Question: What are important economic, political or social factors driving change in countries across Southeast Asia?

External Contributor – Myanmar

Following the overthrow of the democratically-elected government, many people, including myself, underestimated the country’s Generation Z – largely made up of former high-school teachers, students, doctors and entertainers – and their ability to organize sustained assaults against the military’s interests, both in lethal and economic terms. The resistance has gained tactical advantage across parts of Myanmar and many key businesses, including banks, are now having to coordinate with the resistance for operational safety. Even China has requested the National Unity Government (NUG), Myanmar’s government in exile, to coordinate with the resistance to safeguard the gas pipeline that starts in Western Myanmar and extends to Kunming, according to one NUG minister. However, the resistance lacks the firepower and organizational prowess to topple the military and a key issue has been the reluctance of the Ethnic Armed Organizations (EAO) to throw their weight behind the movement.

Regionally, the dynamics are complicated. For ASEAN, the key concern is not the humanitarian crisis, but having to pick sides and getting stuck between Western support for democracy and China, the military’s main benefactor. Cambodia, China’s strongest ally in the region, has leveraged its ASEAN Chairmanship to push for the Myanmar military to be accepted as the legitimate government, only to be brushed off by the rest. Yet, few ASEAN leaders will directly engage with the NUG. As one diplomat shared privately, there is “no headache if no one wins in Myanmar.” The only sustainable solution for peace in Myanmar can be found internally. To be precise, the political discourse must change from putting the deposed government back in power to establishing a federal democracy, where ethnic minorities have equal say. While sympathetic to the movement, the EAOs have yet to fully support the resistance, unclear of its political end game. Lest we forget, the disposed government, which has the resistance’s nominal loyalty, had been equally as unkind to the minorities as the military has been for decades. Therefore, should the minorities gain a seat at the table, a genuine united front could emerge against the repressive regime. The real question, therefore, is one that has troubled Myanmar for decades even before this coup; can the ethnically Burmese, predominantly Buddhist majority, and the NUG as their current representative, accept ethnic minorities as equal participants in Myanmar’s future.

A former banking executive from Myanmar, who has extensive working relationships with corporates, regulators and the diplomatic community.

Pham Kien Son (also known as Ken Atkinson) – Vietnam

There have been several factors driving change since “Doi Moi” in 1988; some constant and some changing over time. Vietnam has benefited from almost 30 years of year-on-year GDP growth in the range of 6 to 7.5%, initially fueled by a combination of development aid, exports, increasing levels of foreign direct investment and a population growing over 1% per annum and soon to reach 100 million. Whilst we are still seeing relatively high growth (the last 2 years excepted), more recently the main drivers of growth have been FDI (consistently in the US$25-30 billion range), a young emerging middle class forecast to be 40% of the population by 2030, and average per capita income surpassing US$3000 per annum. However, wealth in the major cities is much higher with fortunes made from private business, land and real estate. Vietnam is also moving from low-cost labour industries to higher value-add and technology-based industries such as chip manufacturing or the recent investment commitment of US$1 billion by Lego. The economy has also been assisted by growth in remittances from overseas Vietnamese, which reached US$18 billion in 2021.

Against the backdrop of this strong economic performance are more difficult geopolitical issues. The country has taken its seat in regional and global organizations, serving as a non-permanent member of the UN Security Council in 2020-2021 and in 2020 as Chair of ASEAN. This has made it more susceptible to pressure from international organizations and governments. Hence, whilst managing potential regional conflicts with China, it now faces pressure from Europe, the USA, and the UN to support the censoring of Russia and to respect the trade sanctions. This is not easy as Vietnam enjoyed close links with the former USSR during the 1980s and early 90s. These have evolved but not suffered any major ruptures. Moreover, the USSR supported Vietnam with exports of food and other essential goods at a time when Vietnam had no regular source of foreign currency. Also, major Vietnamese groups like Techcombank, Vingroup and Sun Group were financed with capital from business activities in former Soviet States. And, as with India, Russia remains its largest arms supplier. Navigating its own economic emergence while balancing the pressure exerted by various Great Powers will define Vietnam’s future in the years to come.

Pham Kien Son was the founder of Grant Thornton in Vietnam in 1993 and has lived in HCMC since that time. He retired from the partnership in 2019, and now serves as Independent Director and adviser to several public and private companies, including Grant Thornton Vietnam. He established Grant Thornton’s operations in Cambodia and Laos.

Noke Kiroyan – Indonesia

The destruction of Hiroshima and Nagasaki induced Japan to surrender on 15 August 1945, inadvertently giving rise to complications in the Netherlands East Indies that the empire occupied for three years. The absence of an authority to perpetuate administration of the former Dutch colony created a host of problems and threw into disarray the carefully laid plans for an independent Indonesia ushered in under the auspices of Japan. The power vacuum was seized upon by progressive elements in Indonesian society, particularly the militant youth who pressured the politicians to act immediately and declare independence of the Republic of Indonesia, which occurred on 17 August 1945. Later that year Allied Forces spearheaded by the British Army trickled in to establish authority but subsequent Dutch attempts to take over from the Brits and reinstate colonial rule promptly encountered heavy resistance from the nascent republic. The period 1945-1949 is called “The Revolution” in Indonesian history. After increasingly violent armed conflicts interspersed with formal negotiations the Dutch government bowed to the inevitable and transferred sovereignty on 27 December 1949, that the Netherlands to date officially recognize as the day of Indonesian independence, inserting an eternal thorn in the side of bilateral relations as we regard ourselves independent since 17 August 1945.

This chain of events hitherto defines the way Indonesia is run. Nationalism is a powerful driving force that permeates the fabric of Indonesian society as it does in many jurisdictions that acquired nationhood by taking up arms. Nationalism and revolutionary fervor constitute the glue that holds together the largest archipelago of 17,000 islands straddling the equator currently home to 270 million people comprising 700 ethnic groups. They also imbue the populace with a Can-Do Spirit that sometimes leads us to do things on the fly, the argument being that if we had waited until everything was in place Indonesia would never have become an independent nation. In this constellation the state is sacrosanct and embodies the Good and Noble in all aspects. Any mishap or anything untoward is met with the demand for the state to intervene in the interest of the nation. Being cognizant of these historic and cultural factors is essential to doing business in Indonesia and will determine the nation’s response to the dramatic geopolitical changes we are currently experiencing.

Pak Noke Kiroyan is Chairman of Public Affairs consulting firm Kiroyan Partners in Jakarta. He spent his early business career with Siemens’ Indonesian subsidiary that he ultimately headed as CEO, then joined Salim group to oversee operations in Europe and later expand group operations in the USA and Latin America. Back in Indonesia he became country head of Rio Tinto Indonesia then CEO of Rio Tinto-BP joint venture PT Kaltim Prima Coal and subsequently CEO of PT Newmont Pacific Nusantara.

Julio S. Amador III – Philippines

The COVID-19 pandemic rightly captured the attention of policymakers and ordinary individuals across Asia, impacting various facets of civil life. It shifted debates on various issues including economic, where post-pandemic recovery and the strengthening of health protocols and facilities have become important policy discourses. The pandemic may also have exacerbated the Philippine strategic community’s preference of internal security threats as non-medical interventions and preventive measures, humanitarian assistance and disaster relief (HADR) operations became key policy solutions. The militarized response to the pandemic left a sour note on many Filipinos as medical interventions became secondary in the government’s pandemic response arsenal. Meanwhile, external security threats such as territorial defense and US-China competition ranked fifth and eighth, respectively as top security concerns. The government is nevertheless concerned with geopolitical matters, especially balancing between the US and China. This aims to protect core interests particularly territorial integrity and securing its maritime domain. The Philippines remains mindful of the strategic implications of foreign policy on the economy in terms of trade deficits and doubts over security safeguards of its commercial products. Nevertheless, strategic competition presents an opportunity for the Philippines and ASEAN to negotiate in other areas such as trade agreements with the US and China.

While the Philippines was preoccupied with its COVID-19 battle, China’s aggressive grey zone activities intensified between 2020 and 2021 bringing to light the fragile peace existing between Beijing and Manila. It also does not help that negotiations for a Code of Conduct in the South China Sea stalled leaving disputed regions susceptible to more grey zone activities. With respect to Manila’s most important and pivotal relations with China, the Philippines needs to develop a whole-of-nation approach that will adequately balance external and internal defense and pressures, rather than a clear-cut focus and fixation on internal defense. The pandemic brought realizations about the importance of crafting a new and comprehensive national security policy, but one that is not at the expense of non-traditional concerns and external security threats. Ultimately, the prioritization of security threats rests on the decisions taken by each successive administration, which is usually vulnerable to instrumentality and patronage politics. To confront the myriad of security threats, prioritization needs to be anchored on strategic thinking and clear and attainable goals, not on vested and localized interests.

Julio S. Amador III is Founder and CEO of Amador Research Services, a geopolitical advisory firm in the Philippines. He also founded FACTS Asia Inc, which hosts analyses and new ideas on future trends, ASEAN matters, current affairs, and technology issues. He was a civil servant for more than a decade in the Philippine bureaucracy specializing in foreign affairs and national security. He is an active participant in Tracks 1.5 and 2 diplomacies in the Southeast Asian region and beyond.

Jim Stent – Thailand

During the 20^th century Thailand enjoyed remarkable social cohesion and stability, based upon a hierarchical social structure and commitment to monarchy, Buddhism, and a market economy. An elite controlled the country, coopting or eliminating any dissenters. The last decades of the century saw Thailand achieving high economic growth rates, a sizeable emerging middle class, and steps towards real democracy being taken. The Financial Crisis of 1997 shattered this trajectory. Thaksin’s subsequent election to the position of Prime Minister in 2001, and then the student protests of the past two years, signaled rising discontent with the established order. Thai social cohesion ended, and Thailand became polarized. Yet despite polarization, since the military coup in 2014, stability has been maintained by elite suppression of dissent through a quasi-authoritarian political system, garbed in the outward forms of liberal democracy, but effectively under control of the army. As the elite establishment has concentrated power, economic growth has slowed, and Thailand has been unable to move beyond middle-income status. Nonetheless, it remains a country in which business fares well, the financial system is well managed, and foreign investment is welcomed.

Thailand’s failure to emulate the successes of Korea, Taiwan, and Singapore is largely due to entrenched state institutions serving vested interests. Reforms are needed. Education, the police and court system, the agricultural sector, centralized bureaucratic power, the election process, and taxes—all need reform, but the political, military, and economic elite firmly resist change. Will Thailand over the next few years manage to shake off the economic slow-down of the past two decades and get back on a fast track again, realizing its unfulfilled potential? One cannot be very optimistic. The government lacks a national vision such as guided Thailand in the 19^th and 20^th centuries. In many ways it is not competent to lead the country forward but is skilled at control and determined to remain in power. Rural people want change but are powerless. Urban youth see the problems but are thwarted by the government. Elite complacency and self-interest block reforms. So, whilst the status quo is not sustainable, it is not apparent what will precipitate change. On a more pragmatic note, Thailand has always proved adept at “muddling through” and will continue to do so.

Jim Stent has over four decades of experience in commercial banking in Asia, having served in senior management of a Thai bank, and on the boards of banks in Thailand, China, Mongolia, and Myanmar. He is the author of China’s Banking Transformation and writes frequently on Thai political and cultural issues.