ISEAS Perspective: Selections 2012-2013 9789814519274

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Selections 2012-2013

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ISEAS Perspective Series Chairman

Tan Chin Tiong

Series Editor

Ooi Kee Beng

Deputy Editors

Lee Poh Onn Benjamin Loh

Editorial Committee

Terence Chong, Francis E. Hutchinson Daljit Singh

The Institute of Southeast Asian Studies (ISEAS) was established in 1968. It is an autonomous regional research centre for scholars and specialists concerned with modern Southeast Asia. The Institute’s research is structured under Regional Economic Studies (RES), Regional Social and Cultural Studies (RSPS) and Regional Strategic and Political Studies (RSPS), and through country-based programmes. It also houses the ASEAN Studies Centre (ASC), Singapore’s APEC Study Centre, as well as the Nalanda-Sriwijaya Centre (NSC) and its Archaeology Unit.

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Selections 2012-2013

EDITED BY 001 KEE BENG

INSTITliTE OF SOUTHEAST ASIAN STUDIES

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First published in Singapore in 2014 by ISEAS Publishing Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 E-mail: [email protected] Website: http://bookshop.iseas.edu.sg All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2014 Institute of Southeast Asian Studies, Singapore The responsibility for facts and opinions in this publication rests exclusively with the authors and their interpretations do not necessarily reflect the views or the policy of the Institute or its supporters.

ISEAS Library Cataloguing-in-Publication Data ISEAS perspective : selections 2012-2013 / edited by Ooi Kee Beng. 1. Southeast Asia—Politics and government. 2. Southeast Asia—Foreign relations. 3. Southeast Asia—Foreign economic relations. I. Ooi, Kee Beng, 1955II. Institute of Southeast Asian Studies. DS526.7 I611 2014 ISBN 978-981-4519-26-7 (soft cover) ISBN 978-981-4519-27-4 (e-book PDF)

Designed and typeset by More Than Diamonds Printed in Singapore by Markono Print Media

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Table of Contents Foreword ix Who Will Be Indonesian President in 2014? 1 Maxwell Lane

The Seventh Plenum of the Communist Party of Vietnam: The Gains of the Central Committee 10 Ha Hoang Hop

The Struggle to Amend Thailand’s Constitution 16 Michael J. Montesano

Whither China’s Myanmar Stranglehold? 26 Stephanie Shannon and Nicholas Farrelly

Malaysia’s BN Stays in Power, But Deep Changes Have Nevertheless Occurred 37 Ooi Kee Beng

The Significance of China-Malaysia Industrial Parks 46 Khor Yu Leng

Steadily Amplified Votes Decide Malaysian Elections 55 Lee Hock Guan

The Rise of Chinese Power and the Impact on Southeast Asia 67 Rodolfo C. Severino

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The China-Myanmar Energy Pipelines: Risks and Benefits 82 Zhao Hong

Moving ASEAN+1 FTAs towards an Effective RCEP 90 Sanchita Basu Das

Ethnic Insurgencies and Peacemaking in Myanmar 103 Tin Maung Maung Than

Japan’s Growing Angst over the South China Sea 116 Ian Storey

Taking the Income Gap in Southeast Asia Seriously 128 Aekapol Chongvilaivan

Indonesian Parties Struggle for Electability 142 Ulla Fiona

Rohingya Boat Arrivals in Thailand: From the Frying Pan into the Fire? 150 Su-Ann Oh

APEC’s Model of Green Growth is a Move Forward 159 Lee Poh Onn

China’s FDI in Southeast Asia 169 Zhao Hong

Hidden Counter-Revolution: A History of the Centralisation of Power in Malaysia 178 Francis Hutchinson

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The Dominance of Chinese Engineering Contractors in Vietnam 190 Le Hong Hiep

RCEP and TPP: Comparisons and Concerns 202 Sanchita Basu Das

Implications of Demographic Trends in Singapore 214 Saw Swee-Hock

Big Power Contest in Southeast Asia 224 Daljit Singh

The Resurgence of Social Activism in Malaysia 233 Ooi Kee Beng

Pivoting Asia, Engaging China—American Strategy in East Asia 243 Daljit Singh

Towards a Code of Conduct for the South China Sea 253 Rodolfo C. Severino

List of ISEAS Perspective Issues 260

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Foreword The Institute of Southeast Asian Studies (ISEAS) launched its electronic publication ISEAS Perspective in mid-2012. The main function of this new product is to act as a platform for short and succinct articles analysing current events in the region, and written by researchers affiliated to ISEAS. The publication’s production process has been structured for speed and for maximal distribution by electronic means. Kept between 2000 and 3000 words, this publication format has since then proven to be a success. The feedback from members of the public has been very encouraging, as has the huge number of contributions sent in by ISEAS researchers. For subjects where in-house expertise is lacking, ISEAS invites guest writers to fill the gap. During its first year in existence, 58 internally reviewed issues were produced. These were distributed in steady fashion by email to addresses registered with the Institute. Needless to say, the mailing list for this publication has been growing steadily. Those interested to get onto it should register by writing to [email protected]. All past and present issues of ISEAS Perspective can be downloaded from our website for free [www.iseas.edu.sg], and will remain so for the foreseeable future. However, ISEAS has deemed it a worthy public service to have selected articles from that first year published in a single printed volume at cost price. This is the book that you now hold in your hand. Articles herein were chosen according to strict criteria such as analytical strength; continued salience of the subject discussed; referential potential; literary quality in general; et cetera. ISEAS intends to print such annual selections in the coming years. We are certain that you, the reader, will find them informative and stimulating.

TAN CHIN TIONG Director, ISEAS A special word of thanks to Ms Li Shufen for help rendered during the editing process, and to ISEAS colleagues who participated in the selection process. ix

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Who will be Indonesian President in 2014?* By Maxwell Lane (Guest Writer)

EXECUTIVE SUMMARY •

Presidential candidates in Indonesia have to be nominated by a political party (or combination of parties) that have either won 20% of the national vote in the parliamentary elections or control 25% of the seats in the House of Representatives (DPR). Some parties have already made clear choices.

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An analysis of candidate choice must however take into consideration the steady alienation of the majority of the population from existing political processes and actors.

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Voter abstention (golput) has steadily increased for both national and local elections since the 1999 elections. This reflects the alienation of the masses from the system and is reinforced by declining support for all of the political parties. The most popular party in the polls, the PDIP, is scoring only 20% and all other parties are scoring 12% and below.

•

It is increasingly possible that the 2014 elections will take the form of a contest between two modes of political campaigning: an appeal to the charisma of power (pejabatism), and the deliberate rejection of this previous mode.

* Maxwell Lane was invited by ISEAS to give a public seminar on 5 July 2013 on the subject on which this article is based. Dr Lane is a Lecturer in Southeast Asian politics and history at Victoria University and an Honorary Associate in Indonesian Studies at the University of Sydney. This article was first published on 18 July 2013 as ISEAS Perspective 2013: 46.

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INTRODUCTION The usual path to become a presidential candidate in Indonesia is to be nominated by a political party or combination of parties that have either won 20% of the national vote in the parliamentary elections or control 25% of the seats in the House of Representatives (DPR). Some parties already have made clear choices: Golkar (Party of Functional Groups) has nominated ex-Suharto loyalist and tycoon Aburizal Bakrie (although former vice-president Yusuf Kalla still lurks in the wings as a possi-ble challenger); Gerindra (Great Indonesia Movement Party) decided on ex-Suharto general and semi-tycoon Prabowo Subianto; Hanura (People’s Conscience Party) nominated ex-Suharto general Wiranto; and Nasdem (National Democrat Party) chose ex-Suharto loyalist and tycoon Surya Palo. The lead party in the ruling coalition, the Democrat Party (PD), has not yet decided on its candidate although it has now moved to bring former General Pramono Edhie Wibowo, into the leadership. The party that does have a chance of winning 20% of the popular vote is the PDIP (Indonesian Democratic Party-Struggle), but it has also yet to determine a candidate. In the past, it has nominated Megawati Sukarnoputri. There is also a possibility that the PDIP could nominate the current governor of Jakarta, the popular Joko Widodo. However, an analysis of candidate choice must take into consideration the steady alienation of the majority of the population from existing political processes and actors.

“REFORMASI” AND POLITICAL ALIENATION During the 1990s, peaking in 1997-1998, a movement developed demanding reformasi whose main demands were the departure of President Suharto, withdrawal of the army from politics, liberalization of repressive political laws, and the ending of KKN (Corruption, Collusion and Nepotism). The sentiment of this movement reflected a desire for a shift away from an authoritarian system which defended a self-seeking elite to a political system where the rakyat (the common people) would be listened to and its interests promoted over that of the elite. It was a movement strong enough to dislodge an authoritarian leader defended by the military. 2

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By 1999, elections were held under a liberal election law. The movement had emerged after almost 30 years of deep authoritarian rule built upon a period of extreme repression and political engineering from 1965 to 1971. It was thus unable to build on any pre-existing organizations, such as trade unions, political groups or popular associations. Perhaps even more important to note is that, by the 1990s, all political traditions that may have provided an ideological basis for opposition— such as liberalism, liberal democracy, social democracy, socialism, and communism—had been eliminated. This meant that the movement was unable to create a solid infrastructure of its own. Nor did it have time to develop authoritative leadership. During 1997 and 1998, political figures who had been either closely associated with the New Order1 or who had been acquiescing marginal participants, such as Megawati Sukarnoputri (a silent M.P. under Suharto) and Amien Rais, a member of the Suharto-headed Indonesian Islam Intellectuals Association (ICMI), were able to piggy-back on the movement to win a national profile. The consequence has been that the reformasi movement did not develop the structure to contest power with the various components of the New Order. Suharto, his family and his closest political allies had their power terminated, but all the other components of the system he established still dominated the scene. The movement’s temporary character meant that no section of society that was a part of the move-ment, or sympathetic to it, was able to organize itself sufficiently to become a serious political institution. The collapse of authoritarian rule also quickly revealed the structure of the broader ruling class that had developed during the New Order period. It comprised a small number of ex-crony tycoons, a few scores of middle level tycoons based in Jakarta, Surabaya, Makassar and Medan, and thousands of smaller capitalists operating at the kabupaten (district) or provincial level, sometimes connected to the civil service via family ties. The tycoons quickly entered into competition with each other. Two even established their own political parties.2 Their party from the New Order era, Golkar, weakened rapidly. With no united national tycoon bloc (and no reformasi bloc either), the elite at the local level, on all islands, including Java, quickly supported calls for decentralization of budgetary power. 1 The “New Order” was coined by the second Indonesian President Suharto as he came to power in 1966, to contrast his rule from that of his predecessor, Sukarno. 2 They include Surya Palo, who formed Nasdem, and Prabowo Subianto, who formed Gerindra. Both had previously vied for leadership of Golkar. Media tycoon Hary Tanoesoedibjo, who had been with Nasdem, has now switched to Wiranto’s Hanura party, which has announced a Wiranto-Hary Tanoe pairing for the PresidentVice-President candidacy.

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Almost ten years of high prices in commodities such as coal and palm oil, had financed widespread corruption among these elites, and facilitated a rapid expansion of a middle class with high levels of disposable income. This class now makes up perhaps 10% of the population. However, the vast majority of the working population lives on less than $5 per day, many on less than $2. According to the Indonesian Bureau of Statistics, both agricultural and non-agricultural workers earning less than $200 per month have experienced a decline in real wages over recent years. The growth of the middle class is something the government has proclaimed as a meas-ure of its success. However, the visibility of its high levels of consumption, haughty behavior and the high profile of corruption cases have exacerbated the sense of alienation among the remaining 90%.

POLITICAL MANIFESTATION OF ALIENATION Voter participation for the 1999 elections was high at almost 90%. Since then, for both national and local elections, voter abstention (known as golput) has steadily increased. The term golput emerged in the 1990s when students protested against Suharto with a call to boycott the elections. The golput numbers, including those who do not register as voters and those who have registered but do not vote or intentionally spoil their votes, now regularly reach between 40-50%. Even in the 2012 elections, the golput figure was almost 40% for the governor of Jakarta where “popular” former Mayor of Solo, Joko Widodo, stood. This reflects the alienation of the masses from the system and is reinforced by declining support for all of the political parties. Only the very new parties increased their vote to below 5% from their zero starting point. In 1999, PDIP scored 33.74% of the vote. By 2009, this had fallen to 14.03%. Most polls now put the PDIP at a higher figure of around 20%, but this is still way below its 1999 support rate. GOLKAR has gone from 22.4% in 1999 to 14.45% in 2009 and polls now put it around 12%. President Susilo Bambang Yudhoyono’s Democrat Party (PD) scored 7.45% in 2004, which increased to 20.85% in 2009, based on the popularity of its leader. However, following a series of corruption scandals among its leadership, the PD is now scoring less than 10%. Another newer party, the Prosperous Justice Party (PKS), scored 7.34% in 2004 and about the same (7.88%) in 2009. However, it has also been hit by high level corruption and sex scandals and is facing declining approval ratings.

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To put it bluntly, Indonesia is now a country where the most popular party in the polls, the PDIP, is scoring only 20% and all other parties are scoring 12% and below.

JOKO WIDODO AND THE CONTRADICTIONS OF ALIENATION Direct elections were introduced for the position of President and Vice-President at the national level in 2004. Previously these were elected by the Peoples’ Consultative Assembly (MPR). Additionally, reflecting the influence of the newly liberated (from centralized crony rule) local bourgeoisie, direct elections were introduced for the positions of governor, bupati and mayor. These are in addition to the five yearly elections for national, provincial and local parliaments. This shift to extensive electoral activity is a break with the political culture of the previous decades. Rather than the charisma or “awe” of power and authority associated with a dominant state official (pejabat), a “revolutionary” new principle is introduced: a politician must be popular, whatever the basis for that popularity. The first response of parties was to recruit television or religious celebrities, although this does not seem to have stopped the decline in their support. There are now two modes of political campaigning. One is based on an appeal to the charisma of power and authority, pejabatism, a mode inherited from the previous era. The other is based on the deliberate rejection of this mode. The most well-known representative of the new mode is the current governor of Jakarta, Joko Widodo. As the PDIP candidate for mayor of Solo in 2004, he won with the usual 30 plus per cent. But in 2009 he won the election with 91% of the votes. In Jakarta, in 2012, he won a very high 43% in the first round against five other candidates, including the incumbent Fauzi Bowo, who was backed by President Yudhoyono and his coalition. Bowo scored 33%. Voter abstention was however still almost 40%. Unlike all other officials, Joko Widodo had no pictures of himself placed anywhere in public. He disarmed the village militia and negotiated directly with squatters and street peddlers. He seldom wore uniforms and dressed casually (often in a checked short-sleeve shirt, for example). He met with demonstrators, rather than dispersed them. He was appealing to the reformasi sentiment for the rakyat (the common people) to be listened to. He also implemented in Solo what can be described as social safety net policies, somewhat increasing expenditure on health,

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education and small scale kampung (village) infrastructural development. He was able to do this during his eight-year tenure by reallocating some budget items, but, more crucially, as a re-sult of receiving large increases of revenue from the national government. His budget in his final year was 400% above what it was when he first became mayor. This 400% increase reflects a 400% increase in national government revenue between 2004 and 2013 (mainly a result of high coal prices).

DYNAMICS OF THE 2014 ELECTIONS In this situation, it is increasingly possible that the coming elections will take the form of a contest between these two modes of politics and the interests they are connected with at this stage. The PDIP’s “revival” from 14% in 2009 to 20% in current polling is a result of it being seen as being separate from the establishment and having some of the populist gloss of figures like Widodo rubbing off onto it. Other figures like Tri Rismaharini, mayor of Surabaya, and PDIP Members of Parliament like Rieke Pitaloka and Ribka Tjiptaning, who exhibit a maverick social democratic style, have also helped. Pitaloka, especially, played a leading role in a campaign for a Social Insurance Law, which was passed in Parliament in 2011. Megawati has also used this period to talk about the ideological reorientation of the party and regeneration of cadres. Megawati may try to adopt some of Widodo’s methods as a presidential candidate, take Widodo on board as a Vice-Presidential candidate, or she could decline to be nominated and support Widodo as presidential candidate instead. On May 28, Megawati’s daughter, Puan Maharani, chairperson of the PDIP Central Leadership Council, indicated that the party had certainly not ruled out Widodo being its nominee, while urging him to maintain a focus on his current task as Jakarta governor.3 Widodo in the meantime has changed his earlier public assurance that he would stay governor in Jakarta; and now suggests that whether or not he runs for President is “up to Ibu Mega.”4 On June 27, the Indonesian Academy of Sciences (LIPI) issued survey results naming Widodo as the most electable presidential candidate with a 22% support rate. The other candidates rated as follows: Prabowo Subianto at 14.2%, Aburizal 3 http://us.politik.news.viva.co.id/news/read/416449-puan--pdip-pertimbangkan-usung-jokowi-jadi-capres, 28 May, 2013. 4

http://www.merdeka.com/politik/jokowi-soal-capres-tanya-ibu-mega.html

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Bakrie at 9.4%; Megawati Soekarnoputri at 9.3%, Jusuf Kalla at 4.2%, and a few others scoring below 2%. An early decision to nominate Widodo may be seen as too sudden an abandon-ment of his Jakarta responsibilities. This could backfire if he is seen as an ambitious pejabat. The shift to a new basis for popularity requires having policy achievements. Therefore, Widodo will need to be seen as making progress before the PDIP announces a decision. Moreover, his honeymoon period as governor may already be over, since he has angered the trade union movement by approving hundreds of companies’ requests to postpone the implementation of the recently instituted minimum wage.5 The PDIP may also be postponing its decision till it becomes clearer who its main challenger may be. Meanwhile, Yudhoyono’s PD has been in crisis mode following a series of corruption scandals at its top levels. While Yudhoyono’s son and wife have been touted as possible presidential candidates, it seems that such a vulgar dynastical path may be difficult to follow through in the light of the scandals. Without other candidates of stature, former Chief of Staff of the Army (2011-13), Pramono Edhie Wibowo, who was made a member of the Board of Governors in June, is a possible candidate, although nominating him would have to be a very late move that by no means guar-antees success. Another former general who has declared his candidacy is Prabowo Subianto of GERINDRA. Subianto is more controversial and more strongly associated with the New Order’s reputation for repression. He played an active role in 1997 and 1998 in trying to preserve the Suharto government in the face of popular opposition, even to the extent of organizing the kidnapping of student activists. He was eventually dismissed from the Army for these actions. Subianto’s difficulty is that Gerindra is also unlikely, based on present indications, to win more than 20% of the popular vote. In 2009, Gerindra only received 4.4% of the popular vote, while recent polls suggest that its support rating is at 11%. Subianto’s profile is based more on a perceived comparison, in some segments of the electorate, with Yudhoyono, where the latter is seen to be without combat experience and to be indecisive, while the former is seen as a decisive combat officer. However, this niche will not come into play since Subianto will not be facing Yudhoyono in the 2014 election. In the 2004 election, Subianto stood as Vice-President in a Megawati-Subianto team. Could this happen again? Gerindra’s parliamentary record has seen it align 5 http://megapolitan.kompas.com/read/2013/04/22/16054279/Somasi.Tak.Ditanggapi.Buruh.Gugat.Jokowi, April 2013.

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more frequently with the ruling coalition than with the PDIP. Even in June this year when Gerindra voted against fuel price increases, along with the PDIP (and Hanura and PKS), it did so in a last minute switch. Gerindra and Prabowo used rhetoric that is similar to those of the PDIP on the “peoples’ economics” and so on, but it has also spoken out against wage rises and labour demonstrations6 while the PDIP has associated itself with such demands. More fundamentally, Subianto and Gerindra clearly are of the old mode of politcs. This is reflected in Gerindra’s preference for ending local elections and its support for retaining prison sentences for “insulting” public officials.7 Other potential candidates are Golkar’s Bakrie or Kalla and Nasdem’s Surya Palo. Their status as tycoons will make them weak candidates against Widodo or a Megawati-Widodo pairing, although Kalla’s status as a tycoon is less emphasized. All these parties will not differ greatly in voter support, which will be weaker than 20%. Which ones will have the upper hand in negotiations is difficult to predict at this stage.

LIMITATIONS OF THE NEW DYNAMICS The “new politics”, however, has a shallowness to it, even if the social contradictions that have facilitated its emergence are real. It will also be very difficult to retreat from elections (although Subianto has raised the idea of ending direct elections at the local level). Nor will the context change, namely, high levels of corruption among a self-interested elite, a growing middle class with ostentatious levels of corruption and declining real wages and conditions of 180 million rural and urban workers. Widodo’s and the PDIP’s “populism”, if it can be called that, most likely is a transitional phenomenon. Its emergence and rise heighten expectations and legitimize appeals to the common people, the mass of the poor. Widodo’s appeal to the common people is explicitly aimed at encouraging them not to organize or mobilize. Widodo has not tried to build or strengthen the PDIP or any other organization as a vehicle for organisation and mobilization. His approach is primarily electoral, aimed at mobilizing votes rather than movements. The ultimate vote orientation in Widodo’s politics can give it a very opportunistic 6 http://www.asia-pacific-solidarity.net/southeastasia/indonesia/indoleft/2012/detik_prabowocriticisesworkers_181212.htm 7

http://www.thejakartapost.com/news/2013/03/27/gerindra-wants-president-s-critics-jailed.html

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character. This was reflected in the PDIP’s and Widodo’s alliance with Gerindra and Subianto for the Jakarta gubernatorial election, with Widodo running with a Gerindra member as deputy governor. A clear possibility is that the existence of rival modes of politics will be reflected in a contest between the PDIP, with Widodo involved, even as presidential candidate, and a coalition that will select a candidate representing firmness and authority, such as former military figures (Wibowo or Subianto, for example). However, the shallowness and opportunism of the “populist” alternative mean that it is not impossible to envisage an alliance composing both modes of politics, such as another PDIP-Gerindra coalition in the form of a Megawati-Subianto or WidodoSubianto candidature. Gerindra, however, recently stated that it would support Widodo for the presidential election in 2019 but not in 2014.8 Under this cloud of uncertainty, perhaps the most certain thing is that the likely “winner” of the election will be golput. The political gap between reformasi sentiment/aspirations and what the system is offering will not be bridged by 2014.

8 http://nasional.kompas.com/read/2013/05/19/2247518, May 19, 2013

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The Seventh Plenum of the Communist Party of Vietnam: The Gains of the Central Committee* By Ha Hoang Hop

EXECUTIVE SUMMARY •

The Seventh Plenum of the Communist Party of Vietnam (CPV) was notable for the tensions between the Secretary-General and the Central Committee of the Party.

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The Central Committee gained more clout by securing more statutory power. The increase in its power and influence that began in 2001 seems to have reached a new peak in 2013.

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However the CPV as a whole has become weaker as the factions in the party become stronger and more disparate.

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There was a break up, albeit partially, in the practice of democratic centralism within the CPV which could be a healthy development.

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The Foreign Minister is still not a member of the Politburo even though the rules of the Communist Party of Vietnam dictate that he be so.

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The Politburo of the CPV is now seeking to rebuild internal unity, trust, and solidarity within the party, and to regain the trust of the Vietnamese people who have shown increasing dissatisfaction with growing corruption.

* Ha Hoang Hop is a Visiting Senior Fellow at ISEAS. The writer would like to thank Daljit Singh and Mustafa Izzuddin for their helpful comments. This article was first published on 12 July 2013 as ISEAS Perspective 2013: 45.

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INTRODUCTION The Seventh Plenum of the Eleventh Congress9 of the CPV held in early May 2013 was an incredibly important event for the CPV leadership in Hanoi. The Party had intended to use the Plenum to take the first steps in leadership planning towards the next Congress expected to be held in early 2016, and to try to make progress in the fight against corruption, ‘decadence of cadres’, and ‘social evils’. But the results of the votes for additional members to the Politburo and Secretariat took the Plenum onto an unexpected path. The CPV’s Central Committee of 175 members turned down proposals from the Secretary-General of the CPV, Nguyen Phu Trong, and declined to vote for admitting the Head of the Commission on Internal Affairs and Head of the Commission on Economic Affairs (both bodies were re-instated by him after being abolished in 2006) into the Politburo.10 It thus reduced the power of both the Politburo and Secretariat to fight corruption and supervise the government’s economic policy — the two key areas that will determine the legitimacy, and perhaps the very survival, of the CPV. With this situation in mind, the main interest of this brief essay is to make sense of what this tension in the CPV was about, its implications, and what the gains of the Central Committee mean.

THE TENSIONS WITHIN THE CPV The Secretary-General and several other members of the Politburo were actually mistaken in their belief that the re-establishment of the Commission on Internal Affairs would result in some form of breakthrough in the fight against deep-seated corruption in Vietnam. That would have been difficult even if its head were a Politburo member because power had been shifting to the government, the Prime Minister and the Central Committee. Likewise it was a mistake to think that the Commission on Economic Affairs would, in fact, be able to supervise and implement the government’s economic policy. As far as the Central Committee was concerned, its main rationale for not bringing back the two Commissions had to do with the fact that they had been abolished in 2006 because of their failure to 9 There are fifteen or so plenums, each with a specific agenda, between two CPV Congresses. The current term between two consecutive congresses is five-years. 10

For each of the Commissions, the head must be a member of the Politburo.

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contribute significantly to anti-corruption efforts, economic development, and the rule of law reforms. Given also that, since 2006, the government11 had enjoyed more power in economic management, the CPV’s Central Committee could not exercise basic supervision over the government’s economic policy. In fact, since 2001, the Politburo, had loosened CPV supervision over the activities of the government. The inefficiency of State-owned conglomerates even after consuming large slices of national income, the ballooning of the public debt to nearly 100 percent of the GDP, slow speed of technological innovation, high moral hazard among civil servants, and mistakes in the development of human resources have collectively destabilised economic develop-ment, and lowered the welfare of the Vietnamese people. Apart from the tension over the two Commissions, the Seventh Plenum also saw, for the first time, the Central Committee projecting its statutory power by producing its own list of candidates for election into the Politburo as against the list that was proposed by the Secretary-General. In other words, the Central Committee rejected the list put forward by the Secretary-General, which traditionally would have been accepted without fanfare. Moreover, while the Central Committee in the past would only name one candidate for each of the 16 seats in the Politburo, this time the Central Committee named four candidates for each of those seats in the Seventh Plenum, and then voted for their preferred candidates. Remarkably too, Nguyen Ba Thanh, and Vuong Dinh Hue, the two candidates strongly endorsed by the Secretary-General, failed to get into the Politburo. The Central Committee decided not to vote for these two candidates, but rather, gave 80 per cent of their votes to the Secretary-General’s proposed third-choice candidate. Furthermore, the Central Committee named one additional candidate, and then voted that candidate into the Politburo. The Central Committee also voted against the candidates the Secretary-General had proposed for the Secretariat.12 The admission of one additional member into the Politburo, and two more members into the Secretariat, as preferred by the Politburo, were postponed to future plenums.

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The head of the government is the Prime Minister, who is presently ranked third in the CPV hierarchy.

The Secretariat of the CPV is a day-to-day administrative body that implements the decisions of the Central Committee, and the Politburo. 12

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IMPLICATIONS A notable implication arising from the tensions in the Seventh Plenum is that the CPV has become weaker as the factions become stronger and more disparate. More specifically, the power of the Secretary-General appears to have deteriorated considerably. Traditionally, based on the mode of collective leadership followed by the CPV, the Secretary-General was akin to a Chief Executive Officer who enjoyed substantial power over the Politburo and the Central Committee. However, during the period from 1986 to the May 2013 Plenum, the power of the Secretary-General has steadily shrunk due to heightened factionalism within the CPV. So, despite the CPV Statute granting the Secretary-General significant influence, he appears not to get much support from the Central Committee. Today, the Politburo is considered the CPV’s top executive body, while the Central Committee is seen as the ‘Management Board of Directors’ of the Party. Factionalism has also come to the fore within the CPV. In fact, the SecretaryGeneral himself conceded that there have been factions (or “interest groups” in his words) within the CPV. Factions have existed since 1991, but it was only around 2012 that they became more prominent and began flexing their political muscles. Quite clearly, as stated above, there was infighting among different factions during the Seventh Plenum. Further, while the factions in the past were identified with the regions of the North, South and Centre of Vietnam, factions today have become far more complex not just geographically, but also in the pursuit of their specific interests. Another noteworthy development is the fracturing, albeit partially, in the ostentatious practice of democratic centralism13 within the CPV. The reality is that the CPV, like many other Leninist parties in the past, had not been following democratic centralism, because the rule by the Politburo and the Secretary-General on ‘one candi-date for one position’ was against the spirit and practice of democratic centralism, as originally conceived, at least in theory. Moreover, the Politburo in the past decided on everything, and stood above the Central Committee. What should take place is for all issues to be discussed in an open and democratic fashion within the framework of democratic centralism; and after the voting, the minority would have to abide by the decisions and/or resolutions agreed to by the majority. So, in a sense, during the Seventh Plenum, there seemed to have been 13 Democratic centralism is a Leninist principle of Communist party organisation where members partake in policy discussions and elections at various levels within the party, but decisions are made centrally by officials, who are democratically elected in an ostentatious fashion.

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some noticeable changes in the inter-pretation of democratic centralism within the CPV, perhaps for the better. Another development is that the Foreign Minister is still not a member of the Politburo, although the CPV rules dictate that he should be so. The current Foreign Minister Pham Binh Minh was actually named as a candidate for the Politburo in the Seventh Plenum. But the fact that Minh’s name was proposed only by a minor group in the Central Committee, and not the Secretary-General or some of the more influ-ential groups within the Central Committee, resulted in his garnering very few votes even after several rounds of voting, and therefore, in him not being able to secure a seat in the Politburo. As a consequence, the final decision on foreign affairs is still in the hands of Prime Minister Nguyen Tan Dung, and is partially assigned to his deputy, Nguyen Thien Nhan, who is one of two new members voted into the Politburo from the Seventh Plenum. Finally, what do these developments have on policy? It is perhaps too early to draw policy implications from these developments. Suffice to say, an increase in fac-tions and divisions in the power elite would not be conducive to the formulation and implementation of coherent policies. Also, if corruption continues unchecked and the needed economic reforms are not implemented, public disillusionment with the regime will increase—to the detriment of regime legitimacy, as some commentators have noted.

CONCLUSION: GAINS OF THE CENTRAL COMMITTEE The main gain of the Central Committee at the Seventh Plenum has been the securing of more statutory power which includes, among other things, the capacity to supervise the activities of the Politburo, the Secretariat, and the SecretaryGeneral. At first glance, the powerful nature of the Central Committee does not seem unusual because the CPV statute does state that the Central committee is the ‘top power body of the Party between two consecutive congresses’. But in reality, the Politburo has been the ultimate decision-maker for many years, at least since 1951. However, for the first time in 2006, the Central Committee utilised its statutory power to compel three top leaders (Speaker of National Assembly, State President and Prime Minister) to step down before the first plenary session of the National Assembly was held that year. At the same time, the Central Committee chose to

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retain the Secretary-General for a second congressional term. Later, in October 2012, the Central Committee decided, against the wishes of the Politburo, not to discipline a member of the Politburo. In the Seventh Plenum, as noted above, the Central Committee took a bold step to reject the candidates proposed by the Secretary-General for membership in the Politburo and the Secretariat. Simply put, the increase in the power and influence of the Central Committee that began in 2006 seems to have reached a new peak in 2013. For the less reform-minded people within the CPV, the new rules on ‘more candidates for one position’ and ‘one candidate for more positions’ possibly suggests a move away from the traditional practice of democratic centralism. But for the more reform-minded ones, this rule is a healthy step toward democratic centralist practice in the CPV. Presently, the Politburo of the CPV is trying very hard to rebuild the internal unity, trust and solidarity within the party, and above all, to regain the trust of the Vietnamese people. The collective outcome of the Seventh Plenum has turned the clock of hope forward from ‘politics as unusual’ to ‘politics as usual’, that is, as they should be.

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The Struggle to Amend Thailand’s Constitution* By Michael J. Montesano

EXECUTIVE SUMMARY •

Amendment of the Thai constitution of 2007, a charter drafted under the supervision of the putschists who seized state power in Thailand in September 2006, numbered among the promises made by Yinglak Shinawatra and her Phuea Thai party in their campaign for the July 2011 general elections.

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To date, however, the Yinglak government has proved unable to fulfil that promise.

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In 2012, Thailand’s Constitutional Court thwarted its initial effort to amend the charter. This year, the government has launched a second effort, once more under the close scrutiny of that court. The ongoing struggle over constitutional amendment in Thailand reflects the paradoxes of Thai constitutionalism.

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Those paradoxes suggest that the framing of a durable constitution for Thailand must await the resolution of fundamental questions about the country’s political order.

* Michael Montesano is a visiting research fellow at ISEAS and the managing editor of the Institute’s publication, SOJOURN: Journal of Social Issues in Southeast Asia (http:// www.iseas.edu.sg/sojourn.cfm). This article was first published on 1 July 2013 as ISEAS Perspective 2013:41

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INTRODUCTION In January 2001, telecommunications tycoon Thaksin Shinawatra led his Thai Rak Thai (TRT) party to a decisive victory over the Democrat Party in polls for the lower house of the Thai parliament. At least two distinguishing features marked these polls. First, they were the inaugural general elections held under Thailand’s putatively reformist constitution of 1997. In an attempt to introduce and give institutional integrity to a new order for Thai parliamentary democracy, that constitution had created a series of independent bodies. These bodies included Thailand’s first Constitutional Court. The 1997 constitution also introduced for the first time elections for the upper house of Thailand’s parliament, the senate. A second feature also distinguished Thailand’s 2001 elections: TRT campaigned on the basis of a series of specific policy proposals, including several relating to local development funds and lowcost access to health care. A third significant departure duly followed TRT’s electoral victory: in power, the party actually moved to act on its campaign promises. Fulfilment of such promises became what would prove a lasting hallmark of Thaksinite government in Thailand. This 1997 constitution was abrogated following the September 2006 coup d’état which ousted Thaksin from his premiership. In 2007 the military appointed the National Legislative Assembly to draft a new constitution which was subsequently approved through a referendum in 2007. In the campaign for Thailand’s parliamentary elections of July 2011, Yinglak Shinawatra and the Thaksinite Phuea Thai party made a series of specific campaign promises which included a pledge to amend the current constitution to remove a number of its allegedly anti-democratic provisions.14 Almost two years after assuming the premiership, Yinglak has not yet fulfilled her promise to amend the 2007 constitution. This failure has a nakedly political dimension. At the same time, the ongoing struggle over constitutional amendment speaks very clearly to the condition of the Thai political order in the closing years of King Phumiphon’s reign. This struggle also makes clear that achievement of the consensus about that order and its future must almost certainly precede the framing and adoption of a durable, effective, and widely accepted constitution.

14 Suttinee Yuvejwattana, “Thailand Parliament Selects Yingluck as First Female Leader” BloombergBusinessweek, 5 August 2011 (http://www.businessweek.com/news/2011-08-05/thailand-parliament-selects-yingluckas-first-female-leader.html, accessed 6 June 2013).

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ROUND ONE, 2012 Article 291 of the 2007 Thai constitution gives parliament the power to change the charter through a process requiring three readings of any proposed amendment.15 In late February 2012, a draft amendment to that article, proposed by the Yinglak government and allowing for the appointment of an assembly to write a new constitution, passed its first reading in parliament. On 1 June, after the draft amendment had passed its second reading and just four days before its scheduled third reading, Thailand’s Constitutional Court accepted petitions from members of the public accusing the Yinglak government and the Phuea Thai party of violating the constitution by proposing this amendment.16 The court agreed to consider these petitions with reference to Article 68 of the 2007 charter, which made unconstitutional acts to “overthrow the system of democratic government with the king as head of state or to gain authority to govern the country in a manner not prescribed in this constitution”.17 The court thus effectively blocked the third reading of the draft amendment, pending its decision on the petitions. Article 68 of the constitution also empowered the Constitutional Court to order the dissolution of a political party guilty of violating that article and the banning of its leader and the members of its executive committee from politics for five years. Phuea Thai and the Yinglak government could not risk such an outcome by continuing with their effort to amend the charter.18 The Constitutional Court’s 1 June 2012 decision to accept the petitions under Article 68 was bound to stir controversy and anger supporters of the Yinglak government. What made the decision particularly controversial, however, was that the petitions had not reached the Constitutional Court via the attorney-general, as Article 68 seemed to require. Rather, the court took advantage of the ambiguous (and apparently sloppy) language of that article to assume the right to accept such petitions directly from members of the public.19 15 A facsimile of the 2007 constitution as it was published in the Ratckitchanubeksa (Royal Gazette) on 25 August 2007 is available at http://www.ombudsman.go.th/10/documents/law/Constitution2550.pdf (accessed 6 June 2913). For an English translation, see http://www.nhrc.or.th/2012/wb/img_contentpage_attachment/474_file_name_7532.pdf (accessed 6 June 2013). 16 “Court Puts Charter Changes on Hold”, The Nation (Bangkok), 2 June 2012 (http://www.nationmultimedia. com/politics/Court-puts-charter-changes-on-hold-30183371.html, accessed 6 June 2013). 17 That is “เพื่อล้มล้างการปกครองระบอบประชาธิปไตยอันมีพระมหากษัตริย์ทรงเป็นประมุขตามรัฐธรรมนูญนี้ หรือเพื่อให้ได้ มาซึ่งอำ�นาจในการปกครองประเทศโดยวิธีการซึ่งมิได้เป็นไปตามวิถีทางที่บัญญัติไว้ในรัฐธรรมนูญนี้”. 18 “Controversial Bills, Charter Change Vote Off the Agenda, Speaker” The Nation, 6 June 2013 (http://www. nationmultimedia.com/politics/Controversial-bills-charter-change-vote-off-the-ag-30183561.html, accessed 6 June 2013).

19 The relevant section of the article reads “ในกรณีที่บุคคลหรือพรรคการเมืองใดกระทำ�การตามวรรคหนึ่ง ผู้ทราบการก

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Hearings on the petitions began during the first week of July. In an atmosphere of considerable tension, Red Shirt protestors gathered in front of the court to voice support for the government and criticize what they saw as judicial interference in its efforts to amend the constitution. Calls for the impeachment of the members of the Constitutional Court were made.20 In the meantime, observers of the proceedings concluded that the court did not take seriously the petitioners’ charges that those efforts put Thailand’s system of government at risk. Instead, the court had apparently accepted the petition with rather different purposes in mind. The Constitutional Court’s ruling, handed down on 13 July, made those purposes clear. Affirming its right to accept petitions directly from members of the public, the court nevertheless found no basis for those petitions’ principal charges against the government and thus no grounds for the dissolution of the Phuea Thai party. Accepting the petitions looked like a clever ruse. The court found that, as the 2007 constitution had been adopted by means of a national referendum, the authority to convene an assembly to draft a new constitution must also derive from another referendum to determine whether Thais favoured a new constitution. The Constitutional Court had thus introduced a requirement for which the constitution on the basis of which it ruled made no provision. While it did leave the government with the power to amend the 2007 constitution article by article,21 the court nevertheless signaled its determination—and its belief in its right—to play the role of active participant in the process of constitutional change.

ROUND TWO, 2013 The events of mid-2012 made clear that constitutional amendment remained so sensitive a matter in Thailand that struggles over the process of making such ระทำ�ดังกล่าว ย่อมมีสิทธิเสนอเรื่องให้อัยการสูงสุดตรวจสอบข้อเท็จจริงและยื่นคำ�ร้องขอให้ศาลรัฐธรรมนูญวินิจฉัยสั่งการให้เลิก การกระทำ�ดังกล่าว” (In the event that a person or a political party acts as noted in section one, a person knowing of this act has the right to take the matter to the attorney general to investigate its facts and to submit a petition to the constitutional court to decide to order the cessation of this act). 20 Surasak Tumcharoen, “News Analysis: Move to Impeach Judges of Thai Constitutional Court Unlikely to Prosper”, NZweek, 10 May 2013 (http://www.nzweek.com/business/news-analysis-move-to-impeach-judgesof-thai-constitutional-court-unlikely-to-prosper-64264/, accessed 6 June 2013). 21 Nophakhun Limsamarnphun, “Court Delivers Compromise Decision on Charter Change”, The Nation, 14 July 2013 (http://www.nationmultimedia.com/opinion/Court-delivers-compromise-decision-on-charterchan-30186143.html, accessed 6 June 2013), and Daniel Ten Kate “Thai Court Ruling Risks Constitution Showdown: Southeast Asia”, Bloomberg news, 16 July 2012 (http://www.bloomberg.com/news/2012-07-15/ thai-court-ruling-risks-constitution-showdown-southeast-asia.html, accessed 6 June 2013).

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changes could leave the country in political crisis. Further, it was hard not to conclude that the Yinglak government had blinked first in its confrontation with those determined to block its efforts to amend the 2007 constitution. By abandoning its attempt to modify Article 291 of that document, it had by no means given up all chance of amending it. But it had effectively consented to following an apparent appeasing process of article-by-article amendment that would keep the balance between the opposition and the ruling party. The Yinglak government began the second round of its effort to fulfill its campaign promise to amend the constitution on 4 April 2013.22 Its proposals focused on four matters.23 Two of these had figured in the first round of the struggle over amendment in 2012. The proposed change to Article 68 would remove the ambiguity over the ability of members of the Thai public to petition the Constitutional Court directly by requiring that all petitions reach the court by way of the attorney general. The amendment to Article 237 would modify the provisions permitting the dissolution, under the terms of Article 68, of political parties whose members committed electoral malfeasance. The remaining two amendments concerned, first, replacing the half-elected, half-appointed senate created by the 2007 constitution with a fully elected senate like that created by the 1997 charter and, second, relaxing the provision that all international agreements into which Thailand entered win parliamentary approval. Even before the first reading of the bills amending the constitution, the Constitutional Court accepted petitions arguing that proposed changes to Articles 68 and 237 were unconstitutional.24 This decision led not only to renewed protests in front of the court but also to another Phuea Thai effort to impeach its members or see criminal charges filed against them.25 The party also decided that its members would not testify before the Constitutional Court in response to the charges against them for supporting the amendment of Article 68. More than 300 pro-amendment members of the upper and lower houses of parliament prepared a statement decrying the court for accepting these petitions directly, rather than 22 Daniel Ten Kate and Suttinee Yuvejwattana, “Yingluck Seeks Thai Constitution Change amid Court Challenge” Bloomberg news, 4 April 2013 (http://www.bloomberg.com/news/2013-04-04/thai-lawmakers-moveto-change-constitution-amid-court-challenge.html, accessed 6 June 2013). 23 Saksith Saiyasombut, “Uncharted Amendments: Thailand Constitution Changes in Legal Limbo Again”, Siam Voices blog, 5 April 2013 (http://asiancorrespondent.com/104231/uncharted-amendments-thailands-constitutional-changes-in-legal-limbo-again/, accessed 6 June 2013). 24

Ten Kate and Suttinee,“Yingluck Seeks Thai Constitution Change”.

Attayuth Bootsripoom, “Charter Change Conflict Getting Dangerous”, The Nation, 25 April 2013 (http:// www.nationmultimedia.com/politics/Charter-change-conflict-getting-dangerous-30204757.html, accessed 6 June 2013). 25

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through the attorney general, and for seeking to interfere with parliament’s constitutional right to amend the constitution under Article 291.26 On 29 April, Prime Minister Yinglak used her remarks to a meeting of the Community of Democracies in Ulaanbaatar, Mongolia, to send a further signal that she and her Thaksinite government were determined to fight harder in their second round of efforts to secure constitutional change: . . . [T]he story is not over. It is clear that elements of anti-democratic regime [sic] still exist. The new constitution, drafted under the coup leaders led [sic] government, put in mechanisms to restrict democracy. A good example of this is that half of the Thai Senate is elected, but the other half is appointed by a small group of people. In addition, the so called independent agencies have abused the power that should belong to the people, for the benefit of the few rather than to the Thai society at large.27 At home in Bangkok, observers noted the clear retort to the Constitutional Court in this speech. It spoke at the same time to a very different audience. Three years after the Democrats’ and the army’s crackdown on the Red Shirts in Bangkok’s Ratchaprasong area, many in the latter camp remained in prison for lèse majesté, and Yinglak remained unable to keep her promise to amend the 2006 putschists’ constitution. Clearly, then, the prime minister felt the need to deliver a message reaffirming her commitment to the Red Shirt cause to her own supporters, too. A month after Prime Minister Yinglak’s Ulaanbaatar speech, as Thailand’s Constitutional Court began consideration of the petitions seeking to block amendment of Articles 68 and 237 of the 2007 constitution, counsel for the opposition Democrat Party petitioned that court to dissolve Phuea Thai and five other parties 26 “Charter Court Files Complaint against Red Shirts”, The Nation, 27 April 2013 (http://www.nationmultimedia. com/politics/Charter-court-files-complaint-against-red-shirts-30204914.html, accessed 6 June 2013); Suthichai Yoon, “Danger: Politicians Try to Demolish Independent Agencies”, The Nation, 2 May 2013 (http://www. nationmultimedia.com/opinion/Danger-Politicians-try-to-demolish-independent-age-30205223.html, accessed 6 June 2013); Pheu Thai MPs Resolve to Deny Constitutional Court’s Power”, The Nation, 30 April 2013 (http://www.nationmultimedia.com/politics/Pheu-Thai-MPs-resolve-to-deny-Constitutional-Court-30205142. html, accessed 6 June 2013); “Pheu Thai Spokesman Denies Rift over Constitutional Court Boycott”, The Nation, 29 April 2013 (http://www.nationmultimedia.com/politics/Pheu-Thai-spokesman-denies-rift-over-Constitutiona-30204999.html, accessed 6 June 2013); and Chanikarn Phumhiran and Olan Lertrudtanadumrongkul, “Lawmakers Vow to Reject Court Ruling on Article 68”, The Nation, 3 May 2013 (http://www.nationmultimedia. com/politics/Lawmakers-vow-to-reject-court-ruling-on-article-68-30205329.html, accessed 6 June 2013). 27 “Text of Prime Minister Yingluck Shinawatra’s Speech”, The Bangkok Post, 29 April 2013 (http://www.bangkokpost.com/news/local/347530, accessed 6 June 2013).

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whose members of parliament supported constitutional amendment. Again invoking Article 68, the party charged that the effort to amend the former article was an assault on Thailand’s system of constitutional monarchy.28

WHY SUCH A STRUGGLE? The idea, or perhaps ideal, of a constitution can be thought of as a historical project that successive generations struggle to pursue, and this is a motif recurrent in modern Thai history. Following the change of the country’s absolute monarchy to a constitutional monarchy by means of the country’s first successful coup d’état, an interim constitution was announced on 27 June 1932 by civilian and military bureaucrats. Almost eight months later, on 10 December, the same group promulgated a “permanent constitution”.29 The country’s first post-1932 governments made clear their determination to promote constitutionalism, to give the constitution a central symbolic role in national life, and thus to institutionalize constitutional rule. To these ends, for example, Constitution Day became for a time the most important national holiday.30 Of course, the 1932 constitution did not prove permanent. Even before 1997, new charters were promulgated in 1946, 1947 (provisional), 1949, 1952, 1959 (interim), 1968, 1972 (interim), 1974, 1976, 1977, 1978 and 1991. And, less than two weeks after the 19 September putsch, an interim constitution was enacted in 2006.31 However, the sheer number of Thai constitutions has not undercut the importance that many in Thailand attach to constitutions, or at least to some notion of the purposes that a constitution might serve. Modern Thai history makes this last point very clear. The failed effort of the members of the 1932 coup group to put their constitution at the centre of national life notwithstanding, the significance attached to the idea and potential of a constitution has stood at the centre of a number of noteworthy developments. The unprecedented popular protests that helped topple the regime of Thanom Kittikhachon 28 “Democrats Seek to Block Changes”, The Nation, 29 May 2013 (http://www.nationmultimedia.com/politics/ Democrats-seek-to-block-changes-30207108.html, accessed 6 June 2013). 29 Kobkua Suwannathat-Pian, Kings, Country and Constitutions: Thailand’s Political Development, 1932-2000 (London and New York: RoutledgeCurzon, 2003), pp. 33 ff., treats these documents. 30 Chris Baker and Pasuk Phongpaichit, A History of Thailand (Cambridge and New York: Cambridge University Press, 2005), p. 124. 31 See Kobkua, Kings, Country and Consitutions, for a searching analysis of all these documents up to and including that of 1997 and of their context.

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and Praphat Charusathian in October 1973 began, for example, as small demonstrations calling for the promulgation of a new, permanent charter. What followed were debates and decisions that became milestones for later constitution-making episodes and produced the constitution of 1974, arguably the most democratic constitution to date that incorporated representatives of a broad range of social groups into national politics. Hailed as a “people’s constitution” that would put the ugliness of coups and the shabbiness of money politics behind Thailand once and for all, the 1997 charter captured the imagination of Thailand’s self-styled reformists.32 And all this is to say nothing of the acrimony surrounding Prime Minister Yinglak’s efforts to amend—or replace—the 2007 constitution, a document drafted by appointees of the junta that seized state power in Thailand in September 2006. If the importance attached to constitutions in the context of the simultaneous failure to institutionalize any given constitution as a foundational document for government and politics represents an apparent paradox of Thai constitutionalism, it is hardly the only one. A second such paradox lies in the nature of Thailand’s Constitutional Court, an innovation dating from the 1997 Thai constitution. Is it, like Britain’s pre-2009 Law Lords or the United States Supreme Court, a body meant to rule from on high on legal issues of great import? Such a role would certainly accord with symbolic significance with which the framers of Thailand’s 1997 constitution meant to invest that document. Or is, as its effective status as a court of first instance in putatively constitutional matters suggests, something quite different? Perhaps an instrument of latter-day “guided democracy” in Thailand? Some in Thailand would, of course, say that nature and functioning of Thailand’s Constitutional Court during the premiership of Yinglak Shinawatra present no paradox at all. This line of reasoning has it, first, that the Thaksinite or Red Shirt view of politics mistakes electoralism for democracy and that it attaches no importance to the strong institutions necessary to underpin a democratic order. It also stresses that the efforts of the Yinglak government to replace or to modify the junta-sponsored Thai constitution of 2007 is in any case merely a smokescreen and that that government’s true aim is amnesty for Thaksin and the return of his confiscated assets.33 32 For an invaluable discussion of reformism in Thai politics and its role in the creation of the 1997 constitution, see Duncan McCargo, “Alternative Meanings of Political Reform in Contemporary Thailand,” The Copenhagen Journal of Asian Studies XIII (1998): 5-30. This article labels “constitutionalism . . . a ‘disease’ that afflicts Thailand’s body politic”. 33 On this last point, see for example “Constitutional Court Debate is a Risky Proxy War” The Nation, 27 April 2013 (http://www.nationmultimedia.com/opinion/Constitutional-Court-debate-is-a-risky-proxy-war-30204876. html, accessed 6 June 2013), and Suthichai, “Danger: Politicians Try to Demolish Independent Agencies”.

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To the degree that such arguments have some appeal, to the degree that they recall the disdain for parliament and the free press that marked Thaksin’s 20012006 premiership34 and the contempt for the 1997 constitution that marked his involvement in the sale of Shin Corporation in 2006, these argument are also rather self-defeating. For the Constitutional Court’s willingness last year to accept petitions accusing the Yinglak government of violating Article 68 of the 2007 constitution hardly buttressed its stature as a strong and independent—let alone neutral—institution. Neither is resistance to the Yinglak government’s efforts to restore a fully elected senate or to rewrite the language of the third and fourth sections of Article 68 so that they read less like a recipe for overturning the results35 of elections terribly convincing as a display of respect for democratic norms. Former Prime Minister Aphisit Wetchachiwa’s argument against constitutional change on the grounds that it will bring conflict is, like all such Bonapartism, in itself a smokescreen for his Democrats’ own raw political calculations.36 These realities point, then, to a third apparent paradox of the current struggle over the Yinglak government’s effort to amend or replace the 2007 Thai constitution. For all its devilish involution and focus on the constitution and constitutional court, this struggle does not represent a constitutional crisis. The hopes of the promoters of the 1932 coup notwithstanding, no Thai constitution has ever lasted long enough to serve as an institutional basis for the Thai political order. Instead, through the early 1970s, the Thai army and, from the late 1950s onward and above all from the 1970s, the Thai monarchy have played that role. The centrality of these institutions long made impossible, and by some lights even unnecessary, the development both of a robust constitutional order in Thailand and of the institu-

34 Excellent English-language treatments of Thaksin in power are Pasuk Phongpaichit and Chris Baker, Thaksin (Chiang Mai: Silkworm Books, second expanded edition, 2009), and Duncan McCargo and Ukrist Pathmanand, The Thaksinization of Thailand (Copenhagen: NIAS Press, 2005). 35 These sections read, “ในกรณีที่ศาลรัฐธรรมนูญวินิจฉัยสั่งการให้พรรคการเมืองใดเลิกกระทำ�การ ตามวรรคสองศาล รัฐธรรมนูญอาจสั่งยุบพรรคการเมืองดังกล่าวได้ ในกรณีที่ศาลรัฐธรรมนูญมีคำ�สั่งยุบพรรคการเมืองตามวรรคสาม ให้เพิกถอน สิทธิเลือกตั้งของหัวหน้าพรรคการเมืองและกรรมการบริหารของพรรคการเมืองที่ถูกยุบในขณะที่กระทำ�ความผิดตามวรรคหนึ่ง เป็นระยะเวลาห้าปีนับแต่วันที่ศาลรัฐธรรมนูญมีคำ�สั่งดังกล่าว” (In the event that the constitutional court decides to order that a political party ceases an act according to section two, the constitutional court may order the dissolution of that party. In the event that constitutional court orders the dissolution of a political party according to section three, the electoral rights of the head of the party and the executive committee of the party that is dissolved for having committed improper acts according to section one are revoked for a period of five years from the date on which the constitutional court issues that order.) 36 “Charter Change Opponents Fear ‘hidden agenda’”, The Nation, 6 March 2012 (http://www.nationmultimedia.com/politics/Charter-change-opponents-fear-hidden-agenda-30177325.html, accessed 6 June 2013), and Khanittha Thepphajorn, “Amendments Serve Pheu Thai: Abhisit”, The Nation, 3 April 2013 (http://www.nationmultimedia.com/politics/Charter-changes-would-deepen-rift-Abhisit-30203259.html, accessed 6 June 2013).

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tions to safeguard such an order.37 Perhaps the 1997 constitution represented an effort to make up for lost time, to give Thailand a constitution that would last long enough to achieve institutionalization and legitimacy.38 But that effort failed. And so, strictly speaking, a constitutional crisis is not possible in Thailand. It is in the context of this failure and of the apparent paradoxes of Thai constitutionalism that we must understand the often confusing struggle over constitutional change that has attended the premiership of Yinglak Shinawatra. How that struggle will end, whether this year or next, remains unclear. Will Yinglak and Phuea Thai prevail? If so, will their success in amending the 2007 constitution lead to Thaksin’s legal rehabilitation and return to Thailand? Will her government fall victim to the sort of “judicial coup” that ousted both Samak Suntharawet and Somsak Wongsawat from the Thai premiership in 2008? The confusing nature of the ongoing struggle over constitutional amendment in Thailand is due to stakes that are both lower and higher than might appear. For the provisions of one more Thai constitution among so many are unlikely to have lasting significance in their own right. But to try in the closing years of the current reign to frame a durable constitution, one respected by politicians and by the courts, before the emergence of a fundamental new national consensus on the nature of legitimacy in Thai politics and the distribution of power in the Thai social order is likely to prove futile. It is to resist the course that events in Thailand must certainly follow.

The argument about the “judicialization” (ตุลาการภิวัตน์) of Thai politics and the related suggestion that Thailand’s judges have to some degree supplanted its generals as institutional guarantors of the royalist political order that emerged after 1957 lie beyond the focus of this essay. The astute and influential commentator Bangkok Pundit (pseud.) addressed this matter in “Is a judicial coup in Thailand imminent?”, 20 June 2012 (http:// asiancorrespondent.com/108530/thailand-judicialization-of-politics-or-politicization-of-the-judiciary/, accessed 6 June 2013). He there alludes to what is in essence the Magna Carta of ตุลาการภิวัตน์, King Phumiphon’s addresses to judges of Thailand’s Administrative and Supreme Courts on 25 April 2006.

37

38 McCargo, “Alternative Meanings”, calls attention to strong but ever-ambiguous link between constitutions and political legitimacy in Thailand.

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Whither China’s Myanmar Stranglehold?* By Stephanie Shannon and Nicholas Farrelly [Guest Writers]

EXECUTIVE SUMMARY •

The Chinese government and a range of allied commercial enterprises, cultivated close relations with the Myanmar side during the years when interactions with Western democracies were constrained

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For a time, there was talk that China’s “soft power” in Myanmar had become suffocating and that the large numbers of recent Chinese migrants served as a vanguard for wider economic and strategic interests.

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Over the past 25 years, the Chinese population in Myanmar is estimated to have grown by over 2 million people.

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During Myanmar’s present process of political and economic liberalization, the central role of such Chinese interests is being challenged from a range of angles. It is in this environment of greater diversity and competition that China’s once firm position may be set to diminish.

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While the government of Myanmar was previously prepared to tolerate an expand-ing Chinese presence, there is little popular acceptance of Chinese migrants until they more fully integrate with Myanmar society and culture. * Stephanie Shannon is a former student in the Australian National University’s College of Asia and the Pacific. Nicholas Farrelly is a Research Fellow at the same institution. This article was first published on 27 June 2013 as ISEAS Perspective 2013: 40.

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•

Chinese influences now jostle for position alongside an ever-increasing array of other foreign populations, ideas, cultures and approaches, including those that have recently re-engaged Myanmar from among the Western democracies.

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While the Chinese continue to hold some measure of influence in many spheres of Myanmar life, the extent to which they can exercise their influence is subject to limits imposed by the fiercely patriotic Myanmar people and government.

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During the ongoing political transformation under President Thein Sein there is emerging evidence that such limits will be more consistently demarcated.

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INTRODUCTION: RELATIONS IN FLUX In September 2011 Myanmar President Thein Sein made an abrupt decision to suspend construction on the Myitsone dam.� This multi-billion dollar project, spearheaded by major Chinese and Myanmar construction interests, had long served as a magnet for controversy but the decision nonetheless took local and international observers by surprise. They wondered aloud whether Thein Sein was sending a new signal to his allies in Beijing. Curiosity about the deeper significance of the project’s suspension was fuelled when Chinese disapproval began surfacing in the media. When the dust settled, the decision was taken as a sign that cozy ties between Naypyidaw and Beijing were not immune to the vicissitudes of Myanmar’s political transformation, and that Myanmar would be prepared, if required, to find other backers and friends. The fact that the Chinese apparently failed to see it coming was widely considered further evidence that their strong relationship with the Myanmar military brass could not be taken for granted. It seemed possible that the neighbors were not as tight as outside observers had assumed. In the standard account it is asserted that through more than two decades of rule by a dictatorial clique of military officers, Myanmar became increasingly aligned with various Chinese influences, and reliant on their support. At times, the Chinese stranglehold on Myanmar’s prospects, especially with respect to economic matters, was considered overwhelming. Such influences come in such a variety of functional guises, and cloaked in the expression of different historical and cultural trajectories, that it is usually impossible to speak of a single Chinese approach. Instead, it is the great convergence of differences, with all of the ambiguities that implies, which have made the Chinese, whatever they have sought to achieve, some of the most important contributors to contemporary Myanmar life. Especially in those parts of the country where the Chinese border is readily accessible—from the northern Kachin State, right down to the southern portions of the Shan State, and then deep into areas like Mandalay and Magwe—there are sizeable populations of “new” Chinese. They mingle with other waves of migrants, some of whom have been in the country for centuries; Chinese for whom the People’s Republic of China has never been home. Whatever their origin and tenure in Myanmar, what they all share is an ambivalent position in local society. Often wildly successful in commercial activities, the Chinese have been popularly despised for their cultural differences and economic success, and thus vulnerable to changing political priorities.

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Any analysis of those priorities needs to begin with recent demographic shifts. The nadir of Chinese population in Myanmar was as recent as 1983, after a series of government campaigns targeting Chinese groups left the country with what has been described as a mere 234,000 Chinese residents, amounting to just 0.6 per cent of the estimated total population (Mya Than 1997: 118).� It should not be for-gotten that during Myanmar’s socialist period (1962—1988) the Communist Party of Burma, with heavy Chinese materiel and moral support, was a national enemy. It was only once the Communist forces disbanded, and the Cold War thawed, that the government in Myanmar was prepared for fuller and friendlier relations with the Chinese behemoth to the north. Since then, the Chinese population in Myanmar has grown rapidly, bringing approximately two million additional Chinese to seek their fortunes in the newly market-based economy (Zhang 2008: 51). Skills developed while navigating the early phases of economic liberalization back home in China have proved valuable, while networks of Chinese traders, wholesalers, logisticians, construction contractors and petty retailers have taken to exerting their dominance in specific economic sectors. It is an untidy situation and one that would not appear to have been the product of too much top-down planning. Still, it gives the Chinese an enviable foothold in Myanmar society. For a time there was talk that China’s soft power influence had thus become suffocating and that Chinese migrants served as a vanguard for wider economic and strategic interests. In this brief analysis, we ask whether the Chinese are really so important in terms of their long-term influence? To assert that they are we would overlook the powerful draw of Korean pop culture and Western political ideals, not to mention the economic muscle of Singapore and the regional solidarity of the Association of Southeast Asian Nations. Strident commitment to the idea that China is a driving force must also de-emphasize the fact that Thailand has been the primary destination for Myanmar migrants and that there is a significant, highly educated and cosmopolitan diaspora that has tended to go everywhere, except China. Large numbers of Myanmar citizens have found new lives in places as diverse as Norway, the United States and India. In our experience among educated Myanmar citizens who are not ethnically Chinese, Chinese language skills are very rare, trumped almost everywhere by competency in a varied repertoire of English, Thai, ethnic minority tongues and even Japanese. While the Myanmar people have been prepared to tolerate Chinese presence it could hardly be said that there is universal fraternity, especially at the popular level where the prospects for disquiet are greatest.

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Chinese influences therefore jostle for posi-tion alongside an ever-increasing array of other foreign populations, ideas, cultures and approaches. It is in this environment of greater diversity and competition that China’s once firm position may be set to diminish even further. The history of Chinese influence in Myanmar suggests that it is rarely a smooth trajectory.

A SHORT HISTORY OF THE CHINESE IN MYANMAR The reason for close historical ties between Myanmar and China are starkly geographical. On the Chinese side, the border snakes from the high Tibetan ridges in the north, right down to the steamy jungles of Xishuangbanna where Chinese territory abuts Myanmar and Laos, in the so-called “golden triangle” (Chin 2009). For 2204 kilometers, this mountainous, forested terrain is home to peoples speaking a wide variety of languages and varying degrees of connection to China’s centralizing, Han-dominated national culture.� Large numbers of Han Chinese migrants from else-where in the People’s Republic have also found the border areas an attractive home and the opportunities for cross-border trade have been well exploited. One reason that activities on the border have been so lucrative is that the local people on the Chinese side tend to have strong links with Myanmar. Groups of Shan, or Kachin, or Wa, to name just three of the more significant ethnic minority populations of the borderlands, are represented with large populations in both Myanmar and China (see South 2008). Governments, and entrepreneurs, ignore these links at their peril. It is those links that have stood the test of time. Since the foundation of the People’s Republic, there have been new political dimensions to relations between the two countries, and it has not always been smooth sailing. After the Second World War, both countries embraced socialist ideologies, but despite mutual recognition, neither felt motivated to support the other’s spe-cific ideological commitments. At times, the Chinese aimed to inspire communist resistance in their southern neighbour with the Communist Party of Burma serv-ing as a proxy for Chinese interests. Public support for the communist insurgency was backed with the quieter provision of weapons and training. Furthermore, a tussle emerged between the People’s Republic, Taiwan and Burmese governments to secure the loyalty of the hundreds of thousands of ethnic Chinese living in the country. A violent climax was reached in 1967 as the Chinese Embassy in Yangon mobilized ethnic Chinese children to spread

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the Cultural Revolution and promote Mao Zedong Thought, sparking mass antiChinese riots (Fan Hongwei 2012). The Chinese Communist Party had exercised their influence over the ethnic Chinese, but undermined their influence with the Burmese government and populace. Anyone looking or sounding Chinese became subject to suspicion and a rift opened between the Chinese and Burmese governments. The roots of this estrangement go back to the coup of 1962, when General Ne Win seized control. Part of his “Burmanizing” agenda was to curtail Chinese cultural, economic and political power. His policies suppressed Chinese culture and language, as they did the cultural outputs of other ethnic groups. As the public and recognizable face of the communist threat, it was often ethnic Chinese in Burma who personally felt the highs and lows of international relations. In the years leading up to 1988 and the end of the socialist period in Burma, the two governments enjoyed uneasy relations. Along the border, the Burmese government fought sustained campaigns against communist and ethnic insurgencies. China then watched closely as the government stamped out democratic sentiments in the crucial years between 1988 and 1990, as they quashed similar demonstrations in Tiananmen Square. By the early 1990s the Myanmar military dictatorship was begin-ning to appreciate the benefits of closer relations with China, especially as Chinese economic might was becoming apparent. Chinese influence in Myanmar became increasingly obvious at the street-level. While trade with Western democracies was restricted by economic sanctions the Chinese were, at both official and popular reg-isters, enthusiastic about playing key roles in Myanmar’s development. The Myanmar Government warmly received the transfer of technical knowledge, labour, capital and other economic attributes. Their sense of isolation was diminished, in key respects, by the warm reception and strong support of the Chinese authorities. The large-scale migration to Myanmar that occurred over these years also played a key role in increasing ties, as Chinese entrepreneurs found their way into all the crevices of Myanmar’s commercial life. The center of this activity is Mandalay, the trading hub for upper Myanmar. It has comparatively good access to all areas of the country. It is in Mandalay that the Chinese presence is most readily apparent, and where local resentments against the Chinese presence have already emerged. In Myanmar’s Shan and Kachin borderlands the patterns of interaction with China are quite different. There are some enclaves, places like Laiza in Kachin State and Mong La in Shan State, where Chinese influence has, for periods, been overwhelming. In these enclaves, Chinese is the lingua franca and Chinese

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currency is the primary unit of exchange. Chinese entrepreneurs have established gambling houses and brothels frequented by Chinese tourists and public officials. Ethnic militias and their associated political organizations control these pockets of Myanmar territory, some of whom built relationships with China and the Chinese in the days of the Communist Party of Burma. In return, ethnic leaders have allowed these influxes of Chinese people, culture and vices to further their own economic and political ambitions. In these areas, interaction with China is personal and the expansion of Chineseness across the border is ripe for resentment.

RE-EVALUATING CHINESE INFLUENCE AND IMPACT The idea that the Chinese are influential in Myanmar society needs to be seen in the context of the great variety of Chinese activities over recent decades. These activities, undertaken by Chinese citizens and people of Chinese decent, are very often independent of government agendas, although there are those that are more clearly entangled with government interests. While the history books tell us that Chinese people have been trading in the Ayeyarwaddy Basin since at least 128 BC, in recent decades they have been joined by Chinese state-owned companies (Htin Aung 1967: 7). These companies, owned by both national and provincial governments, are now major players in the resource extraction and energy sectors and cannot be ignored by the Myanmar side. They claim to be bringing development, capital and energy to Myanmar society. Yet for many Myanmar people, this comes at the expense of their environment, livelihoods and heritage. Privately owned businesses run by ethnic Chinese are also major play-ers in the Myanmar economy with close links to Myanmar’s former military govern-ment. These major private and state-owned companies in industries ranging from mining to manufacturing, tourism and agriculture may bring influence at the regional and national government level, but they have also increased resentment towards all things Chinese. Combined, they make for an economic force in many sectors of the economy, which has not gone unnoticed by the Myanmar people. It is in the inter-related areas of military and ethnic affairs that the Chinese are most prone to wield their influence, and this has become perhaps the most contentious area for the Myanmar side. Through the years of military rule since 1988, China forged special relationships with local authorities in border areas to facili-

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tate trade and maintain a delicate relationship between the Chinese, ethnic militias and the Myanmar government (Li and Lye 2009: 263). In some places, such as the semi-autonomous Wa region in the Shan State, Chinese patronage of ethnic political leaders has raised regular questions about their broad intentions (Ball and Farrelly 2013). In the interests of maintaining borderland stability and flows of goods and re-sources, the Chinese have exerted their influence with ethnic militias, and cultivated intimate ties. The Chinese have also, at times, attempted to broker peace between the Myanmar military and the ethnic militias on their border, and have sought to dis-courage the involvement of other players, especially from Western democracies. In these areas, where the impact of ethnic conflict on stability in China is most relevant, the Chinese have been consistently willing to shelve their policy of non-interference and meddle in their neighbour’s affairs. It is unclear whether this approach will survive Myanmar’s domestic political changes and there are early indications that China’s once pre-eminent role in border matters may further diminish in the years ahead. Nonetheless, as a superpower looming on Myanmar’s northern border, the Chinese no doubt have a measure of more general influence that must be taken into account, especially when it comes to economic development. Frequent high level visits, messages of support and exchanges of goodwill highlight the importance of the relationship for both sides. In the past, the Chinese have used their political influence to secure major mining and infrastructure projects. However, contention around the Myitsone dam and Letpadaung mine, both places where Chinese influence has been threatened, the Myanmar government has taken decisive action in ways that are perceived to directly challenge Chinese interests and Chinese citizens. So it is reasonable to surmise that while the Chinese hold some measure of influence in many spheres of Myanmar life, the extent to which they can exercise their influence is subject to the limits imposed by the fiercely patriotic Myanmar people and govern-ment. During the current political transformation under the government of Thein Sein it is reasonable to contend that such limits will be ever more thoroughly demarcated and explained.

RISKS AND REWARDS So what is the consequence of this muddled and contested deployment of Chinese power?

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Let’s start, first, at the intersection of social and economic change. In the central Myanmar city of Mandalay—a dusty, bustling, entrepreneurial place—Chinese commercial interests have, since the early 1990s, become a potent addition to the local economic mix. At various times, the overt success of Chinese players has threatened to spark communal conflict, a prospect that the Myanmar authorities have so far chosen to dampen. There is still, all the same, a chance that in the future an anti-Chinese backlash could generate widespread tension, even violence, in those neighborhoods where Chinese presence is strongly resented. The assimilation of the Chinese is now a looming political issue and is one that receives some attention from Myanmar’s newly energized political parties. It is not beyond the realms of modest speculation to conceive of political parties seeking to mobilize supporters around an issue like Chinese migration. Anti-foreigner sentiments have a tortuous history of motivating strident political action in Myanmar and the recent experience of anti-Rohingya purg-es in Rakhine State, and violence between Muslims and Buddhists elsewhere in the country, show the potential for conflict to ignite unexpectedly. Such anti-Chinese sentiments could have a destabilizing effect that not only threatens Chinese influence but that has impact on other parts of Myanmar society. One of the emerging trends in Myanmar is that the entire country, from its most remote outposts to the large cities, and from local smallholder agriculture to massive multinational investment, is becoming more fully enmeshed. As transportation and telecommunications links improve, and as the costs of doing business benefit from greater efficiencies and openness, the need for everyone to ensure a stable political and economic terrain is ever more pressing. Western corporate interests, including the world’s largest companies, are among those seeking to cash-in during Myanmar’s current period of political change. They are looking to manage their risks, and the prospect of anti-Chinese sentiments emerging wouldn’t serve their long-term plans either. For everyone interested in Myanmar’s ongoing changes, the millions of Chinese who now make their livelihoods in Myanmar’s grueling commercial realms will need some more serious analytical focus. Their concentrations close to the Chinese border are inevitable enough, but what needs to be considered is that in all of the country’s major trading centers there is a significant Chinese presence. That presence will not wilt away yet it is unclear whether the Chinese authorities, in Beijing, Yunnan, or the Embassy in Yangon, hold enough sway to fully harness their activities as a plank of national power. The risks for the Chinese government

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are significant and may only increase as democratic institutions and mentalities begin to take root in Myanmar. At the same time, China’s strategic and economic interests in Myanmar are set to increase with the construction of the oil and gas pipeline connecting Yunnan to the Bay of Bengal. Furthermore, what is clear is that the prospect of greater competition for commercial and strategic opportunities in Myanmar is only just beginning. A country so often considered fallow and untapped is now targeted by a mind-boggling collection of different interests. Whatever special leverage various Chinese have been able to muster during the years since 1988, it appears that new patterns of contestation will emerge with the prospect of direct challenges to their role. The public presentation of these new dynamics is likely to be cautious and welcoming. But behind the scenes the jockeying for strength and position will be strident, with the chance that Chinese influence will encounter ferocious competition. It is a delicate situation where miscalculations about the goals of the Chinese, Myanmar, Southeast Asian and Western sides could lead to conflict in various configurations. The real trick for the Myanmar government, irrespective of who wins the proposed 2015 General Election, will be to provide new opportunities for secure foreign investment, to say nothing of international educational development, humanitarian assistance and cultural exchange, without compromising its special responsibility to provide all of Myanmar’s citizens with a fresh chance to feel at home. Can the Chinese also be at home in Myanmar? While the threat of Chinese dominance of the economy and politics appears to have waned, it remains a potentially explosive issue. Strategic competition and re-positioning, including in cultural spheres, has not ended. New phases will bring new risks and a meaningful chance that things could go wrong.

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BIBLIOGRAPHY Ball, Desmond and Nicholas Farrelly (2013). Eastern Burma: Long wars without exhaustion, In Diminishing Conflicts in Asia and the Pacific: Why some subside and others don’t, Abingdon, Routledge, 153—168. Chin, Ko-Lin (2009). The Golden Triangle: Inside Southeast Asia’s Drug Trade, Ithaca and London, Cornell University Press. Fan, Hongwei (2012). The 1967 anti-Chinese riots in Burma and Sino—Burmese rela-tions, Journal of Southeast Asian Studies, 43(2), 234—256. Htin Aung (1967). A History of Burma. New York, Columbia University Press. Li Chenyang and Lye Liang Fook (2009). China’s Policies towards Myanmar: A Successful Model for Dealing with the Myanmar Issue? China: An International Journal, 7(2), 255—287 Mya Than (1997). Ethnic Chinese in Myanmar and their Identity, In Ethnic Chinese as Southeast Asians, Singapore, Institute of Southeast Asian Studies, pp. 115— 146 Scott, James C. (2009). The Art of Not Being Governed: An Anarchist History of Upland Southeast Asia, New Haven and London, Yale University Press South, Ashley (2008). Ethnic Politics in Burma: States of conflict, Abingdon, Routledge. 张君宏 (Zhang Junhong) (2008). 简析缅甸华人族群-果敢族的形成, 发展 及 (Analysis of the Chinese ethnic groups in Myanmar— the formation, development and the situation of the Kokang), 东南亚之窗 (Southeast Asian Window) 2, 49—53.

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Malaysia’s BN Stays in Power, But Deep Changes Have Nevertheless Occurred* By Ooi Kee Beng

EXECUTIVE SUMMARY •

The only change in government following Malaysia’s 13th General Elections was in the state of Kedah. Nevertheless, some fundamentals in the country’s political structure were altered for good, and these are best understood through a historical perspective.

•

All the political parties in Malaysia formed before independence and which are still relevant, are communal parties.

•

Be that as it may, three inter-related dimensions have always formed the backdrop for Malaysian political discourses—ethnocentrism, multiracialism and socialism. Since the 1980s, Islam as a parameter for political mobilization has also become significant, and is best understood within the country’s general inter-ethnic balancing act.

•

The history of UMNO and its allies has been one of internal conflicts despite the dis-course on communal unity. Nevertheless, its dominance continues to rise within the ruling coalition, at the cost of other major member parties.

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The latest split, which occurred in 1998, saw Anwar Ibrahim becoming the major op-position leader, and greatly configured * Ooi Kee Beng is the Deputy Director of ISEAS. His latest book is Done Making Do: 1Party Rule Ends in Malaysia (Genta Media & ISEAS, 2013). A version of this article was carried in Penang Monthly, June 2013. This article was first published on 20 June 2013 as ISEAS Perspective 2013: 38

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Malaysian politics for the following 15 years. This also ignited a revival of social activism, especially after 2007. •

The transition from the Mahathir period after 2003 compounded the political equation further. Abdullah Badawi’s attempts failed badly. With Najib taking power in 2009, a four-year period of de facto campaigning began, which polarized the country further.

•

Najib’s next challenge is to survive the UMNO party elections later this year, which he is likely to do.

•

The huge mal-apportionment in constituency size which made BN’s victory possible, will be a major issue. Policy competition between the two coalitions which began in 2008 will continue.

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HISTORICAL LINES OF CONFLICT The 13th General Elections held on May 5th this year did not bring about the change in government at the federal level which the opposition had hoped for. The only change in government to occur was in fact in Kedah, where the Pakatan Rakyat (PR) lost the second of the five states that it had won on March 8, 2008. However, despite such disappointments, the PR as a whole continued making inroads into new key areas that were once off-limits to the opposition. The despondence that overwhelmed the coalition and its supporters as the officially announced results began going against them ran deep, which in a way explains the psychological need for the subsequent giant rallies held throughout the peninsula to manifest a general distrust of the electoral process. For leaders of the opposition, the growing sense of political empowerment among voters had to be rescued from turning into self-doubt and pessimism; and so a show of unity and of widespread conviction after the results seemed necessary for their struggle to maintain impetus. Be that as it may, the elections, though not the watershed that PR had hoped they would be, were certainly revealing in many essential ways of where the country finds itself today. It has now been almost fifty years since Malaysia came into being and 55 years since Malaya became independent. It has also been over sixty years since the Alliance model came into being and allowed the country’s different races to interact politically, though in a very cautious fashion. At this time then, what kind of periodization will provide us with a functional understanding of the elections and the dynamics surrounding them? The length of the Barisan Nasional’s control over the federal government at one extreme or the short period since the phenomenal rise of the PR at the other? Or is something in between more relevant? To varying degrees, these are all illuminating in different ways, and perhaps switching perspectives is the best way to go about probing the country’s present situation. One point to note is that political parties formed before Independence and who still survive today are all communally based ones. Such was the consciousness of those times, and such was the basis for tensions in those days—the British ruling over a hotchpotch population geared towards supplying the imperial economy; a string of sultanates of varying stature organised to keep the British secure at the top; labour immigration enhanced by colonial needs; the Japanese ruling

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over British colonies deserted by their masters; and then, the insurgency by the Malayan Communist Party to top it all off. And so we have among parties formed in the 1940s: the United Malays National Organisation (UMNO) conceived in irate reaction to ill-advised British attempts to simplify their control over the peninsula; the Malayan Chinese Association (MCA), crafted to mirror the Malay-centrism of UMNO; and the Malayan Indian Congress, created to duplicate the independence movement in India. The scope of inter-party struggle in those days, apart from the communal one, were either ideological in nature, following the left-right dimension of the Cold War and which did not necessarily accept the nascent national boundaries suggested by colonial spheres of influence, or they were idealistically multiracial. Of the other parties that are relevant today, all but Parti Islam SeMalaysia (PAS) were formed after Independence in 1957, in fact as late as after the Federation of Malaysia was formed in 1963. PAS was from the start an Islamist split from UMNO. [Most of the parties in East Malaysia are communally based in principle]. In the late 1960s, as left-wing parties suffered self-doubt and strategic mistakes, we witnessed the rise of several new parties which were in principle multiracial ones. Most important of these were the Parti Gerakan Rakyat, which almost immediately became the government of Penang State; and the Democratic Action Party (DAP), forced into existence after Singapore’s PAP within Malaysia had to be disbanded after Singapore went its own way in 1965. To be sure, these parties have tended to be largely Chinese-based despite their expounded ideology. And so, on the surface, these were the three inter-related dimensions that formed the backdrop for Malaysian political discourses—ethnocentrism, multiracialism and socialism. To that can be added religion, which gained importance in the Mahathir Mohamad period (1981-2003) after being incorporated into the legal, architectural and bureaucratic structure of the country. This was a powerful strategic move by Mahathir pounced within the ethnocentric battle that had become hugely prominent after the New Economic Policy (NEP) was implemented in 1970. This comprehensive affirmative action programme was constructed to better the socio-economic lot of the Malay community as a whole, and was scheduled to end in 1990. Since Islam is used to define Malayness in the Constitution, this last parameter cannot be understood outside the general inter-ethnic balancing act. In fact, the split of PAS away from UMNO in 1951 already hinted at a deep uneasiness within the Malay community about the direction that Malaysian nation building was to go.

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Of course, the adoption of the term “Bumiputera” by the late 1960s seared a deep and indelible line between Chinese and non-Muslim Indians on one side, and Malays and indigenous groups on the other. The NEP helped provide powerful economic support for that division. UMNO would survive a couple of splits, the most important of which was when Tengku Razaleigh Hamzah formed Semangat ’46 after losing an internal battle within UMNO to Mahathir in the late 1980s. That party rejoined UMNO later. In fact, splits in UMNO, which started with the resignation of its founderpresident Onn Jaafar in 1950, are an important dynamic in the development of Malaysian poli-tics, and will continue to be so even in the future.

REFORMING MAHATHIRISM 1.0 Another UMNO split came with the sacking of Anwar Ibrahim in 1998. What is interesting with the formation of the Parti Keadilan Nasional by Anwar’s wife— Wan Azizah Wan Ismail—in the wake of her husband’s arrest and imprisonment by Mahathir was that it joined up with Parti Rakyat Malaysia (PRM) in 2003 to form Parti Keadilan Rakyat (PKR). PRM was in fact a rump socialist party. Today, the last socialist party in Malaysia, Parti Sosialis Malaysia (PSM), which was allowed registration in 2009, stays friendly to the opposition coalition. Thus, Anwar Ibrahim’s refusal to leave quietly in September 1998 precipitated a movement whose impact on Malaysian politics and social activism should not be underestimated. He became the lightning rod for general dissent which immediately led to frighteningly bad election results for the BN in 1999, and which arguably hastened Mahathir’s retirement as prime minister. Mahathir’s choice of Abdullah Badawi ahead of Najib Razak as his successor in 2003 proved strategically astute and the BN won by a record number of parliamentary seats in 2004. However, Abdullah’s failure to deliver on his many promises soon revealed a political consciousness and longing in society which had been growing for some time. This was fuelled by the increasingly young age of the population; the continued urbanisation of the Malay community; and by the advent of new technological means for communication and dissemination of information. The post-Mahathir period was beginning to take definite form. Reforms were now the order of the day. Discerning what was rhetoric and what was sincere; what was effective and what was spin became the new way for judging politicians.

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Trounced badly by Abdullah’s reform agenda in 2004, opposition parties had to undergo some serious soul searching if they were to remain relevant. The emergent mindset of reform quite naturally led public discussions towards fair governance, and to the reforming of the electoral system itself. The discourses of the Reformasi Movement that was now strongly connected to the different opposition parties involved notions of transparency, justice and accountability. From around 2005 onwards, this new political dimension came to intermingle with the traditional ones, and by the time the 12th general elections took place in 2008, it had caught the imagination of the urban young, at least in the northern parts of the peninsula. The electoral reform movement—nicknamed Bersih—seemed perfect at providing a solvent discourse for the differing values of the opposition parties. And it was a technical argument that could not easily turn racial or religious. Despite these parties’ willingness to work with each other once the Reformasi Movement had started, the preferred expressions of their values were serious stumbling blocks to their wish to project a viable coalition. More importantly, Bersih quickly inspired various social movements and encouraged the political activism that is still growing today, now expressed through a diversity of colours. It is thus the relationship between the social groundswell— which follows socio-economic dynamics—and the strategies and needs of the opposition parties that warrants study, alongside the detrimental effects on the BN of UMNO’s increasing dominance over its allies. The latter’s undermining of the credibility of parties such as the MIC, the Gerakan and the MCA had been obvious for some time, but burst into full fury only on election day, March 8, 2008. UMNO’s success was be-coming BN’s failure. The loss of five states and the two-third majority in parliament in 2008 was blamed on Abdullah Badawi, and in a soft coup a year later, he was replaced by the man who had been bypassed earlier for the top position in the country. The new prime minister’s job was to regain the two-thirds majority, or at least win back votes. Najib Razak’s first term in office, from April 2009 to April 2013, can rightly be considered an extended campaign period rather than a nation building phase. His strategy could be poignantly called “Reforming Mahathirism 2.0”, involving some major changes in legislation and a lot of sloganeering. How the excessive politicking of that period, especially the end of it altered Malaysian politics is a subject worthy of future investigation.

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THE 13TH GENERAL ELECTIONS Most things seemed to have been said by the time the campaign period began on 20th April. Throughout the fifteen days before Election Day on May 5, issues were more exhorted than debated. When certain top BN leaders, including Mahathir, tried to use threats to win votes, PR campaigners tried to create a carnival atmosphere to counteract the atmosphere of fear; while PR rallies collected huge amounts in contributions from the public, BN candidates expended immensely larger sums to buy votes through free dinners and other means; and while the PR clothed itself in the chosen colours of various activist movements, the BN flooded the streets with tight rows of blue flags. There was hardly any public dialogue or debate between the two sides during the campaign itself, which was a clear reflection of how polarised Malaysia’s political climate was, and how uncompromising the two positions had become. The PR’s strategy was to bring the groundswell to Johor. In that, they may have succeeded only to a limited extent, but the results did show that the Chinese community throughout the peninsula was now quite decidedly supporting the opposition, synchronised in a broad general swing in that direction in all the country’s major urban centres. As the campaign period drew to a close, it had become more obvious that voters were consciously going to support one or the other coalition more than they would an individual or a party. In that sense, the voter support in urban areas for the PR increased in an exponential manner. The main T-shirt sold at PR rallies in Johor Bahru had opposition leader Lim Kit Siang’s portrait placed alongside the Malay words “Ubah Bersama Lim Kit Siang” (Change with Lim Kit Siang); a PAS rock band would play at concert-style DAP rallies titled “Rock the Vote”; and the flags of all three opposition parties were consciously intermingled. Curious crowds in the beginning of the campaign multiplied into gigantic masses by the end of the 15-day period. But be that as it may, Najib Razak managed to win a majority of parliamentary seats on May 5, despite losing the popular vote. Though narrow, his victory was enough to secure him a five-year term as prime minister. But it is expected that he will have to fight for survival when the UMNO elections take place later this year. With its allies more decimated than ever, UMNO is now shorn of any pretence of being merely one among equals within the BN. UMNO’s dominance in the coalition is now indubitable, and the special logic of the BN as a grouping of parties

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representing all major communities is no longer valid. It will now have to exercise its power more wisely and less arrogantly than it had been doing in recent years. Most of its support now comes from the southern state of Johor, and from East Malaysia. At the same time, UMNO has to deal with three opposition parties which are the second, third and fourth largest in parliament. The huge mal-apportionment in constituency size which made BN’s victory possible, will be a major issue in coming years. The social movements, especially Bersih, will continue to enjoy relevance, partly thanks to the growing incongruence between seats won and the popular vote. Where the PR parties are concerned, with the loss of Kedah state, each of them will now control the government of one state, and all with a two-thirds majority at that. Being second-term governments (at least in Penang and Selangor, Kelantan having been under PAS for a much longer time), public expectations on them will be higher and public readiness to give them the benefit of the doubt will lessen. However, the increased support for them in these states does declare that they have done well enough so far in the eyes of voters. Improving Malaysia’s governance, delivering on promises and engendering pride and optimism in the people in their states will be their main challenges. Being models of good governance will be their best argument against the diehard support that the BN enjoys in rural areas. With regards to Prime Minister Najib Razak, after he survives the next UMNO elections, his job will be an even tougher one. His transformation programmes will have to be repackaged to minimise allegations of being mere electoral spin, and his One Malaysia catchphrase—should he retain that—will have to go beyond being a simple slogan that is displayed ad nauseum. Overselling did not work too well before May 5, and is not likely to work in the future unless it is given substance by his new Cabinet. Competing in good governance practices may become the dimension that will technocratize Malaysian policymaking and end the manipulative politicking that now plagues the country at many levels. Hopefully, with elections five years away, the culture of politicking and the campaigning mode will subside and Malaysians and their various governments will get down to nation building instead, and rely on their performance to convince voters of their competence. Along the way, they will have to find ways of collaborating for the good of the country without fear of being branded as sell-outs to their cause. Compromises

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between coalitions need to be seen as being just as valid as compromises within them where policymaking is concerned. Only when that happens on a regular basis can Malaysia call itself a mature two-party democracy.

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The Significance of China-Malaysia Industrial Parks* By Khor Yu Leng

EXECUTIVE SUMMARY •

China and Malaysia have jointly established the Malaysia-China Kuantan Industrial Park (MCKIP) and Qinzhou Industrial Park (QIP) to further boost bilateral trade and investment.

•

Investment promoters see Malaysia as a country for China to reach markets with-in country-of-origin rules; and the state of Pahang where the MCKIP is planned will likely be selected as the gateway for bringing investment and jobs into the Malaysia Eastern Corridor, which covers an economically lagging area on the peninsula.

•

Sources indicate that the industrial park projects are linked to two significant land deals. The first may relate to the QIP land swap arrangement for land in the Binhai township. The second, at the MCKIP, is said to include the conversion of some state-controlled land for the use of the industrial park.

•

Country data indicates a large imbalance in FDI flows with the broad conclusion that Malaysia OFDI flows to China exceeds the reverse by a factor of five to eight times or even more. However these statistics may still misrepresent the picture since many Malaysian tycoons use Hong Kong as a base for their investments into China.

* Khor Yu Leng is a Visiting Fellow at ISEAS. She specializes in customized industry research and strategic analysis on agribusiness in Southeast Asia and frontier markets. This article was first published on 17 June 2013 as ISEAS Perspective 2013: 37.

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•

To begin to correct this imbalance, Malaysia will quickly need to draw in China OFDI equivalent at least to what it has received in recent years from Germany. Such a rapid transformation in MalaysiaChina investment outcomes is unlikely without more significant investment drivers in place.

•

The relatively small size of the MCKIP (just over a tenth of the size of its twin pro-ject in Qinzhou) is suggestive of a continued imbalance in Malaysia-China foreign investments.

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INTRODUCTION China and Malaysia have established two joint industrial parks to further boost bilateral trade and investment. These are government-to-government promoted initiatives, and notably the third such bilateral effort by China after the Suzhou and Tianjin projects with Singapore. The Malaysia-China Kuantan Industrial Park (MCKIP), to be built on 1,500 acres, is located in the less developed Malaysia Eastern Corridor. Announced on 5 February 2013 at a ground-breaking ceremony attended by Jia Qinglin, chairman of China’s top advisory body, and Malaysian Prime Minister Najib Razak, this industrial park is the twin project of the 13,600acre Qinzhou Industrial Park (QIP) being built in Guangxi Province, also a less developed region of China. Investors taking up industrial land in Qinzhou are expected to be offered attractive land prices, tax incentives, and financial support. Similarly, Kuantan is also expected to offer investment incentives such as 5+5+5year pioneer tax-free status, and gen-erous capital allowances. MCKIP is estimated to cost USD 806 million to develop. It hopes to secure total investments of USD 24 billion by 2020. Its key business areas include oil, electrical products and electronics, and car component manufacturing. While QIP has not reported its cost or its gross development value since its masterplan has yet to be finalized, a start-up area of 1,945 acres within QIP is estimated to cost USD 838 mil-lion. Slated to have a population of 470,000, QIP was launched on 1 April 2012 but a feasibility and investment agreement is still pending as of March 2013. Malaysia hopes that MCKIP will help draw in Chinese outward foreign direct investment (OFDI) of USD 10 billion over the next five years. This would push China from its current lagging spot to a top ranked investor in Malaysia, and match its role as Malaysia’s top trading partner. But can the project really help boost and rebalance the overwhelming flow of Malaysia direct investments to China which dwarfs what China has invested in Malaysia? The data is partial and patchy, but several sources support a conservative estimate that Malaysia outward foreign direct investment (OFDI) to China is at least five times as big as China OFDI to Malaysia. As a point of reference, Chinese official data report its cumulative OFDI in Malaysia at USD 700 million in 2010. In providing a preliminary answer to the above question, this paper examines the rationale for the bilateral projects and, in particular, analyses the site selection, economics, Malaysian electoral politics and geopolitical issues that have bearing on the projects.

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ATTRACTING CHINA OFDI Malaysia’s investment promoters see it as a third country for China to reach markets within country-of-origin rules. Their continued focus on attracting China OFDI seems to be paying off now, with 2011 and 2012 as banner years. Earlier, Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir said that Malaysia would seek increased FDI as “China is on the lookout for a third country like Malaysia to re-export its products to markets where it has exceeded the quota.” He further adds that “Via an investment in Malaysia, Chinese manufacturers can effectively value-add their productions, and also meet the 40% content requirement put forward by the country to obtain the Certificate of Origin before they can start exporting under the label of Malaysia.” China’s push factors include its go-global policy which has existed since 1999. However, the cheap credit post-Global Financial Crisis, especially to its stateowned enterprises (SOEs) may be a better indicator for the current expansion of China OFDI. China OFDI typically seeks to acquire raw materials, markets and technology. China has also in recent years faced a rising cost trend and significant hidden costs relating to intellectual property losses. This has led to key multinationals opting for capital-intensive plant expansion in less developed regions in other parts of the world. Malaysia’s pull factors include market size (its immediate market may be limited but via free trade agreements or FTAs it is widened, though with constraints from country-of-origin rules), natural resources (some Chinese projects seem to target mineral deposits available in Malaysia), a high degree of openness with more investment incentives, cheap subsidized gas for industry, and good infrastructure. Malaysia also has some technological advantages in the steel and chemicals sectors that China investors will seek to acquire. On the negative side of the balance is Malaysia’s need to enhance its human capital resources.

GEOPOLITICAL CONSIDERATIONS Pahang will likely be selected as the Malaysia site, because PM Najib Razak hails from the state and 2013 is a big election year. Mr Najib was born in Kuala Lipis and is the MP of Pekan, both in Pahang. MCKIP is located north of Kuantan, Pahang’s key city and port, on the East Coast. The project would bring investment and jobs to an economically lagging area of Peninsula Malaysia. 49

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But why build a new industrial park when Malaysia already has good in-frastructure with existing industrial park facilities that have yet to be fully utilized? For one thing, MCKIP is located within the Malaysian Eastern Corridor, which is a less developed area that is being promoted for investments. There, investors are offered extra pioneer tax-free status. PM Najib announced the MCKIP project just before the Chinese Lunar New Year celebrations in 2013. He has said that MCKIP will draw in China OFDI of USD 10 billion over the next five years. About USD 3.4 billion of commitments have been reported—for a steel plant, aluminium processing, and a palm oil refinery plus for the expansion of Kuantan port. The location of the MCKIP site close to the controversial Lynas rare earth processing facility is also noteworthy. Lynas has attracted a great deal of grassroots local (mostly ethnic Chinese) opposition in Malaysia, and has witnessed the launch of a green political movement against the project, for fear of serious environmental pollution. Chinese investors are seemingly unworried about the proximity to Lynas, however. Presumably, the show of confidence of the Chinese investors may be meant to sig-nal to Malaysia’s ethnic Chinese population that they should also have few worries about the maligned Lynas project. Political analysts also observe that Najib’s father, former PM Tun Abdul Razak Hussein chose a similar timing in 1974 to make a historic trip to Beijing, making Malaysia the first country in the ASEAN region to establish diplomatic relations with China. Is the so-called “Najib factor” a key driver for improved economic ties with China? (It did after all generate a visit from a China politburo member to officiate at MKCIP). Meanwhile, as the nearby South China Sea disputes rage on, it does China no harm to cultivate better relations with Malaysia with the promise of FDI and joint control of a port. But are the China-Malaysia industrial park projects merely driven by a combina-tion of economics, Malaysian electoral considerations and geopolitics? Some sources point out that the industrial park projects are linked to two significant land deals. The first relates to the QIP land swap arrangement for land in the Binhai township. According to a SP Setia Berhad company announcement: (QIP) is a greenfield area, requiring hefty infrastructure outlays before developments can take place…(and) approvals to allow up to 30% of the commercial and residential land of the ‘start-up district’ to be swapped for land in Binhai New Town (BNT) based on equivalent val-ue. BNT’s land is readily developable, enabling the group to better man-age cash outflows from ‘start-up district’ infrastructure cost to

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prop-erty sales billings from BNT, which is less taxing on its balance sheet. The second land deal, at the MCKIP, is said to include the conversion of some state-controlled land for the use of the industrial park.

KEY PLAYERS & KUANTAN INVESTMENT PLANS In order to consider the prospects for the rapid take-off of the industrial parks projects, a review of the background of the private sector sponsors of the projects is in order. Private sector backers of the industrial parks are heavyweight statelinked developers. No doubt, these projects are still in the design stage but they bear watching. It is also worth noting that while some investment plans have been announced for the industrial park in Malaysia, there has yet to be significant plans for QIP in China. The China consortium consists of China Guangxi Beibu Gulf International Port Group (CGBGIP) and Qinzhou Jinqu Investment Company Ltd (QJIC), which are both state-owned enterprises from Guangxi Province. CGBGIP was established in Nanning in 2007, and is the primary owner of three ports in the Beibu Gulf: Fengchenggang, Beihai and Qinzhou ports. It also has businesses in logistics, international trade, real estate, energy and environmental technologies with total as-sets amounting to RMB 221.6 (USD 35.7) billion at the end of 2011. In 2012, it ranked 446th in the Chinese Enterprise Confederation list with an operating revenue of RMB 20.3 billion; and is ranked 133rd in the list of top 500 Chinese Enterprises of the Service Industry. Its subsidiary, the Guangxi Qinzhou Free Trade Port Area Development and Investment Co., Ltd was established in 2008 with a capital of RMB 2.8 (USD 0.5) billion designated to develop the Qinzhou free port area. The second investor is QJIC, a company established in 2012. Wholly-owned by the Qinzhou City Development and Investment Group Co Ltd, its registered capital is RMB 100 (USD 16) million. Its parent company, owned by the Qinzhou City Government, engages in the operation and management of state-owned construction assets. In the Malaysia consortium, Pahang state is expected to be a minority player in the MCKIP project, with no participation in QIP. Of interest are the substantive Malaysia partners, SP Setia Berhad with Mr Beh Hang Kong and Rimbunan Hijau with Mr James Lau Sze Yuan. SP Setia was a fast-growing Malaysian privatesector property developer, and was reported as the largest public-listed developer

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when it was taken over by Permodalan Nasional Bhd, a key state-controlled fund, in late 2011. SP Setia’s asset base was RM 9.4 (USD 3.1) billion with a share capital of RM 1.5 (USD 0.5) billion in 2012. Its founder, Liew Kee Sin remains with the property group and property sector sources reckon that he is doing “national service” by taking a lead role in the MCKIP project. Beh is a key individual investor in MCKIP. In addition to his role in SP Setia, he is also Managing Director of VTI Vintage Bhd, a Malaysia public-listed roofing company. VTI Vintage’s annual report offers an insight into his background. He started his career in 1980 as a part-timer for the China Press. In 1982, he was employed as a Regional Executive Secretary by the Malaysian Chinese Association. He left this position in 1985 to establish a company involved in the marketing of office equipment. He is also extensively in-volved in property development and investments in various industries. He also held the position of Municipal Councillor for the Majlis Perbandaran Shah Alam from 1986 until 1990. Thus, Beh appears to have old links with Rimbunan Hijau via China Press, and he seems well-established in Malaysia’s ruling coalition and its construction industry. Rimbunan Hijau is a Sarawak-origin conglomerate with key businesses in timber, palm oil, media and finance. Tiong Hiew King of Sibu, Sarawak is the founder and James Lau is his son-in-law. The group has the controlling interest in as many as six publicly listed companies in Malaysia and Hong Kong: Jaya Tiasa (timber, palm oil), Subur Tiasa (timber), Rimbunan Sawit (palm oil), Media Chinese International Limited (media, Malaysia and HK) and EON Capital (finance). In Sarawak, it is the biggest timber player with over 1 million ha of timber concessions and 555,000 ha of reforestation licenses. It also has 130,000 ha of oil palm land bank. It also has international subsidiaries (e.g. Rimbunan Hijau [PNG] Group, Mafrica Corporation Sdn Bhd), and large concessions in Papua New Guinea, Africa (Gabon, Equatorial Guinea) and Russia among others. Local brokers reckon Rimbunan Hijau’s participation is merely as an investor, leaving SP Setia and Beh to take charge. CBGCIP has also bought a 40% stake in the Kuantan Port Consortium Bhd (a subsidiary of IJM, a public-listed construction group) which is in charge of the development and expansion of the Kuantan port in Pahang, for RM 310 (USD 100) million. It plans to invest, together with IJM, a further RM 3 (USD 0.97) billion in the port. The company says it will also invest some RM 5 (USD 1.6) billion in the development of an integrated steel plant, an aluminium processing plant and a palm oil refinery (in which Rimbunan Hijau is also involved) in MCKIP.

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THE ECONOMIC IMBALANCE The trade relationship between China and Malaysia is overwhelmingly (44%) about electronics and electrical products. Malaysia-China trade was worth RM 180 (USD 58) billion in 2012. Malaysia’s key imports from China are electronic integrated circuits and micro-assemblies, automatic data processing machines, ICT equipment, office equipment, printed circuits, electrical transformers, transport equipment. Malaysia’s key exports to China are electronic integrated circuits and micro-assemblies, palm oil & derivatives, automatic data processing machines, rubber, oil & gas, processed edible oils, semiconductors. China has been Malaysia’s number one ranked trading partner since 2009. Its share of Malaysia trade rose from 9.5% in 2006 to 13.8% in 2012. Malaysia’s top five trading partners account for about 50% of its total trade value. The Statistical Bulletin of China’s OFDI records USD 5.6 billion in cumulative flows into China from Malaysia versus USD 709 million moving from China to Malaysia up to 2010. Bank Negara’s data offers a clearer basis for comparison (in line with international recommendations) compared to China’s data which remains sketchy. Bank Negara’s data measures the stock of Malaysia FDI in China at USD 1.9 billion versus USD 363 million received from China. The data differ greatly but both show a large imbalance in FDI flows. The broad conclusion is that Malaysia OFDI flows to China exceeds the reverse by a factor of five to eight times, or even more. But these statistics may still misrepresent the picture as many Malaysian tycoons use Hong Kong as a base for their investments into China, notably Mr Robert Kuok. Thus, the USD 5.6 billion cumulative inflow of Malaysia-sourced investments recorded by the Chinese authorities and the imbalance indicated probably underestimate the situation.

A RAPID EXPANSION AND TRANSFORMATION IN CHINA OFDI? Malaysia has big hopes for MCKIP to draw in RM 10 to 30 (USD 3.2-9.7) billion in the next five years. Such numbers, if achieved, point to a rapid and radical transformation of Malaysia-China investment outcomes. To hit the expected China FDI target, Malaysia will quickly need to draw in China OFDI equivalent to what it has received in recent years from Germany (to achieve the low forecast) or a Singapore plus USA plus Germany combination (for the 53

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higher forecast). Figure 1 illustrates these forecasts. Such a rapid transformation in Malaysia-China investment outcomes may not be easy, without more significant investment drivers in place. Furthermore, MCKIP’s relatively small size of 1,500 acres (just over a tenth of the size of its twin project in Qinzhou of nearly 13,600 acres) is suggestive of a continued imbalance in Malaysia-China foreign investments. Figure 1: Malaysia Key FDI Sources and Forecasts: China FDI with MCKIP (RM, Ringgit Malaysia) 18,000,000,000

China

16,000,000,000 14,000,000,000

China FDI with MCKIP (prev) China FDI with MCKIP (new)

12,000,000,000

Germany

10,000,000,000

Singapore + USA + Germany

8,000,000,000 6,000,000,000 4,000,000,000 2,000,000,000

Source: Khor Yu Leng Data: MIDA FDI statistics received via personal communication, March 2013.

It is still early days yet where the China-Malaysia industrial parks projects are concerned, and the companies are just starting to take up position. Given that the QIP project has yet to announce its masterplan and a land swap with Binhai Township ap-pears to be a key financing issue, it is possible that MCKIP will be the first to launch. The emergence of more promoters and the roll-out of more industrial projects can be expected to set the stage for its eventual take-off.

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Steadily Amplified Rural Votes Decide Malaysian Elections* By Lee Hock Guan

EXECUTIVE SUMMARY •

The principle of “one man, one vote” was never entirely adopted in Malaysia and disproportionate weightage to favour rural areas was in-corporated into the electoral system from the beginning. The ruling Barisan Nasional (BN) has since used the apportionment of seats and the demarcation of constituency boundaries to reinforce its advantage.

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In the recent 13th General Elections, BN’s mal-apportionment and ger-rymandering strategies over decades resulted for the first time in the opposition Pakatan Rakyat winning the popular vote yet failing to gain control of parliament.

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Since 1972, electoral delineation rules have allowed for rural weight-age without clear limitations. The erosion of Malay electoral support in the 1999 election further led BN to use constituency redelineation in 2002 to pre-empt future Malay vote swings against it and to take advantage of the opposition parties’ inability to overcome ethnic vote-pooling.

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However, with the emergence of an opposition multi-ethnic coalition Pakatan Rakyat (PR) that can also gain from ethnic votepooling, mixed constituencies ceased to be BN strongholds. Since 2008, the ethnic voting trend favours PR. * Lee Hock Guan is a Senior Fellow at ISEAS’s Regional Social and Cultural Studies (RSPS) Programme. This article was first published on 6 June 2013 as ISEAS Perspective 2013: 34.

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INTRODUCTION The principle of “one man, one vote” was never entirely adopted in Malaysia and disproportionate “weightage” to favour rural areas was incorporated into the electoral system from the beginning. In a first-past-the-post system, “the manner in which the…total electorate is divided into electoral constituencies is crucially important in determining outcomes” (Lim 2003, p. 26). Excessive use by Barisan Nasional (BN) of the apportionment of seats and the demarcation of constituency boundaries to reinforce its advantage has invariably devalued the “one man, one vote” principle. In the 13th General Election held on 5th May 2013, the opposition coalition Pakatan Rakyat (PR)39 won 50.85 per cent of the popular vote but only 89 parliament seats or 40.09 per cent of the total (Table 1). In contrast, though winning only 46.87 per cent of the popular vote, BN won 133 federal seats and retained control over parliament with 59.91 per cent of the seats. PR’s loss despite winning the popular vote can arguably be attributed to BN’s long-term use of electoral delineation to create unequal-sized constituencies.40 Such delineations have resulted in hugely mal-apportioned districts and an over-representation of the Malay electorate, especially in rural areas. Table 1: Popular votes and Parliament seats won by Barisan Nasional and Pakatan Rakyat in the 13th General Election, in percentage Barisan Nasional

Pakatan Rakyat

Votes

Seats

Votes

Seats

West Malaysia

45.55

51.52

53.26

48.48

East Malaysia

51.53

84.21

33.12

15.79

Total

46.87

59.91

50.85

40.09

Source: Calculations from Election Commission data 39 PR’s component parties are the People’s Justice Party (PKR), the Pan-Malaysian Islamic Party (PAS) and the Democratic Action Party (DAP). Although PR has yet to receive official recognition from the Registrar of Society, for the 2013 elections the three parties more or less campaigned as a coalition. 40 Dubious electoral delineations were only possible with the cooperation and collaboration of the Election Commission (EC). This body was constitutionally established in 1957 to administer the electoral system and its duties include the delimitation of constituencies every 10 years. Since independence, however, successive BN administrations have deployed a multi-pronged approach to remove the EC’s autonomy and authority. Election laws were amended and the EC had been packed with compliant officers (Tey 2010). For example, it has been revealed that the EC chairman and deputy chairman in 2012 were former UMNO members.

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The manipulation of electoral boundaries and gerrymandering were exploited by the BN to secure its grip on power. In particular, the United Malay National Organization (UMNO) has utilized such strategies to amplify its political power by allocating to Malays a greater share of legislative seats than their share of the population. These strategies were also deployed to handicap PAS, UMNO’s main rival for the Malay votes, through the creation of smaller sized constituencies which are UMNO strongholds and converting Malay majority seats into “mixed” seats41. Before 2008, mixed seats were BN’s stronghold because the then-ethnic voting pattern disadvantaged the opposition ethnic parties. Since then, however, BN’s (in particular, UMNO’s) mixed seats strategy, along with their manipulation of race and religious issues, engagement in politics of fear, and patronage practices have become less effective. Conversely, PR has benefited from the fragmentation of the Malay vote, growing support from an overwhelming majority of Chinese voters, the establishment of a multiethnic opposition coalition, and the emergence of non-ethnic issues.

ETHNIC PARTIES AND ETHNIC PARTY SYSTEMS Competition for electoral support in an ethnic party system usually occurs within ethnic groups but not across ethnic group lines. When ethnic politics prevails, “each party, recognizing that it cannot count on defections from members of the other ethnic groups, has the incentive to solidify the support of its own group” (Horowitz 1985, p318). With the rise of ethnic voting in an ethnically divided society, where individuals vote for the party that represents his or her ethnic group, parties that at-tempt to organize along non-ethnic lines are marginalized. Malaysia’s unusual formative conditions led to an ethnic party system characterised by a dominant multi-ethnic ruling coalition opposed by other ethnic parties42. The ruling coalition began as the Alliance Party43 which was a coalition “of ethnic parties, each of which can still profess to be working for the interests of its own 41 Malay majority seats here refer to constituencies which have Malays making up 80 percent and above of the voters. For example, in the delineation exercise after the 1999 elections, several Malay majority seats were converted into mixed seats in Kedah to advantage UMNO (Ong and Welsh 2005). 42 Although the Democratic Action Party is supposed to be a non-ethnic party with social democratic ideals, circumstances forced the party over time to become dependent on the Chinese votes for support. Moreover, for a long time UMNO successfully stigmatized the party as “anti-Malay” and a “Chinese chauvinistic” party. In short, UMNO managed to “racialize” the DAP into an ethnic party. 43 Comprised of UMNO, the Malay(si)an Chinese Association and Malay(si)an Indian Congress, the Alliance Party was formally registered as a political organization on 30 October 1957.

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ethnic group even while participating in the alliance” (ibid, p 396). The Alliance’s formula was stumbled upon by UMNO and MCA in the 1952 Kuala Lumpur municipal elections44. Forming an alliance to pool their respective ethnic group support and using a single slate of candidates, UMNO and MCA defeated the multiethnic party Independence of Malaya Party (IMP). It was enlarged and renamed the Barisan Nasional in the mid-1970s. In addition to ethnic vote pooling, such a multi-ethnic coalition allowed each of its components to become an ‘ethnic party’ when challenged by opposition ethnic parties. Intra-ethnic outbidding occurs when two intra-ethnic parties vie for the support of the same ethnic group. BN frequently encountered stiff competition in constituencies with a huge single ethnic majority. Thus, UMNO would receive stiff competition from PAS in Malay majority seats especially in the Malay heartland states while UMNO’s allies, MCA and Gerakan, would have to compete against DAP in Chinese majority seats. In contrast, ethnically mixed constituencies cannot overcome the ethnic vote-pooling that BN commands because opposition ethnic parties depend on the sup-port of one ethnic group.

Table 2: Ethnic Voting Preference: Peninsular Malaysia, 1974-1995

Voters

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Comments

Malay

Greater preference for UMNO over PAS

Greater preference for MCA/MIC/Gerakan over DAP

In 1990 and 1995 PAS won the majority Malay vote in Kelantan

Chinese

Greater preference for UMNO over PAS

Greater preference for DAP over MCA/MIC/ Gerakan

Since 1990, DAP won majority Chinese support, but in a declining trend

Indian

Greater preference for UMNO over PAS

Greater preference for MCA/MIC/Gerakan over DAP

BN had won the majority of the Indian vote since late 1980s

6 Refer to Carnell (1954).

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As a coalition of ethnic parties, BN could reach out to all the three main ethnic groups unlike the largely ethnic opposition parties whose support would largely come from one ethnic group. This was because a Malay, Chinese or Indian voting for BN could still view himself or herself as voting for a party championing his or her ethnic group (Table 2). A Malay voter would not fear voting for MCA/MIC/ Gerakan because UMNO was also in the alliance to represent his or her ethnic group. Conversely, a Chinese or an Indian vote could vote for UMNO since he or she would indirectly be voting for MCA/Gerakan or MIC respectively. In contrast, opposition parties such DAP and PAS could not overcome the ethnic voting pattern as their candidates would not be judged on their credentials but by which ethnic group their parties represented or were perceived to represent.

UNBALANCED ELECTORAL DELINEATION In 1954, the Constituency Delineation Commission (or Merthyr Commission) was given the task of dividing the peninsula into 52 seats of approximately equal number of inhabitants45. This Commission, however, was also obligated to give “weightage” to rural seats to the extent where a rural constituency could have as little as half of the electorate found in the more populous urban constituencies. Thus the 1955 delineation allowed “a maximum weightage of 2 to 1 in terms of population — or a variation of plus or minus one third or 33% from the average constituency population” (Wong et al. 2010, p.932). In spite of the “weightage” constraint imposed on it, the Merthyr Commission established an electoral system with fairly equal sized constituencies with the largest constituency about 2 times bigger than the smallest (Report 1954, p.36). The Reid Commission that followed was directed to create an electoral system that would balance Malay Special Position with non-Malays legitimate rights. Influenced by the principle of “one man, one vote”, the Commission endeavoured to ensure that each person’s vote be equally weighed. The outcome was that the Reid Commission proposed an electoral system that was not equal but fair. To ensure an even-handed ethnic balance, it proposed “apportioning an equitable distribution of constituencies among the states on the basis of both population and electorate” (Lim 2002, p.106). To limit mal-apportionment due to weightage 45 In part because the constituencies were divided according to the number of inhabitants, the result were rather uneven sizes of constituencies. This was due to the fact that very few of the inhabitants were eligible voters, i.e. citizens, and to poor registration of voters.

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to rural seats, the Commission limited disparities among constituencies to within 15 per cent above or below the average constituency electorate in each state (ibid). Hence, the 15 per cent limit more than halved the amount of rural weightage previously allowed in the Merthyr Commission Report and upheld as much as possible the equal value of every vote. After significant losses to non-Malay opposition parties in the large urban nonMalay majority seats and to PAS in the Malay heartland states of Kelantan and Trengganu in the 1959 election, the Alliance strategized to regain political dominance by manip-ulating the electoral system through the delineation of constituencies, amongst other measures. The coalition was dissatisfied with the EC’s 1960 delineation exercise to reduce the rural weightage advantage by reducing the number of seats from 104 to 100, which particularly affecting the rural areas. In 1962, the Alliance used its power in parliament to diminish the EC’s autonomy through constitutional amendments and also reject the commission’s 1960 constituency delineation proposals. More impor-tantly, the UMNO-led Alliance discarded the Reid Commission’s 15 per cent rural weightage and reverted to the Merthyr Commission’s 35 per cent limit. The May 1969 ethnic rioting presented UMNO with an excellent opportunity to use the electoral delineation to entrench UMNO-Malay political dominance. The requirement of equal average constituency electors among states introduced by the Reid Commission to prevent inter-state mal-apportionment was removed. The requirement of equal electorates among constituencies within states was further watered down by removing the 30 per cent limit rule which stipulates that a rural constituency may contain as little as one half of the electors of any urban constituency. Instead, that requirement was changed to “a measure of weightage given to such (usually refer-ring to rural but can be any) constituencies” (cited in Lim 2002, p.111). Thus, since 1972, the electoral delineation rules allow rural weightage without clearly limiting it and opened the door for the BN to use electoral delineation to entrench its power and increase mal-apportionment. The erosion of Malay electoral support for UMNO in the 1999 election led UMNO to use the constituency re-delineation in 2002 to address the problem of future Malay vote swings against the BN and to take advantage of the opposition parties’ inability to overcome the ethnic vote-pooling barrier. To benefit the BN, the 2002 re-delineation exercise raised the number of Malay majority seats, especially in Johor and also converted Malay majority seats into mixed constituencies. For example, in Kedah, Ong and Welsh (2004) showed that UMNO used the 2002

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re-delineation exercise to reduce risks for BN-UMNO by shifting UMNO’s Malay stronghold districts around, raising the number of non-Malay voters to reduce the Malay majority and transforming Malay majority seats into or creating new mixed Malay constituencies, both at parlia-ment and state levels.

MAL-APPORTIONMENT AND UMNO-MALAY DOMINANCE Table 3 shows that the largest seat was about 3.2 times bigger than the smallest seat in 1959 when the Reid Commission capped the disparities between rural and urban constituencies at 15 per cent deviation. However, since the removal of the cap on rural weightage in 1972, the disparities between rural and urban constituencies have increasingly widened over each successive elections; the largest/smallest seat ratio has increased from 5.6 times in 1974 to 6.7 in 1986, 6.2 in 1999 and 9.1 in 2013. In 2004, the largest seats were nearly 20.5 times the size of the smallest seat in 2004 due the creation of the new federal territory seat of Putrajaya. For the largest seat/average seat ratio in Peninsula Malaysia, it appears that the figure has stabilized around 2 times. However, if one were to include Sabah (average seat size is 39,272 in 2013) and Sarawak (35,000 in 2013) seats, the largest seat/average seat ratio would show a larger disparity46. Table 3: Mal-apportionment of constituencies in Peninsula Malaysia, selected election year Year

Smallest

Largest

Average

Largest/ smallest

Largest/ average

1959

10986

35549

20940

3.23

1.70

1969

18302

81086

31888

4.43

2.54

1974

9190

51534

26019

5.61

1.98

1986

12171

81005

39350

6.66

2.06

1999

16018

98527

49689

6.15

1.98

2004

5079

104185

46995

20.5

2.22

2013

15798

144369

67882

9.14

2.13

Source: adopted from Wong et al (2010) 46 The mal-apportionment in East Malaysia was used as an incentive to convince Sabah and Sarawak to merge with Malaya to form the Federation of Malaysia in 1963. Thus, Sabah and Sarawak has continued to account for a quarter of the total federal seats ever since.

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Table 4: Malay-Majority Parliamentary Constituencies in Peninsula Malaysia, selected election year

Election year

Number of Malay majority seats

Total number of seats

Per cent of Malay majority seats

Per cent of Malay electorate

Overrepresentation ratio

1964

60

104

56.7

54.4

1.04

1974

79

114

69.3

57.9

1.20

1986

92

132

69.7

55.3

1.26

1999

98

144

68.1

56.7

1.20

2008

124

165

75.2

58.9

1.28

Sources: modified from Lim (2005) and Wong et al (2010).

The use of the electoral delineation to enhance political power is clearly illustrated in the over-representation of Malay majority seats (Table 4). In 1964, 60 out of the 104 total seats were Malay majority seats, comprising 56.7 per cent of the total seats Since Malays made up 54.4 per cent of the total electorate, this would mean they were over-presented by 1.04 times. However, after the disastrous electoral perfor-mance of the Alliance Party in 1969, the electoral delineation drastically increased Malay over-representation to 1.20 times such that Malay majority seats now com-prised slightly more than 69 per cent of the seats. The proportion of Malay-majority seats stabilized around 68 to 69 per cent until the 1999 elections when a significant Malay vote swung in favour of the opposition parties, especially PAS. In the 2003 delineation exercise, BN seized the opportunity to significantly raise the number of Malay majority seats especially in Pahang and Johor. Subsequently, in the 2008 elec-tions, the number of Malay majority seats increased to 124 of 165, comprising almost 75.2 per cent of the total seats. With the Malay electorate comprising 58 per cent, it resulted in Malay over-representation increasing to 1.28 times.

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Table 5: Electoral Constituencies by Ethnic Type and Electorate Size in Peninsula Malaysia, 2013 Malay Majority Constituency size

Mixed

Chinese majority

Total # of seats

No.

Per cent

no.

Per cent

no.

Per cent

Total

Per cent

50, 000 and below

26

59.1

17

38.6

1

2.3

44

100.0

50,000 < x