Geopolitical Forecast: Thailand and Malaysia
Date: 28-01-2021 GSI Internal Research and Analysis Group Authors: Sangay Linkins
Thailand
Key trends
Thailand is unlikely to prioritise ambitious international cooperation or devote many resources towards foreign engagement. This will prevent Thailand from taking a partisan stance on the US-Chinese geopolitical rivalry.
The disproportionally harsh response of government to pro-democracy protests encompassing police violence, Internet surveillance and media censorship has drawn harsh criticism from global pro-democracy advocates working under the ‘Milk Tea Alliance.
This will serve as a sticking point in Western attempts to rekindle their relationships with Bangkok. - In light of the response, it is likely that 2021 will see resumed calls for reform of the monarchy, rewriting of the constitution and the resignation of Prime Minister Prayut.
Analytical overview
In 2021, the precarious position of Thailand’s political elite will likely divert the country’s attention away from major international engagement. The overriding concern with stability and day-to-day political survival means the government is unlikely to prioritise ambitious international cooperation or devote many resources towards foreign engagement. In particular, this will prevent Thailand from taking a partisan stance on the US-Chinese geopolitical rivalry. Additionally, American attempts to strengthen cooperation with the regionally influential Southeast Asian nation will be hampered by the associated illegitimacy and image problems of cosying up to a government in full flight towards authoritarianism.
The monarchy and military are Thailand’s two most influential institutions and have long bolstered one another’s authority. The Crown has cultivated a public image of being an indispensable mediator between Thailand’s disparate political forces, commanding the loyalty of the bureaucratic, religious and military upper echelons and exercising significant influence on public affairs. King Maha Vajiralongkorn, who in 2016 ascended the throne after the passing of his respected and long-serving father, has broken with precedent by enhancing his personal authority beyond that which has commonly been held by the royal institution. He has taken direct control of two Bangkok based infantry divisions and of royal assets worth at least US$30b that were formerly held in trust by a state organ. The military, which has dominated political affairs and successfully carried out at least 13 coups d’état since 1932, has generally supported partnership with the US and American-aligned countries. Though Thailand officially transitioned from military junta to elected government with elections in 2019, this was effectively a cosmetic change. General Prayuth Chan-ocha, leader of a major army faction and head of the junta that toppled the government in the 2014 coup, was duly elected prime minister in a process riddled with irregularities.
The conservative monarchic and military elite faced unprecedented opposition in 2020, with student-led protests in Bangkok and other cities attended in thousands. This was a major development in a country where open discussion, let alone criticism, of the monarchy is unheard of. Thais protested against endemic corruption, authoritarianism, and the resumption of harsh lèse-majesté laws which have been abused by the government to punish political opponents. Although protests were dampened by a resurgence of covid-19 at the end of 2020, it is likely that 2021 will see resumed calls for reform of the monarchy, rewriting of the constitution and the resignation of Prime Minister Prayut. Unique to these protests is their grassroots identity and composition, whereas previous pro-democracy protests in the 2010s were orchestrated by partisans of populist former Prime Minister Shinawatra. These protests appear to find support among the majority of the population and in particular have the overwhelming backing a younger generation of Thais but exasperated with military interference in democracy and divorced from the culture of reverence for the monarchy.4 It is also important to note that many traditionally ultra royalist upper and middle class Thais, who in the 2010s were the strongest opponents of the corrupt but democratically elected Shinawatra, are demonstrably ready to join the protests on the pro-democracy side this time around. Even within the establishment, support for the King – who severely lacks the moral authority of his father – and the heavy-handed and incompetent Prayuth is lacking. On this basis, it is unlikely protests will diminish in 2021.
The government’s priorities will therefore be to ensure political survival and restore domestic stability. Internationally, business as usual will be the preferred doctrine, with minimal political interest in an ambitious foreign policy agenda. In particular, sentiment in Thailand is divided on support for China and the US. Many liberal Thais would welcome increased engagement with the US - particularly now that democracy and human rights are being reprioritised under Biden - but a large and influential ethnic Chinese minority remains supportive of increased financial ties with China. 6 Thailand is unlikely to declare a position or shift policy significantly to accommodate either China or US when any definitive moves could incur a domestic backlash the government can ill afford.
Additionally, while the US may be anxious to deepen ties to its treaty ally Thailand as a preliminary step in restoring its position as ‘indispensable power’ in the Indo-Pacific, Biden will nevertheless have a difficult time justifying to the public why he is encouraging ties with an authoritarian country that has increasingly shown a willingness to oppress its own people. The government has responded to the protests in a heavy-handed manner that has drawn international criticism. A 16-year-old boy was charged with lèse-majesté in December 2020 and may spend up to 15 years in prison for attending a protest wearing a revealing crop top that mimicked King Vajiralongkorn’s own non-traditional holiday attire. Another protestor, a 60-year-old civil servant, has been jailed for a record 43 years for sharing pro-democracy posts online. 8 This disproportionately harsh response - which also encompasses police violence, Internet surveillance and media censorship - has drawn harsh criticism from popular global pro-democracy advocates working under the banner of the ‘Milk Tea Alliance. It will serve as a sticking point in Western attempts to rekindle their relationships with Bangkok.
Another concern for Thailand is COVID-related economic fragility, which means the country cannot afford to alienate either the US or China and will be reluctant to make any controversial geopolitical moves. Instead, Thailand will likely continue to court both powers for support through Covid, economic recovery and political legitimacy. Thailand’s economy was already experiencing hurdles pre-Covid including a decelerating growth rate as its industrialisation boom petered out and declining foreign direct investment due to political instability, excess red tape and nationalist-populist legislation that has curtailed investment in supposedly sensitive areas. The economy has also suffered from a lack of innovation and professionalism because of the country’s ineffective education system, with Thailand ranking 54th out of 70 countries in 2015 PISA rankings.
With the economy contracting by 7.7% in 2020, Covid has clearly exacerbated the situation and estimates suggest growth rates will take two years to return to previous levels. 10 The associated travel restrictions and lockdown have also damaged Thailand’s tourism industry, which accounts for almost 20% of GDP. Because of the urgent need for economic recovery, Thailand will likely be more reluctant than usual to pick sides in the growing competition between the US and China – its two largest trading partners and with which Thailand’s economic destiny is heavily intertwined. The country’s tourism industry is particularly vulnerable to the withdrawal of Chinese largesse if Thailand makes political moves contrary to Beijing’s interests. With 40% of tourists originating in China, 11 their spending equals a significant 9% of domestic private consumption. Fundamentally, Thailand’s government will seek to stay the course internationally, doing what it must to attract foreign money while keeping its eye trained on domestic unrest.
Malaysia
Key Trends
While a state of emergency may provide short-term reprieve to the political turmoil, there is no resolution in sight. Opposition parties are too divided on who should lead the charge in presenting a viable alternative to the government.
Election pressures and damages caused by COVID-19 may act as driving forces for changes to foreign investment and trade policy. Namely through improved incentives for FDI and the rejuvenation of major exports to India.
Malaysia could also emphasise its valuable extra-regional networks and relationships vis-à-vis ASEAN and the Five Power Defence Arrangements. 2021 is the 50th anniversary of the FPDA formed in 1971 between Malaysia, Singapore, Australia, New Zealand and the United Kingdom
Analytical Overview
Malaysia has similarly faced a troubling year in domestic politics. Internal political turbulence was at a record high in 2020, allowing for little focus on foreign policy. 2021 may see the ruling coalition – occupying a precarious role for the past year by governing without an electoral mandate – continue to struggle to cling to power as it deals with Covid, with only marginal room for foreign policy ambition. Malaysian politics is a shifting contest for influence, riven with horse trading between uneasy coalitions united in short-term pragmatism. Domestic instability was high in February 2020 – the then ruling coalition Pakatan Harapan, which unprecedentedly swept the polls in 2018 in the first transfer of power to another party in sixty years, was suddenly ended by infighting over intra-party power sharing and power transition.
Infighting between Anwar Ibrahim, who had been promised the premiership, and long serving statesman Mahathir Mohamad, who was unwilling to give up his supposedly temporary leadership, caused the ruling coalition and entire government to collapse. The current government does not have an electoral mandate to be in office. Following the breakdown in February, the King granted the prime ministership to Muhyiddin Yasin of the right-wing Perikatan Nasional coalition, which has barely managed to maintain control. Most importantly, the parliamentary situation is volatile with the government controlling only half of the lower house. Yassin relies on the votes of opposition independents and is at the mercy of the United Malays National Organisation (UMNO), which has repeatedly threatened to turn its back on the embattled government.
Looking ahead, we may expect a short-term reprieve to the political turmoil but no resolution in sight. Sultan Abdullah of Pahang, the Yang di-Pertuan Agong or Paramount Ruler of Malaysia, declared a state of emergency to deal with Covid in January of this year. This prorogues parliament until August at the latest, allowing its resumption before this date only if the pandemic is brought under control.15 Numerous political leaders have condemned Prime Minister Yasin for supposedly orchestrating a declaration of emergency to prevent UMNO lawmakers from deserting the government, effectively manipulating a public health crisis to temporarily prolong his faltering grip on power. Given that parliament must meet no later than six months after the start of the emergency, the political ‘can’ has been kicked down the road and Malaysia will eventually need to confront the question of which party should hold government. There will be no easy answer to this question, as opposition parties are too divided on who among them should lead the charge in presenting a viable alternative to the government. An early election could provide a clear mandate. This political ‘reset button’ has been portrayed by the government as impossible until the pandemic has been dealt with, but early elections could be forced into motion sooner if the other parties are able to cooperate.
With an electoral day of reckoning imminent, Malaysia’s government will want to cultivate an image of effectiveness and engagement. A number of different avenues are available for the government to use foreign policy to drum up its popularity domestically. One way is for the country to appear to prioritise economic investment and recovery. Covid resulted in Malaysia’s economy contracting by around 5.8% in 2020 and though the economy is set to improve markedly this year,16 the government may still wish to emphasise its openness to foreign trade and investment. Prime Minister Yassin has openly courted FDI and promised that Malaysia’s business friendly environment will not suffer due to the state of emergency. For the purpose of promoting trade investment, the government may also try to re-establish good relations with India. Tensions grew under Mahathir, who encouraged ties with China, condemned Indian actions in Jammu and Kashmir in a dramatic move away from Malaysia’s tendency towards neutrality, and also criticised India’s citizenship law amendments that increased hardship for Muslims.17 As a result, Malaysia suffered from an unofficial Indian boycott of Malaysian products, particularly palm oil.
However, any move to restore amity in the relationship with India will need to be balanced with continued support for Pakistan, which forms part of Malaysia’s second foreign policy avenue of solidarity with the rest of the Muslim world. The Malaysian Islamic Party (PAS), an ally of the Muslim Brotherhood, is an important member of the governmental coalition.18 PAS supports a greater role for Islam in Malaysian political and public life and strongly opposes Indian actions against Pakistan. The Government may need to emphasise its support for fellow Muslims to appease PAS and shore up support among its traditional Malay-Muslim base.
Finally, Malaysia could also emphasise its valuable extra-regional networks and relationships. 2021 is the 50th anniversary of the Five Power Defence Arrangements (FPDA) formed in 1971 between Malaysia, Singapore, Australia, New Zealand and the United Kingdom. Despite its low profile and limited public awareness, the FDPA is Asia’s most enduring and diverse security multilateral. 19 Established following Konfrontasi, Indonesia’s invasion to prevent the federation of Malaysia from disparate British territories, the FDPA commits the parties to consult in the event of an armed attack on Malaysia or Singapore. Though the regional political situation has long since transformed and Indonesia and Malaysia are closely tied through bilateral and ASEAN relations, the arrangements continue to benefit the country. While it will certainly not feature among the government’s foreign policy priorities in 2021, the FPDA and Malaysia’s important role within it may gain an increased appreciation as the anniversary arrives. This is bolstered by the potential for growth in Malaysia’s relationship with Australia through a comprehensive strategic partnership announced in January. 20 The Malaysian-UK relationship could also deepen through London’s recent expression of interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, of which Malaysia will form a major part if and when the country ratifies the agreement.