Leader Development & Education for Sustained Peace Program: Cross-Cultural, Geopolitical & Regional Education

InReview: Democratization Paradigms in Southeast Asia

Southeast Asia’s limited news coverage beyond the region, and certainly in the West, is often focused on economic prospects. However, several countries within the region also present interesting examples of stability and democratization in the realms of governance and politics. Two such countries are Indonesia and Malaysia. Given the significant impact economic development can have on a country’s political development, the following will contextualize Indonesia and Malaysia’s unique situations within the Southeast Asian region on the whole.

Indonesia’s Elections

In early July, Indonesia held its general elections. The process was no small feat as Indonesia is the world’s third largest democracy consisting of 187 million voters and in this election, 67 million first-time voters. Further, Indonesia as a country is really a collection of over 17,000 islands with a largely decentralized government. Beyond the geo-political realities, fears of cheating and fraud permeated these elections, as the official result could not be determined for weeks.

As background, The Guardian succinctly described “Five Reasons Why Indonesia’s Presidential Election Matters”:

1. Mega democracy

The incumbent, Susilo Bambang Yudhoyono, is the fourth president since the fall of the former authoritarian ruler Suharto in 1998 – and the first to have been directly elected. After serving a maximum two five-year terms in office Yudhoyono is ineligible to seek a third term. This is the first time power will be handed from one directly elected president to another.

2. Healthy economy

Indonesia is an increasingly important economy. Crippled by the Asian financial crisis of 1998, today it is south-east Asia’s largest economy, a member of G20 and one of the best performing economies globally. Counted among the Mints (Mexico, Indonesia, Nigeria and Turkey), a new group of emerging market economies, Indonesia’s economy is projected to be the seventh largest globally by 2030. Over recent years, the country has returned to investment grade, and sustained strong growth throughout the global recession, largely on the back of healthy domestic consumption. Its GDP growth is forecast to be 5.7% this year and picking up further in 2015. However, around 32 million Indonesians still live below the poverty line and the country’s economic potential is held by back by high levels of corruption and infrastructure bottlenecks.

3. Dynamic society

As a military coup undermines the political stability of Thailand, and questions persist about quasi one-party-rule in Malaysia and Singapore, Indonesia’s democratic transition has largely been hailed as successful. Since the fall of Suharto, and the end of his nepotistic 31 years in power, Indonesia has moved from centralised rule to a boisterous democracy. Vote buying and “money politics” have marred past votes, but the country’s elections are largely free and fair and the country boasts a dynamic civil society and one of the most vibrant and critical press corps in Asia.

In a parliament that is dominated by individuals who rose to prominence during the Suharto era, corruption remains a huge problem. But the country’s anti-corruption body, the KPK, has made incredible gains. The “graftbusters” have jailed some high-profile politicians and figures in recent years, just this week putting Akil Mochtar, the former head of the constitutional court, behind bars for life.

4. Moderate Islam

With a population of 240 million people, 90% of whom are Muslim, is often held up, alongside Turkey, as an example of the compatibility of democracy and Islam. Though the Middle East may be the centre of gravity for the Islamic world, Indonesia has more Muslims than that entire region. Since the fall of Suharto, when both political and religious freedoms were curtailed, democracy and Islam have thrived. Muslims in Indonesia predominately practise a moderate form of Islam, and during recent years the government has worked hard to cripple extremist groups, such as those behind the 2002 Bali bombings. Indonesia’s constitution protects religious freedom but under Yudhoyono – whose coalition includes Islamic-based parties – religious intolerance against Christians, Shia Muslims and Ahmadis has been on the rise.

5. National unity

Poised to play a greater role on the global stage, politically and economically, Indonesia needs a leader who can unify one of the world’s most diverse nations. This is a country that stretches across more than 17,000 islands, with hundreds of ethnic groups and languages – and yet has held together well since its foundation in 1945. In a globalised world beset by schism, separatism and break-up, it stands as an example of the benefits of togetherness. Both leading candidates have a nationalist thread to their argument. Whichever wins, the world may face a more assertive, determined Indonesia after 9 July. (The Guardian)

As Alphonse F. LaPorta explains in a report for the Center for Strategic and International Studies, the elections hit a snag when on Election Day both leading presidential candidates declared victory. LaPorta considers “Indonesia’s Presidential Election: Will Democracy Survive?”:

President Joko Widodo.  Or is it President Prabowo Subianto?

Over 170 million Indonesian voters went to the polls July 9 to elect a new president.  It was the third time a president was to be directly elected by Indonesians under constitutional reforms enacted after the fall of Suharto’s authoritarian regime in 1998.  This year the people’s choice, if the exit polls are to be believed, is Widodo, or Jokowi as he is popularly known.

But former General Prabowo has challenged the heretofore reliable quick count results by citing spurious exit polls showing him with a 1.8 percent victory margin.  Instead of conceding in what the authoritative polls said was an average  5.8 percent vote spread in Jokowi’s favor, Prabowo is pressing ahead with challenges to the official count, which is expected to be delivered July 22, with the prospect of an appeal to the Constitutional Court.  In doing so, he has launched a public relations campaign to convince the public that he has been wronged by politically motivated polls and media friendly to the Jokowi campaign.

Less than six months ago, it appeared that the populist Jokowi was headed for a big win, but a late endorsement, damp enthusiasm, and lackluster campaign by the nationalist Party of Democratic Party of Struggle (PDI-P) helped to erode the better than 12 point lead Jokowi enjoyed in April and May.  The PDI-P is headed by Megawati, Sukarno’s daughter, who herself was president in 2002-2004.  Mega’s daughter, Puan Maharani, chaired the party’s inept and disorganized campaign, while Jokowi himself was constantly fending off social media smears alleging he was Chinese, a Christian, or a communist, or all of these things.  Jokowi repeatedly was compelled to defend the authenticity of his Javanese Muslim background, to the extent of going to Mecca on the “minor haj” during the brief “cooling off” period between the end of the official campaign and voting day.

In contrast, Prabowo and his Great Indonesia Movement Party (Gerindra) mounted a well-organized, lavishly financed and media-savvy campaign that played to popular desires for more decisive national leadership – a reaction to the perceived weak leadership of President Susilo Bambang Yudhoyono who is completing his second term.  Prabowo spoke of a return to the “Guided Democracy” of Sukarno and a restoration of the 1945 Constitution with its strong presidency, but shorn of the human rights safeguards, limits on military involvement in politics, and democratization measures enacted in constitutional amendments in 1999 and 2001.  To underscore his promise of strong leadership, Prabowo adopted Sukarno’s flamboyant style, aping his mannerisms, wearing white bush suits, and riding thoroughbred horses in his sports arena appearances.

Prabowo assembled a large coalition of secular and Islamic parties, including Suharto’s former political vehicle Golkar.  To attract the Muslim parties, Gerindra’s platform pledged to uphold “religious purity,” which many read as code word for enforcing Sunni orthodoxy against non-conformist sects, Shiites, Christians, and others.  According to an authoritative Australian academician, Prabowo has enlisted the hardline Islamic Defenders’ Front (FPI) and Forum Ukhuwah Islamiyah (FUI), which have been responsible for lawless actions against perceived apostates and non-Muslims.  His appeal to the urban middle and upper classes brought campaign money and media access, including the ability to finance friendly polling organizations, social media campaigns, and heavy television coverage.  One of his campaign advisers, according to reliable media reports, was Rob Allyn, a “dirty tricks” specialist from US political campaigns.

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The implications of the dispute over the presidential vote are considerable.  In the campaign debates, Jokowi seemed to emerge as the substantive “winner” against Prabowo’s bombast and generalities.  Jokowi took largely mainstream, albeit slightly nationalistic, positions on economic management and foreign affairs, but outlined a strong domestic agenda for bureaucratic reform, anti-corruption, and improving the health and education systems.  He specifically endorsed a strong role for Indonesia in ASEAN.  On territorial disputes with China, he declared himself “ready to rumble” – backed up by national power – if there are aggressive moves against Indonesian territory or sea space.

For the United States and others for whom democratic values are important, a Prabowo victory would pose difficulties in terms of the legitimacy of his government, the unresolved human rights cases, and winding back the clock on democratization.  Washington can all but forget the Comprehensive Partnership agreed with President Yudhoyono to advance bilateral relations across a broad front, including business and investment.  An outcome favoring Jokowi, on the other hand, would ensure the continuation of open and democratic government.  His emphasis on reform and popular concerns would be good news for Indonesia’s people and international supporters. There is little doubt which choice benefits Indonesia most. (CSIS)

Regardless of who is president, any new government in Indonesia will need to grapple with several key factors affecting the country’s domestic and foreign policy: namely the economy, internal security, and regional relations.

Most commonly, the big topic surrounding Indonesia’s future is hope for its growing economy and fears of the oft-repeated “‘middle-income trap,’ a scenario where a fast-developing, resource-rich economy stalls out.” (See “On Election’s Eve, Indonesia Economy Faces Crossroads,” Wall Street Journal). A report by The World Bank outlines such a scenario in a 2014 Development Policy Review, which is excerpted below:

Indonesia: Avoiding the Trap

Within the next two decades Indonesia aspires to generate prosperity, avoid a middle-income trap and leave no one behind as it tries to catch up with high-income economies. These are ambitious goals. Realizing them requires sustained high growth and job creation, as well as reduced inequality. Can Indonesia achieve them? This report argues that the country has the potential to rise and become more prosperous and equitable. But the risk of “floating in the middle” is real. Which pathway the economy will take depends on: (i) the adoption of a growth strategy that unleashes the productivity potential of the economy; and (ii) consistent implementation of a few, long-standing, high-priority structural reforms to boost growth and share prosperity more widely. Indonesia is fortunate to have options in financing these reforms without threatening its long-term fiscal outlook. The difficulties lie in getting the reforms implemented in a complex institutional and decentralized framework. But Indonesia cannot afford hard to not try harder. The costs of complacency – and the rewards for action — are too high.

The next decade brings opportunities and risks for Indonesia

  • Over the next decade, four domestic and external factors—which good policies can turn into powerful drivers of growth, or “pull factors” —will shape economic prospects. These factors are Indonesia’s demographics, the urbanization trend, commodity prices, and developments in China.
  • Demographics. Indonesia is fortunate to have abundant labor. With the right policies in place to utilize this labor, Indonesia is poised to benefit from a demographic “dividend”, before the population starts to age in 2025-30.
  • Urbanization. Indonesia’s urban population is increasing at an annual pace of about 4 percent, making Indonesia one of the most rapidly urbanizing countries in the world.
  • Global commodity prices. The softening of commodity prices since 2011 poses challenges for Indonesia in the short term, as seen in their impact on Indonesia’s trade balance, but it offers an opportunity to enhance the quality and diversity of investments in Indonesia.
  • Developments in China. China’s rapidly rising wages present Indonesia with a potential in regaining a comparative advantage in labor-intensive export sectors.

However, while none of these potentially favorable factors will be captured without reforms, two risks remain: a risk of a slowdown in long-term growth and a risk of growth not being inclusive.

  • Risk of a growth slowdown. International experience shows that growth slowdowns can occur at all levels of income (Bulman et al, 2012). Recent evidence suggests that their frequency is higher for middle-income countries (IMF, 2013).
  • Risk of growth not being inclusive enough. Even if Indonesia manages to avoid a prolonged growth slowdown, growth may not be inclusive, i.e. the benefits and opportunities associated with growth are not shared widely across the population.

Beyond the economy, security within Indonesia’s borders includes everything from terrorism to poor policing. Regarding the former, Iis Gindarsah writing for the Council on Foreign Relations explains “Indonesia’s Struggle Against Terrorism”:

Since the 2002 bombings in Bali, Indonesia has been struggling against the threat of violent terrorism. As the Indonesian government has developed a counterterrorism strategy, it has sought to address both the immediate threat and underlying causes of terrorism. Indonesia’s multipronged approach to counterterrorism and continued efforts to thwart radicalism provide valuable examples for other nations.

Terrorism in Indonesia

Radicalism, spurred by extremist religious teachings, has become the primary challenge of Indonesia’s counterterrorism campaign. Given Indonesia’s social diversity, radical preachers often deliver messages of hate and violence. With the growing threat of religious intolerance and radicalism, the Indonesian government is coordinating and developing coherent counterradicalization programs in order to revitalize “national resilience” against venomous radical ideology.

No longer do terrorist groups affiliate themselves with a global cause or ideology; rather, they mostly emerge from the splinters of Jemaah Islamiyah and Darul Islam. The current generation of Indonesian jihadists also comes from ordinary public schools rather than Islamist boarding schools (pesantren), and they often form from small but radical religious study groups (pengajian) in different parts of the country. Similarly, the main bases of terrorist operations in the country have also shifted to Poso region in central Sulawesi.

Alongside these transformations, notable trends have emerged in recent terrorist threats in Indonesia. First, the police have become the main target of terrorist plots and attacks.

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Second, despite their ideological distinctions, relationships between jihadist fighters and religious vigilante groups have emerged. The Jamaah Ansharut Tauhid (JAT)—a militant Islamist organization has allegedly served as the liaison among the like-minded radicals through lectures by radical preachers who instill in their audience a commitment to jihad. In recent years, violence against minority groups has taken place in various parts of Indonesia. Attacks against Ahmadiyya and Shia believers have claimed lives and displaced hundreds, and Christian communities continue to experience intimidation by radical Islamists. These incidents provide opportunities for the jihadist groups to recruit new operators and enhance their influence in society.

Indonesia’s Counterterrorism Regime

In light of these threats, the Indonesian government has sought to broaden the scope of its counterterrorism campaign, including the involvement the Indonesian military (TNI). Currently, however, the responsibility for counterterror operations remains under the Indonesian police, particularly the unit Detachment-88. As of 2012, this elite counterterrorism unit has successfully captured hundreds of terrorist suspects and confiscated their weapons across the Indonesian archipelago.

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While improving the effectiveness of counterterrorism operations, Indonesian authorities have also been working on deradicalization and counterradicalization strategies. A recent report suggests that many convicted Indonesian terrorists are due for release after serving time in prison. Given the grave danger of terrorist recidivism, the Ministry of Law and Human Rights seeks to reform the correction system and improve the physical condition of many prisons in Indonesia as part of its deradicalization program for terrorist inmates.

As the terrorist groups are also adapting to the new environment and beginning to update their operations and targets, Indonesia has developed a comprehensive counterterrorism approach. The capture of ex-terrorist convicts, including Lutfi Haedaroh (aka Ubaid) and Abdullah Sunata in 2010 shows the importance of addressing the overall environment that breeds religious extremism and terrorist activities. In that sense, the Indonesian government has begun incorporating persuasive measures to tackle the dissemination of radical religious doctrines and discriminative sentiments at the grassroots level.

Indonesia’s Experience: Lessons for Global Counterterrorism

Indonesia has come a long way, but still faces the threat of terrorism in the future. The country’s porous land and sea borders, endemic criminality and residual radical views continue to provide an attractive logistical and operational theatre for terrorist networks. Weaknesses are also looming from the suboptimal interagency cooperation, especially between the police and military, due to conflicting spheres of jurisdiction and functional confusion arising from the laws mandating domestic security role for the military.

Nevertheless, Indonesia’s experiences in tackling the threats of religious radicalism and terrorism are invaluable and relevant for other nations. As a result of its counterterror offensive, Indonesia today is less susceptible to major terrorist attacks than it was in the early 2000s. In particular, there are three lessons from the country’s counterterrorism that can be applied at the global level.

First, Indonesia addresses the threats of terrorism through the lens of law enforcement. With this approach, the Indonesian government seeks to try terrorist suspects according to the existing laws while modestly using coercive measures against violent terror attacks. To its credit, the police’s counterterror squads have been successful in conducting raids, capturing terrorist suspects, and canceling their plots in recent years.

Second, given the sensitivity of military force employment, the Indonesian government carefully engages the TNI in the counterterrorism campaign. To date, the military has played a crucial role in intelligence gathering. It also contributes to counterradicalization programs through civic missions in conflict-prone areas.

Third, as the threat of terrorism evolves, the Indonesian government enhances its counterterrorism strategy. In addition to counterterror operations, it undertakes a persuasive approach—including prison reform, rehabilitation programs and counter-propaganda. The purpose of these measures is to disengage terrorist convicts from future terrorism activities and prevent or disrupt the radicalization process of Indonesian society. (Council on Foreign Relations)

As Gindarsah points out, the trend seems to have refocused terrorist groups onto domestic targets, namely the police personnel and stations that have been carrying out a systematic and seemingly effective crackdown on militant networks since the 2002 Bali bombings. A 2012 report by the International Crisis Group expounds upon Gindarsah’s analysis of this recent trend and takes a more critical view of policing policies, described as “The Deadly Cost of Poor Policing”:

Indonesian communities are increasingly turning to violence to retaliate against the police for abuses, real or perceived. Some 40 attacks on police stations and personnel since August 2010 are clear evidence that community policing, the centrepoint of the police reform agenda, is not working; police are too quick to shoot, usually with live ammunition; and little progress has been made toward police accountability. In the absence of urgent reforms and mechanisms to address local grievances, public hostility is likely to grow. Police are supposed to be helping prevent conflict but too often they are contributing to its outbreak.

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Community hostility is the cumulative result of police brutality; unwarranted demands for money; perceived arrogance; and lack of accountability, especially in cases of fatal shootings. Failure to investigate or punish errant officers triggers mob action, often involving arson, while community resistance to the arrest of those responsible for such violence intensifies if the police in question go free.

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The problem is compounded by the staffing of precincts with poorly-trained graduates of provincial police schools who receive inadequate firearms training, let alone instruction in community policing. In many cases, local elected officials have to take on the burden of negotiating a way out of the police-community standoff because there are no available institutional mechanisms to resolve grievances. (International Crisis Group)

Finally, the new government in Indonesia can look forward to leading the countries emergence as a major regional and potentially global power. Just looking at the position and span of Indonesia’s geo-political influence, it is clear that the country’s economic potential makes it an appealing ally for other countries in the region. Valerie Sticher at the Center for Security Studies at ETH Zurich recently released an excellent report outlining “Challenges for the New Government” in Indonesia, focusing largely on the country’s regional potential:

Indonesia is on its way to assuming importance beyond Southeast Asia. The world’s fourth-largest country enjoyed a period of economic and political stability under the outgoing president, but left much- needed reforms to the next government. Challenges include managing relations with the regions, improving structural weaknesses in the economy, and defining Indonesia’s role on the international stage.

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Both candidates in the presidential election ran on a predominantly domestic platform – for good reasons: most Indonesians care little about Indonesia’s foreign policy. Issues like the treatment of migrant workers abroad generate far more interest than Indonesia’s role in regional and international affairs. This does not, of course, alleviate the need for Jakarta to position itself actively on the international stage. Australia, which has had an often ambiguous relationship with its largest neighbor, has recognized Indonesia as its most important regional partner. The two countries agreed in 2012 to enhance cooperation to combat illegal immigration to Australia. Indonesia’s strategic position between China and India makes it an interesting potential ally for both of Asia’s leading powers, and the US with its much-hyped “pivot to Asia” is also increasingly paying attention. As the largest Muslim-majority democracy, Indonesia is also seen as a potential moderating voice in the relations between the West and the Muslim world – although it often seems uninterested in engaging in this position of influence.

Unlike most countries in the region, Jakarta refuses to take sides and adheres to its tradition of non-alignment and its vague mantra of an “independent and active” foreign policy. It is forging closer economic ties with a number of regional and international powers and has in recent years established strategic cooperation agreements with the US, China, and India, particularly in the area of maritime security, where Indonesia would like to expand its power. But to become a key security partner, Indonesia will have to professionalize its military, which has been notoriously underfunded and preoccupied with domestic concerns. As it stands, the world’s biggest archipelagic country lacks the maritime capabilities for adequate littoral defense, let alone to play a critical role in the security management of the region.

Whereas bilateral relations with its immediate neighbors are at times strained, Indonesia assumes a leading position within ASEAN. ASEAN has had some quiet successes in liberalizing intra-regional trade and moving toward an economic community, and Jakarta has enjoyed its self-as-signed role as an intermediary within the association. Tensions between some of the members and problems domestically, especially in Thailand, continue to test the ability of ASEAN to promote peace and security in the region.

But the main challenge comes from outside: China’s extensive territorial claims in the South China Sea are at odds with the claims of a number of ASEAN states (Indonesia has recently added itself to the list). Those member states would like to use ASEAN’s diplomatic clout to increase their influence vis-à-vis China. Other members, such as Cambodia, Myanmar, and Laos, are closer to China and more dependent on good relations with the giant in the north. These internal differences leave the group divided and unable to speak with one (soft-spoken) voice. Indonesia’s tradition of non-alignment and its sensitivities to national sovereignty would put it in a good place to deal with those challenges and prevent the political dimension of ASEAN from sinking into near-oblivion. However, to play that role, Jakarta will need to develop a clear and consistent foreign policy vision, and decide whether it wants to be viewed primarily as an ASEAN heavyweight, or as a strong middle power in its own right.

Indonesia remains a mainly inward-looking country and is at times ambivalent about its international ambitions. However, as the country’s economic weight grows, its international profile as a significant region-al actor is likely to become more accentuated as well. Indonesia’s next government will have to build the institutional capacity to accommodate such changes, and to en-sure that economic and human development go hand in hand. (Center for Security Studies)


Malaysia, which trails just behind Indonesia as the third largest economy in Southeast Asia, also presents a unique governance paradigm as a country that has been able to maintain considerable political stability as such a multi-ethnic country. As with Indonesia, the following articles consider the politics, economy, and regional influence of the country, especially since the regional context will likely define Malaysia’s future.

Ethnic Relations in Peninsular Malaysia: The Cultural and Economic Dimensions

Ethnicity remains the most potent force in Malaysia even if of late its influence has been somewhat adulterated by other social stratification forces, principally class and gender. The potency of ethnicity lies in its ability to combine both affective and instrumental appeals. As members of distinct and self-conscious cultural communities, Malays, Chinese and Indians naturally were inclined to identify with and treasure their respective languages, cultures and religions, and thus actively strived to preserve and propagate them. Since they share a common pool of generalized symbols and values, the ethnic members would primarily socialize and associate with their own. Ethnicity thus continues to constitute an integral constituent of the individual Malaysia psyche and ethnic membership critically demarcates his/her social life and taste. It follows that the   effectiveness   of   affective   appeals   originates   from   the   evident   passionate attachments to a particular ethnicity that continue to sway individual identification and pattern of social life. Passionate attachments are readily excited for the purposes of galvanizing ethnic individuals to preserve, protect and promote their culture, language, and religion. Historically, in Malaysia, the affective appeals also became intimately intertwined with the instrumental pursuit of political and economic goals that aimed to manipulate the system and distribution of rewards in preference of the particular ethnic members. Consequently, because ethnicity combines “an interest with an affective tie”, ethnic groups were more effective and successful than social classes in mobilizing their members in pursuit of collective ends in Malaysia. In post-independent Malaysia, ethnic relations became entangled and influenced by the rival ethnic communities’ struggle over the cultural constituents of national identity, the share of political power, and the distribution of economic wealth. This paper is divided into two parts. The first part examines the development in the cultural relations and the second part on the economic relations.

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This paper looks at the changing ethnic relations in Peninsular Malaysia in terms of the interactions between the state’s policies to advance Malay cultural dominance and reduce ethnic economic inequality and the aspirations and actions of the Chinese community. The state of ethnic relations partly will depend on whether the majority of the ethnic members, in particular the ethnic elites, are pursuing separatist or amalgamative strategies and goals, and on whether the rival ethnic groups stand in positions of marked inequality or near equality to each other. In this sense, since the 1969 ethnic riots, ethnic relations have eluded out right conflicts in part because the rival ethnic communities have pursued mainly amalgamative strategies and goals, and in part because the economic inequality gap has narrowed between the Malays and non-Malays. However, the expanding place of Islam in the Malay personal, and hence collective, identity and the relative success in making social classes more multiethnic have added additional complexities to the future of ethnic relations. (Institute of Southeast Asian Studies)

Malaysia – The Best Predictors of Electoral Outcomes

With the availability of new electoral data, researchers have been able to conduct in-depth analysis of the 2013 General Election (GE13) results in Malaysia. The incumbent Barisan Nasional (BN) was able to capture 59.9 percent of parliamentary seats even though they had only won 47.4 percent of popular votes. To be sure, malapportionment (mismatch between vote and seat shares) is evident in many countries with the single-member district plurality system. However, Malaysia is among the world’s top offender in this respect, as I have previously argued. After it’s near electoral defeat, the BN government had described the GE 2013 as a “Chinese tsunami”, attributing its declining popularity to betrayal by the Chinese voters. Was race still the deciding factor in the election, or were there more important factors at work? Additionally, like many other countries across the world, the rural vs. urban electorates in Malaysia are divided along party line. With a large number of rural electorates in the Eastern states of Sabah and Sarawak, securing the support of voters in Peninsular Malaysia was not sufficient for the opposition alliance, Pakatan Rakyat (PR) to secure electoral victory in GE13. (…) Taken together, the works of Pepinsky and Ostwald suggest that race, size of electorate, population density, and rural/urban divide, are potential determinants of election outcome. However, these factors overlap or co-vary. Rural seats that are smaller and less densely populated also tend to have more Malay voters, in comparison to urban seats. Therefore, can we state, with high degree of confidence, that it was the Malay—rather than rural—voters who supported the government? Or were they voters who reside in small and sparsely populated electorates? It is challenging to isolate one effect from another, though it is pertinent to disentangle them.

A recent paper by Jason Ng et al., of Monash University, Malaysia, takes an important step in the right direction. (link HERE) Their model takes into consideration both racial groups and urban/rural/semi-urban location, whereas previous studies look at only one or the other set of factors. (Australian National University College of Asia and the Pacific)

Why Some Christians Want to Worship Allah

Malaysia’s highest court on 23 June rejected a challenge to a ban that in effect prohibits non-Muslims from referring to God as Allah. That ban has been in place since 2007 and, despite a series of appeals by the Catholic Church, will now remain. Malay-speaking Chrisians have long used the word “Allah” to signify God; the word entered the Malay language in the medieval era with the arrival of Arabic-speaking merchants. But in Malaysia’s complex, fragmented social landscape, historic realities often rub up against modern politics. Malaysian authorities pursuing the case say that Christian usage of the term presents a dangerous blurring of lines. An umbrella group of Christian denominations in the country claims that the ruling only applies to the Herald, a Catholic weekly newspaper originally involved in the legal proceedings, and that they will continue invoking Allah in their religious activities. But that is little comfort to some. “[The ruling] will confine the freedom of worship,” said the Rev. Lawrence Andrew, the editor of the Herald. “We are a minority in this country, and when our rights are curtailed, people feel it.” Malaysia styles itself as a kind of Asian crossroads, its multi-ethnic, multi-faith population of Malays, Chinese and Indians an embodiment of the wider continent. But the controversy over the case reflects the longstanding tensions between the country’s majority Muslim population and its religious minorities. In 2009, after Christians briefly won an appeal challenging the ban (that was later overturned), a number of churches in various parts of the country were firebombed and vandalized. (Washington Post)

Perspective: The Fascination of Malaysia

MALAYSIA, my wonderful country and her many facets are fascinating. I remember studying in Australia in 1991 and the Australians were just embracing multi-culturalism – it was the new fad. I remember telling them that I came from a multi-ethnic and multi-religious and cultural country so much so that I was born a Hindu, lived in a country with a Muslim majority population and schooled in a Catholic Convent! And that really baffled them. Again, when I was in Canada in 1998, my elderly landlady referred to an advertisement with an African and a Caucasian, saying that a few decades ago that would not be acceptable. And I told her that over in Malaysia, it is a norm to see all three main ethnic groups represented in advertisements and social messages.

You see, Canada was just walking into the world of multi-culturalism.

And we in Malaysia were far ahead of them. This wonderful country was not only a fascination but also a role model for many developed and developing countries and it made me proud to be part of this nation. I remember in school the words being emphasised – “Malaysia sebuah negara majmuk, pelbagai agama dan hidup Muhibbah.” (Malaysia is a multi-ethnic, multi-religious nation and lives in solidarity.) These were the words that still stay true to my heart when I think of Malaysia. It is a pity that all this is being hijacked by certain quarters who want to extend their narrow ideologies, sometimes even challenging the very Constitution that is the bedrock of this nation, questioning the contributions of the minority ethnic groups. (The Star, Malaysia)

Background: Malaysia – Independence and the Islamic State

After Japanese occupation during World War II, Malaya was returned to the British. The British sought to form a single Malayan Union that would provide equal rights to all ethnic groups on the islands. Many Malays, however, were worried about a takeover by the Malayan Communist Party (MCP), which found its primary source of support in the Chinese population. Malay nationalism led the British to form the Federation of Malaya in 1948, which offered ethnic Malays special rights. This move spurred the MCP to launch an unsuccessful twelve-year campaign of guerilla warfare against the British government known as the Malayan Emergency. In 1957, the Federation of Malaya was granted independence as an Islamic republic, and in 1963, a proposal was adopted to incorporate Singapore, Sabah, and Sarawak into a unified Malaysian state. Within two years, Singapore withdrew to become an independent republic. The new Malaysia maintained significant religious and ethnic diversity. Roughly two-thirds of the population adhered to Sunni Islam and a third belonging to Hinduism, Christianity, Shi’a Islam, and other minority faiths. Similarly, while there is a substantial Malay majority, approximately a third of the population was of Chinese and Indian descent. Relations were often strained, and race riots against ethnic Chinese in Malaysia in 1969 led to the promulgation of a new economic policy intended to improve the economic levels of ethnic Malays and lower communal tensions. At the same time, the United Malays National Organisation (UMNO) began to cater openly to Malay nationalism by invoking racially charged rhetoric and arguing that ethnic Malays are the sole rulers of the land. (Berkley Center for Religion, Peace & World Affairs, Georgetown University)

Malaysia Economy: Neither BRIC nor MIKT

Jim O’Neill, Chairman of Goldman Sachs Asset Management coined the now famous term BRIC, for Brazil, Russia, India and China, as well as the term MIKT for Mexico, Indonesia, (South) Korea and Turkey. Recently, O’Neill said that he was adding the four MIKT countries to his list of growth economies that could prosper despite whatever happens in advanced countries, given that MIKT economies have shown robust performance this year, backed by strong economic fundamentals. Malaysia, on the other hand, is neither part of O’Neill’s BRIC and MIKT nor was it even considered as a potential candidate for classification as one of the growth economies. How does the Malaysian economy rank against the BRIC and MIKT economies? Can Malaysia enter the ‘ivy-league’ of growth economies?

Malaysia in comparison

A quick comparison of Malaysia against the BRIC and MIKT economies shows that there are some lagging economic indicators. For example, despite recording an encouraging GDP growth rate of 5.2% in 2011, surpassing most of the BRIC and MIKT countries with the exception of China, India and Indonesia, Malaysia was only ranked 30th out of 191 countries in terms of Gross Domestic Product (GDP) adjusted for purchasing power parity (please see table below). All four BRIC economies emerged in the top 10 list while all four MIKT economies emerged in the top 20 list. High dependency on the agriculture sector is another area where Malaysia differed in comparison to the BRIC and MIKT economies. Malaysia is seen to be highly dependent on the agriculture sector with 12% sectorial contribution to the GDP whereas the BRIC economies, with the exception of India, recorded an average contribution of 5%. Malaysia’s relatively higher dependence on agriculture reinforces the need to move up the economic value chain, focusing on developing a knowledge-based economy.

Another indicator that did not augur well for Malaysia, in comparison to the BRIC and MIKT economies, was the relatively low household consumption level by the lowest 10% of the population. The said consumption by percentage share stood at 1.8% whereas the BRIC economies (with the exception of Brazil) were recording an average rate of 3%. The same was also noticed in the comparison against the MIKT economies. This clearly shows the need for Malaysia to speed up subsidy rationalisation with the aim of ensuring the subsidies reach the needy segment of the population rather than the entire population, including the rich and well-to-do segments. The effect of the higher level of subsidies is well-reflected in Malaysia’s relatively large budget deficit. (…) It is against this backdrop that one would question whether Malaysia can achieve its aim of becoming a high-income developed nation by 2020.

ERP’s targets

The Economic Transformation Programme (ETP) is one of the four key pillars of Malaysia’s national transformation framework or New Economic Model (NEM). Other pillars include the Government  Transformation Programme (GTP), Malaysia and the 10th Malaysia Plan. Of late, the media has been abuzz that Malaysia’s economy is progressing well under the guidance of the ETP as outlined by the government’s Performance Management and Delivery Unit (Pemandu). The ETP provides strong focus on a few key growth engines called the 12 National Key Economic Areas (NKEAs) which are expected to  make substantial contributions to Malaysia’s economic performance and they will receive prioritised public investment and policy support. It is Pemandu’s aim that the ETP will be led by the private sector while the government’s role is to be a facilitator. Most of the funding will come from the private sector (92%) with public sector investment being used as a catalyst to spark private sector participation.

Challenges ahead

The success of the ETP is predicated on Malaysia’s ability to undertake structural and strategic reform initiatives, such as creating a competitive landscape for industries, rationalising subsidies, introducing quality standards, protecting intellectual properties, revamping the education system and building a talent pool of qualified resources. However, it is sad to note the handbrake seems to be constantly on in some instances. A good example will be the eagerly awaited rationalisation of subsidies. Subsidies have increasingly been blamed for many of our social and economic ills, so much so that the Minister in the Prime Minister’s Department, Dato’ Sri Idris Jala, who leads Pemandu, said that if the Malaysian government does not reduce subsidies provided to the various sectors in the country, its debt would rise and the country could go bankrupt by 2019. (Malaysian Institute of Accountants)

World Bank: Malaysia’s Economy to Grow 5.4%

The World Bank has projected the Malaysian economy to grow by 5.4 per cent in 2014 underpinned by the benefits from the better conditions in advanced economies. The economy will likely grow by 4.6 per cent in 2015. In its Economic Monitor for 2014, it however warned that domestic demand, the main engine of growth of the Malaysian economy to face headwinds. These would be in the form of subsidy cuts, tax hikes and public wage restraint, higher interest rates as well as pressures on household budgets. “With foreign demand absorbing more than half of domestic value-added, a better external outlook outweighs domestic headwinds.” In terms of investments, it said improved global conditions and the approval of the Pengerang Integrated Complex will result in further growth in investments – as well as growth in capital goods imports. On the government’s fiscal consolidation plans, the World Bank said the subsidy bill needs to be reduced and emolument (wages, pensions and gratuities) growth capped to enable it to meet the 3.5 per cent of GDP deficit for 2014. “Fiscal consolidation will have to take place through spending restraint rather than revenue gains.”

Although the Goods and Services Tax (GST) is likely to provide additional revenues starting in 2015, it would be limited especially with additional tax breaks that are coming and pressures to delay further adjustments to administered prices. GST is expected to eventually broaden the tax base and diversify it from oil revenues, ensuring greater revenues in the medium-term. The World Bank also expressed concern with the central bank’s efforts to contain the household debt which continued to climb to 86.5 per cent in 2013 despite its macro-prudential regulations. With the increase in inflation rates due to the increases to administered prices, this has led the real interest rate to slip into the negative territory. Higher employment levels and real wage gains in manufacturing together with the full implementation of the minimum wage of RM900 in Peninsular Malaysia and RM800 in Sabah and Sarawak suggest higher labour incomes in the economy. (…) As Malaysia undertakes the delicate balancing act of tightening fiscal and monetary policies and leverages the improved global environment, these also involve risks of lowering household spending. (Business Times, Yahoo News)

Malaysia: Background and U.S. Relations

Malaysia, a majority Muslim nation in Southeast Asia, has long been a partner in U.S. security and economic initiatives in the region, although political sensitivities in Malaysia have constrained both sides from forging deeper ties or even acknowledging how close the relationship is. Bilateral relations have improved over the past decade, especially under Prime Minister Najib Razak, who has made relations with the United States a priority. The Obama Administration has emphasized deeper engagement with Malaysia and other “emerging partners” in Southeast Asia  as part of the strategic “rebalancing” of U.S. resources and attention to the Asia-Pacific region. Congress has expressed interest in a variety of issues in U.S.-Malaysia relations over the years, especially regarding trade, security cooperation, human rights, and Malaysia’s diplomacy. (…) Despite a diverse ethnic and religious mix, Malaysia has enjoyed considerable political stability since it gained independence in 1957. Political coalitions led by the United Malays National Organization (UMNO), the country’s dominant political party, have ruled Malaysia without interruption since independence. UMNO is a staunch proponent of the preeminent position of ethnic Malays and other indigenous groups, collectively known as bumiputra. The United States occasionally has criticized the Malaysian government for its weak human rights protections, constraints on press freedom, and prosecution of opposition political leaders like Anwar Ibrahim. Malaysia achieved high rates of GDP growth through the 1970s and into the 1990s, as did other East Asian economies. It is now considered a middle-income country, relatively prosperous compared to most other Southeast Asian countries, and has retained its Muslim identity through periods of rapid modernization. As in politics, Malaysia’s economy is divided along regional and ethnic lines; a wide ranging economic program known as the New Economic Policy attempts to address socio-economic disparities by privileging ethnic Malays and other indigenous groups in government contracts, education, and government hiring.

Malaysia has been a constructive diplomatic actor on numerous regional and global issues.  Efforts to promote moderate Islam and marginalize religious extremism have been a major part of Malaysian diplomacy, including acting as a mediator in conflicts between Muslim separatist groups and the central government in both Thailand and the Philippines. Kuala Lumpur maintains good relations with its neighbors and has promoted cooperation among the 10 countries in the Association of Southeast Asian Nations (ASEAN). Malaysia is one of several Southeast Asian countries with maritime and territorial claims in the South China Sea, although it has assumed a low profile in those disputes. U.S.-Malaysia security cooperation includes counter-terrorism activities, numerous military exercises, ship visits, and military education exchanges. (Congressional Research Service)

Indonesia and Malaysia’s Love-Hate Relationship

The Indonesia-Malaysia relationship can be described as one of the most important bilateral relationships in Southeast Asia. Both states are committed to the relationship and a great deal has been made about their similar ‘stock’ (serumpun) and much vaunted ‘sibling’ identity (persaudaraan). But over the last decade or so bilateral relations have been strained by various issues. (…) All of the present tensions can be blamed, ultimately, on colonialism and nationalism. As many scholars have argued, the colonial encounter has irrevocably determined the manner and extent to which friends in the Malay world, otherwise known as ‘Nusantara’, have become strangers, or worse. Many commentators have highlighted the mistreatment of Indonesian migrant workers in Malaysia as the key source of disquiet in the relationship. This issue has been quietly bubbling away for decades until the present day, despite the Indonesian government placing a moratorium on the sending of maids and other workers to Malaysia for much of 2010 and 2011. In November 2011, after the negotiation of improved protection arrangements for Indonesian workers, the moratorium was rescinded, for better or worse. (…)In terms of bilateral tensions and cultural contestations, it appears that Indonesians are constantly making a great deal of fuss about nothing. Malaysia, meanwhile, seems to be doing what it does best, which is to weather the latest storm from its noisy neighbours and focus on developing its own cultural heritage both artistically and economically, with or without UNESCO recognition. (New Mandala, Australian National University College of Asia and the Pacific)

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