibility of beating wives in Islam either. This leaves the interpretation of the Quranic verse 4:34, which seems to endorse the act of beating wives, confined to literalist and patriarchal readings.
Recently, the Department of Islamic Development of Malaysia (JAKIM) appointed Hakimah Mohd Yusoff as their new Director. She is its first woman head. Hakimah’s views on theological and contemporary jurisprudential discourses are however not known to many; she was formerly the head of Halal Hub, a less visible wing under JAKIM. Her appointment was based more on seniority in the organisation rather than anything else. It remains to be seen how she positions herself on matters such as the legal marrying age for Muslim women.
The conservatism of the abovementioned female politicians and religious elites stems from their tertiary training or alma mater. While Asma Harun has a degree from Al-Azhar, Nuridah Mohd Salleh and Hakimah Mohd Yusoff graduated from the Islamic Faculty of the University of Malaya, the alma mater of many PAS activists. Unfortunately, those who carry progressive views such as Dr Siti Mariah Mahmud and Aiman Athirah are not considered to be asatizah, for lack of a degree in Islamic studies.
Another impediment to the appearance and presence of progressive female voices may be the fact that female clerics became visible in Malaysia only in the 1990s, and they fall behind male clerics in Malaysia’s patriarchal climate. Women clerics are also expected to only discuss ‘fiqh wanita’ or women jurisprudential affairs and the role of parenthood, and no other themes.
CIVIL SOCIETY GROUPS LACKING RELIGIOUS LEGITIMACY
In 2009, Sisters in Islam (SIS) released a publication entitled “Are Muslim Men Allowed to Beat Their Wives?”.[8] SIS put forth compelling hermeneutical and socio-historical arguments that the Quranic verse 4:34 does not permit husbands to beat wives.[9] However, SIS lacks religious legitimacy in the eyes of the conservative and rural public, as its members are largely not from the fold of religious preachers or asatizah. It is also not part of their strategy to dominate the pulpits of mosques and religious platforms to spread their progressive ideologies, so their discourse does not gain public traction. To complicate matters, there is also a 2014 Selangor fatwa declaring SIS a deviant organisation for subscribing to “religious liberalism and pluralism”.[10] This proclamation still stands today, although it is being contested by SIS. Furthermore, their perceived standing as a liberal organisation hampers their ability to gain credibility in the public space where fearmongering against the dangers of liberalism is rampant.[11]
Patriarchalism was never as dominant or as strong before colonialism and Islamic revivalism as it is now. Before the colonial period, in fact, there were matriarchal systems in the Malay world, such as in Negeri Sembilan, but such systems were overshadowed and discarded during the colonial period. This trend was further compounded by the religious revivalism of the last 40 years, immersed within processes such as the Islamisation of economic and political systems. Islamic revivalism, in Islamising public space through government policies instead of leaving religion to personal choice, has strengthened extant conservative and patriarchal strands in Malay culture.
Ideology and praxis do not match though. On the one hand, ideologically conservative gender paradigms drive policies and laws and promulgate essentialized roles of women as child bearers and homemakers, and men as breadwinners. While on the other hand, in practice, we have the quotidian experience of women participating both in the public and private spheres. Hence, women with ideologically patriarchal views are more likely to gain prominence and power as they ironically espouse patriarchalism while climbing up the patriarchal social hierarchy. It is definitely hard for a woman espousing progressive, non-patriarchal, non-androcentric and gender egalitarian views, especially overtly, to climb up the social and political hierarchy, let alone disseminate their progressive views. This cultural dimension of patriarchy is not a culturalist analysis; there are very real structural impediments that women face in Malaysian society. For instance, while Kelantanese and Kedahan women are popularly known to be very capable, illustrious and business-minded, PAS’ laws and religious interpretations attempt to put women under gendered surveillance.
STRUCTURAL REFORM FOR GENDER EQUALITY
Beyond the lack of spaces for progressive interpretations and conservatives’ capture of Malaysia’s bureaucracy and courts, there is a need to examine the structural factors that drive patriarchy and gender inequality in Malaysia and what gender rights groups and gender movements can do to level the playing field.
As an indicator of Malaysia’s lack of structural progress in gender egalitarianism, Malaysia ranks 104th in the World Economic Forum’s Global Gender Gap Index 2020 out of 153 countries and 9th out of 11 countries in the Southeast Asian region.[12] Suhakam, a human rights institution in Malaysia, cites that according to this index, “Malaysia is still far behind in other key areas including literacy rates (86th), economic participation (97th) and political participation (117th). ”[13] Certainly, there are a lot of structural factors such as disparity in education, political and work opportunities that reinforce the patriarchal and androcentric paradigms of the religious and political elites who interpret Islamic sources and discourses. In turn, these patriarchal and androcentric paradigms also reinforce the structural gender inequality in a feedback loop.
As gender rights groups and gender movements in Malaysia try to gain momentum to galvanise structural change in gender equality through lobbying and discursive strategies, they are encumbered by religious and political elites as well public officers who hold androcentric and patriarchal views on gender relations.
In contrast, outside the religious domain such as in politics, Muslim women are doing quite well. For instance, Tengku Maimun Tuan Mat has been elected as Chief Justice; Latheefa Bibi Koya was briefly Chief Commissioner of Malaysian Anti-Corruption Commission; Nor Shamsiah Mohd Yunus is the Governor of the Central Bank of Malaysia and Wan Azizah Wan Ismail was Deputy Prime Minister during Pakatan Harapan’s administration. However, gender egalitarianism is not progressing as fast in the religious domain.
There is a need for systemic change, and gender rights groups and gender movements need to work in a concerted manner to reform religious elites, asatizah and preachers in the country to adopt a more gender egalitarian worldview. This is all the more important since their chances of lobbying government agencies and courts captured by religious conservatives appear slim. Instead, they need to cooperate with religious elites who are more gender-progressive in order to introduce the public to more progressive Islamic interpretations of gender relations and equity. This may be difficult since there is a scant number of progressive religious elites. Gender rights groups and gender movements also need to ensure that more progressive religious elites occupy influential positions in religious bureaucracies and key ministries. Key figures such as former Terengganu’s Mufti, Ismail Yahya who opposed female circumcision (FGM) and Mohd Na’im Mokhtar, Malaysia’s Sharia Chief Judge who appointed two women Sharia judges in Selangor in 2016, need to be engaged and given wider reportage.
While Malaysia and Indonesia are different from each other in terms of Islamic approach and climates, both countries are seeing more women participating in the public arena, and this includes Islamic missionaries.
Among the strategies to ensure the equal access of women to matters of justice within the Islamic arena is to follow the footsteps of the state of Selangor in electing more women as Sharia judges. At the moment there are only two women Sharia judges, one of them being Noor Huda who was trained at the School of Oriental and African Studies, University of London; the government is positioning her to disseminate a more creative and innovative outlook on Shariah law. Civil society groups such as Sisters in Islam, or ABIM must ensure that they have like-minded allies graduating from non-traditionalist institutions, who eventually move on to work in important positions in the religious bureaucracy and courts, as well as in key agencies such as the Ministry of Women, Family and Community Development.
In order to achieve a balanced participation of women and men in political and public decision-making, and gender mainstreaming in all policies and measures, political parties need to push for more women from all backgrounds to be electoral candidates.
One concrete strategy is for civil society actors and progressive actors to gain legitimacy by winning over the conservatives in a struggle over day-to-day women’s issues such as fair wages in employment, equity in access and opportunity to higher education, and support for mothers who take on the double shift of homemaker and n employee, self-employed person or entrepreneur. All these concrete efforts will ensure that overarching issues concerning women such as the legal marriage age for Muslim women will get fair attention, and not only from conservative voices. The call to add more women leaders must be made effortlessly with a coherence of concerted efforts from both political parties and civil society actors.
At the moment, Malaysia’s Director-General of Education is Nor Zamani Abdol Hamid, and there are other key positions held by women such as the Director of the Department of Islamic Development of Malaysia (held by Hakimah Mohd Yusoff), and the Information Director-General (held by Roselindawati Abdul Rahman). In addition, women who are influential within social media with more than a million followers include female celebrities such as Noor Neelofa Mohd Noor and Mira Filzah. Being in positions of influence and authority, these women can dismantle structural and cultural patriarchy to contribute to gender egalitarianism and women’s development and progress. They should work together with fellow male allies and not resort to blaming men and male actors per se. Humanistic and gender egalitarian Malay and Islamic traditions that can be gleaned from the historical past and continued intellectual heritage should be revived in public discourse.
CONCLUSION
The capture of the key ministry dealing with women’s development, by conservative, patriarchal and androcentric political actors who adopt literalist and patriarchal interpretations of key Islamic sources and law does not bode well for gender egalitarianism in Malaysia. This has culminated in the ministry endorsing acts that may lead to domestic violence, and meeting with little to no opposition for doing so. Gender rights groups’ perceived lack of religious legitimacy and their little foray into mainstream religious discourse make little headway in changing the mainstream conservative religious discourse on gender relations and equity.
One important strategy for gender rights groups and movements is to work to reform religious elites, asatizah and preachers so that they can help propagate progressive religious discourse. This is necessary since the political and religious bureaucracy has been captured by patriarchal and androcentric elites, and seems impervious to progressives’ lobbying for now. There also needs to be a network of like-minded allies for civil society groups to work with, involving graduates from non-traditionalist institutions who can possibly go on to occupy positions of influence in government and in society in general.
Gender rights groups and gender movements need to pick up the momentum to galvanise grassroots actions to get women from diverse backgrounds appointed as electoral candidates and law-makers; this can counteract and dilute the dominance of conservative voices. Only then can systemic and structural changes occur to promote gender egalitarianism in Malaysia, alongside progressive and gender egalitarian hermeneutics and interpretations of key Islamic sources, laws and texts.
ENDNOTES
[1] Lingan Suganya, “Malaysian Minister under Fire for Apparently Endorsing Domestic Violence,” News, Benar News, Accessed May 6, 2022, 17:12:00+08:00, https://www.benarnews.org/english/news/malaysian/video-fallout-02142022120855.html.
[2] Soo Wern Jun, “Women Ministry’s ‘Household Happiness’ Posters Could Fuel Gender Stereotypes and Domestic Violence, Advocacy Groups Say | Malay Mail,” accessed April 20, 2022, https://www.malaymail.com/news/malaysia/2020/03/31/women-ministrys-household-happiness-posters-could-fuel-gender-stereotypes-a/1852073.
[3] Ibid.
[4] “It implies that women are ultimately responsible for getting domestic chores done when the duty should be a shared one. It makes women the ones who need to persuade their partners to chip in, and worse, asks that women downplay a rightful request by using infantile language and mannerisms — so as not to offend the apparent sensitivities of men. The implicit message is that men are allowed to slack off on domestic work and it’s women who must follow up with them — but they should only do so nicely. In short, it sends the message that women are subordinate in the home and are not allowed to function as equals to men,” said Women’s Centre for Change in a strongly worded statement. (Soo Wern Jun, “Women Ministry’s ‘Household Happiness’ Posters Could Fuel Gender Stereotypes and Domestic Violence, Advocacy Groups Say | Malay Mail,” accessed April 20, 2022, https://www.malaymail.com/news/malaysia/2020/03/31/women-ministrys-household-happiness-posters-could-fuel-gender-stereotypes-a/1852073.)
[5] Lingan Suganya, “Malaysian Minister under Fire for Apparently Endorsing Domestic Violence,” News, Benar News, Accessed May 6, 2022, 17:12:00+08:00, https://www.benarnews.org/english/news/malaysian/video-fallout-02142022120855.html.
[6] “Hannah Concerned about Deputy Minister’s Support of Child Marriage,” Malaysiakini, 10:56:00+08:00, https://www.malaysiakini.com/news/513990.
[7] M. Fakhrull Halim, “Child Marriage: Deputy Minister Says Policies That Don’t Clash with Islam Will Go On,” Malaysiakini, 20:14:00+08:00, https://www.malaysiakini.com/news/514611.
[8] Yasmin Masidi and SIS Forum (Malaysia) Berhad, Are Muslim Men Allowed to Beat Their Wives? (Selangor: Sisters in Islam, 2009).
[9] Amongst its arguments, SIS argued that the word “daraba” in the Quranic verse 4:34, which is traditionally understood as “strike”, could refer to the act where someone “strikes out” on a journey or “gives or sets as an example”. Furthermore, even if classical jurists were to accept that “daraba” means “strike”, SIS argues that the historical context tells us that it is not a license for men to beat their wives, considering that he final verse in the Qur’an on male-female relationships which regards women and men as being each other’s protective friends and partners. Ibid, 11-13.
[10] Hafiz Yatim / theedgemarkets com August 27 and 2019 15:29 Pm +08, “Selangor Fatwa Declaring Sisters in Islam as a Deviant Group Stands — High Court,” The Edge Markets, August 27, 2019, http://www.theedgemarkets.com/article/selangor-fatwa-declaring-sisters-islam-deviant-group-stands-%E2%80%94-high-court.
[11] After Malaysia experienced waves of Islamic revivalism in the 1970s, outward forms of symbolism and ethnoreligious identity markers such as the veil or tudung among women leaders also render more religious legitimacy to wearers of the tudung, and the leaders of SIS, many of whom do not don the tudung, do not have claim over this symbolic legitimacy of religiousness.
[12] Klaus Schwab et al., Global Gender Gap Report 2020 Insight Report. (Geneva: World Economic Forum, 2019).
[13] “Gender Equality – SUHAKAM,” accessed April 20, 2022, https://suhakam.org.my/portfolio/gender-equality/.
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“Financial Technology Adoption in Greater Jakarta: Patterns, Constraints and Enablers” by Astrid Meilasari-Sugiana, Siwage Dharma Negara and Hui Yew-Foong
2022/55 “It Takes Two to Tango: Vietnam-US Relations in the New Context” by Hong Kong Nguyen and Pham Muoi Nguyen
EXECUTIVE SUMMARY
- Shifts in global politics, particularly in the wake of Russia’s invasion of Ukraine, raise questions about the prospects of Vietnam’s cooperative partnership with countries that are imposing anti-Russia sanctions, particularly the United States.
- Since their diplomatic normalisation in 1995, Vietnam and the US have continuously strengthened their economic ties and deepened cooperation in both traditional and non-traditional security issues, a trend that is likely to endure in the future, given the increasing importance that the two countries attach to their bilateral relationship.
- Vietnam’s delicate balancing act between major powers suggests that it is unlikely to advance a relationship with one power at the expense of another. Instead, it will try to maintain an independent position and promote ties with all powers, where possible.
- While Vietnam and the United States increasingly see eye-to-eye on a number of strategic issues, certain political differences between the two remain. Going forward, they will need to address such differences while maintaining frequent political, economic, cultural and military exchanges in order to build an enduring partnership.
- Upgrading ties to the strategic partnership level should also be a bilateral goal in the short to medium term.
*Hong Kong Nguyen is a PhD student in International Relations at Ritsumeikan Asia Pacific University and a non-resident WSD-Handa fellow at Pacific Forum. Pham Muoi Nguyen is a former Wall Street Journal reporter based in Hanoi and is currently director of Vietnam Panorama (Toan Viet), a private media monitoring company.
ISEAS Perspective 2022/55, 23 May 2022
INTRODUCTION
When US President Joe Biden released his Indo-Pacific Strategy on 11 February 2022, Vietnam was named one of the leading regional partners of the United States, alongside India, Indonesia, Malaysia, New Zealand, Singapore, Taiwan, and the Pacific Islands.[1] Over the past two years, despite the COVID-19 pandemic, Vietnam has also been visited by various senior US officials, including then-Secretary of State Mike Pompeo in 2020, and Defense Secretary Lloyd Austin and Vice President Kamala Harris in 2021. All signs were pointing toward a positive trajectory for bilateral relations until Russia invaded Ukraine on 24 February. In the two months that followed, Vietnam found itself among a minority of countries that did not support efforts by America and its allies to punish Russia for its invasion. Specifically, Hanoi abstained on two United Nations (UN) General Assembly resolutions that condemned Russia’s invasion and demanded civilian protection and humanitarian access in Ukraine, and voted against a resolution that suspended Russia from the UN Human Rights Council.
Hanoi’s votes on the above resolutions disappointed Western countries. On 8 March, ambassadors of the European Union, Norway, Switzerland and the United Kingdom in Hanoi co-signed a letter urging Vietnam to stand with Ukraine because the Soviet Union, Vietnam’s historical ally, “is long gone and we are in a new era.”[2] However, from Hanoi’s perspective, Russia remains a highly important partner, especially in terms of arms supplies[3] and oil and gas cooperation.[4] Amid the growing pressure to side with the West on the Ukrainian issue, the Vietnamese government has continued business as usual, trying to maintain a balance between the major powers. On 12 March, Vietnam gave the green light for Gazprom International, a subsidiary of the Russian state-owned Gazprom, to go ahead with a US$293 million gas-fired power plant in the central province of Quang Tri.[5] Two weeks later, Foreign Minister Bui Thanh Son welcomed US Department of State Counselor Derek Chollet in Hanoi, and in early May, Vietnam announced that it would provide US$500,000 in humanitarian aid to Ukraine.
The chain of events raises questions about the prospects of Vietnam’s cooperation with partners that impose anti-Russia sanctions, particularly the United States. As Hanoi and Washington will mark ten years of their “comprehensive partnership” in 2023, this provides a timely opportunity to review recent developments in bilateral relations and assess their prospects, especially regarding the potential upgrading of bilateral ties to the “strategic partnership” level.
CEMENTING COMMON GROUND
Expectations for deepening Vietnam-US relations are grounded in a number of factors, but none clearer than the increasingly robust bilateral economic ties (Figure 1). The US is currently Vietnam’s second-largest trading partner after China, while Vietnam is among the top ten trading partners of the US. Between 2016 and 2021, two-way trade turnover more than doubled to US$111.56 billion.[6] In terms of foreign direct investment, America is Vietnam’s 11th biggest investor, with a total of 1,138 projects and accumulative registered capital of US$10.28 billion as of end-2021, up 32.8 per cent and 4.10 per cent from 2017, respectively.[7]
Vietnam’s emergence as a major trading partner of America has been driven partly by shifts in regional supply chains, such as the higher manufacturing costs in China as well as the trade frictions between China and the US. For this reason, although Vietnam and the US are not mutual parties to any comprehensive trade agreements, bilateral trade is likely to maintain its growth momentum. Recently, Washington has announced its Indo-Pacific Economic Framework (IPEF), an attempt to re-engage Asia in the economic domain. Although the IPEF does not offer greater access to the US market, it is envisioned as an inclusive and flexible framework, covering a wide range of issues, from trade facilitation, technology, digital economy, cross-border data flow, clean energy, infrastructure, to high labour and environmental standards.[8] With the US hosting the Asia-Pacific Economic Cooperation (APEC) summit in 2023, Vietnam and other APEC members can expect the US to take further concrete measures to roll out the IPEF, thereby further deepening America’s economic ties with the region.
Several outstanding trade issues remain between the two countries, including the US Trade Representative’s investigation into Vietnam’s timber trade practices, strict US regulations over the import of Vietnamese catfish, and high anti-dumping tariff on Vietnamese honey.[9] However, these are rather minor issues that are unlikely to significantly constrain bilateral ties going forward.
The two countries are also increasingly aligned on a host of traditional and non-traditional security issues. According to the US Department of State, between 2015 and 2019, the US authorized the permanent export of more than US$32.3 million in defense articles to Vietnam through Direct Commercial Sales. It also registered over US$162 million in active Foreign Military Sales with Vietnam during this period. From 2017 to 2021, Washington provided Hanoi with about US$60 million in security assistance under the Foreign Military Financing (FMF) programme and more than US$20 million under the Southeast Asia Maritime Security Initiative.[10] The FMF spending, which supports capacity building for Vietnam in military education and maritime security/domain awareness, is the third-highest by the US in ASEAN, jumping from merely US$100,000 in 2012 to US$40 million in 2019.[11] At a press conference in Hanoi on 20 April 2022, Ambassador Marc Knapper disclosed that the US was preparing to transfer a third coast guard cutter to Vietnam.[12] The announcement was made despite Vietnam’s unwillingness to side with the West on the Ukraine issue, showing the Biden administration’s strong commitment to promoting ties with Vietnam.
Deepening military-to-military ties are also evidenced by the frequency of US port calls to Vietnam. As shown in Figure 2, between 2009 and 2020, Vietnam received a total of 28 visits by US military vessels, including 13 official port calls, two oceanographic survey missions,[13] and six voyage repairs. There were also nine multilateral humanitarian assistance and disaster relief (HA/DR) preparedness missions within the annual US-led Pacific Partnership framework.
On non-traditional security issues, the United States Agency for International Development (USAID) is implementing different projects in Vietnam that focus on, among other things, infectious diseases control and prevention, environmental security, and overcoming war legacies.[14] Notably, by early May, America had donated nearly 40 million COVID-19 vaccine doses to Vietnam, in addition to US$23.46 million in COVID-19 assistance through USAID.[15] Another potential area for cooperation is energy; the US is committed to helping Vietnam reduce greenhouse gas emissions and develop clean and renewable energy.[16] Vietnam has also approved the USAID Vietnam Low Emission Energy Program II—a five-year US$36-million clean energy project announced by Vice President Kamala Harris during her visit to Vietnam in August 2021.
Currently, the two sides are doing a major dioxin remediation project at Bien Hoa air base, the largest remaining dioxin hot spot in the country.[17] The project, costing US$390 million, was launched in 2019 and would take at least ten years to complete. Although Vietnam and the US have moved beyond past hostilities towards talks of strategic alignment, addressing war legacies remains an important and relevant bilateral goal. The two countries only elevated their relationship to a “comprehensive partnership” in 2013, one year after the US initiated the first major programme for dioxin cleanup in Vietnam.[18] Addressing war legacy issues, including dioxin remediation, unexploded ordnance removal, cooperation on wartime remains recovery, and support for individuals affected by the war, is thus critical to cementing the common ground for a stronger, lasting partnership between the two former enemies.
REALITY CHECK
A recurring question over the past few years is whether and when Vietnam and the US would forge a strategic partnership. The idea was first proposed by then-Secretary of State Hilary Clinton during her visit to Hanoi in 2012 and has since been reiterated by numerous US senior officials, including Vice President Kamala Harris. In the nomination hearing at the US Senate Committee on Foreign Relations on 13 July 2021 for the post of US Ambassador to Vietnam, Marc Knapper said it would be a priority, both for him and America, to develop a strategic relationship with Vietnam during his posting in Hanoi.[19] According to Knapper, this objective can be realized by focusing on three aspects: “strengthening even further our security relationship,” “strengthening our trade and economic ties,” and “deepening our people-to-people ties.” Knapper reaffirmed this aspiration in an interview with a state-run Vietnamese newspaper in February, noting that the upgraded partnership would reflect the genuine nature of bilateral ties going forward.[20] He reiterated this point in April and May, suggesting an upgrade in 2023 as befitting to mark the 10th anniversary of the Vietnam-US comprehensive partnership.
While Vietnam is interested in strengthening ties with the US, China and Russia continue to feature prominently in Hanoi’s strategic calculations. Both countries, seen as America’s strategic rivals, are Vietnam’s “comprehensive strategic partners”—the highest level in Hanoi’s hierarchy of diplomatic relations. As a matter of fact, Vietnam maintains close cooperation with China and Russia in all the three areas that Ambassador Knapper mentioned. For example, while Vietnam is reliant on Russia for arms imports and oil and gas operations in the South China Sea, it is also heavily dependent on China for imports of a wide range of production inputs. As a result, Hanoi has been unwilling to upset its ties with Russia despite western pressures. At the same time, it is also trying to maintain regular high-level exchanges with Beijing despite China’s growing assertiveness in the South China Sea.
The nature of Vietnam’s relationships with China and Russia is not lost on the US. Although that will unlikely discourage Washington from strengthening ties with Hanoi, it prefers a higher diplomatic status, no less important than Vietnam’s three comprehensive strategic partners (China, Russia, and India) or its other 14 strategic partners (Japan, South Korea, Spain, the United Kingdom, Germany, Italy, Indonesia, Thailand, Singapore, France, Malaysia, the Philippines, Australia, and New Zealand).
To this end, both sides need to understand and even accept certain differences, and on that basis, deepen their cooperation. In a meeting with Ambassador Knapper in Hanoi on 30 March, Prime Minister Pham Minh Chinh mentioned the need for trust-building, particularly through overcoming war legacies.[21] The Vietnamese leader underlined that the comprehensive partnership should be deepened on the basis of “respect for each other’s independence, sovereignty, territorial integrity, political regimes and differences.” The “differences” undoubtedly include the human rights situation in Vietnam that the US has long expressed concerns about. However, even this issue is unlikely to be a major obstacle to bilateral ties going forward. Wishing to focus on economic and strategic cooperation with Hanoi to counter the China challenge, Washington has recently been less critical of Hanoi’s human rights record, making the Vietnamese leadership more comfortable in strengthening ties with Washington.
While the declaration of a strategic partnership between the two countries remains unlikely for now, the steady growth trajectory of bilateral ties since their normalisation in 1995 indicates the making of a reliable partnership. From economic to security cooperation, both sides are seeing eye-to-eye on various issues of strategic importance. In particular, Vietnam supports security-defense cooperative mechanisms suitable to its capabilities and interests, including those in the Indo-Pacific region, as affirmed in Vietnam’s 2019 Defense White Paper.[22] Vietnam and the US also share the same vision for a peaceful and stable regional rules-based order, and the respect for international law and the freedom of navigation and overflight in the South China Sea.
Such positions are unlikely to be affected by the ongoing Russo-Ukrainian conflict. If anything, the conflict is a useful lesson for the Vietnamese leadership. The ever-increasing pressures on Vietnam to side with either the US or Russia would only reinforce Hanoi’s long-standing belief that not taking sides is a wise decision given its strong desire for strategic autonomy. This view has been clarified by Former Deputy Minister of Defense Nguyen Chi Vinh, who stated in a recent interview that “Vietnam is not neutral, Vietnam is independent. Being independent is utterly different from being neutral. We are independent on the basis of ethical principles, international law, and Vietnam’s interests.”[23] Such an emphasis on independence may add further momentum to Vietnam–US ties if Hanoi sees a strengthened partnership with America as essential to its efforts to maintain strategic autonomy and independence, especially in the face of rising pressures from an increasingly assertive China. However, it may also mean that Vietnam will push back against America’s efforts to impose its will on Hanoi, including in the Ukraine issue, if Hanoi considers Washington’s pressures too intrusive and detrimental to its strategic independence.
CONCLUSION
Just as it has taken Vietnam and the United States decades to transform their relationship from foes to friends, it will take time for the two countries to build trust and deepen their current partnership. During this process, bilateral dialogues and engagements in different domains, including trade and investment, cultural, education and people-to-people exchanges, as well as defense and security cooperation activities, should be further strengthened and promoted.
Prime Minister Pham Minh Chinh led a Vietnamese delegation on a working visit to the US on 11-17 May, and joined the Special US-ASEAN Summit in Washington D.C. on 12-13 May. As Chinh’s visit was not a formal bilateral one, there was no bilateral meeting between Chinh and President Joseph Biden. However, during a short meeting on the sidelines of the summit, the two leaders touched on the “special” Vietnam-US relationship and reiterated their commitment to bolster bilateral cooperation.[24] President Biden also accepted Chinh’s invitation to visit Vietnam and said he would arrange it at a mutually suitable time. Should the visit happen, ideally next year when the two countries celebrate the 10th anniversary of their comprehensive partnership, it may be the right opportunity for the two sides to upgrade their relationship to the strategic partnership level as a landmark for their deepening ties over the past ten years and pave the way for an even stronger relationship going forward.
ENDNOTES
[1] White House, “FACT SHEET: Indo-Pacific Strategy of the United States,” 2022, https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/02/11/fact-sheet-indo-pacific-strategy-of-the-united-states/.
[2] “Op-Ed by the Ambassadors of the European Union, Norway, Switzerland and the United Kingdom in Hanoi,” Delegation of the European Union to Vietnam, 8 March 2022, https://www.eeas.europa.eu/delegations/vietnam/op-ed-ambassadors-european-union-norway-switzerland-and-united-kingdom-hanoi_en.
[3] Although Vietnam has been trying to diversify its arms imports away from Russia since 2014, Russia still accounted for 68.4 per cent of Vietnam’s arms imports in the period 2015-2021. See Le Hong Hiep, “Will Vietnam be able to wean itself off Russian arms?”, Fulcrum, 4April 2022.
[4] According to state media reports, about 30 per cent of crude oil and about 25 per cent of gas in Vietnam are exploited by firms involving investments from Russian companies such as Zarubezhneft, Rosneft, and Gazprom. See: Thanh Dat, “Russia-Vietnam plans displaying confidence, ” Vietnam Investment Review, 6 December 2021, https://vir.com.vn/russia-vietnam-plans-displaying-confidence-89887.html.
[5] Hoang Hiep and Van Tuan, “Gazprom International sẽ đầu tư dự án điện khí 297 triệu USD tại Quảng Trị [Gazprom International to invest in a gas-fired power plant worth USD297 million in Quang Tri], ” Vietnam Finance, 12 March 2022, https://vietnamfinance.vn/gazprom-international-se-dau-tu-du-an-dien-khi-297-trieu-usd-tai-quang-tri-20180504224266050.htm.
[6] “Tình hình xuất khẩu, nhập khẩu hàng hóa của Việt Nam tháng 12 và 12 tháng/2021 [Exports, imports of Vietnam in December and 12 months of 2021], ” Vietnam Customs, 19 January 2022, https://tongcuc.customs.gov.vn/portal/index.jsp?pageId=442&tkId=4682&group=Ph%C3%A2n%20t%C3%ADch&category=Ph%C3%A2n%20t%C3%ADch%20%C4%91%E1%BB%8Bnh%20k%E1%BB%B3.
[7] “Tình hình thu hút đầu tư nước ngoài tại Việt Nam năm 2021 [Foreign Direct Investment in Vietnam in 2021], ” Foreign Investment Agency, 24 December 2021, https://fia.mpi.gov.vn/Detail/CatID/f3cb5873-74b1-4a47-a57c-a491e0be4051/NewsID/5d476094-8272-4d9d-b810-1609ce7b67b3/MenuID.
[8] Andreyka Natalegawa and Gregory B. Poling, “The Indo-Pacific Economic Framework and Digital Trade in Southeast Asia, ” CSIS, 5 May 2022, https://www.csis.org/analysis/indo-pacific-economic-framework-and-digital-trade-southeast-asia.
[9] Congressional Research Service, Vietnam’s Economy and U.S. Trade: Key Issues in 2021, 1 February 2021, https://crsreports.congress.gov/product/pdf/IF/IF11753. While the anti-dumping duty for Vietnamese honey has decreased from 410.93% – 413.99% in the preliminary conclusion to 58.74% – 61.27%, the tax rates are ten times as much as those imposed on honey imported into the US from India (5.85%). See Thanh Nguyen and Ha Thanh. “Vietnamese honey cannot compete in the US despite the deep reduction in taxes, ” Customs News, 6 May 2022, https://english.haiquanonline.com.vn/vietnamese-honey-cannot-compete-in-the-us-despite-the-deep-reduction-in-taxes-22358.html.
[10] US Department of State, “U.S. Security Cooperation With Vietnam, ” 2 June 2021, https://www.state.gov/u-s-security-cooperation-with-vietnam/.
[11] Stephen Burgess, “The US–Vietnam Comprehensive Partnership and the Key Role of Air Force Relations, ” Air University, 13 December 2021, https://www.airuniversity.af.edu/JIPA/Display/Article/2870567/the-usvietnam-comprehensive-partnership-and-the-key-role-of-air-force-relations/.
[12] Viet Anh, “Time to upgrade US-Vietnam relationship, says US envoy, ” VnExpress International, 20 April 2022, https://e.vnexpress.net/news/news/time-to-upgrade-us-vietnam-relationship-says-us-envoy-4453788.html.
[13] These missions were jointly operated by US naval ships and Vietnamese vessels. For instance, the mission in 2011 was a month-long one conducted by the US Joint POW/MIA Accounting Command and the Vietnamese Office for Seeking Missing Persons.
[14] USAID Vietnam, “USAID/Vietnams Country Development Cooperation Strategy (2020-2025),” 2022, https://www.usaid.gov/vietnam/cdcs.
[15] USAID Vietnam, “COVID-19 Assistance,” 2022, https://www.usaid.gov/vietnam/covid-19-assistance.
[16] “Special Presidential Envoy for Climate John Kerry visited Vietnam, ” U.S. Embassy & Consulate in Vietnam, 2 March 2022, https://vn.usembassy.gov/special-presidential-envoy-for-climate-john-kerry-visited-vietnam/; “Vietnam seeks US investment in renewable energy,” Vietnam News Agency, 14 March 2022, https://en.vietnamplus.vn/vietnam-seeks-us-investment-in-renewable-energy/223430.vnp.
[17] Vi Vu, “Vietnam, US launch dioxin cleanup at Bien Hoa airbase, ” VnExpress International, 20 April 2019, https://e.vnexpress.net/news/news/vietnam-us-launch-dioxin-cleanup-at-bien-hoa-airbase-3912324.html.
[18] Thomas Fuller, “4 Decades on, U.S. Starts Cleanup of Agent Orange in Vietnam, ” New York Times, 9 August 2012, https://www.nytimes.com/2012/08/10/world/asia/us-moves-to-address-agent-orange-contamination-in-vietnam.html.
[19] U.S. Congress, “Nominations – Tuesday, 13 July 2021,” https://www.foreign.senate.gov/imo/media/doc/07%2013%202021%20Nominations%20–%20Smith%20Bitter%20Medina%20Knapper.pdf.
[20] Quynh Trung and Lan Huong, “Đại Sứ Marc Knapper: Việt Nam luôn chiếm vị trí độc nhất trong trái tim tôi’ [Ambassador Marc Knapper: ‘Vietnam always holds a unique place in my heart’],” Tuoi Tre, 2022, https://tuoitre.vn/dai-su-marc-knapper-viet-nam-luon-chiem-vi-tri-doc-nhat-trong-trai-tim-toi-20220220154544323.htm.
[21] “Thủ tướng Phạm Minh Chính tiếp Đại sứ Hoa Kỳ Marc Evans Knapper [PM Pham Minh Chinh meets with U.S. Ambassador Marc Evans Knapper],” Vietnam News Agency, 30 April 2022, https://www.vietnamplus.vn/thu-tuong-pham-minh-chinh-tiep-dai-su-hoa-ky-marc-evans-knapper/781091.vnp.
[22] Ministry of Defense, “Quốc Phòng Việt Nam 2019,” 2019, http://mod.gov.vn/wps/wcm/connect/a7f22b32-724d-4643-9301-878e2ca4d8db/QuocphongVietNam2019.pdf.
[23] Van Kien and Luan Dung, “Thượng tướng Nguyễn Chí Vịnh: Việt Nam không chọn phe, Việt Nam độc lập! [Lieutenent General Nguyen Chi Vinh: Vietnam does not take side, Vietnam is independent!],” Tien Phong, 30 April 2022, https://tienphong.vn/thuong-tuong-nguyen-chi-vinh-viet-nam-khong-chon-phe-viet-nam-doc-lap-post1433614.tpo.
[24] “PM Pham Minh Chinh Meets with US President Joe Biden,” Nhan Dan, 13 May 2022, https://en.nhandan.vn/politics/item/11486202-pm-pham-minh-chinh-meets-with-us-president-joe-biden.html.
| ISEAS Perspective is published electronically by: ISEAS – Yusof Ishak Institute 30 Heng Mui Keng Terrace Singapore 119614 Main Tel: (65) 6778 0955 Main Fax: (65) 6778 1735 Get Involved with ISEAS. Please click here: /support/get-involved-with-iseas/ | ISEAS – Yusof Ishak Institute accepts no responsibility for facts presented and views expressed. Responsibility rests exclusively with the individual author or authors. No part of this publication may be reproduced in any form without permission. © Copyright is held by the author or authors of each article. | Editorial Chairman: Choi Shing Kwok Editorial Advisor: Tan Chin Tiong Editorial Committee: Terence Chong, Cassey Lee, Norshahril Saat, and Hoang Thi Ha. Managing Editor: Ooi Kee Beng Editors: William Choong, Lee Poh Onn, Lee Sue-Ann, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
2022/54 “Analyzing Public Opinion on Moving Indonesia’s Capital: Demographic and Attitudinal Trends” by Burhanuddin Muhtadi
EXECUTIVE SUMMARY
- Public support for relocating the Indonesian capital to East Kalimantan is divided. In a national survey conducted in February 2022, 48.5% of respondents support the plan while 44% disagree with it.
- Although a slight majority of respondents support the new capital city (IKN) initiative, the level of support in 2022 reflects a decrease of nearly 5 percentage points compared to a similar survey carried out two years ago. This decline in support may be due to the perception that managing the Covid-19 pandemic should be a higher priority.
- Support for the IKN plan varies by demographics and region, but political affiliation seems to be the most salient factor in shaping public attitudes towards the plan. Jokowi’s base in the 2019 presidential election continues to support the IKN plan while Prabowo supporters in that election tend not to.
- Support for the IKN plan is higher among those who understand the various technocratic reasons for moving the capital city, such as the water crisis and overcrowding in Jakarta and creating more balanced economic development between Java and the outer provinces. This suggests that the government must do a better job in explaining the rationale for a new capital.
- The majority of respondents in Jakarta oppose the relocation of the capital, even though they directly bear the brunt of overcrowding and infrastructural problems in the city. They probably prefer the government to focus on fixing the problems in Jakarta rather than relocating the capital.
- Failure to arrest the downward slide in public support for the IKN initiative may jeopardise the prospects for a successful move altogether.
* Burhanuddin Muhtadi is Visiting Fellow in the Indonesia Studies Programme at ISEAS – Yusof Ishak Institute, and Senior Lecturer at Islamic State University (UIN) Syarif Hidayatullah.
ISEAS Perspective 2022/54, 20 May 2022
INTRODUCTION
President Jokowi’s aspiration to move the nation’s capital is not a novel idea. This ambitious capital relocation plan has resurfaced in almost every Indonesian President’s term in office.[1] But it was only during Jokowi’s presidential term that this so-called national pipe dream has begun to be realised. President Jokowi himself only revealed the plan during a limited cabinet meeting on 29 April 2019, a few days after he was re-elected for his second term. Prior to that, he had never mentioned the idea at all, and certainly not during the election campaign. This probably reflects his awareness that the proposal was too controversial and could be strongly rejected by the public, especially by those who have benefited from having the capital city in Jakarta.
Since this idea was introduced, many analyses have appeared from technocratic, environmental, economic and legal perspectives, but little has been discussed about what public opinion towards the plan is like. How do Indonesians actually respond to the plan to relocate the nation’s capital? What factors best explain support for capital relocation? What are the demographics of supporters and opponents of the IKN plan? How does each political affiliation base and mass organization respond to the plan? And what strategies can the government use to increase public support for IKN? These are the questions addressed in this article.
PUBLIC ATTITUDES DIVIDED
To answer the questions above, I analyze two representative face-to-face national surveys conducted by an independent survey agency, Indonesian Political Indicators (Indikator), in 2020 and 2022.[2] In terms of issue awareness, in 2022, 84.3% of respondents claim to know or have heard about the plan to relocate the nation’s capital to East Kalimantan. The majority in almost all socio-demographic bases, except for respondents in the Maluku Papua region, are aware of the planned relocation of the capital.
However, at the public support level, there are indications of a decline in positive sentiment towards IKN. In 2020, 53% of citizens stated that they strongly or quite agreed with the plan to move the capital, but this support declined slightly to 48.5% in 2022. While in 2020 only 33.6% said they disagreed or strongly disagreed, in 2022 the level of public disapproval increased to 44 %. Unlike in 2020, current public attitudes are more divided between those who are for and those who are against IKN.
Note that the 2020 survey was conducted before the official government announcement was made on 2 March 2020 that Covid-19 cases had appeared in Indonesia. The pandemic has very likely reduced public support for IKN in the 2022 survey; the public health crisis having lowered its overall priority. This is evident even among citizens who agree with IKN; 51.1% of the supporting public stated that the idea was a non-exigent one to implement at the moment amidst more pressing issues facing the country. This means that many residents have a positive opinion about moving the capital city, but now find the timing inappropriate. Also, among those who disagree, almost 80% of them think that IKN is not urgent at all under present conditions.
It is not surprising that the survey also found that among citizens who are satisfied with President Jokowi’s performance, the majority agree with moving the capital city (54.4%). On the other hand, among dissatisfied citizens, most disagree with the IKN plan. However, the proportion of Jokowi’s satisfied voters who disagree with IKN is quite high, at 38.6%. This shows that even among supporters, the capital relocation idea has not gained enough traction. Why the capital relocation proposal now faces heavier resistance is due to the idea being considered less urgent amidst the pandemic situation. The fear is that the project may heavily burden the state budget while the country is still reeling from the economic slump of the pandemic. Moreover, the public perceives that economic recovery should take precedence over the ambitious capital relocation plan.
WHO ARE THE SUPPORTERS OF IKN?
The survey offers insight into the demographic characteristics of supporters and opponents of IKN. From the gender composition, men tend to show higher support for IKN than women. Based on age group, support among young voters under the age of 21 for IKN is slightly higher than that among those in the age generation above it.
Meanwhile, judging from ethnic composition, only Javanese and Batak ethnic groups tend to support the idea of moving the capital city, while Sundanese, Betawi, Minang, Malay, and Madurese ethnic groups tend to reject it. This is presumably related to partisan factors: ethnic Javanese and Batak make up Jokowi’s supporter base which delivered him his second presidential term, while Sundanese, Minang, Betawi, Madurese and Malays were Prabowo’s supporters in the 2019 election.[3]
The partisan factor is also evidently present in the breakdown based on religion. Non-Muslim voters who have been Jokowi’s main support base[4] solidly support his plan. On the other hand, Muslim voters are relatively divided; in absolute terms, there are slightly more Muslim voters who reject it than who support it.
The partisan element is also evident when dissected based on domicile, namely rural-urban and regional demographic background. The support from rural residents for IKN is slightly higher than that from urban residents; this fact mirrors exit poll data showing that Jokowi’s support in the presidential election was consistently higher in rural villages than in urban cities.[5] So, even though they were Jokowi’s opponent in 2019, Prabowo Subianto and his running mate, Sandiaga Uno, are now ministers in Jokowi’s cabinet, the attitude of their voter base has remained relatively unchanged.
The same pattern is also evident where regional background is concerned. In regions where Jokowi had a landslide victory in the 2014 and 2019 presidential elections, a majority supports his plan to move the capital. The exceptions are in Maluku and Papua where the majority of the people do not have an attitude or opinion about the plan since they generally do not know about it. The biggest support comes from Kalimantan where an overwhelming majority is behind the government and DPR’s decision to move the capital to their island. In Jakarta, Jokowi had a slight advantage over Prabowo in the 2019 presidential election, but the absolute majority of Jakarta residents tend to reject IKN. This is expected because they have enjoyed the privilege of being residents of the nation’s capital for years. Be that as it may, in Prabowo’s strongholds such as West Java, Sumatra, and Banten, the majority also rejects IKN.
Meanwhile, when analyzed by education level, the higher the education level of a respondent, the higher is the level of support shown for IKN. 57.7% of those with university education and above support creating the new capital. At the same time, support among those with lower secondary education tends to be divided. The same pattern is also evident where income level is concerned. The higher the income level, the higher the support for IKN, and vice versa.
PUBLIC SUPPORT BASED ON POLITICAL AFFILIATION
The partisan factor for supporting IKN is highly evident when we break it down based on the presidential choice made in 2019 election. Among 55.5% of respondents who claim to be Jokowi-Ma’ruf Amin voters, the majority support building the new capital. On the other hand, 61% of Prabowo-Sandiaga voters reject IKN outright. Also, although the majority of Jokowi’s supporters support the plan, a significant minority among these display disagreement with IKN.
When analyzed further based on the respondents’ party vote in the 2019 legislative elections, we get further insight into why more than a third of Jokowi’s supporters have negative sentiments about IKN. The mass base of Jokowi’s coalition parties does not solidly support Jokowi’s ambition to develop a new capital city. Only the PDI-P and NasDem voter bases solidly support the plan. On the other hand, the majority of PKS and Democrat mass bases – the two remaining opposition parties in parliament – reject IKN. Meanwhile, Golkar’s mass base is equally divided on that issue.
The variation in support for IKN is more visible when based on the supporter base of each of the presidential candidates projected to run in 2024. The polling firm Indikator asks about the electability of ten presidential candidates if the election were held during the 2022 survey. While the electability of the ten varies, the support bases of Ganjar Pranowo (Governor of Central Java), Erick Thohir (Minister of SOEs), Puan Maharani (Chairman of the DPR and PDIP elite) and Airlangga Hartarto (Coordinating Minister for the Economy and Golkar Chairman) tend to solidly support Jokowi’s agenda.
This is quite logical because apart from these four candidates viewed as individuals in close proximity to Jokowi, their support base at the same time also coincides with Jokowi’s base. What sticks out is the majority of Sandiaga’s supporters; these support IKN even though Sandiaga was Jokowi’s
adversary in the 2019 election. Sandiaga’s position as Jokowi’s minister as well as his public appearance with Jokowi on many occasions seem to have changed the attitude of his supporters towards being more positive towards IKN.
On the other hand, the majority of supporters of Anies Baswedan (Governor of Jakarta) and Agus Harimurti Yudhoyono (Chairman of Democrats) reject the new capital. These two figures have been presenting themselves as Jokowi’s oppositional figures, thereby attracting voters who are disillusioned or opposed to the Jokowi government. Prabowo supporters are quite divided, although slightly more among them support IKN than are against it. Supporters of the Governor of West Java Ridwan Kamil and of the Governor of East Java Khofifah Indar Parawansa are also sharply divided regarding the plan to move the capital.
HOW TO BOOST PUBLIC SUPPORT FOR IKN?
Given the downward trend of public support for the new capital, the government urgently needs to find ways to turn the situation around. Moreover, the IKN plan should no longer be seen as just a reflection of Jokowi’s personal ambition, but a long-term Indonesian project that was popularly passed into law on 18 January 2022. Of the nine factions in the DPR, only PKS firmly rejected IKN, while the Democrat party together with the remaining seven other governing coalition parties jointly voted to pass the IKN Bill.[6]
Our analysis suggests that one potential way for the government to boost public support is to disseminate the objective and practical rationales for why the capital needs to be relocated. Indikator’s survey posed to respondents a series of questions to ascertain the level of knowledge and support for various technocratic policy rationales that have been used to justify why a new capital is needed. The level of awareness among respondents from 34 provinces throughout Indonesia about the reasons behind moving the capital turns out to be underwhelming.
Only a third of the respondents are aware of the two main rationales that are used to justify relocating the capital, namely “Jakarta is threatened by the Sunda Strait Megathrust earthquake” (33.6% of the respondents were aware) and “the crisis of water supply in Java, especially Jakarta” (37% were aware).
For respondents who claim to be aware of the rationales for a new capital, Indikator then asked follow-up questions about how much they believed in or supported those rationales. I have correlated the public’s knowledge of the rationales with the level of trust/support for such rationales. The findings show that the absolute majority of respondents who are aware of the rationales express strong belief / support for these reasons (Table 4). In contrast, where respondents display lack of awareness of the rationales, their levels of skepticism and resistance to the capital move tend to increase. This finding clearly shows that if the government wants to boost positive perceptions of IKN, then the public needs to be made more aware of the reasons for the move.
CONCLUSION
The idea of moving the Indonesian capital from Jakarta, which is widely considered to be overstretched in its ability to remain the seat of the central government and the locus of economic activities in the country, has persistently cropped up since the era of Indonesia’s founding father President Sukarno and been revisited in every presidential era ever since. However, this ambitious idea has failed to materialize, until now. It was only during the time of President Jokowi that proper plans for the construction of the new capital began to take shape. Parliament passed the IKN Bill into Law earlier this year. But instead of increasing public support after the legal instrument was passed, public resistance has increased instead. Opposition to IKN has increased from 33% in 2020 to 44% in February 2022.
If this deteriorating trend in public support for IKN continues, the government will find it difficult to carry out the stages of relocating the capital effectively. Public objection may also disrupt the process of relocating civil servants and public officials from the 82 state institutions or ministries to IKN, and it is highly plausible that in the future, dissent will increase among civil servants or public officials who refuse to relocate to the new capital. If public resistance grows, it is not impossible that the stance of government coalition parties that originally supported it could shift. Furthermore, if the Jokowi government fails to arrest the slide in public levels of support for the capital move, the next administration may be reluctant to follow through with it and instead place blame on the Jokowi’s administration for the costs and confusion involved.
For this reason, the Jokowi government urgently needs to increase public support for IKN. First, the partisan effect that affects support or rejection of IKN must be addressed. All parties supporting the government, including those who were previously in the opposition, must be involved in order to make the IKN agenda a success. Prabowo and Sandiaga, both currently serving as Jokowi’s ministers, including two former opposition parties, Gerindra and PAN, which are now part of the government coalition, need to be drawn in more intensely to shore up support for the IKN agenda. To further boost positive perceptions of IKN, the government also needs to intensify socialization on why the country needs a new capital.
The absolute majority of residents who know or display high level of awareness of these rationales tend to be strongly supportive of the IKN project, compared to citizens who are unaware of the rationales being presented. Of course, in communicating these rationales, the government risks being perceived to be ignoring the infrastructural issues facing Jakarta and to be instead taking the easy way out, by moving the capital. The government needs to convince the public that it remains committed to solving the classic problems that have long plagued Jakarta, such as the water crisis, the threat of earthquakes and Jakarta sinking, and others. If the government is successful in socializing the rationale why Indonesia needs to build a new capital, then public support for IKN should increase and Jokowi can leave a good legacy behind for the next government to build upon.
ENDNOTES
[1] Rohmatin Bonasir, “Rencana pemindahan ibu kota dari Jakarta: Berapa lama waktu yang diperlukan dan apa saja syarat-syarat ibu kota?” BBC News Indonesia, 29 April 2019, https://www.bbc.com/indonesia/indonesia-48093451
[2] The first survey was carried out simultaneously in all regions on 5-10 February 2020, while the second survey was conducted on 11-21 February 2022. The population for this survey were Indonesian citizens with the right to vote, who were thus 17 years old and above, or already married when the survey was conducted. Using a questionnaire, the interviews were conducted face-to-face by our interviewers on 1,220 voting-age adults in the first survey and 4,220 respondents in the second survey who were selected with multistage random sampling. These were proportionally distributed over the 34 provinces.
[3] Indikator Politik Indonesia, “2019 General Election exit poll,” 17 April 2019, p. 42 https://indikator.co.id/rilis-exit-poll-pemilu-2019-2/
[4] Ibid, p. 41. For comparison, see the results of the 2014 presidential election exit poll, Indikator Politik Indonesia, “Hasil exit poll Pemilu Presiden,” 9 July 2014, p. 21, https://indikator.co.id/laporan-exit-poll-pemilu-presiden-2014/
[5] Ibid, p. 43.
[6] Nicholas Ryan Aditya, “PKS Tolak RUU IKN Disahkan di Rapat Paripurna, Ini Alasannya”, Kompas.com, 18 January 2021, https://nasional.kompas.com/read/2022/01/18/09200151/pks-tolak-ruu-ikn-disahkan-di-rapat-paripurna-ini-alasannya?page=all.
| ISEAS Perspective is published electronically by: ISEAS – Yusof Ishak Institute 30 Heng Mui Keng Terrace Singapore 119614 Main Tel: (65) 6778 0955 Main Fax: (65) 6778 1735 Get Involved with ISEAS. Please click here: /support/get-involved-with-iseas/ | ISEAS – Yusof Ishak Institute accepts no responsibility for facts presented and views expressed. Responsibility rests exclusively with the individual author or authors. No part of this publication may be reproduced in any form without permission. © Copyright is held by the author or authors of each article. | Editorial Chairman: Choi Shing Kwok Editorial Advisor: Tan Chin Tiong Editorial Committee: Terence Chong, Cassey Lee, Norshahril Saat, and Hoang Thi Ha. Managing Editor: Ooi Kee Beng Editors: William Choong, Lee Poh Onn, Lee Sue-Ann, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
2022/53 “Uncertainties in Malaysia’s Economic Recovery” by Cassey Lee
EXECUTIVE SUMMARY
- The prospects for a more robust economic recovery in Malaysia are being clouded by a number of uncertainties. Bank Negara Malaysia’s minor downward adjustment of a mere 0.2% of Malaysia’s economic growth forecast to 5.3-6.3% seems somewhat optimistic in the light of recent developments.
- The shift to the endemic phase of Covid-19 will undoubtedly increase domestic economic activities, but the economic gains from the easing of restrictions on mobility of people and goods may be lower than expected.
- The war in Ukraine and the de-coupling of Russia from major economies are expected to cause disruptions which in turn are likely to slow down the global economy and generate inflationary shocks.
- Malaysia’s growth will probably be adversely affected by the external conditions, despite the higher market prices for some of its exports, such as crude oil and palm oil.
- Inflation is already creeping upwards, especially in food prices. Such inflationary pressures are likely to be aggravated if the Ringgit weakens further due to higher interest rates in the United States.
- If inflation in Malaysia worsens, policymakers may have to tighten monetary policy further, combined with additional fiscal stimuli funded by debt and petroleum royalties.
*Cassey Lee is Senior Fellow at ISEAS – Yusof Ishak Institute. The author thanks Francis Hutchinson, Lee Hwok Aun, Tham Siew Yean, Siwage Dharma Negara, Serina Abdul Rahman, Quah Boon Huat and Marc Foo for their useful comments and suggestions. The usual caveat applies.
ISEAS Perspective 2022/53, 19 May 2022
INTRODUCTION
In October last year, official forecasts projected the Malaysian economy to grow by 5.5 to 6.5 percent in 2022.[1] More recently, Bank Negara Malaysia has downgraded its forecasts for the country’s economic growth in 2022 to 5.3 to 6.3 percent.[2] This minor adjustment of a mere 0.2 percent belies the uncertainties generated by recent events that cloud the prospects of the country’s continuing recovery in the coming months. These include the impact of the war in Ukraine, the ongoing un-coupling of the Russian economy from the global economy and inflationary pressures in developed economies.
Given these uncertainties, what are the prospects of recovery for the Malaysian economy in the coming months and beyond? A good place to start is an assessment of how far the Malaysian economy has recovered thus far.
THE ECONOMIC RECOVERY SO FAR
The Malaysian economy suffered a severe contraction of -5.6% in 2020. This was a consequence of the implementation of a series of control measures starting from the lockdown (Movement Control Order) from 18 March 2020 to 3 May 2020. As a result, the country’s real GDP plunged by 16 percent (quarter to quarter) in the second quarter of 2020 (Figure 1). Subsequent relaxation of control measures brought about a sharp economic recovery in the third quarter of 2020. Further relaxation of the control measures in 2021 generated a further though modest 3.1 percent recovery in 2021. As a whole, the economic recovery in 2021 was very uneven: the economy was still relatively weak in the second and third quarters of 2021, but showed a strong recovery in the fourth quarter.
At the time of writing, the Malaysian economy has not fully recovered. Before the pandemic, between 2016 and 2019, the economy grew at a compound annual growth rate (CAGR) of 5.0 percent per annum. Comparing the actual 2021 GDP with a counterfactual GDP derived by assuming a five percent CAGR growth rate, the “lost output” amounts to about 11.8 percent of the GDP (Figure 2). This figure is a measure of the economic cost of the pandemic for the past two years. The real GDP in 2021 is estimated to be 97.3 percent of the level attained in 2019. Thus, the level of economic activity at the end of 2021 is still slightly below the level achieved before the pandemic began.
Based on components of GDP by expenditures, the recovery in 2021 was driven primarily by private consumption (Figure 3). The external sector’s contribution was mixed given the sharp decline in export in Q3-2021, which was due to the lockdown from June 2021 to August 2021. This took place amidst a growing global demand for electrical and electronic goods in 2021. Investment recovered slightly in Q4-2021 but was below the historical average.
From a sectoral perspective, the services sector is the main component of the GDP. Examining trends in the sectoral components of GDP, the services sector only recovered in the second half of 2021 (Figure 4). The sector’s future trajectory remains uncertain as the sector already began plateauing in 2019 before the pandemic. The manufacturing sector also picked up in the second half of 2021.
More recent trends in economic recovery can be partially inferred from the mobility of the population. Population mobility for business-related activities increased since mid-2021 driven by gradual relaxation of Covid-19 restrictions especially in the last quarter of 2021 (Figure 5).[3] However, mobility associated with these activities declined slightly in January and February 2022.
Labour market conditions also provide some indication of the extent of recovery achieved so far. Before the pandemic, the unemployment rate was hovering around 3.3 percent (Figure 6), but increased to 5.1 percent in Q2-2020. By early 2022, this rate had declined and stabilised around 4.1-4.2 percent.[4]
In terms of the composition of the unemployed, workers in the 15-24 age group account for the largest share despite a slight decline in the past two years. The weakness in the labour market is also reflected in the sharp decline in wages experienced in 2020; median salaries and wages declined by 15 percent (Figure 7). This decline has been particularly steep for younger workers (20-29) and older workers (60-64). Workers with a lower level of education are also more severely affected (Figure 8). More recent data are not available. However, given that the unemployment rate only declined slightly from late 2021 to early 2022, median salaries and wages are unlikely to have fully recovered to pre-pandemic levels. This can also be seen in the job creation figures which only increased in the last quarter of 2021 (Figure 9). The level of job creation is still about one-third below levels observed before the pandemic. Also, though job creation in the manufacturing sector has rebounded, the services sector remains a laggard.
UNCERTAINTIES IN THE HORIZON
Surveys conducted in early 2022 are optimistic about Malaysia’s growth prospects in 2022. The Business Confidence Indicator (BCI) published by the Department of Statistics in late February 2022 showed that economic activities were expected to increase in the first quarter of 2022 (Figure 10).[5] Whilst the floods in January and March 2022 are likely to have short-term impact on growth in this quarter, they are not likely to have large impact for the rest of the year.[6] In contrast, two factors will determine the trajectory of the economy in the coming months. The transition to the Covid-19 endemic phase, which began on the first of April 2022, is expected to boost domestic sources of growth. However, the growth induced by the Covid-19 endemic phase may be neutralised by adverse and inter-related developments abroad, such as the war in Ukraine and inflationary pressures in developed economies.
Covid-19 Endemic Phase
Malaysia is currently undergoing its fifth wave of the Covid-19 pandemic. The number of daily new Covid-19 cases in this current wave is higher than during previous waves (Figure 11). However, the number of daily new Covid-19 deaths has remained relatively low (compared to the number of new cases). This is likely to be due to the high vaccination rate in the country. About 79 percent of the country’s population have been vaccinated with two doses.[7] This has prompted the Malaysian government to relax the control measures further. The country officially entered the Covid-19 endemic phase starting 1 April 2022.
How much will the economy be boosted by the implementation of the endemic phase? In theory, an increase in population mobility for retail activities is likely to increase private consumption. Though the endemic phase will impact domestic economic activity positively, the size of this impact is difficult to ascertain in any precise manner. For starters, the mobility indicators for economic activities such as retail and work have been increasing since June 2021 (Figure 12). It already peaked in late December 2021, before declining slightly – mostly likely due to the floods and seasonal effects. Hence, the domestic economic gains from transitioning to the Covid-19 endemic phase may be smaller than expected.
However, there is one potential silver lining – the move to the Covid-19 endemic phase may be able to support the revival of Malaysia’s tourism industry. In 2019, the sector supported about 3.5 million workers, or 23 percent of total workers in Malaysia.[8] The pandemic has had a severe impact on the sector, with tourist arrivals and tourism receipts both plunging by more than 80 percent in 2020 following border closures (Figure 13).
While the revival of the tourism sector is likely to take a long time, it might be possible to achieve faster gains in some markets, such as tourists from Singapore. Before the pandemic, Singapore accounted for the most significant number and share of inbound tourist arrivals (Figure 14). The reopening of the land borders between Singapore and Malaysia for fully vaccinated travellers on 1 April 2022 is expected to provide a near-term boost to the recovery of the tourism sector.
War in Ukraine
The war in Ukraine and economic sanctions on Russia have created some uncertainties. There are several dimensions to these uncertainties, which are all still evolving. The war and the de-coupling of the Russian economy continue to worsen the supply shocks in various commodities markets such as crude oil, natural gas, wheat, and sunflower oil. Both Ukraine and Russia are major exporters of these commodities, with a combined global export share of 69 percent for sunflower oil, 25 percent for wheat, 18 percent for barley, and 14 percent for corn.[9] Russia is a major exporter of fertilizers (13.1 percent), crude petroleum (12.5 percent global trade share), and refined petroleum (9.62 percent).[10] Expectations of supply shocks – either through reductions induced by war destruction or trade sanctions on Russia, have driven up the prices of food commodities (Figure 15). Food prices had already been trending upwards since mid-2020 due to drought and recovery in demand, but the more recent price increases are driven mainly by supply shocks. In mid-May 2022, India’s decision to ban wheat exports has exacerbated food prices further. Oil price has also been increasing since April 2020. The war in Ukraine, which began in February 2022, increased the level and volatility of oil prices (Figure 16).
The annual CPI values showed that Malaysia transitioned from a deflationary (-1.2 percent) economy in 2020 to an inflationary one (+2.5 percent) in 2021. Looking at the price changes in the CPI components, the inflation in 2021 was driven by sharp increases in transport and food costs (Figure 17). The increase in transport costs would have been higher without fuel subsidies (for RON95 petrol and diesel). This can be seen from the increasing gap between the prices for these fuel products and the price of RON97 petrol (which is not subsidised) (Figure 15). With the relatively high weightage of the transport and food costs in the CPI, the inflation rate is likely to be higher in Malaysia in 2022. Recent inflation data suggest that inflation has remained moderate on the whole but food prices have risen significantly. Comparing 2022 to 2021, the price of food has risen by 3.6 percent in January 2022, 3.7 percent in February 2022 and 4 percent in March 2022 (Table 1).
On the production side, the price shocks in the commodities market could benefit producers and exporters of crude oil, liquefied natural gas (LNG), and edible oils (e.g. palm oil). The rise in the price of oil and gas will positively impact the value of Malaysia’s exports of crude oil, LNG and palm oil. However, in the case of crude oil, the net benefit from higher prices might be smaller than expected, seeing how the country’s net exports for crude oil has declined in recent years (Figure 19).
Expectations of shortages of edible oil have also driven up the demand for and prices of palm oil. The current settlement price for palm oil futures rose by 42.9 percent between 3 February 2022 and 1 March 2022.[11] Prices have since declined slightly but remain 25-30 percent higher than before the commencement of the Russian invasion of Ukraine. Palm oil prices are expected to remain high until the third quarter of 2022.[12]
The war in Ukraine and sanctions on Russia are also expected to increase the risk of a slowdown in global economic growth. In April 2022, the IMF revised downward its growth projection for the world economy in 2022, from 4.4 percent to 3.6 percent.[13] As an open economy, Malaysia’s growth prospects will also be adversely affected by a global economic slowdown. This effect is an indirect one through weakening demand by its major trading partners (such as China, the US, and the EU).
Malaysia’s direct exposure to Ukraine and Russia in terms of trade is relatively small. Ukraine and Russia account for only 0.05 percent and 0.31 percent of the country’s total exports in 2020, respectively.[14] Ukraine and Russia’s shares of Malaysia’s total imports in 2020 are 0.12 percent and 0.41 percent, respectively. However, about 25 percent of Malaysia’s wheat imports is from Ukraine.[15] Thus, the war likely to affect Malaysia’s wheat imports in terms of both quantity and price.
Another global development that will impact Malaysia is the Federal Reserve’s response to inflationary shocks in the US. The current inflation rate in the US is close to double the earlier forecast for 2022. The Federal Reserve raised the federal funds rate by a quarter of a percentage point in March 2022, and further hikes in interest rate are expected in the coming months. Aside from slowing down the US economy, further increases in US interest rates will likely to trigger short-term capital outflows from Malaysia, which will weaken the Ringgit. The Ringgit has depreciated by about four percent from Mid-March to late April. Though this will make Malaysia’s exports more competitive, such an effect might be dampened by a more sluggish global economy. One downside of a weaker ringgit will be higher import costs which can exacerbate inflationary pressures in Malaysia.
ECONOMIC STABILIZATION CHALLENGES AHEAD
With external headwinds on the horizon, the growth prospects of the Malaysian economy will also depend on what policymakers can do. Malaysian policymakers will face several challenges in stabilizing the country’s economy. At present, there are still significant uncertainties about the trajectory of global economic growth and inflation. The global economic slowdown and inflationary pressures are imminent, but their quantum and duration are unknown. Irrespective of these uncertainties, the global economic slowdown, and inflation shocks will undoubtedly impact the Malaysian economy in the coming months.
In terms of policy responses, the near-term goals of economic stabilization should continue to focus on supporting domestic demand and, at the same time, neutralising the effects of imported inflation (driven by higher fuel prices and weaker exchange rates). These will be challenging times for monetary policy. If inflation becomes a severe problem in the coming months, a gradual upward adjustment in the interest rate might be needed. This process has begun with Bank Negara decision to raise the overnight policy rate (OPR) from 1.75 percent to 2 percent on 11 May 2022.
Fiscal stimulus might be required to mitigate the effects of this rate hike and support economic growth. The fuel subsidy is a double-edged sword – it helps keep down the cost of fuel for consumers but also saps the government’s fiscal resources. Government fuel subsidies are expected to increase from RM11 billion in 2021 to RM28 billion in 2022 if oil prices remain above USD$100 per barrel.[16] This will shrink the country’s fiscal space further. The Federal government’s debt-GDP ratio was reported to be at 63.3 percent in June 2021 against the 65 percent threshold set by the parliament.[17]
Thus, unless the limit for the debt-GDP ratio is raised further, the fiscal resources from additional borrowings could also be limited, especially if the economic recovery is lacklustre. One temporary fix is the drawing of royalties from Petronas, which is made feasible by higher prices of oil exports. Tax reforms could be another medium-term policy option but this is unlikely to take place soon, given the imminence of a general election.
CONCLUSION
Malaysia’s prospects for a more robust economic recovery in 2022 have been clouded by a number of uncertainties. The transition to the Covid-19 endemic phase will undoubtedly increase domestic economic activities; however, the economic gains from greater mobility might be lower than expected. A weak labour market and sluggish domestic consumption could affect the country’s growth prospects.
A slowdown in the global economy and inflationary shocks will adversely impact the country’s growth despite the higher market prices for some of the country’s exports. Inflationary shocks could be worsened by a weakening Ringgit if the Federal Reserve raises its interest rates further to battle domestic inflation in the US. If inflation in Malaysia worsens, policymakers may have to implement a more restrictive monetary policy combined with fiscal stimulus funded by debt and petroleum royalties.
ENDNOTES
[1] Source: https://www.theedgemarkets.com/article/malaysias-economy-grow-65-2022-%E2%80%94-bnm, accessed 9/3/2022.
[2] Source: https://www.theedgemarkets.com/article/bnm-sees-2022-gdp-growth-53-63-shade-below-official-projection, accessed 21/4/2022.
[3] The monthly mobility index is constructed by summing up the daily change in mobility.
[4] Labour Force Report, February 2022.
[5] The rise in business confidence is also mirrored in MIER’s Business Confidence Index (up to Q4-2021): https://www.mier.org.my/post/business-conditions-index-4th-quarter-2021, Accessed 8/3/2022.
[6] Severe and intermittent floods since mid-December 2021 have caused severe damages. Official estimates of the economic damages caused by floods from December 2021 to January 2022 stood at RM6.1 billion (0.4 percent of the 2021 GDP). Significant material losses were incurred in public assets and infrastructure (RM2 billion), living quarters (RM1.6 billion), and vehicles (RM1 billion). The estimated loss in sales for the manufacturing sector was estimated to be RM891 million or 0.06% of the total sales of the sector in 2021. See Laporan Khas Impak Banjir di Malaysia 2021, Department of Statistics, Malaysia. The study was conducted between 30 December 2021 and 27 January 2022.
[7] Source: https://covidnow.moh.gov.my/, Accessed 11/3/2022.
[8] Sources: Tourism Satellite Account 2020, Department of Statistics Malaysia.
[9] 2019 figures, Source: Observatory of Economic Complexity at: https://oec.world/en/home-a, Accessed 13/3/2022.
[10] 2019 figures, Source: Observatory of Economic Complexity at: https://oec.world/en/home-a, Accessed 13/3/2022.
[11] Author’s computation based on data from CEIC.
[12] Source: https://www.reuters.com/business/energy/palm-oil-prices-set-new-record-highs-coming-months-analyst-fry-2022-03-09/, Accessed 15/3/2022.
[13] Source: https://www.imf.org/en/Publications/WEO/Issues/2022/04/19/world-economic-outlook-april-2022, Accessed 27/4/2022.
[14] Source: Final Trade Statistics 2020, Department of Statistics, Malaysia.
[15] Author’s calculation based on Comtrade data for year 2020.
[16] Source: https://asia.nikkei.com/Economy/Malaysia-oil-subsidies-could-more-than-double-in-2022-finance-chief, Accessed 27/4/2022.
[17] Economic Outlook 2022, Ministry of Finance, Government of Malaysia.
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