2021/88 “Rural Finance in Lao PDR: Whither Village-Level Savings Groups?” by Chansathith Chaleunsinh and Koichi Fujita
EXECUTIVE SUMMARY
- Establishing sustainable semi-formal rural and micro finance institutions has been a critical policy goal in Laos since 2003, especially given the fact that the malfunctioning Agricultural Promotion Bank has an extremely low outreach.
- Village-level savings groups (SGs)—organised since the late 1990s as a joint venture between Lao Women’s Union (LWU) and Thai NGO/governmental institutions—are semi-formal financial institutions serving the rural sector.
- Where successfully established, these SGs have become a major source of credit for villagers. However, the problem of excess funds has become a major constraint on SGs’ sustainable development.
- Transfer of excess funds to outside borrowers through the building of SG federations at higher administrative levels is technically a possible solution, but its implementation has been limited in Laos.
- Initiatives undertaken by LWU to solve the excess funds problem have not worked. Instead, they have suppressed their development.
- Another type of SGs, the village banks (VBs)—organised since 2009 as a joint venture between GIZ and Bank of the Lao PDR (BoL)—has a mechanism for the transfer of excess funds to outside borrowers. However, their target is limited to poor rural areas.
- In rural Laos, it is SGs/VBs that hold good promise of becoming sustainable microfinance institutions. The reality of community-based rural organisations needs to be respected; however, their technical capacity needs to be improved.
* Chansathith Chaleunsinh is a founder of the volunteer group, Who Have Heart, based in Vientiane, Lao PDR. Koichi Fujita is Professor at the Center for Southeast Asian Studies, Kyoto University, Japan.
INTRODUCTION
About 67% of the population of Lao PDR reside in rural areas today.[1] Given the high dependency on informal credit in such areas, a big policy challenge for the government is the development of sustainable semi-formal rural and microfinance institutions. This has been a critical policy goal in the country since the early 2000s (BoL, 2003). Existing formal institutions have had limited success in rural finance; for example, the state-owned Agricultural Promotion Bank (APB), formed in 1993, has a wide branch network, but covers only 2% of borrowings by rural households (Coleman and Wynne-Williams, 2006).
One potential approach is the village-level savings groups (SGs). Overall, SGs have been quite successful in mobilising savings in rural areas, especially in Vientiane Capital. Villagers gain access to a good credit source with reasonable interest rates, and this has contributed to the elimination of usurious standing crop sales and to a decline in interest rates in informal credit. Their savings-first approach is quite different from that of mainstream microfinance such as the Grameen Bank in Bangladesh. Its strength lies instead in financial autonomy, viability and outreach with minimum cost.
This essay provides a review of the nature of and the challenges facing SGs.[2] The emphasis here is on the excess funds problem, which jeopardizes its sustainable development. If the problem can be solved in a real sense, the rural segmented financial market can be integrated into the nation-wide financial structure.
THE EVOLUTION OF VILLAGE-LEVEL SAVINGS GROUPS AND BANKS
Two types of village-based financial institutions have emerged in Lao PDR in the past three decades. These are the village-level savings groups and the village banks.
Village-level savings groups (SGs) are semi-formal rural financial institutions formed to collect savings from member villagers and lend them back to needy members with its profits distributed as dividend. The SGs were initiated in the late 1990s by the Lao Women’s Union (LWU) in collaboration with a Thai NGO (FIAM: Foundation for Integrated Agricultural and Environmental Management) and a Thai governmental institution (CODI: Community Organizations Development Institute). Each LWU-SG is managed by five to six elected committee members of the village-level LWU. The major task of accepting savings and extending loans is completed within one day each month. Each member contributes a minimum of 5,000 kip (US$0.6) per month to the savings fund.
The LWU-SG movement started from rural Vientiane Capital and expanded to other rural areas. By 2009, 453 villages in Vientiane Capital (91%) had established SGs. The total number reached 3,453 in 2015. However, the number of LWU-SGs in Vientiane Capital decreased from 453 in 2009 to 397 in 2020. It is reported that 80% of them are operating actively, while the rest are facing some difficulties. About 7% of LWU-SGs have been unable to conclude their annual accounts. Of the SGs that collapsed, 6% of which returned funds to members while 8% did not.
The LWU-SGs are not the only village-level player in the rural finance sector. In 2009, village banks (VBs) were introduced by the German aid organization GIZ in collaboration with the Bank of the Lao PDR (BoL) through the Microfinance in Rural Areas–Access to Finance for the Poor Project (AFP).[3]
The number of AFP-VBs reached 825 (in six provinces) in January 2020. They have a total of 360 billion kip of savings,[4] matching the 353 billion kip managed by LWU-SGs in Vientiane Capital.[5] Both are good candidates to be policy-targeted sustainable MFIs in semi-formal rural financial sector.
Since 2008, all microfinance institutions (MFIs) need to be registered with the central bank, BoL, either as Deposit-taking MFIs, Non-Deposit Taking MFIs, or Microfinance Projects. Savings and credit unions are regulated by a different set of legislation. But the number of registered MFIs in 2015 is only 53, compared to 4,815 unregistered ones. Both the LWU-SGs and the AFP-VBs are not yet registered. Of the 4,121 unregistered Deposit-taking MFIs, the share of LWU-SGs and AFP-VBs is 83.8% and 13.3%, respectively (NERI, 2015). It means that despite the endeavours by BoL, the major MFIs are not yet registered, mainly because of their ownership structure, and the difficulty of complying with BoL’s accounting and financial requirements. In this respect, the BoL will need to review its regulatory requirements, taking into account the realities of community-based rural financial organisations. These realities are discussed next.
FIELDWORK INSIGHTS ON SAVINGS GROUPS
Effective promotion and regulation of rural finance require a proper understanding of the realities of this sector at the village level. Rural villages in Laos are geographically and economically very diverse. Some are located in mountainous and remote areas (e.g. along the Ou River) with no car road connections. Villages can also be found in lowland areas along the Mekong River. There are villages that are the backbone for the hand-weaving industry established by ethnic minorities migrated from northern Laos.
Some of the challenges facing the rural sector were caused by earlier government policies. Take the example of villages involved in shifting cultivation. The shifting cultivation stabilisation policy was implemented since the 1990s. It essentially prohibited the practice of shifting cultivation that was widely observed in Laos at that time. Under the policy, three plots were distributed to each household. As a result, rural households (mainly ethnic minorities)[6] which depended on shifting cultivation were forced to convert to permanent upland crop agriculture. Many, however, failed to adjust and had to migrate to other villages or towns.
For example, in an early survey conducted in late 2000s (Table 1), some villages were heavily dependent on cash income from agriculture.[7] For some of these, as high as 70% of cash income came from agriculture (incl. livestock and fisheries), at the same time as various non-farm job opportunities were developed in other villages.
The economic diversity of the villages is also reflected in the different levels of savings collected by the SGs across the villages. The participation rates in SGs are lower among the poorer households in each village (Table 2). The poor hesitate to join SGs for fear of being unable to continue monthly savings. In some villages, the mobilised savings per member household was 154,000-423,000 kip (18-50 US$) while for others, it was 413,000-4.05 million kip (49-477 US$). An important purpose of SGs loans were “medical expenses and other emergencies” and “consumption”. The other notable fact is the high dependency of households on SGs as a source of credit. Where SGs are successfully established, they become a very important source of credit for the villagers.
Our earlier survey revealed, however, that it is difficult in general for SGs to develop smoothly in remote rural areas with poor infrastructure,[8] and in rural areas without profitable investment opportunities. But the exceptions are those in areas dealing in trade business and lowland rice production. There are also inherent problems confronting SGs, notably in the form of the excess fund.
THE EXCESS FUNDS PROBLEM
Savings groups are involved in financial intermediation. They channel funds from savers to lenders. An excess funds problem, in which the funds collected from savers exceed lending opportunities, can emerge as SGs develop. This excess funds problem has been widespread among successful SGs, and tends to appear within 4-5 years of their founding. This problem emerged as early as in the mid-2003, to reach a non-negligible level by early-2005.
There are both supply and demand sides to the problem. On the supply side, SGs can experience rapid accumulation of savings in a short period of time. This occurs when a high rate of dividend (e.g. 70% of loan interest rate: 2.1-2.4% per month) encourages villagers to increase the number of members per household and the amount of monthly savings.
On the demand side, committee members of SGs are often under pressure to meet the expectations of high dividend rates from villagers (savers). In the case of a studied village (Fig. 1), at first, the SG attempted to reduce its excess funds by increasing the demand for loans by reducing the lending interest rate from 4% to 3% and by allowing male members to borrow (the LWU-SG initially targeted women borrowers). The SG created demand for the funds by going into business themselves, for example starting a pig-raising business. Unfortunately, these ventures eventually failed. Finally, the SG began extending loans to businesspersons outside the village. Loan disbursements to non-villagers subsequently escalated.
More problems eventually emerged when, after some time, the monthly repayment of interest experienced delays and subsequently stopped entirely. Some borrowers-entrepreneurs even stopped repayment of the principal sums. The SG was thereby trapped into a default problem by mid-2008, when 96 million kip of loans to 16 outsiders became non-performing loans (NPLs). After that, the SG ceased its activity and just focused on the recovery of their NPLs.
How should the excess fund problem be tackled? One approach is to reduce the lending interest rate to, say less than 2% per month. This would lower the rate of dividend to a level that no longer attracts villagers.
Alternatively, excess funds can be deposited in commercial banks. However, the result is similar —SGs will then cease to develop. Now, if the excess funds can be transferred to other fund-deficit SGs, the overall benefit would be very large. The experience of the Japanese cooperative movement in pre-War period—building a two-tier federation of cooperatives at prefecture and national level, through which excess funds were transferred out—can provide a good lesson for SGs in Laos.
Efforts to form similar type of federations were attempted for LWU-SGs with the establishment of district funds and a central fund in the Vientiane Capital in 2005. In the case of the district fund, only three were established, and no central fund was realised.
In 2011, FIAM/CODI, the original co-sponsors of the LWU-SG project, withdrew from the project. All SGs were then put under LWU’s supervision. The LWU attempted to then solve the excess fund problem by instituting several rules. First, the maximum amount of loan was reduced from 5 times of savings to 3 times (or 25 million kip). Second, the maximum amount of monthly savings (hitherto unlimited) was introduced at 500,000 kip, or less than 10% of total savings. Third, the share of dividend to net profit was reduced from 70% to 65%. These measures effectively discouraged the enthusiasm of villagers to save in SGs.
The excess funds problem is not unique to LWU-SGs. VBs have also encountered this problem. The approach adopted involves the establishment of higher-level organisations called Network Support Organizations (NSOs) registered at BoL. VBs pay service fees to NSOs for technical services and VBs can also deposit their excess funds in NSOs at 1% monthly interest rate, which is then transferred to fund-deficit VBs (Table 3 and Fig. 2). The AFP-VBs have thereby put in place an institutional mechanism to prudently eliminate the excess funds problem. However, their target is limited, and is confined to poor rural areas. Finally, it should be added that there is a necessity to substantially improve the low technical capacity of both LWU-SGs and AFP-VBs as well.
CONCLUDING REMARKS
Rural finance remains an important but challenging in Laos. In the past, village-level savings groups have played an important role in serving the credit needs of rural households. However, their future remains clouded mainly by the inability to solve the excess funds problem. Village banks have also been established but these serve a limited subset of the rural sector, namely the poor.
Compared to the mainstream MF such as the Grameen Bank in Bangladesh, both the SGs and VBs in Laos have the potential to integrate rural financial markets into a nation-wide one. This will ensure that rural savings are effectively utilised for economic development, with villagers benefiting from the interest revenues. A major obstacle in Laos is the excess funds problem. Compared to the experience of Japan, the problem lies in the big gap in interest rates between village-level and outside formal financial markets.[9] From such a perspective, it might be wise to establish an excess funds-transferring system with slightly higher interest rates than the market ones, while suppressing the ‘excessive’ development of SGs for the time being.
REFERENCES
Central -LWU, 2011, Notice on Implementation of Regulation on Management of LWU Savings Group No. 200/Central LWU dated in April 4 (in Lao).
Coleman, B. E. and J. Wynne-Williams, 2006, Rural Finance in the Lao People’s Democratic Republic: Demand, Supply, and Sustainability, Asian Development Bank.
Bank of the Lao PDR (BoL), 2003, Policy Statement for the Development of Sustainable Rural and Micro Finance Sector.
Behrle, S., 2005, Village Banking in Upland Communities. Improving Livelihoods in the Uplands of the Lao PDR.
LWU-FCD-CODI-FIAM, 2001, Manual for Establishment and Promotion of Savings Group (in Lao).
Microfinance in Rural Areas–Access to Finance for the Poor (AFP), 2014, Handbook Operating Village Banks.
National Economic Research Institute (NERI), 2015, Microfinance in the Lao PDR, 2015.
Prochaska, K., P. Hauger, and D. Fischer, 2012, Rural Finance in Laos: GIZ Experience in Remote Rural Areas, GIZ.
ISEAS Perspective 2021/88, 29 June 2021
ENDNOTES
[1] See Lao Statistical Bureau, Ministry of Planning and Investment, Results of Population and Housing Census 2015 (https://data.opendevelopmentmekong.net/dataset/4a2c03e0-2402-4691-b2fd-56277fc95c31/resource/0be5dd3f-8f9e-4bfe-9f75-bbddc5284146/download/phc-eng-fnal-web.pdf).
[2] We draw on field research on SGs which we did in the late 2000s. For detailed discussions, see the special issue of Southeast Asian Studies at https://englishkyoto-seas.org/2015/03/vol-3-supplementary-issue-of-southeast-asian-studies/.
[3] See Prochaska et al. (2012) for more details.
[4] See Facebook’s page of Access to Finance for the Poor (https://www.facebook.com/accesstofinanceforthepoor).
[5] See Vientiane Mai Newspaper on 17 December 2020, Report on Implementation of LWU Saving Groups in Vientiane Capital in 2020.
[6] In Table 1, H-L are basically mixed with Lao and Khmu. F is also mixed with Lao, Khmu, and Hmong.
[7] This early survey covered 12 SGs. Four are located in Vientiane Capital whereas the other two are situated in nearby Luang Prabang city, and the remaining six are in Ngoi District of Luang Prabang Province. The six villages in Ngoi District are in mountainous remote areas along the Ou River and has no car road connections. From Vientiane Capital, two are selected from the villages engaged in the hand-weaving industry (relatively recently established by ethnic minorities migrated from northern Laos), while the other two are selected from lowlands along the Mekong River.
[8] Poverty does not necessarily retard savings mobilisation, but extreme poverty seems to be an exception.
[9] Commercial banks were already extended to rural areas in Japan, and cooperatives could mobilise savings at slightly higher interest rates than the market ones.
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2021/87 “COVID-19: A Catalyst for the Digital Transformation of Cambodian Education” by Kimkong Heng
EXECUTIVE SUMMARY
- Despite positive developments in recent years, Cambodia’s education system continues to be constrained by numerous challenges, including limited resources and infrastructure, high dropout rates, skills mismatches, low research capacity, low teaching salaries, and limited utilisation of information and communication technology (ICT).
- While the COVID-19 pandemic has caused considerable disruptions, it also provides an excellent opportunity for Cambodia to strengthen the integration of ICT in education, and foster the digital transformation of its education system.
- Cambodia needs to take advantage of the crisis by continuing to support ICT adoption and integration in education. It also needs to invest in digitalising education, support ICT research and development, strengthen public-private partnerships, promote independent learning, and facilitate the adoption of blended learning.
- Other concerned stakeholders such as educational institutions, teachers, parents, students and the private sector also have a pivotal role to play in achieving digital transformation of education in Cambodia.
* Guest writer, Kimkong Heng, is Visiting Senior Research Fellow at Cambodia Development Center and an Australia Awards Scholar pursuing a PhD at the University of Queensland, Australia.
INTRODUCTION
In March 2020, the World Health Organisation declared the outbreak of a novel coronavirus (SARS-CoV-2) as a pandemic (COVID-19). The virus originated in China’s Wuhan city and was first reported at the end of December 2019. By early 2020, COVID-19 had spread across the globe, causing chaos and disruptions to all dimensions of life. The impact of COVID-19 has been grave and unprecedented, and the anxiety and unpredictability it has caused have far-reaching consequences beyond public health.
In the realm of education, COVID-19 has caused global disruptions, resulting in the temporary closure of schools and universities worldwide and the proliferation of online classes. In a developing country like Cambodia, the impact of COVID-19 has been dramatic. When educational institutions were first ordered to temporarily close in March 2020, they faced difficulties in providing online classes due to limited resources and a general lack of experience in the management of online learning.
However, despite the challenges, all the concerned stakeholders were able to collaborate in order to make online classes possible.[1] It would seem that the pandemic also brings the country an opportunity to scale up the adoption and integration of information and communication technology (ICT) in education.
This article focuses on the educational opportunities enabled by the responses to COVID-19, and examines major reforms in the Cambodian education sector as well as the key challenges facing it. It concludes with recommendations for expanding ICT adoption in Cambodia’s education.
MAJOR REFORMS AND KEY CHALLENGES
There have been significant improvements made to the education sector in Cambodia over the past few decades, and it seemed even before the pandemic to be on a positive trajectory.[2] The Ministry of Education, Youth and Sport (MoEYS), for example, introduced an unprecedented reform to the Grade 12 National Examination in 2014 to prevent exam frauds. Despite its abrupt introduction, the reform managed to gain traction over the years.[3] MoEYS also launched a New Generation Schools project in 2015 to improve the quality and relevance of general education as well as to prepare students for work in the 21st century.[4]
In collaboration with key development partners such as the World Bank, MoEYS introduced teacher upgrade programmes to help about 2,000 schoolteachers who teach biology, chemistry, history, Khmer, math, and physics subjects to obtain bachelor’s degrees.[5] Meanwhile, school principals have been trained and supported to improve their leadership and management skills. In November 2019, MoEYS launched a three-year School Leadership Programme (2019-2021) to support 108 principals and deputy principals to upgrade their leadership knowledge and skills.[6]
To improve the quality of higher education, MoEYS launched the Higher Education Quality and Capacity Improvement Project in 2011. This US$23-million project, funded by the World Bank, was unprecedented. It sponsored more than 50 higher education staff and lecturers to pursue postgraduate degrees and certificates abroad, mostly in Australia.[7] In 2018, MoEYS, with funding from the World Bank, launched the Cambodia Higher Education Improvement Project, worth US$92.5 million. This initiative aims to promote the quality of teaching and research in the field of science, technology, engineering and mathematics (STEM) and agriculture in several public universities.
There are other positive developments such as the introduction of a competitive national research grant, called the Research Creativity and Innovation Fund, and the decision to implement a long-awaited professorial ranking system that officially promotes university lecturers to the rank of Assistant Professor, Associate Professor and (Full) Professor, based on their qualifications and merits. These research-focused initiatives are vital in fostering a healthy research culture in Cambodia.[8]
Despite the reforms and positive developments, several key challenges still confront the country. In general education, one of the problems is the prevalent practice of private tutoring or extra classes, which perpetuates educational inequalities and prevents quality teaching and learning.[9] Other problems include the lack of educational resources and infrastructure; inadequate teaching staff and schools, especially in rural areas; the low quality of teachers and principals; high dropout rates in secondary schools; continued application of traditional teaching methods; and corruptions in schools.[10]
The quality of higher education remains an issue. Research has shown that many students graduate with skills not aligned to market needs.[11] While a large proportion of students pursue degrees in business, banking and finance, and language education, not many undertake their studies in STEM fields. Limited research capacity among Cambodian university academics is another pressing issue.[12] A recent bibliometric analysis of the Scopus database – one of the world’s largest abstract and citation databases – ranked Cambodia 8th among the 10 ASEAN countries in terms of the total number of Scopus-indexed documents published between 2010 and 2019.[13] Although there are university research activities, most are commissioned, policy-oriented research. Academic research in general is underdeveloped and underfunded.[14]
There are also other pressing issues such as policy misalignment across national, institutional and departmental levels;[15] low teaching quality; depressed academic salaries; inadequate resources and facilities for teaching and research;[16] limited stakeholder involvement;[17] an ineffective governance and financial management system;[18] and minimal use of ICT in teaching and learning.[19]
ICT ADOPTION INDUCED BY THE PANDEMIC
Despite the enormous disruptions it has caused, COVID-19 has provided a golden opportunity for increasing the use of ICT in education and deepening educational reforms. At the same time, the pandemic facilitates the enhancement of the public-private partnership, with MoEYS establishing collaboration with different key stakeholders, including development partners (JICA, UNICEF) and the private sector (Cellcard, Metfone, Smart Axiata), in order to offer online learning opportunities to students.[20]
The COVID-19 pandemic has indeed set in motion the digital transformation of education in Cambodia. Notably, MoEYS established the Centre for Digital and Distance Learning in June 2020 to boost digital learning and teaching,[21] and it has produced hundreds, if not thousands, of video lessons that are being broadcast on TV and social media platforms such as Facebook and Telegram. In collaboration with the Union of Youth Federations of Cambodia, MoEYS recently launched an e-learning app called MoEYS E-Learning, to support online learning during the pandemic.[22] The app contains video lessons, e-books, tests and other useful information for students from grades 1 to 12. It is a welcome initiative that will help to promote independent learning and support digital education. Meanwhile, many schools and universities have gained experience in offering and managing online classes, leading to increased interest in online and blended learning (combining online with face-to-face learning). This experience is invaluable for administrative and academic staff to help them navigate online learning and understand blended learning in the future.
Before the pandemic, online learning and blended learning were relatively new concepts in Cambodia.[23] Not many schools or universities fully embraced the concept of blended learning due to structural constraints such as limited technological and human resources as well as a lack of experience and motivation.[24] However, COVID-19 has enabled, if not forced, educational institutions to embrace online learning as an alternative to face-to-face learning. Through online learning, many educational institutions were able to continue educating students.[25]
COVID-19 has also contributed to an environment conducive to integrating blended learning into mainstream classes. As classes move online, all stakeholders, including MoEYS, educational institutions, teachers and students, have invested in necessary technological tools that facilitate online learning.[26] Many private schools and universities have, for example, begun to use Learning Management Systems, and there will consequently be more resources for online or blended learning post-COVID-19. The infrastructure and experience accumulated during the COVID-19 crisis will act as a strong impetus for the greater utilisation of ICT in Cambodian education in the future.[27]
In the context of Industry 4.0, where technology plays a leading role in driving socio-economic innovation and development, technology-enhanced classrooms are the future of education. COVID-19 has offered a timely opportunity to rethink education in Cambodia as the country seeks to enhance its relevance and competitiveness in the region. In today’s digitalised world, traditional methods of teaching and learning and the reliance on face-to-face classes are not helpful and are relatively inefficient, especially given the technological advancements and the lessons learned from the disruptions caused by the COVID-19 pandemic. There is therefore a pressing need to digitalise the education system and enhance its quality to ensure that the new generation of Cambodians can be trained into a highly skilled and capable workforce.[28]
Despite the opportunity for wider ICT adoption in education, many challenges remain, especially for students in rural areas and for those from weak socioeconomic backgrounds. Many students, for instance, reportedly faced challenges in accessing online educational resources due to their lack of experience using online platforms and to their limited access to the internet and ICT devices.[29] Although the internet penetration rate in Cambodia has quickly risen from less than 2% of the population in 2010 to 50% in 2019, it is lower than the world average (56%) and that of many countries in Southeast Asia, including Thailand (69%) and Vietnam (61%).[30] The overall technological infrastructure needed to support online learning and the digital transformation of education remains weak. In fact, almost 80% of Cambodia’s population live in rural areas, and many suffer problems related to the unavailability and unaffordability of technological devices and services, as well as to the lack or unreliability of electricity supply.[31]
RECOMMENDATIONS
Post-pandemic Cambodia needs to build on the positive momentum generated by COVID-19 to expand ICT utilisation in education and accelerate the digitalisation of the education system. Following are some suggestions towards this end.
Invest in the digitalisation of education. The integration of ICT and blended learning into mainstream classrooms, particularly in school, deserve serious attention from both policymakers and other stakeholders. The government thus needs to invest in digitalising the education system to ensure that students become digitally literate and technologically savvy, and are equipped with knowledge and skills needed in the digital economy.
Support ICT research and development. Research that examines how ICT can be effectively used in the Cambodian education context should be conducted, promoted and properly funded. Specifically, research into how this can be done in schools, particularly those in rural areas, should be fully supported. Researchers should investigate the challenges faced by Cambodian students and teachers as they embrace online education during the pandemic. An understanding of the attitudes and experiences of these key actors towards online and blended learning is vital.
Strengthen public-private partnerships. To broaden the adoption of ICT in education, different stakeholders have a crucial role to play. At the national level, MoEYS should continue to actively engage and expand collaboration with the private sector and development partners. Strengthening public-private partnerships is essential given the limited resources the government can commit to education. The development and provision of technological infrastructure in schools need to be maintained and proliferated.
Facilitate the integration of blended learning. Greater efforts should be made to integrate blended learning or hybrid classroom models into the mainstream face-to-face classrooms. This requires effective leadership, strong commitment and institution-wide collaboration. Educational institutions must ensure that their library facilities or website have up-to-date learning resources that can support students’ independent and online learning. Online and blended learning must be accompanied by abundant learning resources that encourage independent study. Professional development programmes for teachers and lecturers also need to be delivered on a frequent basis. The design and creation of learning content and objectives must involve input from teaching staff who are involved in implementing hybrid or blended learning.
Promote independent learning. The production and dissemination of video lessons and other learning resources should continue even after the pandemic is over. Making video lessons available online or on television offers students the opportunity to engage in self-study and self-directed learning. This is essential for the promotion of learner autonomy and independent learning, especially in the Cambodian context where students remain heavily dependent on their teachers.
In considering these recommendations, it is imperative to pay close attention to “effective planning, budgeting, controls and communication”[32] as well as to micro-level practices of individuals responsible for adopting and implementing ICT in education. Moreover, concerted efforts and collaboration by all relevant stakeholders are needed to promote digital skills and competencies, increase the availability of digital devices/tools, and improve pedagogies for teaching and learning in the digital age.[33]
CONCLUSION
Efforts to improve Cambodia’s education system have been seriously disrupted by COVID-19 since early 2020. However, the pandemic has also brought the opportunity to not only deepen educational reforms but also strengthen the utilisation of ICT and modern technologies in education. In fact, the pandemic serves as a catalyst for transforming and modernising the education system.
Therefore, all relevant stakeholders, particularly the Ministry of Education, Youth and Sport, need to take advantage of the crisis and build on the positive momentum to continue ICT adoption and integration in education. With the greater use of ICT and technology in education, Cambodia will be in a better position to produce the quality human resources required to drive its post-pandemic development.
ISEAS Perspective 2021/87, 25 June 2021
ENDNOTES
[1] Kimkong Heng, Sopheap Kaing, Vutha Ros, and Koemhong Sol, “English language teaching, education, and online learning in Cambodia during COVID-19: Perspectives from practitioners and researchers,” Cambodian Education Forum, 2020, https://cefcambodia.com/2020/12/29/english-language-teaching-education-and-online-learning-in-cambodia-during-covid-19.
[2] MoEYS, “Education strategic plan 2019-2023,” 2019, https://www.moeys.gov.kh/index.php/en/policies-and-strategies/3206.html.
[3] Janelle Retka, “Four years later, National exam reforms are bearing fruit,” The Cambodia Daily, August 21, 2017, https://english.cambodiadaily.com/news/four-years-later-national-exam-reforms-are-bearing-fruit-133848.
[4] Melissa Donaher and Nuoya Wu, “Cambodia’s New Generation Schools reform,” in Empowering teachers to build a better world, edited by Fernando M. Reimers, Springer Open, 2020, https://www.springer.com/gp/book/9789811521362.
[5] Visal Sot, Soth Sok, and Gail Dickinson, “Four decades of teacher development: Teacher preparation and teacher upgrading programs in Cambodia from 1979 to 2018,” Cambodia Education Review 3, no. 1 (2019): 115-139.
[6] Dara Voun, “Cambodia-Singapore school leadership programme launched,” The Phnom Penh Post, November 19, 2019, https://www.phnompenhpost.com/national/cambodia-singapore-school-leadership-programme-launched.
[7] MoEYS, “Higher Education Quality and Capacity Improvement Project (Development and Innovation Grants): Stocktaking report,” 2015, https://www.moeys.gov.kh/index.php/en/hed/2115.html.
[8] Kimkong Heng, “New hope for a research culture in Cambodia,” Cambodia Development Center, 23 October 2020, https://cd-center.org/en/new-hope-for-a-research-culture-in-cambodia.
[9] William C. Brehm, Iveta Silova, and Mono Tuot, “Hidden privatization of public education in Cambodia: The impact and implications of private tutoring,” Education Support Programme Working Paper Series 29 (2012): 1-44.
[10] MoEYS, “Education congress,” 2017, http://www.moeys.gov.kh/index.php/en/education-congress-2017; MoEYS, “Education strategic plan 2019-2023,” 2019, https://www.moeys.gov.kh/index.php/en/policies-and-strategies/3206.html; UNESCO, “Education and fragility in Cambodia,” UNESCO International Institute for Educational Planning, 2011, https://unesdoc.unesco.org/ark:/48223/pf0000211049.
[11] Asian Development Bank and International Labour Organization, “Cambodia: Addressing the skills gap – Employment diagnostic study,” 2015, https://www.adb.org/publications/cambodia-addressing-skills-gap; Chivoin Peou, “On Cambodian higher education and skills mismatch: Young people choosing university majors in a context of risk and uncertainty,” Journal of Education and Work 30, no. 1 (2017): 26-38.
[12] Phyrom Eam, “Factors differentiating research involvement among faculty members: A perspective from Cambodia,” Excellence in Higher Education 6, no. 1&2 (2015): 1-11.
[13] Kimkong Heng, “Steps to promote academic research in Cambodia,” Cambodia Development Center 3, no.4 (2021), 1-4, https://cd-center.org/en/steps-to-promote-academic-research-in-cambodia.
[14] Eam, “Factors differentiating research involvement among faculty members”; Anatoly Oleksiyenko and Vutha Ros, “Cambodian lecturers’ pursuit of academic excellence: Expectations vs. reality,” Asia Pacific Journal of Education 39, no. 2 (2019): 222-236.
[15] Vutha Ros and Anatoly Oleksiyenko, “Policy misalignments and development challenges in the Cambodian academic profession: Insights from public university lecturers,” Higher Education Policy 31, no. 1 (2018): 19-35.
[16] Kian-Woon Kwok, Sopheap Chan, Chinda Heng, Sedara Kim, Baromey Neth, and Vimealea Thon, “Scoping study: Research capacities of Cambodia’s universities,” The Development Research Forum in Cambodia, 2010, https://cdri.org.kh/wp-content/uploads/sr5ae.pdf.
[17] Chanphirun Sam and Heidi Dahles, “Stakeholder involvement in the higher education sector in Cambodia,” Studies in Higher Education 42, no. 9 (2017): 1764-1784.
[18] Ngoy Mak, Say Sok, and Leang Un, “Governance and finance of public higher education in Cambodia,” Cambodia Development Resource Institute, 2019, https://cdri.org.kh/wp-content/uploads/WP114_Gov-PHE.pdf.
[19] Jayson W. Richardson, John Nash, and Kevin Flora, “Unsystematic technology adoption in Cambodia: Students’ perceptions of computer and internet use,” International Journal of Education and Development Using ICT 10, no. 2 (2014): 63-76.
[20] Kimkong Heng, “COVID-19: A silver lining in the crisis for Cambodia’s education sector,” Cambodian Education Forum, 5 July 2020, https://cefcambodia.com/2020/07/05/covid-19-a-silver-lining-in-the-crisis-for-cambodias-education-sector; Darren Touch, “Digitalising Cambodia’s education system: Transforming the learning experience for the future,” Asian Vision Institute, 9 May 2020, https://asianvision.org/archives/publications/avi-commentary-issue-2020-no-18.
[21] Kanika Som, “New centre to boost digital learning in the Kingdom,” Khmer Times, 23 June 2020, https://www.khmertimeskh.com/736895/new-centre-to-boost-digital-learning-in-the-kingdom.
[22] Phal Niseiy Sao, “Digital app to promote students’ independent learning,” Cambodianess, 7 May 2021, https://cambodianness.com/article/digital-app-to-promote-students-independent-learning.
[23] Jayson W. Richardson, “Challenges of adopting the use of technology in less developed countries: The case of Cambodia.” Comparative Education Review 55, no. 1 (2011): 08-29.
[24] Julie Crews and Jenni Parker, “The Cambodian experience: Exploring university students’ perspectives for online learning,” Issues in Educational Research 27, no. 4 (2017): 697-719; Jayson W. Richardson, “ICT in education reform in Cambodia: Problems, politics, and policies impacting implementation,” Information Technologies & International Development 4, no. 4 (2008): 67-82.
[25] Phirom Leng, Sothy Khieng, and Tineke Water, “Going digital – The second phase of HE transformation,” University World News, 27 June 2020, https://www.universityworldnews.com/post.php?story=20200623154410596
[26] Leng, Khieng, and Water, “Going digital”.
[27] Heng, “COVID-19: A silver lining in the crisis for Cambodia’s education sector.”
[28] MoEYS, “Policy and strategies on information and communication technology in education,” 2018, https://www.moeys.gov.kh/index.php/en/policies-and-strategies/ict-in-education-cambodia.html
[29] Kanika Som, “E-learning highlights educational inequality,” Khmer Times, 31 March 2020, https://www.khmertimeskh.com/707759/e-learning-highlights-educational-inequality. [30] Simon Kemp and Sarah Moey, “Digital 2019 spotlight: Ecommerce in Southeast Asia,” Datareportal, 18 September 2019, https://datareportal.com/reports/digital-2019-spotlight-ecommerce-in-southeast-asia.
[31] Freedom House, “Freedom on the net 2020,” https://freedomhouse.org/country/cambodia/freedom-net/2020.
[32] Scott Gardner and Colin G. Ash, “ICT‐enabled organisations: a model for change management,” Logistics Information Management 16, no. 1 (2003): 18-24.
[33] Colrain M. Zuppo, “Defining ICT in a boundaryless world: The development of a working hierarchy,” International Journal of Managing Information Technology 4, no. 3 (2012): 13-22.
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2021/86 “China’s Vaccine Diplomacy in Southeast Asia – A Mixed Record” by Khairulanwar Zaini
EXECUTIVE SUMMARY
- Southeast Asia is a key target for Chinese vaccine diplomacy, accounting for 29 per cent of China’s total vaccine donations and 25.6 per cent of its vaccine sales worldwide.
- China’s vaccine outreach is helped by its first-mover advantage and regular supplies to the region, but this advantage is diminishing as Western countries start releasing their spare vaccine inventory.
- While looking towards China as a major source of vaccine supplies, most Southeast Asian countries also seek to diversify their vaccine portfolios.
- China’s exercise of soft power through vaccine diplomacy has yet to generate strategic trust in Southeast Asia, mainly due to Beijing’s assertion of hard power in other domains, especially in the South China Sea.
- To live up to its promise of providing vaccines as a “global public good” and counteract criticism that the country is engaging in self-serving “politics of generosity”, China should cooperate with the West in accelerating the production and distribution of vaccines to the developing world.
* Khairulanwar Zaini is Research Officer at the Regional Strategic and Political Studies Programme (RSPS) at ISEAS – Yusof Ishak Institute.
INTRODUCTION
The stockpiling of COVID-19 vaccines by Western countries has precipitated a supply crunch for the rest of the world in the first half of 2021 and heightened global demand for Chinese vaccines. A spokesperson from China’s foreign affairs ministry shared that Beijing had, as of 2 June, provided “vaccine assistance to over 80 countries and vaccine exports to 40 plus countries”.[1] Commercial purchases form the bulk of the demand for Chinese-made vaccines. According to Bridge Consulting’s China COVID-19 Vaccine Tracker database, China has donated 25 million doses to other countries (and a further 10 million to COVAX), while having contractually agreed to sell 792 million doses.[2]
Southeast Asia is a key target for China’s vaccine diplomacy. All the countries in the region have either purchased or received donations of Chinese-made shots. This paper examines Chinese vaccine supplies to Southeast Asia to assess whether China’s vaccine diplomacy has been translated into strategic dividends in the region. In terms of its strengths, Chinese vaccine outreach is helped by its first-mover advantage through the steady deliveries of its vaccine supplies. However, China does not have a monopoly on vaccines in Southeast Asia. Furthermore, Beijing’s propaganda about its generosity and its assertive actions in other domains – such as the South China Sea (SCS) – have significantly constrained the soft power effect of its vaccine outreach, thus limiting the strategic trust it is able to foster in the region.
SUPPLYING SOUTHEAST ASIA
Collectively, Southeast Asian countries have ordered around 203 million Chinese-made vaccines (Table 1), which is 25.6 per cent of China’s commercial vaccine commitments.[3] Indonesia is the biggest customer of these vaccines in Southeast Asia with its purchase of 125 million Sinovac doses.[4] The Philippines is a distant second, having ordered 25 million Sinovac shots. Other notable buyers in the region include Thailand (18.6 million Sinovac doses), Cambodia (14.5 million Sinovac and 4 million Sinopharm doses) and Malaysia (12 million Sinovac and 3.5 million CanSino doses).
In terms of donations, Southeast Asia has received 7.3 million (29 per cent) of the 25 million doses that China distributed for free worldwide. Africa has received roughly a similar amount, but the 6.6 million doses donated to the continent have been divided between a considerable number of countries, leaving each recipient with only between 100,000 to 600,000 shots.[5] Cambodia and Laos are the largest recipients of the complimentary Chinese shots both in the region and the world, having obtained 2.2 million and 1.9 million doses respectively – a testament to their strategic importance to China. China’s generosity towards Cambodia is particularly striking. Media reports in February 2021 indicated that Cambodia was expecting China to donate one million doses,[6] yet the current tally is more than double what was promised. The Philippines and Thailand each received one million shots gratis, but this seems to be a supplementary bonus to their much larger commercial purchases.
Part of the regional appetite for Chinese vaccines can be attributed to its cost-effectiveness. While procurement details vary between countries (and are often kept confidential), China’s Sinovac — an inactivated vaccine — is generally understood to be cheaper to buy and handle compared to mRNA-based vaccines. For instance, Indonesia was sold each dose of Sinovac at the price of US$13.60,[7] while Pfizer and Moderna are respectively estimated to cost around US$15-20 and US$15-18 per shot.[8] Moreover, the figures for the latter two do not yet reflect storage and transportation costs that the mRNA vaccines incur, given their requirement for cold-chain capabilities.[9]
Furthermore, unlike other vaccine suppliers, China is the only source sending regular shipments of vaccines in sufficient quantities and has met around 58 per cent of the region’s orders to date. For instance, Cambodia has been receiving regular monthly shipments of Chinese shots (both donated and purchased) since February.[10] These regular deliveries have enabled Cambodia to inoculate 16.6 per cent of its population with at least one dose by early June, making it the second fastest in the region behind Singapore.[11]
Likewise, Indonesia has been receiving steady shipments of Sinovac since December 2020. With the recent delivery of 10 million doses on 20 June, China has now fulfilled around 75 per cent (94.5 out of the 125 million doses) of Indonesia’s total Sinovac order.[12] The Indonesian government was reportedly considering in April the purchase of “an additional 90-100 million” doses from China after being told that the supply of around 100 million AstraZeneca shots — 50 million bought directly from the manufacturer and the rest through COVAX — will arrive late.[13] AstraZeneca is only promising the delivery of 20 million doses later this year and the other 30 million in the second quarter of 2022.[14] The remaining doses through COVAX will also likely be delayed, as supplies from the Facility have generally fallen short (Table 2). A similar situation is playing out in The Philippines. Of the 14 million doses that have arrived in the country by mid-June, nine million were Sinovac.[15]
Meanwhile, Thailand’s plans to rely on local pharmaceutical firm Siam Bioscience to manufacture around 60 million AstraZeneca doses on license have not been going well. Production at Siam Bioscience is “not going smoothly”,[16] leaving Thailand mostly dependent on its stock of Sinovac to run its vaccination programme. Although the Thais have placed orders with vaccine manufacturers such as Pfizer and Johnson & Johnson, these are not expected to be delivered anytime soon. In contrast, a further 11 million Sinovac doses are expected to arrive in Thailand between June and August 2020.[17] That delivery cannot come soon enough, as reports in mid-June suggest that hospitals in Bangkok are postponing vaccine appointments due to suspected inventory issues.[18]
Table 1. Southeast Asia’s inventory of China-made vaccines (as of 20 June 2021)
| No. of doses donated by China | No. of doses purchased from China | No. of purchased doses delivered by China | |
| Brunei | 52,000 (Sinopharm) | N.A. | N.A. |
| Cambodia | 2.2 million (Sinopharm) | 14.5 million (Sinovac) 4 million (Sinopharm) | 5.5 million (Sinovac) 1 million (Sinopharm) |
| Indonesia | N.A. | 125 million (Sinovac) | 94.5 million |
| Laos | 1.9 million (Sinopharm) | N.A. | N.A. |
| Malaysia | N.A. | 12 million (Sinovac) 3.5 million (CanSino) | 3.7 million (Sinovac) |
| Myanmar | 500,000 (Sinopharm) | N.A. | N.A. |
| Singapore | N.A. | 200,000 (Sinovac) | 200,000 |
| Thailand | 1 million (Sinovac) | 18.6 million (Sinovac) | 5.5 million |
| The Philippines | 1 million (Sinovac) | 25 million (Sinovac) | 8 million |
| Timor-Leste | 100,000 (Sinovac) | N.A. | N.A. |
| Vietnam | 500,000 (Sinopharm) | N.A. | N.A. |
Sources: Media reports and the Bridge Consulting’s China COVID-19 Vaccine Tracker.
N.B.: Figures only reflect the amounts procured by national governments for their country’s immunisation programmes, and do not include purchases by the private sector.
SOUTHEAST ASIA’S VACCINE DIVERSIFICATION STRATEGY
While China is a major source of vaccines for many countries in the region and has first-mover advantage in terms of its regular deliveries, it does not have a monopoly over vaccine supplies to the region. Southeast Asian countries have sought to hedge their choice of vaccines with as many providers as possible. A closer look at their vaccine portfolios (Table 2) suggests that the region’s procurement decisions are motivated more by the urgency to secure as many vaccine doses as they can rather than by a prevailing preference for Chinese vaccines. All the countries in the region are not singularly reliant on China, having supplemented their stock of Chinese vaccines with supplies from at least one other source.
The procurement decisions of Indonesia and Malaysia stand in the middle of the region’s vaccine diversification spectrum. Besides significant purchases of Chinese-made vaccines, the vaccine portfolios of Indonesia and Malaysia consist of a substantial portion of non-Chinese vaccines. For instance, Malaysia has ordered AstraZeneca, Pfizer and Sputnik V vaccines, while Indonesia has sought provisions from AstraZeneca, Pfizer and Novavax to complement their Chinese vaccine holdings.[19] Both countries have also sought supplies through COVAX. On aggregate, Malaysia has ordered a total of 64 million doses from non-Chinese suppliers; vaccine purchases from China thus constitute slightly less than a fifth of the country’s portfolio. In a similar vein, Chinese vaccines occupy only a third of Indonesia’s inventory; its hefty order of 125 million doses from Sinovac is balanced by the purchase of around 250 million shots from other vaccine manufacturers.
Cambodia and Laos are on the one end of the spectrum. These two countries predominantly rely on Chinese vaccines to carry out their national immunisation programmes, with COVAX serving as their only major alternative supply source.[20] (Laos has reportedly requested two million doses of Russia’s Sputnik V vaccine, but little news has emerged since the delivery of 1,000 shots in January.)[21] Cambodia’s wager on Chinese vaccines is notable and represents a volte face from the country’s apparent reticence to adopt Sinovac in December 2020. At that time, questions swirling around Sinovac prompted the Cambodian government to opt for supplies through COVAX, with Prime Minister Hun Sen insisting that “Cambodia is not a dustbin … and not a place for a vaccine trial”.[22] In May, Hun Sen was singing a different tune, stating that “without assistance from China, maybe we will not have vaccines for [the Cambodian] people”.[23]
At the other end of the spectrum, Vietnam has — until very recently — consciously eschewed the use of Chinese vaccines, preferring instead to depend on other vaccine manufacturers and COVAX while developing its own homegrown vaccines. Two promising candidate vaccines – Nanocovax and Covivax – are currently undergoing Phase 2 trials,[24] with Vietnam hoping for Nanocovax to be ready for general use in 2022.[25] Vietnam’s strategy has partly been made possible by its effective containment of the pandemic over the past year, but the latest resurgence of COVID-19 cases in the country have tested its resolve about avoiding Chinese vaccines. Vietnam has accepted China’s donation of 500,000 doses of Sinopharm on 20 June,[26] after providing regulatory approval for the vaccine on 4 June.[27] However, these 500,000 Sinopharm shots are reserved for Chinese nationals living in Vietnam, those living around the China-Vietnam border and Vietnamese citizens heading to China for work or studies.
In general, Southeast Asian countries have sought to diversify their vaccine sources, even though the depth of their respective efforts may vary. The region does not want to place all its bets on Chinese vaccines. Furthermore, even though China has a slight advantage through the regularity of its deliveries, it is not the provision of vaccines alone that matters, but also the Chinese narrative surrounding such provision. China’s vaccine outreach suffers from its lack of soft power mastery and the discrepancy between its exercise of soft and hard power.
Table 2. Southeast Asia’s vaccine portfolio (as of 20 June 2021)
| No. of doses of Chinese vaccines | No. of doses from other suppliers | COVAX First Round of Allocation[28] (P: promised; D: delivered) | |
| Brunei* | 52,000 | • Moderna: 200,000 • Novavax: unspecified • Pfizer: 300,000 | • P: 108,000 AstraZeneca • D: 62,400 |
| Cambodia | 20.7 million | N.A. | • P: 1.1 million SII-AstraZeneca • D: 324,000 |
| Indonesia | 125 million | • AstraZeneca: 50 million (with an additional 54 million expected through COVAX) • Novavax: 100 million • Pfizer: 100 million | • P: 11.7 million AstraZeneca doses • D: 8.2 million doses |
| Laos | 1.9 million | • Sputnik V: 2 million | • P: 480,000 SII-AstraZeneca • D: 132,00 AstraZeneca and 100,620 Pfizer |
| Malaysia* | 15.5 million | • AstraZeneca: 12.8 million (including through COVAX) • Pfizer: 44.8 million • Sputnik V: 6.4 million | • P: 1.4 million SK Bioscience- AstraZeneca doses • D: 828,200 doses |
| Myanmar | 500,000 | • SII-AstraZeneca: 30 million • SII-AstraZeneca donated by India: 1.5 million | • P: 3.6 million SII-AstraZeneca doses • D: no delivery recorded thus far |
| Singapore* | 200,000 | • Moderna: unspecified • Pfizer: unspecified | • P: 250,000 AstraZeneca • Did not order allocated shots |
| Thailand | 19.6 million | • AstraZeneca: 150,000 • Johnson & Johnson: 5 million • Pfizer: 20 million • Siam Bioscience: 61 million | Non-participant |
| The Philippines | 26 million | • AstraZeneca: 17 million • Johnson & Johnson: up to 10 million • Moderna: 20 million • Pfizer: 40 million • SII-Novavax: 30 million • Sputnik V: 20 million | • P: 4.6 million AstraZeneca and 2.5 million Pfizer • D: 2.6 million AstraZeneca and 2.5 million Pfizer |
| Timor-Leste | 100,000 | • AstraZeneca donated by Australia: 20,000 | • P: 100,800 AstraZeneca • D: 124,800[29] |
| Vietnam | 500,000 | • AstraZeneca: 30 million • AstraZeneca donated by Japan: 1 million • Moderna: 5 million • Pfizer: 31 million • Sputnik V: 20 million | • P: 4.2 million AstraZeneca • D: 2.5 million |
Sources: Media reports, the World Health Organization, the UNICEF COVID-19 Vaccine Market Dashboard and the Bridge Consulting’s China COVID-19 Vaccine Tracker.
CHINA’S ELUSIVE SOFT POWER
Vaccine diplomacy is an exercise in soft power. The point is neither to compel nor coerce, but to convince or “co-opt” – usually by example.[30] As Joseph Nye writes, a country’s foreign policy can function as a source of soft power, but this can be undermined if other policies “appear to be hypocritical, arrogant, indifferent to the opinion of others, or based on a narrow approach to national interests”.[31] China is still finding its feet in terms of cultivating soft power with the necessary nuance and finesse. For one thing, Beijing’s propaganda efforts accompanying its vaccine outreach lack subtlety. Moreover, China has yet to recognise that its exercise of hard power has to be recalibrated to avoid undermining its soft power efforts.
Nye is fond of saying that “the best propaganda is not propaganda”.[32] China could learn from this since its rhetorical indignation against Western vaccine nationalism (and hard selling of Chinese generosity) have gone overboard. The 25February commentary by China’s ambassador to Timor-Leste published in the Suara Timor Lorosae newspaper offers an instructive look at the flavour of Chinese polemics:
“Take fair distribution of vaccines in COVID-19 as an example, some rich and powerful countries pursue vaccine “nationalism”, which order and hoard vaccines in large quantities far more than what they need, but it is very difficult for many developing countries to get enough vaccines. And China is demonstrating to the world that Chinese vaccines, as global public goods, will make them affordable to developing countries and promote equitable distribution of vaccines, and prevent a country in need from being left behind, nor will anyone waiting for the vaccine be forgotten.”[33]
Despite the bluster about ensuring that no one will be “forgotten” or “left behind” under its watch, China donated on 5 June only a small package of 100,000 doses to Timor-Leste, a country with a population of 1.3 million.[34] Timor-Leste’s vaccination needs will be primarily served instead by COVAX and Australia. By ratcheting up such rhetoric, China risks inviting accusations of arrogance and hypocrisy, especially if its vaccine offerings fail to match the elevated sense of expectations. The invective against the West also suggests that China is more interested in point-scoring and using the developing world as pawns to further geopolitical goals.
The other factor blunting China’s soft power is the fact that many countries are conscious that China’s congeniality can be capricious. China has a record of retracting its generosity and banishing countries to “the doghouse” (as the Economist magazine memorably puts it) for perceived slights.[35] And while Southeast Asia has been generally spared the worst of China’s “wolf-warrior diplomacy”, it is not blind to how China punishes those failing to toe Beijing’s line. China may offer vaccines today, but trade sanctions tomorrow: regional governments are taking careful note, for instance, of China’s economic and trade reprisals against Australia for what Beijing perceives to be anti-China policies.[36] Southeast Asian capitals also remember what happened when Singapore inadvertently vexed Beijing with a statement on the 2016 Arbitral Tribunal’s judgment. After being chastised by China for “interfering in South China Sea issues” as a non-claimant state,[37] Singapore found its military vehicles detained while in transit in Hong Kong, and its prime minister was not invited to the inaugural Belt and Road Initiative (BRI) Summit. Although relations eventually stabilised, that episode – along with Australia’s current experience – is a stark reminder of the darker underbelly of Beijing’s charm offensives. More importantly, it highlights how over-reliance on China can entail over-exposure to Chinese punitive measures when the inevitable disagreement arises.
Furthermore, China’s assertions of hard power in other domains fundamentally undercut its soft power, preventing Beijing from translating its vaccine diplomacy advantage into sustained strategic dividends, especially in Southeast Asia. Regional goodwill for Beijing’s vaccine diplomacy risks being thwarted by its mischief in the SCS. In April 2020 alone, while the region was teetering from the initial wave of COVID-19 infections, a Chinese coast guard ship collided with and sank a Vietnamese fishing boat near the Paracel Islands,[38] while survey vessel Haiyang Dizhi 8 entered into Malaysia’s exclusive economic zone (EEZ) to disrupt the exploration activities of a Malaysian ship.[39] In March this year, more than 200 vessels from China’s maritime militia loitered around the Whitsun Reef, which lies within the Philippines’ EEZ.[40] More recently, on 31 May, while Malaysia was grappling with another lockdown due to spiralling COVID-19 cases, 16 Chinese military transport planes approached within 60 nautical miles of the Borneo coast, ignoring requests from Malaysia’s air traffic control to identify themselves.[41]
Instead of trying to affirm its reliability as a magnanimous partner during a stressful time, China sought to bulldoze its way through in the SCS. These encounters, timed especially during a pandemic that has stretched the capacity of many regional governments, have undermined the effectiveness of Beijing’s charm offensives in the health domain. As demonstrated in the State of Southeast Asia 2021 survey by ISEAS – Yusof Ishak Institute, although China is recognised as the ASEAN Dialogue Partner that has provided the most help to the region on COVID-19, the distrust towards Beijing among Southeast Asians continues to deepen.[42] As long as China keeps doubling down on its assertiveness in the South China Sea in the name of its own national sovereignty at the expense of those of its neighbours, no number of vaccines can overcome this strategic distrust.
CONCLUSION
China has been able to get a head start with its vaccine diplomacy because the Western countries were preoccupied with their own domestic needs. Now that the developed countries are on course to finish vaccinating their populations, vaccine supplies from the West will start flowing. If the G-7’s pledge to donate one billion shots worldwide does materialise,[43] it will outstrip the 742 million shots that China has sold and the 22 million doses that it has donated. Furthermore, once India recovers from its current bout of infections, its vaccine-manufacturing capacity will likely help close the vaccine gap in the developing world.
The current advantage that China’s vaccine diplomacy now has is therefore diminishing. If Beijing continues with its rough approach to soft power, it could see its efforts going down the drain, especially once the immediacy of the pandemic recedes when global recovery is well underway. One possible way of avoiding such an outcome is to reach out to the West (and India) to cooperate in the production and distribution of vaccines to the developing world, instead of turning vaccine outreach into another domain of the geostrategic competition between China and the West. To do this, China will also need to be more transparent with its vaccine trial data and address concerns about reported disparities in its vaccine efficacy rates.[44] At the very least, such actions would demonstrate Beijing’s sincerity in ensuring that the vaccines are indeed a “global public good”, as proclaimed by Chinese leaders and diplomats.
ISEAS Perspective 2021/86, 24 June 2021
ENDNOTES
Note: the author extends his thanks to Lye Liang Fook and Hoang Thi Ha for their guidance and suggestions on earlier drafts.
[1] Ministry of Foreign Affairs of the People’s Republic of China, “Foreign Ministry Spokesperson Wang Wenbin’s Regular Press Conference”, 2 June 2021, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/t1880861.shtml.
[2] Bridge, “China COVID-19 Vaccine Tracker”, 7 June 2021, https://bridgebeijing.com/our-publications/our-publications-1/china-covid-19-vaccines-tracker.
[3] The numbers and figures in the article are either calculated or compiled by the author based on various sources, including media reports, the World Health Organization, the UNICEF Covid-19 Market Dashboard and the Bridge Consulting’s China COVID-19 Vaccine Tracker.
[4] Indonesia has allowed the private sector to run its own parallel vaccination programme, allowing the latter to purchase vaccines that the government has not procured, including Sinopharm and CanSino. As the focus of this article is on government procurements for their national immunisation programmes, details and figures relating to private sectors’ vaccine purchases will not be discussed.
[5] Ibid.
[6] “China delivers 600,000 Covid-19 vaccine doses to ally Cambodia”, Straits Times, 7 Feb 2021, https://www.straitstimes.com/asia/china-delivers-600000-vaccine-doses-to-ally-cambodia.
[7] “COVID-19 vaccine to be priced at Rp 200,000 per dosage: Bio Farma”, Jakarta Post, 14 October 2020, https://www.thejakartapost.com/news/2020/10/13/covid-19-vaccine-to-be-priced-at-rp-200000-per-dosage-bio-farma.html.
[8] Carmen Ang, “COVID-19 Vaccine Prices: Comparing the U.S. and EU”, Visual Capitalist, 7 June 2021,https://www.visualcapitalist.com/covid-19-vaccine-cost-eu-versus-us.
[9] In comparison, the AstraZeneca vaccine generally costs $4 per dose, making it the cheapest. However, the vaccine is plagued by considerable supply issues.
[10] Cambodia received from China 600,000 donated Sinopharm doses on 7 February, 700,000 on 31 March, 400,000 on 28 April and 500,000 on 8 June. 1 million purchased Sinopharm shots also arrived on 12 June. The country also took delivery of 1.5 million Sinovac shots on 26 March, 500,000 on 17 April, 500,000 on 11 May, 500,000 on 16 May, 1 million on 23 May, 500,000 on 8 June and 1 million on 19 June.
[11] Our World in Data, “Share of people who received at least one dose of COVID-19 vaccine”, accessed on 11 June 2021, https://ourworldindata.org/covid-vaccinations.
[12] “Indonesia Gets Another 10 Million Doses of Sinovac Bulk Vaccines”, Tempo, 20 June 2021, https://en.tempo.co/read/1474687/indonesia-gets-another-10-million-doses-of-sinovac-bulk-vaccines.
[13] “Indonesia turns to China to help plug Covid-19 vaccine shortage after AstraZeneca delays”, Straits Times, 8 April 2021, https://www.straitstimes.com/asia/se-asia/indonesia-turns-to-china-to-help-plug-vaccine-shortage-after-astrazeneca-delays.
[14] “Indonesia says about 100 million AstraZeneca COVID-19 vaccine doses face arrival delays”, Channel NewsAsia, 8 April 2021, https://www.channelnewsasia.com/news/asia/covid-19-indonesia-100-million-astrazeneca-vaccine-delays-india-14580314.
[15] “TRACKER: The Philippines’ COVID-19 vaccine distribution”, Rappler, 1 April 2021, https://www.rappler.com/newsbreak/data-documents/tracker-covid-19-vaccines-distribution-philippines.
[16] John Reed, Michael Peel and Hannah Kuchler,”A king’s vaccine: Thailand’s struggle to deliver jabs to its people”, Financial Times, 10 June 2021, https://www.ft.com/content/aaa8b820-68c7-408d-9486-222fe2d65634
[17] Tanutam Thawan, “11 million Sinovac doses to arrive in Thailand over the next 3 months”, Thaiger, 3 June 2021, https://thethaiger.com/coronavirus/11-million-sinovac-doses-to-arrive-in-thailand-over-the-next-3-months.
[18] Hannah Beech and Muktita Suhartono, “A mass inoculation campaign in Thailand stumbles amid a severe outbreak”, New York Times, 14 June 2021, https://www.nytimes.com/2021/06/14/world/thailand-shortage.html.
[19] Both Malaysia and Indonesia have also sought to strengthen their vaccine supply chains by entering into fill-and-finish production agreements with the Chinese manufacturers.
[20] Australia has also bequeathed Cambodia with a US$28 million grant in February 2021 to support the country’s vaccination efforts, but not much has been revealed about how the money has been or will be disbursed.
[21] Souksakhone Vaenkeo, “Laos to get additional doses of Russia’s Sputnik V vaccine”, Vientiane Times, 26 May 2021, https://www.vientianetimes.org.la/freeContent/FreeConten_Laoto_100.php.
[22] Shaun Turton, “Cambodia shuns China’s Sinovac vaccine in favour of COVAX shots”, Nikkei Asia, https://asia.nikkei.com/Spotlight/Coronavirus/Cambodia-shuns-China-s-Sinovac-vaccine-in-favor-of-COVAX-shots.
[23] “Cambodia’s Hun Sen: ‘If I don’t rely on China, who will I rely on?’”, Nikkei Asia, 20 May 2021,https://asia.nikkei.com/Spotlight/The-Future-of-Asia/The-Future-of-Asia-2021/Cambodia-s-Hun-Sen-If-I-don-t-rely-on-China-who-will-I-rely-on
[24] COVID-19 Vaccine Tracker, “Vietnam”, accessed on 11 June 2021, https://covid19.trackvaccines.org/country/viet-nam.
[25] “Vietnam says homegrown COVID-19 vaccine to be available by fourth quarter”, Channel NewsAsia, 17 March 2021, https://www.channelnewsasia.com/news/asia/vietnam-homegrown-covid-19-vaccine-nanocovax-covivac-14426964.
[26] “Vietnam receives 500,000 Sinopharm doses from China for select groups”, Straits Times, 20 June 2021,https://www.straitstimes.com/asia/se-asia/vietnam-receives-500000-sinopharm-doses-from-china-for-select-groups.
[27] “Vietnam approves China’s Sinopharm vaccine for use against Covid-19”, Straits Times, 4 June 2021, https://www.straitstimes.com/asia/se-asia/vietnam-approves-chinas-sinopharm-vaccine-for-use-against-covid-19.
[28] Countries marked with an asterisk are Self-Financing Participants (SFP) in the COVAX Facility.
[29] Timor-Leste received shots in excess of its allocated amount due to from New Zealand’s donation of 24,000 doses through COVAX. See UNICEF, “Timor-Leste receives 100,800 doses of COVID-19 vaccines from COVAX, the largest single batch of vaccine doses delivered to the country to date”, 9 June 2021, https://www.unicef.org/timorleste/press-releases/timor-leste-receives-100800-doses-covid-19-vaccines-covax-largest-single-batch.
[30] Joseph Nye, Soft Power (New York: Public Affairs, 2004), p. 6-8.
[31] Ibid., p. 11, 14.
[32] Joseph Nye, “China’s Soft Power Deficit”, Wall Street Journal,8 May 2012, https://www.wsj.com/articles/SB10001424052702304451104577389923098678842.
[33] Ministry of Foreign Affairs of the People’s Republic of China, “Signed Article by H.E. Dr. Xiao Jianguo, Chinese Ambassador to Timor-Leste”, 25 February 2021, https://www.fmprc.gov.cn/mfa_eng/wjb_663304/zwjg_665342/zwbd_665378/t1856548.shtml.
[34] Government of Timor-Leste, “100,000 doses of Sinovac vaccine arrived today”, 5 June 2021, http://timor-leste.gov.tl/?p=28353&lang=en.
[35] “Asian countries are learning to cope with Chinese bullying”, Economist, 27 February 2021, https://www.economist.com/asia/2021/02/27/asian-countries-are-learning-to-cope-with-chinese-bullying.
[36] “As China-Australia ties fray, who is shaping Canberra’s increasingly hawkish policy on Beijing?”, South China Morning Post, 6 June 2021, https://www.scmp.com/week-asia/people/article/3135930/china-australia-ties-fray-who-shaping-canberras-increasingly.
[37] Catherine Wong, “Chinese diplomat tells Singapore to stay out of South China Sea disputes”, South China Morning Post, 16 August 2016, https://www.scmp.com/news/china/diplomacy-defence/article/2004638/china-urges-singapore-not-interfere-south-china-sea.
[38] “Chinese ship, Vietnamese fishing boat collide in South China Sea”, South China Morning Post, 3 April 2021, https://www.scmp.com/news/asia/southeast-asia/article/3078286/chinese-ship-hits-and-sinks-vietnamese-fishing-boat-south.
[39] “South China Sea: Chinese ship Haiyang Dizhi 8 seen near Malaysian waters, security sources say”, South China Morning Post, 18 April 2021, https://www.scmp.com/news/asia/southeast-asia/article/3080510/south-china-sea-chinese-ship-haiyang-dizhi-8-seen-near.
[40] “Philippines says 220 Chinese vessels have encroached into South China Sea”, Straits Times, 21 March 2021, https://www.straitstimes.com/asia/se-asia/philippines-says-220-chinese-vessels-spotted-at-disputed-reef-in-south-china-sea.
[41] “Malaysia to summon Chinese envoy over ‘suspicious’ air force activity”, Straits Times, 2 June 2021, https://www.straitstimes.com/asia/se-asia/malaysia-says-chinese-military-planes-came-close-to-violating-airspace.
[42] Sharon Seah, Hoang Thi Ha, Melinda Martinus and Pham Thi Phuong Thao, The State of Southeast Asia: 2021 (Singapore: ISEAS – Yusof Ishak Institute), /wp-content/uploads/2021/01/The-State-of-SEA-2021-v2.pdf.
[43] “G7: World leaders promise one billion Covid vaccine doses for poorer nations”, BBC, 14 June 2020, https://www.bbc.com/news/uk-57461640.
[44] “Low Efficacy of Chinese Shots Sows Concern on Global Rollout”, Bloomberg, 11 April 2021, https://www.bloomberg.com/news/articles/2021-04-11/sinovac-shot-cuts-risk-of-symptomatic-covid-in-half-in-key-study.
| 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 | 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 Managing Editor: Ooi Kee Beng Editors: William Choong, Malcolm Cook, Lee Poh Onn, Lee Sue-Ann, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
2021/85 “Trade and Environmental Disputes May Persist Despite Promising Leaders’ Summit on Climate” by Melinda Martinus and Qiu Jiahui
EXECUTIVE SUMMARY
- The recent Leaders’ Summit on Climate Change convened by the Biden Administration signalled the US’ return and major powers’ unwavering commitment to tackling climate change.
- Four of ten ASEAN leaders — Indonesia, Singapore, The Philippines, and Vietnam — were invited to the summit and announced their newest goals and initiatives, which include renewable energy acceleration, decarbonisation practices, and pathways to net-zero emissions.
- One key emphasis shared by several ASEAN leaders’ speeches is the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) which recognises differentiated levels of economic development between states in response to climate change.
- Some ASEAN thought-leaders have recently expressed a growing concern about the Carbon Border Adjustment Mechanism (CBAM), introduced by the European Union (EU), functioning as trade protectionism or discrimination which could threaten the exports of developing countries.
- The themes and issues raised by some ASEAN leaders at the summit are a harbinger of climate negotiations to come. Can developed and developing countries find a balance between heightened climate ambition and the spirit of CBDR-RC?
* Melinda Martinus is Lead Researcher (Socio-Cultural Affairs) at the ASEAN Studies Centre, ISEAS – Yusof Ishak Institute, and Qiu Jiahui is Research Officer at the Climate Change in Southeast Asia Programme.
THE LEADERS’ SUMMIT ON CLIMATE: AN INSIGHT
The recent Leaders’ Summit on Climate Change, organised by the Biden Administration, signalled the US’ return to the Paris Agreement after years of neglect. The US and 40 world leaders restated their commitment and highlighted their countries’ efforts to limit global warming to 1.5-degree Celsius, and most importantly, demanded more concrete actions from the United Nations Climate Change Conference (COP 26) to be held in November 2021 in Glasgow.
To observers, the summit showed a glimmer of hope that two major powers, the United States and China — despite their belligerent relationship in trade and strategic affairs — are approaching climate challenges with the same urgency. As major carbon emitters, both countries agreed to ramp up efforts to combat rising temperatures and strengthen international institutions in meeting this challenge.
In his opening remarks, President Biden spoke about economic opportunities from climate actions which include job creation, clean technology and infrastructure renewal. The US’ climate plans also call for decarbonising the US power sector by 2035 and achieving net-zero emissions by 2050.
The Biden Administration recently introduced a US$2 trillion plan to overhaul the country’s infrastructure and boost the US economy’s competitiveness. The plan emphasises the need to accelerate renewable energy adoption, provide ubiquitous charging stations for electric cars, and invest in public transportation. While Republicans and Democrats are still deeply divided on the matter, Biden’s pragmatic and economically opportunistic approach to climate change exhibits a strategic bid to win bipartisan support.
President Xi Jinping, in much the same way, has reiterated China’s commitment to green development. China has vowed a technological revolution, industrial transformation, and innovation to achieve carbon neutrality before 2060 — the country is to begin phasing down coal in the period of 2026-2030. Unlike the US, China has in recent years been looking to build a global coalition. On several occasions, Chinese leaders pledged their commitment to green initiatives to benefit all Belt and Road (BRI) partner countries. Chinese investment has brought capacity-building opportunities and technology transfers which are much needed for sustainable development in these developing countries.
Similarly, other major economies are adopting the premise of green transformation to revive their economies after the Covid-19 crisis. The European Green deal, an ambitious plan to make Europe carbon neutral by 2050, is one example. President Macron of France has suggested an overhaul of the global financial system, bringing together sovereign funds, asset managers, and private equity firms to integrate climate risks in the investment calculation. Likewise, Chancellor Merkel of Germany has reiterated the need to establish a robust market system to stymie carbon emissions. As one of the global leaders on climate action, Germany has been fairly successful in implementing carbon pricing. Early this year, it introduced a €25 (US$30) per ton carbon tax on the transport and heating sectors.[1]
CONTENTIOUS ISSUES
Four of ten ASEAN member states—Indonesia, Singapore, the Philippines, and Vietnam—were invited to the summit, where they announced their newest goals and initiatives. President Joko Widodo announced that Indonesia is piloting a net zero emissions development project called the Indonesia Green Industrial Park, and that it will rehabilitate 620,000 hectares of mangroves up to 2024. Philippine Secretary of Finance, Carlos G. Dominguez III, shared that The Philippines’ first NDC had just been submitted. Prime Minister Lee Hsien Loong announced the Singapore Green Plan 2030, a living plan with climate and sustainability targets across sectors such as energy, green finance, transport, waste and adaptation. He also shared that Singapore will quadruple its solar energy production by 2025. President Nguyen Xuan Phuc highlighted new targets of increasing the share of renewables in the primary energy supply by 20% by 2030 and 30% by 2045, and reducing greenhouse gas intensity by nearly 15% and methane emissions from agriculture by 10%.
One key emphasis shared by several ASEAN leaders’ speeches is the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), which acknowledges that the non-polluters of yesterday should not bear the cost of climate consequences today. Often brought up by developing countries to call for assistance in achieving their climate goals, this sentiment was echoed at the summit by Indonesia, The Philippines and Vietnam, as well as China.
In particular, President Xi Jinping used this principle to discourage developed countries from enacting green trade barriers, and instead called for them to support developing countries in finance, technology and capacity building to help transition to low carbon-development. President Joko Widodo approached the same topic from the angle of multilateralism, warning that applying trade barriers under the pretext of environmental issues would undermine a real global partnership. These arguments highlight a growing concern about green trade barriers threatening exports from developing countries where environmental regulations may be less stringent, and are perceived as trade protectionism by developed countries.
In March 2021, the European Parliament backed a Carbon Border Adjustment Mechanism (CBAM) proposal, which, if implemented, would impose a carbon price on certain carbon-intensive imports into the European Union (EU), including cement, steel, aluminium, oil refining, paper, glass, chemicals, and fertilisers, whether embedded in intermediate or final products.[2] The CBAM is applied to extend the geographical reach of EU’s carbon price in order to more accurately reflect the carbon content of imports.[3] This mechanism aims to mitigate longstanding concerns about carbon leakage or the relocation of emissions from the EU to non-EU countries due to the high carbon price imposed within the EU. Without such a mechanism, a reduction in overall global emission is impossible to achieve.
Some critical points have been emerging against the CBAM proposal, however, chief of which being the unfair impact it will have on developing countries’ exports. If such a law is imposed to all imports currently covered by the EU’s Emission Trading System, up to US$16 billion of exports from developing country to the EU could face an additional charge, thus making them less competitive in the EU market.[4] This could undermine the principle of CBDR-RC embraced by the Paris Agreement that forms the basis of agreement that developing countries should not share the same burden as those of the rich. Under such a principle, the global community has acknowledged that rich countries must bear the cost of climate change, as they have historically contributed a larger share of carbon emissions.
Further, there is concern about the technical aspects of the carbon tax on imported goods. Currently, the EU favours limited implementation on some carbon-intensive goods. However, drawing distinctions between targeted and non-targeted sectors is extremely challenging since the supply chain of goods production has now become highly complex. Companies tend to object to disclosing location details of their supply chains, often considering these to be trade secrets.[5] Companies could also re-route their products from countries that impose carbon tariffs over to unregulated markets.[6] Calculating the total carbon content of a certain good will also be a huge challenge. For instance, a car might be made of components from many countries with different climate and energy policies.[7] To be sure, more robust rule of origins control in a Free Trade Agreement (FTA) would help importers determine the country of origin and carbon content of a product.
Likewise, the implementation of the CBAM is politically costly for the EU. Some countries have raised concerns over the CBAM to the World Trade Organisation (WTO), particularly on how the EU may use the mechanism as a revenue raising tool and to favour their domestic resources rather than as a means of addressing climate change.[8]
WHERE DOES ASEAN STAND?
Generally, the EU’s CBAM is viewed by its global counterparts as a protectionist and unilateral approach to trade and environmental protection. EU officials have however frequently affirmed that such an approach is necessary and that the absence of climate actions by other countries could derail the decarbonisation progress made so far by the EU.
As the third largest trading partner and one of the largest exporters of machinery and transport equipment, agricultural products, and textile and clothing to the EU, ASEAN is generally not expected to favour such a mechanism. Yet, a recent survey report on the Perception of the Planned EU Carbon Border Adjustment Mechanism in Asia Pacific from Konrad Adenauer Stiftung captures nuanced perceptions among three ASEAN member states thought-leaders; Indonesia, Singapore, and Thailand.[9]
The survey report highlights that Indonesia, for instance, fears that the CBAM would damage its palm oil sector as the European Commission labels palm oil as high-risk commodity based on the indirect land use changes that result from its production. On the other hand, because Indonesia has not yet established its carbon pricing mechanism, the CBAM could be a trigger for Indonesia to adopt more ambitious climate policies. Experts also suggest that such a mechanism could become acceptable to Jakarta if the revenue generated from the CBAM is used to help Indonesia develop its decarbonisation pathway.
It should be noted though, that smoother environment-related trading interactions are possible. Experts cite the case of EU-Indonesia cooperation on certified timber. The EU, acknowledging Indonesia’s particular challenges, provides assistance in capacity building and developing monitoring systems for its timber exports. This allows Indonesia to adhere to the EU’s regulations and upgrade its own national timber legality assurance system. In this case, close understanding and support not only help avoid disputes, but also assist Indonesia in improving the robustness of its own environmental framework. Experts thus recommend a similar approach for implementing the CBAM and other environmental trade mechanisms that still manages to maintain good trade relations and empower Indonesia to heighten its climate ambitions.
Thailand, despite concerns over the technical aspects of the implementation and the potential disadvantage these hold for developing countries, views the CBAM as a positive step in mitigating change climate impact. The country is in the process of developing its compulsory emissions trading scheme, and the CBAM could in that context encourage businesses to enhance their decarbonisation efforts and meet the country’s climate pledges.
Singapore, meanwhile, expresses little concern about the CBAM as long as it complies with international rules and agreements. Singaporean experts suggest that the EU could start with small steps, for instance, only taxing heavy polluting industries before gradually moving towards other industries.
Indonesia and Malaysia – two of the most vocal opponents of the CBAM in ASEAN – recently protested against the EU’s 2018 decision to ban palm oil imports for biofuel claiming how the industry contributes to deforestation, peatland degradation and resulting emissions. The Indonesian government claimed that it was a protectionist move to favour European rapeseed.[10] Both initiated WTO dispute complaints against the EU in 2019 and 2021 respectively, claiming that the EU’s measures violated international trade agreements. The two cases are being heard, even as the EU and Indonesia continue to negotiate a free trade agreement. Similarly, at the second Seoul Summit of Partnering with Green Growth and the Global Goals 2030, Prime Minister Hun Sen of Cambodia called for a commitment to globalisation through multilateralism and international trade openness as a means for strengthening climate actions.[11]
Earlier this year, ASEAN and the EU initiated the first joint group meeting on palm oil.[12] Indonesia’s Foreign Affairs Deputy Minister, Mahendra Siregar asserted Indonesia’s willingness to improve sustainability practices in the palm oil industry, citing Indonesia’s moratorium on new logging and plantation permits which successfully dwindled deforestation by 75% within the 2019-2020 period. At the same time, Indonesia demanded a fairer and transparent assessment from the EU.[13] Other vegetable oils such as rapeseed and soya plantations cultivated in the EU also contribute to pollution on soils, rivers and seas due to the use of pesticide. Mahendra also noted that another ASEAN country, The Philippines, had also expressed concerns about coconut oil being increasingly rejected by the EU market. These environmental trade regulations and disputes are likely to be a source of climate conundrum of the future.
CONCLUSION
The issues raised by leaders at the Summit are a harbinger of climate negotiations to come. Whether developed and developing countries can find a balance between heightened climate ambition and the spirit of CBDR-RC bears monitoring, especially for developing Southeast Asian countries that are vulnerable to environmental trade regulations.
At COP26, the world will observe the US’ return to its leadership role in international climate negotiations, the effects of net-zero commitments from major economies, and a new urgency for a green recovery from the COVID-19 pandemic. Much has changed since 2019, while the clock keeps ticking for the environment.
ISEAS Perspective 2021/85, 23 June 2021
ENDNOTES
[1] DW, “Merkel Pushes for Carbon Pricing ‘worldwide’ at Final Climate Conference,” DW.COM, May 6, 2021, https://www.dw.com/en/merkel-pushes-for-carbon-pricing-worldwide-at-final-climate-conference/a-57451959.
[2] European Parliament, “Towards a WTO-Compatible EU Carbon Border Adjustment Mechanism,” 02 2021, https://www.europarl.europa.eu/doceo/document/A-9-2021-0019_EN.html.
[3] M. Mehling and R. Ritz, “Going beyond Default Intensities in an EU Carbon Border Adjustment Mechanism,” Cambridge Working Papers in Economics, Cambridge Working Papers in Economics (Faculty of Economics, University of Cambridge, September 16, 2020), https://ideas.repec.org/p/cam/camdae/2087.html.
[4] Sam Lowe, “The EU’s Carbon Border Adjustment Mechanism: How to Make It Work for Developing Countries” (Centre for European Reform, April 22, 2021), https://www.cer.eu/publications/archive/policy-brief/2021/eus-carbon-border-adjustment-mechanism-how-make-it-work.
[5] Ben McWilliams and Georg Zachmann, “A European Carbon Border Tax- Much Pain, Little Gain,” Policy Contributions, Policy Contributions (Bruegel, March 2020), https://ideas.repec.org/p/bre/polcon/35218.html.
[6] McWilliams and Zachmann.
[7] The editorial board, “EU’s Carbon Border Tax Plan Is Risky but Needed,” Financial Times, January 29, 2020, https://www.ft.com/content/28bbb54c-41b5-11ea-a047-eae9bd51ceba.
[8] Lowe, “The EU’s Carbon Border Adjustment Mechanism.” and WTO, “Brexit, EU’s Carbon Border Adjustment Mechanism Take Centre Stage at Market Access Committee,” accessed June 1, 2021, https://www.wto.org/english/news_e/news20_e/mark_16nov20_e.htm.
[9] Konrad Adenauer Stiftung, “Perception of the Planned EU Carbon Border Adjustment Mechanism in Asia Pacific — An Expert Survey” (Konrad Adenauer Stiftung, March 2021), https://www.kas.de/en/web/recap/single-title/-/content/perception-of-the-planned-eu-carbon-border-adjustment-mechanism-in-asia-pacific-an-expert-survey.
[10] Verdinand Robertua, “ENVIRONMENTAL DIPLOMACY: CASE STUDY OF THE EU-INDONESIA PALM OIL DISPUTE,” July 10, 2019.
[11] Xinhua, “Cambodian PM Renews Call for Freer Int’l Trades, Adherence to Multilateralism,” accessed June 6, 2021, http://www.xinhuanet.com/english/asiapacific/2021-06/01/c_139982475.htm.
[12] ASEAN, “First Meeting of the Joint Working Group on Palm Oil between the European Union and Relevant ASEAN Member Countries,” ASEAN | ONE VISION ONE IDENTITY ONE COMMUNITY, February 1, 2021, https://asean.org/first-meeting-joint-working-group-palm-oil-european-union-relevant-asean-member-countries/.
[13] Jayanty Nada Shofa, “Asean Leads by Example in Sustainable Vegetable Oil: Indonesia,” Jakarta Globe, accessed June 1, 2021, https://jakartaglobe.id/business/asean-leads-by-example-in-sustainable-vegetable-oil-indonesia.
| 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 | 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 Managing Editor: Ooi Kee Beng Editors: William Choong, Malcolm Cook, Lee Poh Onn, Lee Sue-Ann, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
2021/84 “Major Parties Lacking Candidates with a Winning Chance in Bangkok’s Gubernatorial Election” by Termsak Chalermpalanupap
EXECUTIVE SUMMARY
- The election for the post of governor of Bangkok is due to take place in the last quarter of this year. However, Thailand’s major political parties lack suitable candidates with realistic chances of victory.
- Recent surveys show that nearly one in three Bangkok voters remains undecided.
- Among Bangkokians who intend to vote, a favourite is an independent candidate, former Transport Minister Chadchart Sitthipun. Chadchart has been preparing to contest this year’s Bangkok gubernatorial election since November 2019, and he has had success in creating a broad non-partisan united front of supporters.
- At a minimum, most of the country’s major political parties will try to put up a good fight at the polls in order to gain the respect of Bangkok voters and to build momentum for a possible early general election next year.
*Termsak Chalermpalanupap is Visiting Fellow in the Thailand Studies Programme, ISEAS – Yusof Ishak Institute. He was previously Lead Researcher on ASEAN political and security cooperation in the Institute’s ASEAN Studies Centre.
INTRODUCTION
Major Thai political parties are facing a dreadful predicament. An election for the post of governor of Bangkok is on the horizon for the last quarter of 2021, but most of the country’s parties still do not have strong candidates to run. At the same time, their predicament is that most of them need to be seen to take this election seriously if they are to generate momentum in anticipation of a possible early general election early next year.[1] Since 1975, Bangkok has been the only province in Thailand whose residents have the right to elect their governor. The governor serves a four-year term, and may stand for re-election for another term. The Ministry of Interior appoints the governors of Thailand’s remaining 76 provinces.
Recent public opinion polls show that nearly one-third of Bangkok voters remain undecided. (See Table I.)
The coming election will be the first gubernatorial election in Bangkok since 2013; the military regime that took power in May 2014 cancelled sub-national elections during the half-decade that it held power. So far, all those who have declared interest in the post intend to run as independents. The candidate with the greatest potential to win is Chadchart Sitthipun, who has been preparing for this year’s Bangkok gubernatorial election since November 2019.
Most of Thailand’s major parties will seek to use the polls to win respect from Bangkok voters, since gaining political acceptance in the Thai capital is a significant boost to a party’s public image at the national level.
When Bangkok voters choose their Bangkok Governor, they will also vote to fill the Bangkok Metropolitan Council and the capital’s 50 district-level councils.
Table I. Public Opinion Surveys. Whom would Bangkok voters choose as their next Bangkok governor?
| Third Survey: 31 May-2 June 2021 | Second Survey: 31 March-2 April 2021 | First Survey: 2-3 March 2021 |
| Undecided: 30.62% | Undecided: 32.67% | Undecided: 29.96% |
| Chadchart Sitthipun(a): 23.84% | Chadchart Sitthipun: 24.77% | Chadchart Sitthipun: 22.43% |
| Pol Gen Chakthip Chaijinda(b): 12.57% | Pol Gen Chakthip Chaijinda: 11.93% | Pol Gen Chakthip Chaijinda: 15.51% |
| Pol Gen Aswin Kwanmuang(c) (incumbent): 10.59% | Pol Gen Aswin Kwanmuang (incumbent): 8.66% | Pol Gen Aswin Kwanmuang (incumbent): 7.68% |
| Any candidate of Phuea Thai Party: 5.33% | Any candidate of either the Progressive Movement (d) or the Move Forward Party: 4.26% | Any candidate of the Phuea Thai Party: 4.49% |
| Ms Rossana Kositrakul(e): 3.43% | Any candidate of the Phuea Thai Party: 3.95% | Ms Rossana Kositrakul: 4.26% |
| Any candidate of either the Progressive Movement or the Move Forward Party: 2.82% | Ms Rossana Kositrakul: 2.89% | Any candidate of either the Progressive Movement or the Move Forward Party: 4.26% |
| Dr Suchatvee Suwansawat (f): 2.05% | Any candidate of the Democrat Party: 2.81% | Dr Suchatvee Suwansawat: 3.35% |
| Any candidate of the Democrat Party: 1.75% | Any candidate of the Phalang Pracharat Party: 2.20% | Any candidate of the Phalang Pracharat Party: 3.27% |
| Will Not Vote: 1.60% | Dr Suchatvee Suwansawat: 1.59% | Any candidate of the Democrat Party: 2.66% |
Notes: The surveys were conducted by the NIDA Poll of the National Institute of Development Administration (NIDA). See the NIDA Poll’s website at www.nidapoll.nida.ac.th
a. Chadchart served as Minister of Transport in the Yingluck Shinawatra administration, August 2011-May 2014.
b. Chakthip was the national police chief, August 2015-September 2020.
c. Aswin is the incumbent Bangkok Governor; he was appointed by the head of the previous military regime on 18 October 2016.
d. The Progressive Movement is headed by Thanathorn Juangroongruangkit, leader of the dissolved Future Forward Party. The Move Forward Party is the successor of the Future Forward Party, in which Thanathorn can no longer play any role because of his disqualification from politics since the dissolution of Future Forward in February 2020.
e. Rossana is a former Bangkok senator.
f. Suchatvee is president of the prestigious King Mongkut’s Institute of Technology Ladkrabang.
NEW OPPORTUNITY FOR PHALANG PRACHARAT PARTY
The Phalang Pracharat Party (PPP), the core party of Thailand’s ruling coalition, remains undecided on what to do. Two potential candidates, ex-national police chief Pol Gen Chakthip Chaijinda and incumbent Bangkok Governor Pol Gen Aswin Kwanmuang, have been vying for support of the PPP leadership.
The 2014-2019 National Council for Peace and Order (NCPO) junta appointed Aswin to the governorship in October 2016. As the incumbent, Governor Aswin has a clear edge. Three incumbent Bangkok governors have won re-elections since the introduction of polls for the post in 1975. And Aswin has recently gained media exposure through his active role in supporting the Prayut Chan-ocha administration’s COVID-19 vaccination campaign in Klong Toey, Bangkok’s largest slum.
Chakthip, on the other hand, did not have a particular noteworthy record during his five years as the national police chief. He appears, however, to have political ambitions in national politics, and contesting the Bangkok election may be just a debut intended to draw public attention.
If PPP leader Deputy Prime Minister Gen Prawit Wongsuwan — a leading figure in the former junta — had his way, however, he would not want the PPP to field or endorse any candidate in the approaching Bangkok polls. He is concerned that the party would be violating Thailand’s current local government administration law, which is designed to deter interference in local government on the part of powerful national parties.
Members of parliament, including senators, as well as cabinet members are prohibited from offering any form of assistance to candidates in local elections. Parties must carefully record and then report every baht spent on campaigning for their candidates. Any misstep can lead to lawsuits and party dissolution.
Nevertheless, Captain Thammanat Prompow, who is the de facto manager of the PPP, is keen to tackle the challenge of competing in the Bangkok election. The PPP won 12 of the 30 House seats in the Thai capital in the March 2019 general election, and its machine and grassroots bases in Bangkok have been growing ever since, chiefly because of its leading role in the ruling coalition.
Thammanat’s political fortune and clout are also on the rise. At the PPP’s annual leadership meeting in Khon Kaen on 18 June, he was elected the PPP’s new secretary-general. Earlier, he succeeded in helping a PPP candidate win the by-election in the southern province of Nakhon Si Thammarat in early March. That was an especially remarkable achievement, given that the province was long a political stronghold of the Democrat Party. In May, Thailand’s Constitutional Court ruled that Thammanat could remain a member of Prime Minister Prayut’s cabinet despite his conviction on drug-smuggling charges in Australia in the 1990s.
Thammanat personally proposed — and party leader General Prawit agreed — that the PPP should hold its leadership meeting in the northeastern province of Khon Kaen. The province sends ten members to the House of Representatives. In Thailand’s most populous Isan region, only Nakhon Ratchasima’s 14 House seats exceed that total, while Ubon Ratchathani also has ten House seats. Staging a show of force in Khon Kaen – one of the strongholds of the Phuea Thai Party in the Northeast – is part of the PPP’s and Thammanat’s emerging plan to best Phuea Thai in the next general election.
Helping a PPP candidate win the Bangkok governor’s post will be yet another prominent feather in Thammanat’s political cap. Such an impressive achievement will reinforce his position as the new secretary-general of the party. But Thammanat will need both to avoid being seen to violate the law that prohibits his involvement in sub-national elections such as this one and to consider carefully the pros and cons of candidates whom the PPP might field or endorse.
Regardless of the PPP’s political clout and financial resources at the national level, its victory in the Bangkok gubernatorial election is far from guaranteed. In the past ten Bangkok gubernatorial elections, a government party’s candidate has won only once, in 2009, during the premiership of the Democrat Party’s Abhisit Vejjajiva. (See the Table II.)
Table II. Results of Bangkok Governor Elections, 1975-2013.
| Election Date | Winner | Second Place | Premier |
| 10 Aug.1975 | Dhammanoon Thien-ngern, Democrat Party | Dr Arthit Urairat, Phalang Mai Party | Kukrit Pramoj, Social Action Party |
| 18 July 1985 | Maj Gen Chamlong Sri-muang, Ruam Phalang Group | Chana Roongsaeng, Democrat Party | Gen Prem Tinasulanonda, non-partisan |
| 7 Jan. 1990 | Maj Gen Chamlong Sri-muang (incumbent), Phalang Dharma Party | Decho Sawananon, Thai Citizens Party | Gen Chatchai Choonhavan, Chat Thai Party |
| 19 Apr. 1992 | Krissada Aroonwong, Palang Dharma Party | Dr Bhichit Rattakul, Democrat Party | Gen Suchinda Kraprayoon, coup leader |
| 3 June 1996 | Dr. Bhichit Rattakul, Worker Ants Group | Maj Gen Chamlong Sri-muang, Phalang Dharma Party | Banharn Silapa-archa, Chat Thai Party |
| 23 July 2000 | Samak Sundaravej, Thai Citizens Party | Sudarat Keyuraphan, Thai Rak Thai Party | Chuan Leekpai, Democrat Party |
| 29 Aug. 2004 | Apirak Kosayodhin, Democrat Party | Paveena Hongsakul, independent | Thaksin Shinawatra, Thai Rak Thai Party |
| 5 Oct. 2008 | Apirak Kosayodhin(incumbent), Democrat Party | Prapas Chongsanguan, People’s Power Party | Somchai Wongsawat, People’s Power Party |
| 11 Jan. 2009 | Sukhumphan Baripatra, Democrat Party | Yuranan Pamorn-montri, Phuea Thai Party | Abhisit Vejjajiva, Democrat Party |
| 3 Mar. 2013 | Sukhumphan Baripatra(incumbent), Democrat Party | Pol Gen Pongsapas Pongcharoen, Phuea Thai Party | Yingluck Shinawatra, Phuea Thai Party |
TWO GOVERNMENT PARTIES WITH DIFFERENT NEEDS
Bhumjaithai, the second largest party in the ruling coalition, will most likely just stay out of the Bangkok race. It has neither MPs nor a grassroots base in the Thai capital. Bhumjaithai Party secretary-general Transport Minister Saksiam Chidchob has also been at odds with the Bangkok Metropolitan Administration over delays in mass transit projects in Bangkok and adjacent provinces, and over commuters’ resultant inconvenience and unhappiness.
Saksiam was hospitalised in April after contracting COVID-19 under mysterious circumstances. He faced accusations of being a virus “super-spreader” following his alleged visits to nightclubs in Soi Thonglor, Bangkok’s high-end night spot. The minister has denied ever visiting any of the infamous nightclubs, where several hostesses were infected and suspected of being sources of the current “third wave” of COVID-19 infections in Thailand.
Whether or not Minister Saksiam was to be blamed for contributing to this wave is one question. Another is whether Bhumjaithai Party leader Anutin Charnvirakul, a deputy prime minister and the Minister of Public Health, has failed to work collaboratively enough with Prime Minister General Prayut in tackling the pandemic.
In late April, General Prayut imposed an emergency decree to transfer cabinet ministers’ administrative powers under 31 laws to himself. The purpose of this transfer was to enable the prime minister to enforce those laws directly under his “single command” in the face of the coronavirus crisis.[2] The transfer made the ministers concerned, particularly Anutin, look bad. Under such adverse circumstances, the Bhumjaithai Party has practically no chance of winning the coming Bangkok election.
Further complicating the situation, Phuea Thai and other opposition parties have been egging on the Bhumjaithai leadership to quit the ruling coalition. Believing that the party has potential to lead an alternative coalition government, they hope to force General Prayut to resign or to dissolve the House and call an early general election.
The Democrat Party, the third largest government party, has been hoping against hope to make a come-back, particularly in Bangkok. It suffered a humiliating wash-out in the city in the last general election, failing to win any of its 30 House seats.
On the other hand, the party has a record of enjoying strong support from Bangkok voters in gubernatorial elections. In fact, its candidates won the last four successive elections for Bangkok’s governor.
Democrat Party deputy party leader Ong-art Klampaiboon, who is in charge of the party’s preparation for the Bangkok election, has narrowed down his search to two unnamed potential candidates. The individual finally chosen will be a knowledgeable public person with strong determination, high-level leadership experience, and capability to work with others, according to Ong-art.[3]
However, the recent failure of the Democrat Party to defend its House seat in the by-election in Nakhon Si Thammarat has reinforced public perception that the party is in decline. In contrast to Bhumjai Thai, it is seen to have no capability to lead an alternative government coalition.[4]
PHUEA THAI’S LOST OPPORTUNITY
The Phuea Thai Party has not been successful in leading the opposition to the Prayut government. Worse still, it has suffered from defections and internal dissent.[5] Winning the Bangkok gubernatorial election can be the magical panacea to heal all these wounds and strengthen the party in time for the next general election. The party has significant support in outlying districts of the capital, where it won nine House seats in the last general election.
But the party is still looking for a viable candidate for the post of Bangkok governor. At first it thought it had a sure-winner in Chadchart, its second nominee for the premiership in the last general election. But Chadchart left the party in November 2019 and has declined its offers of support and endorsement in the race for governor.
Another potential Phuea Thai candidate was Sudarat Keyuraphan, the party’s top nominee for the premiership in 2019. Sudarat came second in the Bangkok gubernatorial election of July 2000 as the candidate of the Thai Rak Thai Party — the predecessor of the People’s Power Party, which was in turn the predecessor of the Phuea Thai Party. She was beaten that year by Samak Sundaravej of the Thai Citizens Party, who in 2008 became the prime minister in the People’s Power Party-led government coalition. But Sudarat left the Phuea Thai Party in November 2020 to lead a new party, called Thai Sang Thai or Thais build Thailand.
It is highly unlikely that Sudarat will stand in the approaching Bangkok election. Most probably her party will field a young and upcoming candidate, and Sudarat will help with the campaign to make her own and her new party’s presence felt in the campaign.
MOVING OUT OF THANATHORN’S SHADOW
Another opposition party that needs to make its presence felt in Bangkok’s gubernatorial election is the Move Forward Party, a successor party of the dissolved Future Forward Party of Thanathorn Juangroongruangkit. After the dissolution of the latter party in February 2020 and the disqualification of Thanathorn from politics for 10 years, Thanathorn established a new political action group called the Progressive Movement.
Despite Thanathorn’s active campaigning, the Progressive Movement failed to capture a single provincial administrative organisation in elections held in December 2020. It also fared poorly in municipal elections held this past March. Those two successive failures have undermined Thanathorn’s influence. Nevertheless, he still hopes that his Progressive Movement will be able to do better in another round of local government elections, at the tambon or sub-district level, which may be held in July or August of this year.
After those polls, Thanathorn and his Progressive Movement plan to step aside and let the Move Forward Party field a candidate in the Bangkok gubernatorial election. The party would certainly relish the opportunity to move out of Thanathorn’s political shadow and stage its own show in Bangkok. It could still count on the popularity of Thanathorn and the former Future Forward Party in the capital, where the party won nine of 30 House seats 2019 — partly because of overwhelming support from young voters.
Move Forward has been looking for someone from the “new generation” who, according to party leader Pita Limcharoenrat, must have clear and innovative ideas, be forward-looking, and have a good understanding of Bangkok people and their aspirations.[6]
So far, the Move Forward Party has not announced its candidate for the Bangkok governor’s post. Speculation that it will field Thanathorn’s elder sister Chanaphan has been dismissed by the party spokesperson.[7] It seems only to have been an unusual coincidence that Chanaphan has been an active supporter of the party’s new “Orange Peel Group” set up in May to prepare for the Bangkok election.
After the tambon elections across provincial Thailand in July or August, the Bangkok gubernatorial election — along with polls for the manager of the world-famous beach resort of Pattaya, with its special administrative status — will be the last set of sub-national elections.
CHADCHART THE HOT FAVOURITE
Recent polls have shown that at least one in five of Bangkok voters intends to vote for Chadchart, who holds a doctorate in structural engineering from University of Illinois, earned while on a King’s Scholarship.[8] The Thai media has given him the nickname “the Strongest Man on Earth”[9] because he is physically very fit, and bikes and skateboards in his neighbourhood. He sometimes goes out in shorts, a T-shirt and sneakers. Though he is in his mid-fifties, his down-to-earth demeanour appeals to young voters.
Chadchart has explained that he left the Phuea Thai Party to pursue the Bangkok governor’s post as an independent candidate because he saw the need to build a broader non-partisan united front of all Bangkokians who aspire to work together for a “Better Bangkok”.[10] He has successfully used his Facebook page to recruit volunteers and “Friends of Chadchart” to join him in visiting Bangkok neighbourhoods and bringing basic supplies to the poor, as well as in listening to the grievances and ideas of Bangkokians at the grassroots level.
Chadchart’s active electoral preparations, underway since November 2019, have also led a number of potential candidates for the Bangkok Metropolitan Council and district councils to leave their political parties and to jump on his “Better Bangkok” bandwagon. A stronger team of candidates for the council elections will enhance Chadchart’s prospects for winning the governor’s post.
Chadchart’s popularity has created new headaches for all the major political parties. It has become difficult for parties to find enough candidates for posts on the metropolitan and district councils, let alone to have realistic chances of winning seats on those councils.
CONCLUSION
Chadchart’s well-organised preparations are creating a groundswell of popular support for his campaign to become governor of Bangkok. It may also attract the undecided to vote for him. His strategy of entering the race as an independent appears to be working.
Meanwhile, having a strong party label will be a political liability rather than a political asset in Bangkok for candidates from government parties and opposition parties alike.
The PPP and Thammanat, therefore, will have to think long and hard before committing the party to any course of action in the race. Thammanat does not want to risk suffering a major defeat in Bangkok, especially since he has just risen to post of party secretary-general.
The Bhumjaithai Party with its stronghold in Buriram Province, in the lower Northeast, is likely to stay out of the Bangkok election altogether. This is a convenient position but one that may leave the party looking bad, especially when its leader Anutin aspires to be Thailand’s prime minister.
As for the fumbling Democrat Party, another wash-out in the Bangkok election will almost doubtless constitute a blow from which the party cannot recover.
Strong candidates from the Phuea Thai and the Move Forward Parties will undercut each other as they tap into the same pool of unhappy Bangkok voters who oppose the Prayut administration and its ruling coalition. This effect will directly benefit Chadchart, who is offering his non-partisan united front as a new and better choice.
The Bangkok gubernatorial election and its outcome will have significant implications for all of the country’s major political parties at the national level.
ISEAS Perspective 2021/84, 22 June 2021
ENDNOTES
[1] See the author’s article on speculation about a possible dissolution of the House of Representatives before the end of its full four-year term in March 2023 and a consequent early general election, possibly in the first quarter of 2022; Termsak Chalermpalanupap, “An Early Election For Thailand? Will It Matter?” , ISEAS Perspective No. 2021/68 (www.iseas.edu.sg/articles-commentaries/iseas-perspective/2021-68, accessed 9 June 2021).
[2] “ด่วนที่สุด! ครม. โอนอำนาจให้นายกฯ คุมเบ็ดเสร็จแก้ไขสถานการณ์โควิด” [Most urgent! Cabinet transfers to prime minister powers to tackle COVID situation], Naew Na , 27 April 2021 (www.naewna.com/politic/568930, accessed 10 June 2021).
[3] “‘องอาจ’ แย้ม ปชป. มี 2 ตัวเลือกสมัครผู้ว่าฯ กทม. ลั่นไม่หวั่นเจอคู่แข่งบิ๊กเนม ‘ชัชชาติ — บิ๊กแป๊ะ’ ”[“Ong-art” discloses that Democrat Party has two potential candidates for the Bangkok Governor election, insists that the party is not afraid of competing against big names such as “Chadchart” and “Big ‘Paeh” (Pol Gen Chakthip)], the Thai Post, 13 April 2021 (www.thaipost.net/main/detail/99351, accessed 9 June 2021).
[4] The Democrat Party, with only 164 MPs, managed with implicit support from the Army to replace the People’s Power Party, which had 233 MPs, in leading a new government coalition in December 2008. This turn of events propelled its leader Abhisit Vejjajiva to the premiership following judicial removal of three prime ministers from the People’s Power Party, the predecessor of the Phuea Thai Party.
[5] Seven MPs of the Phuea Thai Party did not take part in voting against the cabinet’s bill on 500 billion baht emergency fund in the second week of June; the ruling coalition passed the bill with 270 votes, whereas the opposition could muster only 196 votes against the bill. The missing Phuea Thai MPs are suspected to be potential defectors preparing to join either the Phalang Pracharat Party or the Bhumjaithai Party when opportunities arise. Meanwhile, at least four MPs from the Move Forward Party have indicated their intention to join the Bhumjaithai Party if and when they are expelled from the second largest opposition party. Those four Move Forward MPs defiantly crossed party lines and voted for the bill on the emergency fund.
[6] “‘พิธา’ ตั้งคุณสมบัติผู้สมัครผู้ว่าฯ กทม. ‘ใหม่ ชัด โดน’ ถามคนกรุงจะเอา ตร. ทหาร พรรคเก่าหรือ [“Pita” sets qualifications of candidate for the Bangkok Governor: “New, clear, and attractive”. Asks why Bangkokians would still want police officer, soldier or old parties again], Thai Post, 23 January 2021 (www.thaipost.net/main/detail/90767, accessed 9 June 2021).
[7] “ก้าวไกลแจงไม่เป็นความจริงส่ง ‘พี่สาวธนาธร’ ลงชิงผู้ว่าฯ กทม.” [Move Forward Party clarifies that it is untrue that the party will field “Thanathorn’s elder sister” to vie for the Bangkok governorship], Bangkok Times, 9 March 2021 (www.thebangkoktimes.com/2021/03/09/7174, accessed 9 June 2021).
[8] Dr Chadchart is 55 years old, is married and has one son. He also has a master’s degree in structural engineering from Massachusetts Institute of Technology, and a bachelor’s degree with first-class honours in engineering from Chulalongkorn University in Bangkok. He served with an unblemished record as transport minister in the 2011-2014 Yingluck Shinawatra administration, when he was actively involved in laying down Thailand’s master plan for high-speed railways. His Facebook page at facebook.com/chadchartofficial has more than 850,000 followers.
[9] That is, “บุรุษที่แข็งแกร่งที่สุดในปฐพี”.
[10] “‘ชัชชาติ’ ลั่นพร้อมชิงผู้ว่าฯ กทม. ในนามอิสระ ลาออกจากเพื่อไทยแล้ว ไม่ทราบ ‘แม้ว’ ไม่พอใจ” [“Chadchart” declares his readiness to vie for the Bangkok governorship as an independent, has resigned from the Phuea Thai Party, doesn’t know if Thaksin is displeased], Manager Online, 30 November 2019 (www.mgronline.com/politics/detail/9620000114921, accessed 10 June 2021).
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2021/83 “Challenges Facing Vietnam’s Emerging Automobility Landscape” by Ivan V. Small
EXECUTIVE SUMMARY
- International trade agreements, especially the ASEAN Free Trade Area, are making cars more accessible to Vietnamese consumers and reshaping the country’s transportation landscape.
- The pace and sequencing of mobility transitions are a concern given limitations in Vietnam’s transportation infrastructure, planning coordination and environmental and safety management.
- Future mobility solutions and sustainability models that are being developed by automakers in conjunction with research labs in Singapore for application across Southeast Asia are insufficient to address Vietnam’s particular transportation needs.
- Given impending congestion problems, the completion of public transportation systems in Vietnam’s major cities should precede the removal of non-tariff barriers to automobile imports.
- How the Vietnamese government coordinates with stakeholders in the auto industry as well as trade and urban planning authorities will have an impact on the growth and expansion of cities. With proactive planning and foresight, Vietnam can reduce the primacy of cars while developing effective multi-modal transportation networks.
* Ivan V. Small is Visiting Senior Fellow at ISEAS – Yusof Ishak Institute and a sociocultural anthropologist and Associate Professor at Central Connecticut State University.
INTRODUCTION
Vietnam, which attained lower-middle-income status in 2009, has grabbed global attention as an emerging hub of international supply chains. One of the metaphors for the increasing circulation of capital that has characterized Vietnam’s now highly global economy is the expansion of road traffic since the 1990s, often embodied by the seemingly ubiquitous motorcycles on its streets.[1] In recent years, however, motorbike sales have started to flatten, while automobile sales have been increasing. Vietnam is expected to reach per capita GDP of US$5,000 in 2025[2] (up from $2,700 in 2019), which market analysts consider an important threshold that will fully launch the nation into the “next stage” of widespread car consumption, or “motorization”.[3]
Over 17 auto makers have built factories or entered into joint ventures with Vietnamese companies to build cars since 1995, although the vast majority of output comes from plants that assemble cars from mostly imported components. Market leaders such as Toyota, Thaco and Thanh Cong assemble and distribute a variety of foreign brands like Toyota, Mazda, Peugeot, Kia and Hyundai, while emerging local companies such as VinFast hope to build a national car brand that will extend its presence to the global market.[4] The Vietnamese auto market has therefore been driven by not only the increasing wealth of Vietnamese consumers and the removal of tariff barriers under free trade agreements, but also by investments from foreign car companies and the Vietnamese government’s ambition to develop a native automotive industry. However, a relatively underdeveloped road infrastructure and poor urban planning are constraining the growth of Vietnam’s auto market.
This article examines how the Vietnamese auto market has been shaped by industrial development policies, and how these are shifting with the implementation of international free trade agreements, particularly the ASEAN Free Trade Area (AFTA). It then considers Vietnam’s mobility infrastructure and urban planning shortfalls, and whether multi-modal transport models and technologies, such as those developed in Singapore, can be implemented in Vietnam. The article concludes by interrogating the automotive inevitability assumed in future mobility research agendas and car companies’ market strategies.
EFFECTS OF TRADE AGREEMENTS ON VIETNAM’S AUTO MARKET
Car sales in Vietnam, which has a population of 96 million but a relatively low car ownership ratio, have soared in recent years. In 2019, for example, over 300,000 cars were sold in the country, nearly a tenfold increase from 2006. Vietnam’s participation in free trade agreements (FTAs), which has reduced trade barriers once designed to protect Vietnam’s emerging automotive sector, is a major driver behind this trend.
In 2007, Vietnam joined the World Trade Organization, which required a phased reduction of the 90% tariff previously imposed on most automobiles. Of greater significance for the Vietnamese car market, however, is the country’s membership in the ASEAN Free Trade Area (AFTA). AFTA’s ASEAN Trade in Goods Agreement (ATIGA) imposed on Vietnam a complete elimination of tariffs by 2018 on automobiles assembled in any ASEAN member state. While lower prices on imports have been offset by consumption taxes, registration and license fees as well as other non-tariff measures such as inspections to maintain elevated car prices, the inevitable erosion of added costs that made cars unaffordable in the past now contribute to the emergence of an automobility society.[5]
AFTA is causing many automotive companies to rethink their manufacturing and market strategies across the region and in Vietnam. This has been especially the case for Japanese car manufacturers that made significant investments in Thailand and until recently maintained a dominating market share in Vietnam as well as the region.[6] Many expected that the AFTA would encourage Vietnam to focus on light truck and van building, drawing on its comparative advantage in this segment, rather than passenger cars.[7] Yet anticipated manufacturing shifts away from passenger cars remain in play. Non-tariff barriers, such as the requirement issued in 2018 for completely built-up (CBU) cars to undergo tests in a Vietnamese lab to ensure that they met environmental and emissions standards, slowed the expected flood of cars manufactured in other ASEAN countries into Vietnam.[8]
While some companies scale back their production in Vietnam, Hyundai, which surpassed Toyota to become the best-selling car brand in Vietnam in 2020, has opted for an expansion strategy by increasing production capacity at its joint venture with Thanh Cong in Ninh Binh Province. With the EU-Vietnam Free Trade Agreement opening up cost-efficient supply chains for parts, and with the Regional Comprehensive Economic Partnership (RCEP) on the horizon, Vietnam is still considered by some companies as an attractive car market and production hub.[9]
What remains to be seen is how the implementation of the latest regional trade agreements, such as the RCEP and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), will further reshape Vietnam’s auto industry as regional supply chains become further integrated. The CPTPP took effect in Vietnam in 2019; and the RCEP, which Vietnam signed in November 2020, is expected to be ratified in 2021. Adaptations to trade agreements’ provisions will be gradual but will most likely further connect the supply chains and consolidate the production strategies of automotive companies. Against this backdrop, and together with the increasing income of Vietnamese consumers, it is likely that Vietnam’s auto industry and car market will continue to expand.
INFRASTRUCTURE AND URBAN PLANNING LIMITATIONS
While many Vietnamese are generally excited about the prospect of car ownership, the country’s poor transportation infrastructure – including roads and alternative public transportation options – remains a challenge to expanding automobility.[10] Urban planning in Vietnam remains weak and uncoordinated compared to more developed countries in the region such as Singapore,[11] which has become a hub for designing mobility solutions for Southeast Asia.[12] Many of the solutions developed in Singapore through grants from auto companies project technologically sophisticated multi-modal mobility models intended for not only Singapore but also densely populated mega-cities throughout the region.[13] One such future urban mobility research group’s stated goal is to “develop, in and beyond Singapore, new paradigms for the planning, design and operation of future urban mobility systems.”[14] For another, “a key focus will see how research outcomes can benefit the Asian market based on the needs of the region”.[15]
For most Vietnamese living in major cities like Ha Noi, Ho Chi Minh City and Da Nang, the motorcycle remains an essential part of life. Yet the use of motorbikes has also led to congestion, pollution, traffic fatalities and other growth dilemmas.[16] Many interlocuters that I interviewed feel that given the uncontrolled growth of cities, cars offer mobility as a valuable escape to more sustainable and safe suburban lifestyles.[17] They also map their previous experiences with motorcycles onto their future expectations of cars. Some signed up for driving lessons even before owning cars, and bought land and houses in suburban satellite districts as they prepare for an inevitable lifestyle shift.
Although the Vietnamese government has declared that the positive effects of “modernization and industrialization” brought by the auto industry’s expansion must be synchronized with “traffic infrastructure development, consumption policies, environmental protection requirements and energy saving trends”,[18] most interlocuters have little faith that local or national authorities will effectively implement sustainable urban development plans. Consequently, many residents have been anticipating and building alternative living spaces, often piecemeal. Among the growing middle class, there is a strong desire for “civilized”, safe, and pollution-free living environments, as anthropologists have discovered in recent studies of new urban districts in Ho Chi Minh City such as Saigon South.[19] In other mid-sized cities like Da Nang, residents watch as an urban landscape designed for future automobility efficiency rapidly unfolds, featuring multi-lane highways, bridges, and new suburban zones, in anticipation of increased car ownership and the metro area population doubling by 2030.[20]
Mobility futures attached to the automobile can excite or terrify, depending on one’s vantage point. Spectral to Vietnam’s automobility horizons are cautionary tales of regional cities such as Jakarta or Manila that suffer under the congested weight of poorly-planned urban expansion and motorization. Tran Bao Ngoc, a general director at Vietnam’s Ministry of Transport, identifies the following challenges to urban transportation in Vietnam: slow road and public transport infrastructure development, high growth of personal vehicles, inadequate planning and management, and no targeted control of personal vehicles to manage traffic.[21] Studies of Ho Chi Minh City’s infrastructure planning and development, including its subway system, warn of generally weak and uncoordinated responses by urban planners that if left unaddressed will have long-term congestion consequences.[22] A city and regional planner analyzing conflicting transit plans in Ho Chi Minh City identified competing and fragmented regimes of legal and regulatory frameworks, grant incentives, and planning principles that act as barriers to a more streamlined and effective development approach to the metropolitan public transport system.[23] The first subway line in Ho Chi Minh City, financed by Japan, and Ha Noi’s first metro line, financed by China, are well behind schedule. The former was supposed to open in 2018 and the latter in 2017, coinciding with the drop in auto tariffs imposed by AFTA, but by mid-2021 both remain uncompleted. Meanwhile, in Ha Noi, Da Nang, and Ho Chi Minh City, bus public transit accounts for less than 10% of commuter transportation, a small proportion compared to other major cities in the region.[24]
On the other end of the Southeast Asian city traffic spectrum, Singapore has invested heavily in car-lite city planning and its Land Transport Authority has emphasized technological innovation and transportation engineering to discourage widespread individual car use.[25] The automobile has come to co-exist with a variety of other mobility options, especially trains and buses, producing a city that remains surprisingly mobile for its size. The ease and connectivity of multiple modalities of transportation in Singapore have made it a test-bed, model and hub for developing and exporting mobility solutions for cities across the region.[26] A number of mobility labs funded by corporate and government grants at Singapore University of Technology and Design, Nanyang Technological University, National University of Singapore, and TUMCREATE[27] have been conducting research on the “future of mobility” from various urban planning, technology and engineering perspectives. These include investments in areas of environmental sustainability and first- and last-mile connectivity. Collaborative industry grants from companies such as Daimler, BMW, Volvo, Hyundai, Grab and Huawei which fund these labs are highly technology-centred, and generally revolve around key research areas such as autonomous vehicles, electromobility, traffic modeling, connectivity and vehicle sharing. According to one researcher, mobility solutions developed in these labs can be applied in Singapore and used as “models” for cities across the region.[28]
While these mobility futures under development sound promising, lingering within them are some of the very problems they purport to address. Central is the issue of sustainability. Across the board, technology is promoted by mobility service providers as a requisite solution to address problems of emissions, environmental degradation and climate change. In particular, electrification, car sharing, and multi-modal links to public transport are seen as progressive measures that can help tackle these issues. Yet, electrification often depends on energy generated by traditional power sources such as coal-fired power plants. Electric cars themselves still take up more space than is available on narrow Vietnamese city streets, requiring a continuous expansion and upgrading of infrastructure. Their batteries require many rare earth minerals, and are still not widely recycled. New car models that are technologically connected will also have shorter life spans and faster replacement rates, which produce more expenses and waste.
Future mobility projections that rely on automobile companies’ research grants are also likely to produce new dilemmas down the line. While many policy and industry efforts have been taken to make cars more energy-efficient and mega-cities more car-lite, such visions are still based on the assumption that the car must be here to stay, even if produced and used in modified and interconnected forms. While reinvented mobility services are meant to help expand automotive companies’ revenue in the global North, targeting emerging markets like Vietnam that are reaching the profitable stage of “motorization” for legacy car sales remains an important parallel strategy for many car companies.
Widespread motorization has not yet happened in Vietnam, partly because the country is still relatively low on the development ladder. Another reason is that the Vietnamese government has managed to maintain their own version of “car-lite” cities through taxation. However, this planning and revenue tool is being eroded. The 90% tax rate on automobiles sold in Vietnam just 15 years ago made car ownership a rare luxury and mostly prohibitive. But since Vietnam is now a member of the WTO and 15 free trade agreements, tariffs on automobiles are being removed and markets are being pried open. A former luxury is likely to eventually become a necessity.
Unlike Singapore where research institutions are working in greater tandem with urban planners, the government, and industry to get ahead of the problem and maintain a mobile and environmentally friendly city, the coordination between local stakeholders to improve Vietnam’s urban planning and to facilitate a car-lite future does not necessarily exist to the same extent.[29] The mandatory elimination of tariffs on cars in Vietnam and elsewhere in the region through trade agreements does not bode well for cities that are already congested and polluted and where strong planning mandates or alternative transportation infrastructures are lacking.[30]
If imported mobility solutions are limited in their applicability to the Vietnamese context, and the country’s infrastructure to support widespread automobility remains insufficient, what alternatives are there to address Vietnam’s expanding mobility needs?
CARS AS VIETNAM’S INEVITABLE FUTURE?
Vietnam’s automobile consumption has recently slowed. The closure of borders and the disruption of economic activities during the COVID-19 pandemic saw car sales in the country decline 8% in 2020. Disrupted supply chains have also constrained automobile production.[31] Special consumption taxes, vehicle certification requirements and other protective measures, although being challenged, are also temporarily decelerating the flood of imported cars into Vietnam.
Nonetheless, many potential problems associated with capitalist hyper-mobility await on the post-pandemic horizon. Now is perhaps the time to rethink what future mobilities should realistically look like over the longue durée, and how to more holistically project and extend the collective “profit” of sustainable living to future generations. Interrogating assumptions about the inevitability of Vietnam’s auto market expansion is a good starting point.
The post-automotive future has already been anticipated by the auto industry. Vietnam should avoid becoming a dumping ground for legacy car sales – the primary profit area that car companies focus on in emerging markets without having to take responsibility for associated problems. For Vietnam’s densely populated cities, it is urgent that the national and local governments coordinate to prioritize the rapid completion of essential transportation infrastructures, especially highways and city metro systems. Until then, authorities should continue to stave off widespread auto consumption with short term non-tariff barriers – as they have tried to do since 2018. Such barriers will inevitably be challenged, but even a short extension of Vietnam’s public infrastructure development timeline will help prepare the country for more seamless and appropriate mobility solutions.[32] In the interim, targeted qualitative studies that emphasize user needs, experiences and constraints in Vietnam’s rapidly changing urban and transportation ecosystems are also required to effectively inform the implementation of sustainable urban development plans. Being proactive, rather than reactive to the transportation challenges facing Vietnamese cities, is critical.
As Vietnam tweaks its national industrialization and urban planning priorities and policies, it should encourage some leapfrogging within assumed transportation development trajectories. Most studies anticipate an influx of cars in the near future, but given Vietnam’s late start in motorization, they also hold out the possibility of alleviating if not bypassing the presumed inevitability of mass automobility. If approached with creative foresight and planning, automobiles and their associated problems may not necessarily have to dominate the future of mobility in Vietnam and elsewhere.
ISEAS Perspective 2021/83, 18 June 2021
ENDNOTES
[1] Allison Truitt, “On the Back of a Motorbike”, American Ethnologist 35 No. 1. (2008): pp. 3-19.
[2] Hai Hong Nguyen, “Vietnam’s Frontrunner for Prime Minister”, Fulcrum, 29 March 2021, https://fulcrum.sg/vietnams-expected-next-prime-minister/
[3] Joyce Dargay, “Income’s Effect on Car and Vehicle Ownership” Transportation Research Part A Issue 33 No. 2. (1999): 101-138.
[4] VinFast bought General Motor’s Vietnam manufacturing and distribution operations in 2018. On VinFast, see Le Hong Hiep, “Vietnam’s Industrialization Ambitions” ISEAS Trends in Southeast Asia No. 2 (2019).
[5] On automobility and society, see Mimi Sheller and John Urry, “The City and the Car”, International Journal of Urban and Regional Research Vol. 24 Issue 4 (2000): pp. 737-757.
[6] Kaoru Natsuda and John Thorne, Automotive Industrialisation: Industrial Policy and Development in Southeast Asia,(London: Routledge, 2021).
[7] Prime Minister Decision No. 229/QD-TTG (2016) incentivizes manufacture of priority vehicles including trucks and 9-seater vans.
[8] Thailand, dubbed the “Detroit of Asia” for its efficiency of scale in auto manufacturing, is Vietnam’s primary concern within ASEAN and the target of protective trade barriers against imported CBUs. Lamonphet Apisitniran and Piyachart Maikaew, “Heat on Vietnam Car Barriers Rises”, Bangkok Post 12 June 2018. https://www.bangkokpost.com/business/1483213/heat-on-vietnam-car-barriers-rises. Non-tariff barriers have been identified “as causing the most problems to free trade”: see “ASEAN – an Emerging Global Automotive Hub in the Making”, EU-ASEAN Business Council (2015).
[9] Under the EU-VN FTA, tariffs on auto assembly components drop from 32% to zero by 2025.
[10] Urban planner Danielle Labbe points out that “transportation planning experts generally agree that a city with a moderate density of 30 persons per hectare needs about 25 percent of its surface devoted to road space to support car traffic. Hanoi not only has three times that density, but its roads represent less than 20 percent of its surface”. Labbe, Danielle. “Urban Transition in Hanoi”. ISEAS Trends in Southeast Asia Issue 2 (2021) pg 10.
[11] Labbe also points out that in Vietnam “there has long been a need to integrate the mission of the institutions responsible for land-use development with other transport and infrastructure plans”. Ibid pg. 12.
[12] Glenn Van Zutphen, “Singapore’s Race for Mobility Solutions”, (2015), https://www.mobility.siemens.com/global/en/portfolio/road/stories/singapores-race-for-mobility-solutions.html
[13] Technology and planning solutions include the development of green and AI technologies for autonomous, connected, electric and shared vehicles, and of well linked multi-modal public transport networks, traffic engineering, electronic road pricing and routing algorithms to reduce personal car traffic.
[14] Singapore-MIT Alliance for Research and Technology, Future Urban Mobility Research Cluster, https://smart.mit.edu/research/fm/about-fm
[15] “BMW Group and NTU set up first joint research lab in Southeast Asia”, 23 April 2013, https://www.bmw-sg.com/local-news/bmw-group-and-ntu-set-up-first-joint-research-lab-in-southeast-asia/2013/04/23/
[16]Arve Hansen, “Transport in Transition: Doi Moi and the Consumption of Cars and Motorbikes in Hanoi”, Journal of Consumer Culture 17 No. 2. (2017): pp 378-396.
[17] Between 2013 and 2019, the author interviewed current and potential motorcycle and automobile users as well as auto sales, manufacturing and marketing representatives in Ho Chi Minh City, Da Nang, and Ha Noi. See Ivan V. Small, “Anticipating the Automobile”, Consumer Culture Theory 19 (2018): 145-161.
[18] Prime Minister Decision No 1211/QD-TTg 2014 “On the Approval on the Master Plan on Vietnam Automobile Development to 2020 with a Vision to 2030”.
[19] Erik Harms, Luxury and Rubble, (Berkeley: Univ of California Press, 2016).
[20] Ichiro Kutani and Yasutomo Sudo, “Case Study of Da Nang City”, in Addressing Energy Efficiency in the Transport Sector Through Traffic Improvement, Economic Research Institute for ASEAN and East Asia Research Project Report FY 2015 No. 10, 2016, https://www.eria.org/research/addressing-energy-efficiency-in-the-transport-sector-through-traffic-improvement/
[21] Tran Bao Ngoc, “Challenges and Solutions for Sustainable Urban Transport in Cities of Vietnam” UNESCAP, 2016, https://www.unescap.org/sites/default/d8files/Country%20Report_Viet%20Nam_SUTI.pdf
[22] T.H. Truong, T. T. Truong and S.T. Tung, “Housing and Transportation in Vietnam’s HCMC”, Friedrich Elbert Stiftung, 2017, https://asia.fes.de/news/housing-and-transportation-in-vietnams-ho-chi-minh-city; Jessica Lockrem, “Moving Ho Chi Minh City: Planning Public Transit in the Motorbike Metropolis”, Ph.D. dissertation, Rice University, 2016, https://scholarship.rice.edu/handle/1911/96259
[23] Hun Kee Kim, “Speculating on World Class Transportation Infrastructure in Ho Chi Minh City”, Trends in Southeast Asia, no. 11, 2017, /images/pdf/TRS11_17.pdf.
[24] Pham Minh Hai, “Ho Chi Minh City Sustainable Urban Transport Index”, UNESCAP, 2018, https://www.unescap.org/sites/default/files/SUTI%20%20Mobility%20Assessment%20Report%20%20-%20Ho%20Chi%20Minh%20City.pdf
[25] Singapore Ministry of Foreign Affairs and Centre for Liveable Cities, “ASEAN Smart Cities Network”, 2019; Urban Land Institute Asia Pacific and Centre for Liveable Cities, “Urban Mobility: 10 Cities Leading the Way in Asia Pacific”, 2017.
[26] Enterprise Singapore, Urban Solutions, https://www.enterprisesg.gov.sg/industries/type/urban-solutions/industry-profile
[27] A research platform founded in 2010 to foster research collaborations between Singapore and the Technical University of Munich.
[28] In 2013 and 2021, the author interviewed mobility lab researchers and auto corporate executives in Singapore about their designs for the city and region. See Ivan V. Small, “Affecting Mobility: Consuming Driving and Driving Consumption in Southeast Asian Emerging Markets”, Journal of Consumer Culture 18 No. 3. (2018): 377-396.
[29] Danielle Labbe and Clement Musil, “Periurban Land Redevelopment in Vietnam Under Market Socialism”, Urban Studies 51 No. 6. (2014): pp. 1146-1161.
[30] In 2017, air pollution in Ho Chi Minh City was more than double the levels recommended by the World Health Organization. Hanoi was rated the seventh most polluted capital in the world by IQ AirVisual in 2019.
[31] Ben Shepherd and Anita Prakash, Global Value Chains and Investment: Changing Dynamics In Asia, Economic Research Institute for ASEAN and East Asia Research Project Report 2021 No. 01, https://www.eria.org/publications/global-value-chains-and-investment-changing-dynamics-in-asia/
[32] Do Mai Lan and Hoang Oanh, “Vietnam’s Tentative Approach to Regional Infrastructure Initiatives”, Perspective No. 71, 2021, /articles-commentaries/iseas-perspective/2021-71
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2021/82 “Tracking the Swelling COVID-19 Vaccine Chatter on TikTok in Indonesia” by Yatun Sastramidjaja and Amirul Adli Rosli
Figure 1: Member of Parliament Ribka Tjiptaning’s rant about the government’s COVID-19 vaccination programme becomes a trending topic on social media, fuelling anti-vaccine propaganda on TikTok. Picture : Fajar National Network, “Menolak Divaksin, Ribka Tjiptaning: Negara Tidak Boleh Berbisnis Dengan Rakyatnya”, https://www.youtube.com/watch?v=7iVMVG7bgYY.
EXECUTIVE SUMMARY
- On Indonesian social media, ambivalent sentiments towards the government’s COVID-19 vaccination program are amplified and solidified into polarized stances, creating fierce competition between opponents and proponents of vaccination to shape public perceptions.
- These polarized stances are particularly pronounced on TikTok as its videos swiftly go viral by providing quick visual impact and instant emotional gratification to users. TikTok videos on contentious issues tend to fuel strong sentiments on an intuitive level, even if factual evidence is flimsy.
- On Indonesian TikTok, anti-vaccine messages are often mixed with global COVID-19 conspiracy theories and merged with domestic anti-government and anti-Chinese sentiments; furthermore, they are typically couched in religious discourse and spread by religious micro-influencers.
- The government tried to counter the online spread of anti-vaccine messages by pressuring social media companies to remove misinformation and block accounts that spread them, while also intensifying its vaccination campaign on TikTok and other social media by using celebrities and influencers.
- However, the silencing of anti-vaccine voices on social media does not make them disappear, and risks being interpreted as “evidence” of the government’s lack of transparency and hidden agendas. Besides engaging in social media battles, the government would do well to engage in grassroots dialogue with the sceptics.
* Yatun Sastramidjaja is Assistant Professor in Anthropology at the University of Amsterdam, and currently an Associate Fellow with the Regional Social and Cultural Studies Programme at the ISEAS – Yusof Ishak Institute. Amirul Adli Rosli is Research Officer at the Regional Social and Cultural Studies Programme at the same Institute.
INTRODUCTION
Nine months and approximately 20,000 deaths and 750,000 cases after the first reported COVID-19 case in Indonesia, President Joko Widodo (“Jokowi”) announced on 16 December 2020 that the Indonesian government would provide free vaccinations for all.[1] On 13 January 2021, he was publicly vaccinated, kicking off the country’s mass vaccination drive.[2] Jokowi’s vaccination programme has received mixed reactions, both offline and online. The government aims to vaccinate 181.5 million of Indonesia’s 270 million population by March 2022.[3] However, in a nationwide survey conducted in December 2020, only 37 percent of respondents stated that they were willing to be inoculated.[4]
Doubts about the vaccines are not without basis; Indonesia did experience problems with fake polio and hepatitis vaccines in 2016, which led to some deaths.[5] Furthermore, besides facing a formidable challenge in countering vaccine hesitancy, the government has had to deal with public outrage. When they announced that those who reject the vaccine would be fined five million rupiahs and be refused financial aid, there was much uproar both within parliament and among the public.[6] From the outset, the doubts were amplified on social media, where ambivalent sentiments on the government’s vaccination programme soon solidified into polarised stances, with opponents and proponents of vaccination vying to dominate the online discourse on the topic.
In this article, we focus on one social media platform, TikTok, whose presence on Indonesia’s digital landscape has been steadily growing in recent years. Launched in 2017 in the country,[7] TikTok has, as of August 2020, garnered at least 22 million users.[8] The video-sharing app has quickly evolved from a niche platform, catering to Gen Z’s notoriously short attention span with its 15-to-60-second video format, into a serious competitor in the digital marketplace of ideas—including ideas on government policy. TikTok’s influence in Indonesia became apparent during last year’s controversy over the Omnibus Law, when netizens actively used social media to mobilize public opposition against that piece of legislature; some TikTok videos of the mass protests in October 2020 gained up to 8.6 million views.[9]
The government’s policies in response to the COVID-19 pandemic further provided fodder for online agitation. Each new government announcement—from the “Large-Scale Social Restrictions” (PSBB) policy to the “New Normal” discourse—led supporters and critics to construct on social media narratives in support of or against them. However, the online battle was fought most fiercely over the government’s vaccination programme, and especially on TikTok, where the byte-sized anti-vaccine propaganda spread with remarkable speed. An analysis of the hashtag #vaksin (vaccine) on TikTok offers a glimpse into the anti-vaccine narratives that TikTok users have created, and into pro-vaccine responses as well.
BETWEEN CRITICISM AND CONSPIRACY
Criticism of the government’s COVID-19 response has been rife on social media, and not all of it directed against the need for health protocols and vaccination. In fact, from the outset, a prevalent sentiment expressed by Indonesian netizens (especially among the higher-educated urban middle class and civil society actors) was that the government’s response was too little, too late, too unscientific if not irrational, and too often driven by political rather than public health interests. One year into the pandemic, such criticism has barely subsided.[10] More worryingly, a more extreme type of commentary has been making its rounds on social media, questioning the legitimacy of the government’s pandemic response altogether, and even dismissing any official information about COVID-19.
This type of commentary is akin to the COVID-19 conspiracy theories that had been spreading across the globe since the start of the pandemic. Based on wild rumours, misinformation and deliberate disinformation, these myths channel doubts and fears surrounding the pandemic into alarming narratives about governments’ ill intentions, hidden agendas, foreign threats, or other plots kept secret from the public. In the early phases of the pandemic, such narratives had focused on the origins and nature of the virus itself, but since the global roll-out of vaccines they now mainly target the mass vaccination programmes, seeking public rejection of vaccines.[11] In its most extreme form, such propaganda constructs COVID-19 vaccination as an evil plot orchestrated by global elites to enslave humanity. More commonly, it fuels vaccine hesitancy by questioning the safety of vaccines developed in such a short time-span, or by appealing to the public’s moral and ethical concerns.
In Indonesia too, COVID-19 misinformation has been rife since the outbreak of the pandemic, triggering panic-buying and even denial of the existence of the disease.[12] COVID-19 misinformation and anti-vaccine propaganda in Indonesia is often couched in religious terms. Anti-vaccine narratives thereby appear to represent the position of Indonesia’s majority religion, Islam, and the interests of the ummah (Islamic community), especially when proclaimed and spread by Islamic micro-influencers with a large following on social media. Accordingly, a common theme in Indonesian anti-vaccine discourse is the claim that COVID-19 vaccines do not meet halal (permissible according to Islam) requirements, and speculation about vaccine ingredients being haram (forbidden by Islamic law) spread rapidly on social media after the announcement of the country’s vaccination programme. Hence, to reassure the public, the words halal and aman (safe) were put up prominently as the backdrop at President Jokowi’s public vaccination event.
While anti-vaccine propaganda has spread through all social media platforms, it has been particularly pronounced on TikTok due to this platform’s socio-technological affordances. Designed for quick visual impact and instant emotional gratification to promote virality, the communicative interface of TikTok tends to fuel strong sentiments on an intuitive rather than cognitive level. This is because the short-form videos on TikTok generate impact not so much on the basis of individual micro-posts—or any specific information that can be fitted into 15- to 60-second videos—but rather by the mass volume created by numerous micro-posts that duplicate or mimic particular contents, which together shape a “collective affect” or broadly shared sentiments.[13] To understand the influence of anti-vaccine messages on social media, it thus makes sense to trace how these narratives play out on TikTok.
#VAKSIN TRENDS ON TIKTOK
The top videos on TikTok with the hashtag #vaksin reveal some of the anxieties which Indonesians have about the vaccine (see Figure 3). In March 2021, the top videowas an edited version of a scathing rant against Indonesia’s vaccination programme, made in parliament by Ribka Tjiptanin on 13 January 2021. Tjiptaning’s tirade was broadcast on mainstream television channels and had added significance because she is a member of parliament for the ruling party PDIP.[14] In her speech, she stated that she would refuse the COVID-19 vaccine even though her age makes her eligible to be among the first to receive it, adding that she was willing to pay the five million rupiah fine for herself and her children and grandchildren should they also refuse. She strongly doubted the safety of the COVID-19 vaccine which had not gone through all required clinical trials (and warned of a repeat of the deadly fake vaccine debacle in 2016), and she asserted that “forcing the people to get vaccinated is a violation of human rights”. Finally, she exclaimed that the government should not be profiting off its citizens, referring to the government’s business deals with pharmaceutical companies. While Tjiptaning’s speech questioned vaccine safety and criticized the government’s overbearing policy of “forcing” the vaccine on its citizens, her fiercely moralistic tone made it resonate with broader concerns among Indonesian netizens.
The video of Tjiptaning’s speech quickly went viral on social media. While mainstream media stressed the irresponsibility of Tjiptaning’s rejection of the vaccine, on social media she was often lauded for her “bravery”. Although some netizens gave a nuanced interpretation, arguing that Tjiptaning did not oppose vaccination per se but rather called for caution, her speech was exploited for anti-vaccine propaganda, especially on TikTok. In the weeks after her speech, the original clip of her parliamentary rant were among the top ten TikTok videos with the hashtag #tolakvaksin (reject the vaccine); the top video on that list garnered 9000 likes, 388 comments and 2,085 shares. This number pales, however, in comparison to the immense reach of an edited version of Tjiptaning’s speech, which topped Indonesian TikTok in a second phase of viral circulation. In this edited video, paired with the hashtag #vaksin, Tjiptaning’s message acquired distinctly religious overtones.
In February, when the controversy over Tjiptaning’s speech had subsided in mainstream media, this edited video was uploaded on TikTok by an account named @adab.ulama, which translates as “the ulama’s (religious scholar) conduct”. The length of the original video was cropped, a filter was added to it, and a dramatic Islamic song was embedded into the background; furthermore, the edited video only featured Tjiptaning’s bolder claims. By 25 February 2021, the video was the top trending video on TikTok with the hashtag #vaksin, recording 1.6 million likes, 577,000 comments and 51,600 shares. The video’s popularity, however, cannot be solely attributed to @adab.ulama’s editing skills. It was the appropriation of Tjiptaning’s speech into a larger discourse of Islamic opposition that made this video so compelling.
Figure 3: The top #vaksin videos on TikTok in March 2021 ranked by engagement, including number of received likes, shares and comments.
The Islamic element is a common theme in Indonesia’s anti-vaccine discourse. A considerable number of TikTok videos that express anti-vaccine sentiments have been made by religious micro-influencers. In March 2021, the third most popular TikTok video with the hashtag #vaksin was a video by @coach_dive, a religious teacher and motivational speaker who calls himself “Coach”. Boasting 86,800 followers on TikTok, Coach presents himself as a fatherly, wise and pious character whose words are to be trusted. In his video on the vaccine, he echoed Tjiptaning’s criticism of the government for fining those who refuse the vaccine. Captioned “Sanction? Or stealing the citizens’ money?”, the video garnered 459,300 likes, 19,400 comments and 46,600 shares.
The next religiously-tinted top video is by @insyaAllah.istiqomah, a TikTok micro-influencer with 14,000 followers, who posts her own religious commentaries on edited clips of others’ religious sermons. Her #vaksin video features a preacher named Ustaz Ihsan denouncing the vaccine, claiming that it changes a recipient’s DNA. Like @adab.ulama’s edited video of Tjiptaning’s speech, @insyaAllah.istiqomah’s video employs visual effects and dramatic music to stimulate viewers’ emotional engagement. The video received 41,700 thousand likes, 2708 comments and 14,700 shares. The bottom part of the video contains the word “Part 1”, signalling a sequel. “Part 2”, however, cannot be found on @insyaAllah.istiqomah’s page. In a later video, she explains that “Part 2” was deleted by TikTok and her account temporarily suspended because of it. She also shares that the deleted video had received hundreds of likes and several comments before its removal, and hoped that users would be open-minded and only take the video’s hikmah (wisdom) about the vaccine. We learn that “Part 2” was a continuation of Ustaz Ihsan’s sermon where he reasoned that the vaccine was part of a Big Tech conspiracy to implant microchips into people. This claim comes straight out of the “anti-vaxxer” repertoire, indicating how seamlessly global conspiracy theories combine with local religious sensibilities on TikTok. Still, it remains unclear why “Part 2” has been removed from TikTok while “Part 1” remains untouched. It indicates an inconsistency in TikTok’s censorship policy.
CENSORING ANTI-VACCINE MESSAGES
To curb anti-vaccine propaganda, TikTok applies direct and indirect censorship. The video by @adab.ulama, featuring Tjiptaning’s rant, was removed soon after topping the #vaksin list. The third top video by @coach.dive was temporarily shadowbanned. This is a strategy used by TikTok and other social media platforms to curate users’ feeds and conceal certain content according to a particular algorithm, making it less likely for users to come across these targeted videos. Shadowbanning is a controversial measure because nobody really knows the extent to which an algorithm, combined with human moderation, can manipulate one’s feed and block a video. Furthermore, it happens discreetly, without warning, and no one is sure how long the ban will last. Coach’s video was discovered to have been shadowbanned when it did not appear on the feed in early March 2021 during the present research process, while it was still available on his user page. By late April, Coach’s account was found to be fully banned altogether.
Although TikTok has released statements explaining its recommendation system,[15] its decision-making process regarding whom to ban and block, or which videos to remove, downgrade or shadowban, remains shrouded in mystery. The cases discussed above indicate that censorship of anti-vaccine videos occurs systematically on TikTok. Like other social media platforms, TikTok has publicly committed itself to combatting “misinformation related to COVID-19, vaccines, and anti-vaccine disinformation more broadly”.[16] Besides adding new features to help with the reporting of suspicious videos, the platform has announced “multiple approaches to make anti-vaccine and COVID-19 misinformation harder to find”, including removing content and redirecting “searches associated with vaccine or COVID-19 disinformation to our Community Guidelines”.[17] Still, TikTok’s mechanisms regarding COVID-19 misinformation have largely been inconsistent.
Clearly, not all videos containing COVID-19 misinformation are being removed. Anti-vaccine videos with the hashtag #vaksin, particularly the top video showcasing Tjiptaning’s rant, might have been removed because of the large engagement it received. But similar videos showcasing the same rant with the hashtag #tolakvaksin continue to circulate on TikTok. Such inconsistency is likely to encourage TikTok users to tread more carefully, for instance by adding disclaimers without altering their message. Thus, @insyaAllah.istiqomah states that her videos are “for informative purposes only” rather than claiming to be arbiters of the truth. Rather than actually countering misinformation, the lack of consistency and transparency in censorship policies may deepen distrust in “authorized” or officially permissible information and information channels, which is the very fodder for conspiracy thinking.
POLARIZED COLLECTIVE AFFECTS
According to the Anti-Slander Society (MAFINDO), a group working to fight misinformation in Indonesia, Indonesian anti-vaxxers can be categorized into three groups: firstly, religious groups; secondly, the group with an anti-West bias; and lastly, the anti-Chinese group.[18] In the fluid and fast-paced information ecology of social media, however, those categories tend to overlap.
Bolstering the anti-vaccine claims of religious micro-influencers is the fact that Indonesia’s vaccination programme has relied predominantly on the Sinovac vaccine from China. This allows anti-vaccine propagandists to exploit the anti-Chinese sentiments traditionally nurtured among Indonesia’s conservative Muslims, embellish fears about the “foreign threat” posed by China to Indonesia’s geopolitical and economic interests, and question the quality of “second-rate” products made in China. Furthermore, the “foreign threat” argument is easily linked to anti-Western sentiments, as epitomized by the narrative about Western Big Tech giants such as Bill Gates seeking to control humanity. On TikTok, where different anti-vaccine mini-stories and master-narratives converge under a single hashtag into an endless stream of emotionally evocative videos, the net result is not so much about users’ belief in one or another particular COVID-19 conspiracy theory. Rather, it is the collective effect of deepening distrust in official information and policies, especially when this distrust is intimately tied to one’s religious identity.
However, the collective effect also works the other way, as demonstrated by the equally strong presence of pro-vaccine videos on TikTok. While three of the top videos with the hashtag #vaksin in March 2021 were anti-vaccine, the other seven supported vaccination. After the removal of @adab.ulama’s edited video of Tjiptaning’s rant, the new top video in April 2021 was by Hai Online, a popular teenage magazine, featuring a cropped YouTube clip of President Jokowi’s vaccination, edited with a localized dangdut remix of the hit single “How You Like That” by Korean pop group Blackpink. This video garnered 1.4 million likes, 50,600 comments and 57,800 shares. Other top trending videos similarly depicted the president’s jab.
The top users promoting vaccination with the hashtag #vaksin included a significant share of national celebrities. One of them was Willy Kun (@tiktokwillykun), a badminton athlete and Southeast Asian Games medallist, who documented his whole vaccination experience. Other top videos—such as the ones uploaded by the news broadcaster @liputan6.com and by radio DJ Aviliani (@Aviardan)—also spotlighted celebrities receiving the vaccine. Such videos tap into Indonesians’ sense of national pride, which engenders a positive collective effect based on trust in the nation’s capabilities, as opposed to the anti-vaxxers’ prevailing sentiment of distrust.
CONCLUSION
TikTok’s troubles with COVID-19 misinformation has highlighted the role of religious micro-influencers in driving anti-vaccine propaganda. They have the platform, the reach and the content-creating ability to spread their message to a large support base of faithful followers, whose trust in religious role models remains unshaken by censorship. Amidst the social media-driven COVID-19 infodemic, their influence in propagating anti-vaccine narratives is a worrying trend. Like TikTok and other social media platforms, the Indonesian government responds to COVID-19 misinformation by means of censorship and repression, declaring “war” on fake news with the objective to hunt down and silence those spreading COVID-19 hoaxes.
But this heavy-handed approach does little to overcome vaccine hesitancy and leaves little room for addressing people’s concerns.[19] By marginalizing or silencing anti-vaccine sentiments on social media, the government risks further alienating not only anti-vaxxer propagandists but also significant parts of the population that have these concerns. If the online battle against misinformation is largely a matter of nurturing trust and minimizing distrust, then the government would do well to focus on earning people’s trust—not only by providing accurate information, but also by facilitating grassroots dialogue with, and earnestly listening to, those in doubt.
ISEAS Perspective 2021/82, 17 June 2021
ENDNOTES
[1] Ardila Syakriah, “Jokowi Announces ‘Free’ COVID-19 Vaccines for All”, The Jakarta Post, 16 December 2020, https://www.thejakartapost.com/news/2020/12/16/jokowi-announces-free-covid-19-vaccines-for-all.html.
[2] Arlina Arsahd, “Indonesian President Jokowi Receives Covid-19 Jab, Starting National Vaccination Drive”, The Straits Times, 14 January 2021, https://www.straitstimes.com/asia/se-asia/indonesian-president-jokowi-receives-covid-19-jab-starting-national-vaccination-drive.
[3] Ibid.
[4] Rizki Fachriansyah, “Majority of Indonesians unsure about COVID-19 vaccination, survey finds”, The Jakarta Post, 23 December 2020, https://www.thejakartapost.com/news/2020/12/23/majority-of-indonesians-unsure-about-covid-19-vaccination-survey-finds.html.
[5] Yenni Kwok, “Indonesia Will Revaccinate ‘Millions’ of Children after Fake Vaccines Come to Light”, Time, 28 June 2016, https://time.com/4385064/indonesia-children-vaccination-scandal-vaccine-health/.
[6] Unknown, “Indonesia Capital Warns of Big Fines for Refusing COVID-19 Vaccine”, Reuters, 18 February 2021, https://www.reuters.com/article/health-coronavirus-indonesia-vaccines-idUSL4N2KO1ZD.
[7] Unknown, “Indonesia Bans Chinese Video App TikTok for ‘Inappropriate Content”, Reuters, 4 July 2018, https://www.reuters.com/article/us-indonesia-bytedance-ban-idUSKBN1JU0K8.
[8] Emarketer, “TikTok Users around the World”, Emarketer, https://www.emarketer.com/content/tiktok-users-around-world-2020.
[9] Yatun Sastramidjaja and Pradipa P. Rasidi, “Indonesia’s Hashtag Wars: How Online Narrative Battles Shape Political Controversy”, Perspective, forthcoming; Nuurrianti Jalli, “How TikTok Can Be the New Platform for Political Activism: Lessons from Southeast Asia”, The Conversation, 24 February 2021, https://theconversation.com/how-tiktok-can-be-the-new-platform-for-political-activism-lessons-from-southeast-asia-155556.
[10] Ika Krismantari, “After a Year of Living with Coronavirus, Indonesia is Going Backward”, The Conversation, 5 March 2021, https://theconversation.com/after-a-year-of-living-with-coronavirus-indonesia-is-going-backward-156382.
[11] Center for Countering Digital Hate, The Anti-Vaxx Playbook (2020), https://www.counterhate.com/playbook.
[12] Ika Ningtyas, “Indonesia battles spread of vaccine misinformation”, AA, https://www.aa.com.tr/en/asia-pacific/indonesia-battles-spread-of-vaccine-misinformation/2124319.
[13] Clare Sutherton (University of New South Wales, Sydney), “TikTok Methods”, Breaking Methods Webinar Series, https://www.youtube.com/watch?v=cts7BDyoH9E.
[14] CNN Indonesia, “Politikus PDIP Ribka Tjiptaning Tolak Divaksin Covid-19”, 12 January 2021, https://www.cnnindonesia.com/nasional/20210112182608-32-592818/politikus-pdip-ribka-tjiptaning-tolak-divaksin-covid-19.
[15] TikTok Newsroom, “How TikTok Recommends Videos #ForYou”, 18 July 2020, https://newsroom.tiktok.com/en-us/how-tiktok-recommends-videos-for-you.
[16] TikTok Topics: Covid-19, https://www.tiktok.com/safety/en-us/covid-19/. Retrieved 20 May 2021.
[17] Ibid.
[18] Ika Ningtyas, “Indonesia battles spread of vaccine misinformation”, AA, 27 January 2021, https://www.aa.com.tr/en/asia-pacific/indonesia-battles-spread-of-vaccine-misinformation/2124319.
[19] Susan Mercado, “A Pandemic of Fear and Misinformation”, The Jakarta Post, 20 April 2021, https://www.thejakartapost.com/academia/2021/04/19/a-pandemic-of-fear-and-misinformation-.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 | 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 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). |
“Widodo’s Employment Creation Law, 2020: What Its Journey Tells Us about Indonesian Politics” by Max Lane
2021/81 “Rethinking Extremism Beyond Physical Violence: Anti-Shia Hostility in Malaysia” by Norshahril Saat, Nur Syafiqah Mohd Taufek, and Afra Alatas
EXECUTIVE SUMMARY
- Academic studies on extremism have tended to view the issue through a security lens. Recent attacks on churches in Indonesia and Malaysia would have reinforced the popularity of this approach.
- However, violent extremism does not exist in a vacuum. Acts of terror are driven by ideas and discourse that motivate and justify terrorist acts.
- This article examines the impact of non-physically violent extremism on Muslims. Drawing on the case of the Shi’as in Malaysia, it explores how extreme ideas are espoused by some people in power, including popular preachers, religious elites, and bureaucrats.
- It analyses the Malaysian experience and demonstrates how labels such as “deviant” or “liberal” can lead to distress among Muslims advocating different points of view and inhibit their constructive participation in society at large.
*Norshahril Saat is Senior Fellow and Coordinator of the Regional Social and Cultural Studies Programme at ISEAS – Yusof Ishak Institute. Nur Syafiqah and Afra Alatas are research officers under the same programme at the Institute.
INTRODUCTION
For a long time, Malaysia has been referred to as a “moderate” Muslim country. However, it is no longer stranger to religious extremism. On 19 November 1985, police stormed a village in the state of Kedah, where Ibrahim Mahmood (also known as Ibrahim Libya), a PAS (Islamic Party of Malaysia) member, was resisting arrest. According to the government, Ibrahim had planned to overthrow the government by force, deeming it an un-Islamic government.[1] Known as the Kampung Memali incident, that action resulted in 14 villagers and four policemen losing their lives. Fifteen years later, members of an organisation by the name of Al-Ma’unah disguised themselves as military personnel and entered a military camp in the state of Perak, seizing weapons and threatening to overthrow the government and wage a holy war.[2] Lives were lost, and the standoff between security forces and Al-Ma’unah lasted for five days.
Both these groups condoned the use of violence in the name of Islam against what they deemed an infidel enemy.
Malaysia has faced other terrorist threats, early ones including those arising from movements such as Kumpulan Mujahidin Malaysia (KMM), Jemaah Islamiah (JI) and the Abu Sayyaf group. In 2014, it was reported that at least 30 Malaysians had left the country to join the Islamic State (ISIS) in Iraq and Syria, and that a number of alleged ISIS members in Malaysia had been arrested for attempting to launch an attack in the country. Reports on Malaysians being recruited by ISIS, and possible infiltration into the military continued to surface over the years.[3] What was also of concern was that in a survey conducted by the Malaysia-based Merdeka Centre in 2018, it was found that 5.2% of the respondents supported ISIS, while 18.1% supported JI.[4] Malaysia scored the highest in this context in comparison to Indonesia, Thailand, and the Philippines.
Organisations such as JI and ISIS are driven by a train of thought that justifies violent means or the use of physical force to cause harm and casualties, and establish an Islamic polity in the form of a caliphate or Islamic state. This is distinct from non-violent extremism, which does not resort to the use of physical force, but which nevertheless has extremist ideas.
However, the differentiation between “violent” and “non-violent” in the literature of extremism is becoming increasingly blurred. The binary masks the fundamental problem that extremist ideologies, whether entertained by violent or non-violent groups, do threaten a country’s social and political stability and can be violent in other ways. Non-violent extremist groups are not often seen to be inflicting visible physical harm, and the impact of their ideas on society has not been sufficiently studied. Instead, studies on extremism continue to be dominated by security concerns. Counteracting extremism—more easily considered counter-terrorism—is a growing field of study. Interestingly, in recent years, policymakers, researchers, and security forces have started paying greater attention to non-violent extremism and its impact, particularly how it can eventually lead to physical violence.[5]
This article highlights two limitations of the violent and non-violent binary and proposes that extremism be understood more broadly. We will also illustrate that non-violent extremism may not be as “non-violent” as it claims. We carry out a case study of extremist ideology aimed against intra-religious minorities in Malaysia to examine the various manifestations of extremism that are not physically violent and their impact on individuals in diverse societies. It will conclude that non-(physically) violent extremism should be of equal concern to security experts as physically violent extremism.
LIMITATIONS OF THE BINARY
Any attempt to define extremism has to immediately consider the issue of objectivity. Indeed, someone categorised as extreme by one group can be deemed a hero or a moderate by another. Rather than getting entangled in claims and counter-claims of being biased and objective, we seek guidance from what scholars have already agreed to consider basic human rights. Any deviation from these can be determined to be extreme. Muslims agree that basic rights such as freedom of expression, the sanctity of human life, democracy, and freedom of choice, align with their religious values. Moreover, gauging extremism must go beyond abstractions or broad definitions, and should also examine its impact on human life and societies at the day-to-day level.[6]
In terrorism studies, violent extremism is often differentiated from non-violent extremism. While violent extremists “embrace offensive violence as an instrument to advance towards their version of utopia”,[7] non-violent extremism is generally understood as the rejection of the use of physical force in pursuing a cause. There are two limitations in distinguishing non-violent extremism from violent extremism.
First, the problem does not lie with the binary itself but in the highlighting of violent extremism as the main issue to be tackled. Strategies to tackle extremism heavily focus on violent extremism or terrorism, and are globally known as Prevention or Counter-Violent Extremism measures (P/CVE). These divert attention from the fundamental issue to be tackled, i.e., the ideology underpinning all forms of extremism, violent and non-violent. In the context of Muslim extremism, Schmid posits that the difference between non-violent extremists who engage in missionary work and violent extremists who practice jihad “is often only one of strategy and tactics.”[8] Hence, it is more important “to look at what both groups of extremists share in their political outlook”, as they are “two sides of the same coin.”[9]
Second, the binary assumes that extremist ideas that have not been pursued through physical violence are incapable of inflicting harm on targeted groups or society. This neglects the fact that other forms of violence, such as psychological and emotional ones, may be inflicted without resort to physical force. To be sure, security studies are many steps behind research on domestic violence, which considers psychological pain to be of equal significance to physical violence. For instance, psychological violence may be inflicted in the form of the fear instilled among targeted communities due to hate speech and discrimination. This then begs the question: since non-violent extremism can harm people in other ways, is it really “non-violent”? While physical violence is the most overt manifestation of extremism and is therefore of great concern, restricting the definition of violent extremism solely to physical acts of terror excludes discussions about other forms of violence and about the harm faced by many individuals and society at large. Ultimately, extremism carried out at the discursive level must not be neglected, and should in fact be considered as fodder for violent groups in their development towards conducting acts of terror.
NON-(PHYSICALLY) VIOLENT EXTREMISM IN MALAYSIA
The intolerance towards and unsympathetic treatment of intra-religious minorities in Malaysia, such as the Shi’as, reflect hatred against them. While the Shi’a community rarely encounters physical violence, they continue to be victims of the ideology of hatred propounded by religious preachers and state religious authorities. This punitive trend against the Shi’a community arose in the 1990s, especially following the 1996 fatwa (legal opinion) issued by the Fatwa Committee of the National Council of Islamic Religious Affairs which outlawed all doctrines that contradict the doctrine of Ahl al-Sunnah wa al-Jama’ah, or Sunni Islam.[10] Tolerance of the Shi’as among Malaysian religious leaders had earlier been due to various external conditions; indeed, the Iranian Revolution of 1979 inspired many Malays to study Shi’ism, awed as they were by its capacity to mobilise the masses to topple the unpopular westernised Shah of Iran.
However, the Syrian civil war that began in 2011, with “its sectarian framing along the Sunni/Shia divide”,[11] caused Shi’as to be portrayed more and more negatively. Research reveals that the extremist ideology adopted by sections of the mainstream Muslim community in Malaysia manifests itself mostly in the form of hate speech. This includes labelling, false information and portrayals of Shi’as as dangerous and deviant. Occasionally, the mistreatment escalates into raids on Shi’a community events.
DAILY ENCOUNTERS WITH ONLINE AND VERBAL HATE SPEECH
It is not uncommon for some Sunni Muslims, who constitute the majority in the country, to insult minority Shi’a Muslims and to spread falsehoods about them.[12] For example, at the everyday level, there is a Facebook group by the name of Gerakan Anti Syiah Malaysia (Malaysian Anti Shi’a Movement) which posts content about the alleged evils and deviating teachings of Shi’ism and talks about the need to “dismantle the Shi’a movement” so as to prevent Malaysia from being “tainted with corrupted beliefs.”[13] They also say that “as long as the Shi’as have a place in this country, Malaysia will not be peaceful.”[14] Such comments not only falsely portray Shi’a Muslims as deviants from the teachings of Islam, but also claim them to be a security threat that needs to be eliminated. This amounts to psychological violence. Verbal insult and harassment of Shi’a Muslims disrupts their peace of mind, and has resulted in many Shi’a followers going into hiding. This contradicts the fact that Malaysia is a signatory of the Amman Message, an international accord sponsored by King Abdullah Hussein of Jordan in 2004 and signed by Muslim leaders declaring Sunnis, Shi’as and Ibadis to be part of mainstream Islam.[15]
However, such comments are not only made by Malaysians at the everyday level but also by religious preachers who have access to a large following. For example, Ustaz Azhar Idrus, an independent preacher who has more than a million followers on each of his social media platforms, agrees with the popular view that all Shi’as are kafir,[16] or the alternative view that most of them are kafir, and only some are “still Muslim.”[17] Another preacher, Ustaz Don Daniyal, who is popular for his appearances on several television programmes, says that Shi’as are infiltrating schools and “corrupting the morals of the students.”[18] He further says that Shi’ism is a “deviant teaching”, and that Shi’as believe that Angel Gabriel wrongly sent a revelation to Prophet Muhammad. Similar to the ones made on Facebook groups, these comments are forms of hate speech and psychological violence against Shi’a Muslims. Since they are made by preachers and often delivered in mosques, listeners from across the country may believe that these comments are backed by religious knowledge and authority, which will therefore deepen their prejudice and even hostility towards Shi’as, perpetuating an environment of fear for the latter. Prior to becoming the Mufti of the Federal Territories, Dr Zulkifli Al-Bakri, currently the Minister in the Prime Minister’s Department for Religious Affairs, once commented that while not all Shi’a beliefs are wrong, some attempt to distort the religion and engage in conflict. Citing the conflict in Syria, he said that Shi’as have permitted killings of Sunnis.[19]
Hate speech against the Shi’a community is also perpetuated by state religious authorities such as the mufti (a person who issues fatwa). The Mufti of Perlis, Dr Mohd Asri Zainal Abdin (MAZA), for instance, has stated that “Shi’a is a deviant teaching”[20] and that “they do not know how to live in harmony with others in a Muslim country as evidenced from the sectarian conflicts in Pakistan and Iraq.”[21] He also highlights that it is problematic when Shi’as practise their beliefs in public spaces.[22] This implies that Shi’as do not have the freedom to practise their religion in public, and should remain behind closed doors. However, as will be shown later, even religious Shi’a events held privately and away from the public eye, have not been spared. The Mufti of Perlis also claims that “Shi’ism is a political mazhab (school of thought)”[23] that seeks to establish a cleric state, and is therefore dangerous if not controlled.
Overall, the hate speech directed against Shi’as, and the labelling of the community as deviant and dangerous stands in stark contrast to the reality of the community. Presenting the Shi’as in Malaysia as a security threat is also uncalled for as they are significantly outnumbered by the Sunnis. Moreover, if there are Shi’a followers who seek to undermine the state through revolution or armed struggle, there are enough laws in Malaysia to prevent this, and the same laws against insurrection apply to anyone, including the Sunnis.
Anti-Shi’a views propagated by state religious authorities not only deepens the normalisation of hate speech against Shi’as on both online and offline platforms but has also resulted in the formalisation of discriminatory practices against the community in state-level religious institutions. This is evident from the publication of a booklet by the Selangor Islamic Religious Council (MAIS) in 2015 which refers to Shi’ism as a “virus” that needs to be contained in order to prevent “chaos and bloodshed which stems from the conduct and actions of Shi’as.”[24]
Since 2010, extreme views against the Shi’a community among religious authorities have gone beyond the verbalising of such sentiments to raids being carried out against their private gatherings.[25] More recently, the New Straits Times reported that in September 2019, raids were conducted in Johor and in an area near Kuala Lumpur against Shi’as holding events to commemorate Ashura.[26] It is worth noting that prior to a raid conducted by the Selangor Islamic Religious Department (JAIS), several mosques in the state “delivered a government-sanctioned sermon” that labelled Shi’a “heinous”, “nonsense” and “nauseating.”[27] This episode highlights that hate speech can easily be translated into physical actions.
What is more significant is that the raiding received support from several religious authorities, such as the late Harussani Zakaria, the longest-serving Mufti of Perak.[28] He also stated that the teachings of Shi’ism should not be spread and practised in Malaysia, not even in private spaces.[29] This view is also held by Abdul Rahman Osman, the Mufti of Pahang, who claims that Shi’ism is deviant and that there should be no room for their beliefs in Malaysia.[30] The Mufti of Selangor, Mohd Tamyes Abd Wahid, justified that the raiding had to take place because the Shi’a gathering violated “a state fatwa that declares Shi’a to be deviant.”[31]
“NON-VIOLENT EXTREMISM” AS PSYCHOLOGICAL VIOLENCE
The European Institute for Gender Equality defines psychological violence as “any act or behaviour which causes psychological harm to the partner or former partner. Psychological violence can take the form of, among others, coercion, defamation, a verbal insult or harassment.”[32] While this definition was coined in relation to intimate partner violence, it can also be applied to non-violent religious practices. The definition can be applied to the case of Shi’as in Malaysia. For example, following the raids in 2019, they expressed great fear for their safety,[33] claiming that the religious authorities had stepped up the crackdown on the community as demonstrated in the fact that several Shi’as were detained without a warrant and brought to the Sharia Court without any reason being given.[34] Furthermore, throughout the years during which Shi’as have been subjected to extremist views by the public and by religious authorities, they have feared identifying themselves publicly as Shi’a.[35] They also hide their beliefs and practices.[36]
That the regular instances of hate speech and raids have effectively stoked fear among members of the Shi’a community supports the argument that such non-physically violent practices qualify as violent extremism based on Angus’ definition that violent extremism occurs when “a person or group decides that fear, terror and violence are justified to achieve ideological, political or social change, and acts accordingly”. [37] Hence, the seemingly non-violent practices against the Shi’a community are potentially not “non-violent.” The absence of physical harm done towards the community does not negate the fact that Shi’as are the subject of discrimination and persecution which have harmed their psychological well-being.
CONCLUSION: UNDERSTANDING NON-VIOLENT EXTREMISM
The harsh treatment of Malaysian Shi’as serves as a reminder of the dangers of non-violent extremism in Southeast Asia. The Shi’a example is not unique to Malaysia, but also applies to Indonesia, where a fatwa issued by the East Java chapter of the Council of Ulama Indonesia (MUI) declaring Shi’as as deviant led to persecution of the community in Sampang. Physical violence that transpired in the episode remains a blackmark for the Susilo Bambang Yudhoyono (SBY) government on inter-faith and intra-faith matters. Moreover, hate speeches and online vitriols against Shi’as also apply to other religious minorities such as Ahmadiyyas, and some Sufi tariqah orders. To be sure, extreme voices at the discursive level, if not clamped down on by those in power, especially the state, undermines intra-religious harmony at the societal level. These may also fuel harsher structural policies targeted at religious minorities, providing an atmosphere for the development of violent physical extremism.
The Malaysian and Indonesian experiences provide several learning points for neighbouring countries such as Singapore. Labelling groups or individuals with different viewpoints as “deviant” even though they are accepted as mainstream in the Islamic world, is non-violent extremism. While Shi’as and Ahmadiyyas are allowed to practise their faith freely in Singapore, the view of the religious authority towards the former, remains ambiguous, despite Singapore too being a signatory of the Amman Message. At the everyday level, there are still Muslims in Singapore who argue that the sect is outside of Islam’s fold. There is also very little attempt to distinguish the different schools of thought within Shiism.
In Singapore, the more significant concern is the labelling within Muslim discourses of those with different views as “liberal” and the term is often used against those deemed deviant or out of the fold of Islam. This has caused distress among those who hold a different religious point of view. Unchecked labelling could result in those with alternative viewpoints withdrawing from society and not contributing to social betterment.
ISEAS Perspective 2021/81, 16 June 2021
ENDNOTES
[1] Ahmad Fauzi Abdul Hamid, “Islamist Violence in Malaysia: Reflections from the Pre-GWOT Era with Special Reference to the Memali and Al-Ma’unah Cases,” in Chuah Teong Ban (ed), SEARCCT’S Selection of Articles (Kuala Lumpur: Southeast Asia Regional Centre for Counter-Terrorism, 2020).
[2] “NST175: Al-Ma’unah and the Arms Heist that Rocked the Nation,” New Straits Times, 11 August 2020, https://www.nst.com.my/news/nation/2020/08/615708/nst175-al-maunah-and-arms-heist-rocked-nation.
[3] “Malaysia vs ISIS: A Timeline of Recent Arrests Linked to the Militant Group,” The Straits Times, 19 January 2016, https://www.straitstimes.com/asia/se-asia/malaysia-vs-isis-a-timeline-of-recent-arrests-linked-to-the-militant-group.
[4] “S-E Asia Survey Sheds Light on Attitude Towards Extremism,” The Straits Times, 20 November 2018, https://www.straitstimes.com/asia/se-asia/s-e-asia-survey-sheds-light-on-attitude-towards-extremism.
[5] Gunnar Stange. “The Danger of Intolerant Above-ground, Non-Clandestine Organizations is Bigger for Indonesia Than Violent Extremism”: An Interview with Sidney Jones on Religious Extremism, Political Violence and Conflict Dynamics in Indonesia,” Austrian Journal of South-East Asian Studies 12, no. 2 (2019): 267–74.
[6] Syed Farid Alatas, “Conceptualizing Muslim Extremism and its Relation to Terrorism,” in Hans Kochler (ed), The “Global War on Terror” and the question of World Order (Vienna: International Progress Organization, 2008).
[7] Alex P. Schmid, Violent and Non-Violent Extremism: Two Sides of the Same Coin? (The Hague: International Centre for Counter-Terrorism, May 2014): p. 18.
[8] Ibid.
[9] Ibid, p. 20.
[10] Razak Ahmad, “Reason Behind Ban on Syiah Teachings,” The Star, 12 December 2013. https://www.thestar.com.my/News/Nation/2013/12/16/Reason-behind-ban-on-Syiah-teachings-Controversial-doctrines-have-led-to-many-seeing-it-as-a-potenti/.
[11]Dominik M. Müller, “Ummah Revisited: Anti-Shia Hatred in Malaysia since the Outbreak of the Syrian Civil War,” in Sophie Lemiere (ed), Illusions of Democracy: Malaysian Politics and People (Amsterdam: Amsterdam University Press, 2019), p. 137.
[12] For deeper study on Shi’as in Malaysia, see Mohd Faizal Musa, “Sunni-Shia Reconciliation in Malaysia,” in Norshahril Saat and Azhar Ibrahim (eds), Alternative Voices in Muslim Southeast Asia: Discourse and Struggles (Singapore: ISEAS, 2020).
[13] Gerakan Anti Syiah Malaysia, Facebook, 30 October 2020, https://www.facebook.com/gasmpage.
[14] Ibid, 14 January 2020.
[15] The Amman Message, https://ammanmessage.com
[16] It has become a derogatory term, used to highlight non-Muslims as infidels.
[17] Ustaz Azhar Idrus Official, “Syiah & Islam Liberal–Ustaz Azhar Idrus Official,” YouTube, 22 March 2019, https://www.youtube.com/watch?v=zCEvBukDJvA.
[18] Saddan As, “Ust Don Daniyal–Bahaya Syiah,” YouTube, 10 January 2014, https://www.youtube.com/watch?v=AELVc3dug9M.
[19] Hira Dakwah, “Apakah Perbezaan Fahaman Wahabi, Syiah & Sunni,” YouTube, 12 December 2013. https://www.youtube.com/watch?v=QoPGFWhUQ4I.
[20] TVSUNNAH. “Syiah Adalah Satu Ajaran Sesat – Dato Dr MAZA,” YouTube, 31 December 2013, https://www.youtube.com/watch?v=hxBaVMCBtCU.
[21] Ibid.
[22] PROmediaTAJDID Short Video, “Drmaza- Pendirian saya tentang syiah,” YouTube, 16 May 2019. https://www.youtube.com/watch?v=X8zabPJzWwI
[23] Ibid.
[24] Adakah Aku Mengenalimu, Syiah?, (Selangor: Majlis Agama Islam Selangor, 2015), http://www.mais.gov.my/wp-content/uploads/2019/07/ADAKAH-AKU-MENGENALIMU-SYIAH.pdf.
[25] “Malaysian Shias Get ‘Holocaust’ Like Treatment in their Own Country,” WION, 25 November 2019, https://www.wionews.com/world/malaysian-shias-get-holocaust-like-treatment-in-their-own-country-264439.
[26] “Shi’ite Detentions in Malaysia Fuel Fears of Crackdown,” New Straits Times, 25 November 2019, https://www.nst.com.my/world/world/2019/11/541835/shiite-detentions-malaysia-fuel-fears-crackdown.
[27] 2019 Report on International Religious Freedom: Malaysia, (Office of International Religious Freedom, U.S. Department of State, 2019), https://www.state.gov/reports/2019-report-on-international-religious-freedom/malaysia/.
[28] Syahidatul Akmal Dunya, “Syiah Tidak Boleh Disebarkan Walaupun Secara Tertutup: Harussani,” Sinar Harian, 11September 2019, https://www.sinarharian.com.my/article/47454/BERITA/Nasional/Syiah-tidak-boleh-disebarkan-walaupun-secara-tertutup-Harussani.
[29] Ibid.
[30] “Syiah Kekal Fahaman Menyeleweng, Tegas Mufti Pahang,” Berita Mediacorp, 22 November 2018, https://berita.mediacorp.sg/mobilem/dunia/syiah-kekal-fahaman-menyeleweng-tegas-mufti-pahang/4186724.html.
[31] 2019 Report on International Religious Freedom: Malaysia.
[32] Glossary of Definitions of Rape, Femicide and Intimate Partner Violence, (European Institute for Gender Equality, June 2017), https://eige.europa.eu/publications/glossary-definitions-rape-femicide-and-intimate-partner-violence.
[33] “Shi’ite Detentions in Malaysia Fuel Fears of Crackdown,” New Straits Times, 25 November 2019, https://www.nst.com.my/world/world/2019/11/541835/shiite-detentions-malaysia-fuel-fears-crackdown. “Malaysian Shias Get ‘Holocaust’ Like Treatment in their Own Country.”
[34] WION, “Gravitas: The Plight of Shia Muslims in Malaysia,” YouTube, 26 November 2019. https://www.youtube.com/watch?v=SBIenA74pR0.
[35] “Malaysian Shias Get ‘Holocaust’ Like Treatment in their Own Country.”
[36] “Gravitas: The Plight of Shia Muslims in Malaysia.”
[37] Chris Angus, Radicalisation and Violent Extremism: Causes and Responses, E-Brief, (NSW Parliamentary Research Service, February 2016), https://www.parliament.nsw.gov.au/ researchpapers/Documents/radicalisation-and-violent-extremism- causes-and-/Radicalisation%20eBrief.pdf.
| 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 | 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 Managing Editor: Ooi Kee Beng Editors: William Choong, Malcolm Cook, Lee Poh Onn, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
2021/80 “The Importance of Export Diversification for Developing ASEAN Economies” by Phi Minh Hong
EXECUTIVE SUMMARY
- Southeast Asian economies have a higher degree of export diversification than those in other developing regions. The region’s upper-middle-income (UMI) economies diversify their export partners and products more than the lower-middle-income (LMI) ones, except for Vietnam, which has succeeded in expanding exports across products and destinations.
- The more countries diversify their exports, the less volatile their export earnings are and the more sustainable their economic growth. Export diversification reduces an economy’s vulnerability to adverse external shocks.
- Since the Covid-19 crisis involves both demand and supply shocks, export diversification should be combined with supply side policies to enhance economic resilience.
- In order to grow exports, UMI economies should increase the intensive margin of exports by concentrating on more sophisticated products.
- LMI economies should develop new export products and markets by reducing the export share of resource-based products and expanding manufacturing exports in which they have comparative advantage.
* Phi Minh Hong is ASEAN Graduate Fellow at the ASEAN Studies Centre, ISEAS – Yusof Ishak Institute and Lecturer, University of Rouen Normandie (France) and Foreign Trade University Hanoi (Vietnam).
INTRODUCTION
What can developing economies do to stimulate economic growth and catch up with the richer ones? The export-led growth hypothesis suggests export expansion as the way.[1] Typically, developing economies specialise in producing and trading goods in which they have a comparative advantage: mainly commodities and primary goods. However, this model leads to greater exposure to external adverse shocks, such as those due to trade instability and foreign demand variations. Contrary to the traditional model of trade, the Newly Industrialised Countries (NICs) of East Asia in the early 1970s had successful experiences in enlarging the production and trade of a variety of goods. They therefore enjoyed rapid growth in value-added manufacturing and GDP growth, thus highlighting the importance of export diversification.
This Perspective examines export diversification in ASEAN member states, minus Brunei and Singapore which have higher per capita income than the rest.
EXPORT DIVERSIFICATION IN ASEAN DEVELOPING ECONOMIES
Literature on the subject shows an inverted U-shaped pattern of export diversification in relation to the development level.[2] Countries with lower income per capita tend to diversify, meaning that their exports are spread more equally across products or across destinations, and the motivation to specialise can become the leading economic force when they reach relatively high per capita income levels. Diversification is particularly important early in the development process of lower-income economies. This present study focuses essentially on the export diversification strategies of developing economies and identify lessons that can be drawn from these experiences.
Southeast Asia is one of the developing regions in the world that is most dependent on exports, and has the most diversified exports.[3] It is worth first comparing the degree of export diversification[4] in ASEAN to China, and to East Asian Pacific developing economies excluding China (EAP).[5] In Figure 1, exports from ASEAN developing economies are highly diversified in both products and trading partners, with the average of 0.027 and 0.08 over the period 1995-2019. These degrees of export diversification are six times higher in product diversification and 3.5 times in partners than in EAP developing economies.
At the country level, the evolution of export diversification indices is heterogeneous. The upper-middle-income economies (UMI) (Indonesia, Malaysia and Thailand) have consistently had higher degrees of export diversification in products and partners since 1995 (Figure 2). For the lower-middle-income economies (LMI) (Cambodia, Laos, Myanmar, Philippines, Viet Nam), these indices are relatively lower; they have just joined the stage of export diversification and can be referred to as latecomer countries in the export diversification process.[6]
On average, over the period 1995-2019, Thailand had the highest degree of export diversification in products and partners, followed by Indonesia (Figure 3). Although their export diversification indices in products were lower than China, the four countries (Thailand, Indonesia, Malaysia and Vietnam) succeeded in diversifying their export destinations more than their neighbours did.
ECONOMIC BENEFITS OF EXPORT DIVERSIFICATION
For small economies, export diversification can ensure sustainable economic growth by mitigating fluctuations in export earnings. By specialising in a more concentrated export portfolio, particularly in the case of commodities, a country’s export revenues fluctuate significantly with a large change in commodities price (about 30%-50% on a monthly basis). By contrast, a more balanced flow of export revenues can be the result of a more diversified export basket.[7] For countries whose exports were highly concentrated in 2009-2019 (high HHI), such as Laos and Myanmar, their exports in the same period were largely volatile (Figure 4).[8] The UMI countries and Vietnam, which have succeeded in diversifying their exports (low HHI), have had less volatile export earnings.
Moreover, export diversification can make developing economies less susceptible to external shocks. From an economic standpoint, a country’s vulnerability to external economic shocks is largely determined by its dependence on exports, since export earnings fund imports and contribute to investment and development. Production structures based primarily on export-led growth expose economies to external shocks more than those oriented towards domestic demand structures.[9] Hence, the effect of a shock is usually recorded by losses in export earnings, the size of which depends on the country’s export composition and key trading partners. Focus on exporting a few commodities, especially primary commodities, and having only a few partners make a country more vulnerable to economic shocks.
Looking back to the 2007-2008 global financial crisis, export earnings then worsened drastically throughout all regions. Export revenues dropped by 22% in 2009. Interestingly, the lowest losses of 18% were registered for Asian developing economies, the most export-dependent region but also the region with a highly diversified export portfolio.[10] For developing ASEAN economies, the export growth was -16% in 2009.
During the Covid-19 pandemic, we have a similar picture of the export losses for the region. The recent statistics of UNCTADstat reveal that in 2020, the smallest export loss was recorded for Asian developing economies with a growth rate of -4.64% (against -20.3% for Africa and -9.7% for Latin America). For ASEAN developing economies, the reduction of export was also relatively low, about -1.2%.
At the country level, we compare the export growth rates of developing ASEAN economies in 2019, when the pandemic had not occurred, and in 2020, to examine their resilience to external shocks.[11] For most ASEAN developing economies, export diversification is associated with an improvement in their export growth rates (Figure 5). For countries who suffered losses in export earnings prior to the pandemic (Indonesia, Malaysia), these losses lessened in 2020. Latecomers such as Cambodia, Laos and Vietnam succeeded in keeping their positive export growth even during the pandemic crisis. However, it seems that the benefit of export diversification in reducing the adverse external shocks does not hold for all economies and requires further study for each individual economy. Two other LMI economies, Myanmar and The Philippines, despite an increase in exports earnings in 2019, suffered great losses in 2020. This might suggest that the export diversification process should be combined with other policies to mitigate the impact of the pandemic and hence increase their exports. This is because the Covid-19 crisis is related to both demand and supply shocks. While export diversification can reduce the adverse external shocks, policies related to the supply side, such as policies to control the disease (early reaction, quarantine based on possible exposure, improving healthcare capacity, etc.) or policies that help firms maintain their operations (tax deferment, financial aid, etc.), are necessary.
Good control of the Covid-19 pandemic is a crucial factor for business operations. In a recent survey conducted by the United Nations Industrial Development Organization (UNIDO) for The Philippines, labour shortages due to social distancing have reduced production capacity in firms. Although the work-from-home arrangement has been considered a necessary adaptation measure, the production sector could not use this method due to the nature of its operations, hence the cuts in production.[12] Using cumulative confirmed Covid-19 cases from Our World in Data as a proxy to the effectiveness of government responses to the pandemic (Table 1), we observe that the increase in export earnings of Cambodia, Laos and Vietnam are associated with not only a high degree of export diversification but also effective measures in preventing the Covid-19, reflected by the low number of Covid-19 cases. By contrast, Myanmar and The Philippines, who experienced high losses in exports in 2020, have greater numbers of Covid-19 cases.
HOW TO DIVERSIFY EXPORTS
A country can diversify its exports by either increasing the number of active export lines via new products and new markets (extensive margin diversification, EM) or increasing exports of the same products to the same markets (intensive margin diversification, IM). The question for ASEAN developing economies is not only how to diversify their exports, but also how to diversify their exports to take advantage of the benefits of diversification.
Recent studies show differences in the effect of export diversification on export growth between the UMI and the LMI economies. For the former, such as Thailand, Indonesia and Malaysia, increasing export diversification at the IM will have a negative impact on export growth. These economies should develop exports along the IM with a re-concentration of their exports towards more sophisticated existing products. A 1% increase in the degree of concentration at the IM raises export growth by 1.078%.[13]
The concentration of exports in more sophisticated existing products of more advanced economies shifts labour-intensive activities to the LMI economies. This allows them to diversify their exports via new products, which in turn will increase the export volume. For Asian LMI economies, including those in the ASEAN region, a 1% increase in the level of diversification at the EM increases exports by 0.681%. Enlarging new product exports is particularly important for the LMI economies who are in the early stages of export diversification to achieve sustainable export growth.
The implementation of this goal might depend on the specific situation of each economy. For example, in the case of Laos, although the export diversification at the EM has increased gradually since the late 1990s (Figure A2), resource-based products still take a large share of its total exports. According to the BACI database, mineral and metal exports account for 41% of Laos’ total share in 2019 against 52% in 2010. Shifting from commodity exports with low-income values and high price volatility to manufactured product exports is necessary to ensure sustainable export growth. Moreover, a deep integration into Global Value Chains (GVC) can enable the country to move into new activities and to diversify exports. The GVC participation rate for Laos is still lower than that for ASEAN, suggesting the potential to increase its participation in GVCs.[14] Meanwhile, Vietnam has had successful experience in diversifying exports through GVCs. Vietnam improved its GVC participation index from 50.6% in 2005 to 55.6% in 2015 (only after Malaysia and Singapore).[15] This is associated with the decrease in HHI in products from 0.46 in 2005 to 0.35 in 2015.
The developing economies, particularly those in the early stages of diversification, could develop products that are close to those in which they have comparative advantage.[16] Vietnam is one example that has markedly reduced the size of their agriculture sector and expanded production to manufacturing activities with high labour-intensity in which it has a comparative advantage. Its agricultural share of exports declined from its peak of 36.7% in 1985 to 3.3% in 2019 (Figure A3). Meanwhile, the export share of the manufacturing sector rose more than two-fold from 39% in 1985 to 94% in 2019. In the early years of the diversification process, Vietnam expanded its exports of labour-intensive products (textile, clothing). The export share of textile and clothing sectors grew sharply in the 1990s but slightly decreased since 2004. From the 2000s, Vietnam explored its new comparative advantage in the electronic and telecommunication equipment products through foreign direct investment (FDI) and its active participation in the Asian electronic regional network in which China plays a central role.[17] Exporting high value products that matched those of richer countries stimulated the country’s export growth.[18] The growing share of electronic products in total exports since mid 2000s has become a growth engine of Vietnam even during the Covid-19 crisis (Figure A4). Recent statistics provided by the General Statistics Office of Viet Nam show that the annual export growth in Computers and Electronical products was 24% in 2020, and this contributed significantly to the positive growth of total exports.
The choice of trading partner also matters. South-South trade has a more diversified export pattern than South-North trade.[19] The main explanation is that physical infrastructure and market access (i.e., lower transaction costs) have improved due to trade agreements between and within developing regions. Moreover, a country can import cheaper inputs (e.g., raw materials) from other developing countries through better market access, that allow it to produce and export goods with lower prices. This increases export diversification towards partners from the South.Therefore, expanding exports to other new developing markets is particularly important for LMI economies such as Laos, whose exports are highly concentrated in only three destinations—Thailand, China and Vietnam. In 2019, exports to these three developing markets account for 80% of Lao’s total exports (BACI). Furthermore, as the experience of Vietnam in exporting electronical products shows, upgrading quality products and developing more sophisticated goods that are matched to that of richer countries can help a developing country increase its export destinations to include developed ones.
CONCLUSION
Recent studies and experiences of Asian developing economies, including those in ASEAN, show the important role export diversification plays in ensuring sustainable economic growth through reducing export earnings volatility and vulnerability.
Mere diversifying of exports to take advantage of the benefits of the diversification is in question. The UMI economies (such as Thailand, Indonesia and Malaysia) are suggested to increase exports at the IM with a re-concentration towards more sophisticated existing products. Meanwhile, the LMI economies in ASEAN should enlarge new products exports to new destinations by shifting from commodity exports to manufactured product exports in which they have comparative advantage, integrating actively into GVCs, then upgrading quality products and developing more sophisticated goods.
Trading with new developing markets is also important since South-South trade has a more diversified export pattern than South-North trade does.
ISEAS Perspective 2021/80, 15 June 2021
ENDNOTES
[1] Wilbur, W. I., & Haque, M. Z. (1992). An investigation of the export expansion hypothesis. The Journal of Development Studies, 28(2), 297-313.
Yamada, H. (1998). A note on the causality between export and productivity: an empirical re-examination. Economics Letters, 61(1), 111-114.
Awokuse, T. O. (2003). Is the export‐led growth hypothesis valid for Canada?. Canadian Journal of Economics/Revue canadienne d’économique, 36(1), 126-136.
[2] Imbs, J., & Wacziarg, R. (2003). Stages of diversification. American economic review, 93(1), 63-86.
[3] “Towards Human Resilience: Sustaining MDG Progress in an Age of Economic Uncertainty”, Chapter 1. https://www.undp.org/content/undp/en/home/librarypage/poverty-reduction/inclusive_development/towards_human_resiliencesustainingmdgprogressinanageofeconomicun.html
[4] Export diversification is typically measured by the Herfindahl-Hirschman Index (HHI). A lower HHI indicates a higher degree of export diversification. The advantage of using HHI is that it allows us to analyse both export diversification in products, in which a country expands its variety of goods exported, and export diversification in partners, when a country exports its goods to various destinations. To compute the HHI, we use disaggregated data on bilateral trade flows from the Basis for the Analysis of International Trade (BACI) dataset compiled by the CEPII at the HS 6-digit product level. Original data are taken from countries’ bilateral exports in value to all regions from 1995 to 2019.
[5] The export diversification for ASEAN and EAP developing countries at the region-level is weighted by GDP to account for country size.
[6] Koshy, M., Geoff, G., Gee, H., Sung, E. J., Schmittmann, J., & Yu, J. (2016). China’s changing trade and the implications for the CLMV economies. https://www.imf.org/external/pubs/ft/dp/2016/apd1601.pdf
[7] Samen, S., 2010, A Primer on Export Diversification: Key Concepts, Theoretical Underpinnings and Empirical Evidence. Growth and Crisis Unit. World Bank, Washington, DC.
[8] Export volatility is calculated as the standard deviation of annual exports growth rates based on World Trade Organisation (WTO) data.
[9] Foxley, A., 2009, Recovery: The Global Financial Crisis and Middle-income Countries. Carnegie Endowment for International Peace. Washington, DC.
[10] World Trade Report 2020, Trade in natural resources https://www.wto.org/ENGLISH/res_e/booksp_e/anrep_e/world_trade_report10_e.pdf
[11] We classify the countries according to their degree of export diversification in products in 2019. Since the data on the HHI in 2020 have not been available, the degree of export diversification in 2019 could be a good approximation for 2020. For the ranking of export diversification in partners, see Figure A1 in Appendix.
[12] https://www.unido.org/sites/default/files/files/2021-03/UNIDO%20COVID19%20Assessment_Philippines_FINAL.pdf
[13] Mania, E., & Rieber, A. (2019). Product export diversification and sustainable economic growth in developing countries. Structural Change and Economic Dynamics, 51, 138-151.
[14] https://www.asean.or.jp/ja/wp-content/uploads/sites/2/GVC_Laos_Paper-5_full_20210324-web.pdf
[15] https://english.thesaigontimes.vn/78676/vietnam’s-participation-in-the-global-value-chain.html
[16] Hausmann, R., and Klinger, B. (2006). Structural Transformation and Patterns of Comparative Advantage in the Product Space (CID Working Papers No. 128). Cambridge, MA: Harvard University.
[17] Chaponnière, J. R., & Cling, J. P. (2009). Vietnam’s export-led growth model and competition with China. Économie internationale, (2), 101-130.
[18] Hausmann, R., Hwang, J., and Rodrik, D. (2007). What You Export Matters. Journal of Economic Growth, 12(1), 1-25.
Hummels, D., and Klenow, P. J. (2005). The Variety and Quality of a Nation’s Exports. American Economic Review, 95(3), 704–723.
[19] Tran, T. A. D., Phi, M. H., & Diaw, D. (2017). Export diversification and real exchange rate in emerging Latin America and Asia: A South–North vs. South-South decomposition. The Journal of International Trade & Economic Development, 26(6), 649-676.
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