Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698838443782.pdf (Singapore)
ASIAN INTELLIGENCE An Independent Fortnightly Report on Asian Business and Politics No.
1,085 Wednesday February 9, 2022 REGIONAL OVERVIEW .......................... 2 PHILIPPINES .......................................... 10 CHINA ......................................................... 3 SINGAPORE............................................. 11 HONG KONG ............................................. 4 SOUTH KOREA ....................................... 12 INDIA .......................................................... 6 TAIWAN ................................................... 13 INDONESIA ............................................... 7 THAILAND .............................................. 15 JAPAN ......................................................... 8 VIETNAM ................................................. 17 MALAYSIA ................................................. 9 EXCHANGE RATES ................................ 18 POLITICAL & ECONOMIC RISK CONSULTANCY LTD.
Elections and other key political events in Asia in 2022 Political & Economic Risk Consultancy, Ltd. Issue #1,085 REGIONAL OVERVIEW An analysis of key political events in 2022 Overall, Asia has been moving away from democracies forms of to more authoritarian government.

However, there are still many elections scheduled for 2022.

The Philippines and South Korea will both hold presidential elections.

Japan will hold elections for its Upper House of parliament.
There will be key state elections in India and local elections in Taiwan that will set the stage for presidential elections in 2024.

The current terms of Hong Kong’s Chief Executive and China’s President are both due to end.

In Hong Kong, it remains to be seen if Beijing will want the current Chief Executive to stay on or if it will appoint a new local leader.

In China, Xi Jinping is laying the ground to extend his leadership position for at least a third five-year term.
Although no major elections are scheduled this year for Indonesia, candidates are starting to position for succeeding the current president when his term expires in 2024.

In Singapore speculation is building about who the next generation of PAP leaders will want to settle on as their “first among equals” to succeed the current President, Lee Hsien Loong.
The longer it takes to make this selection public, the more it looks like there might be divisions or clashes of egos within the only political party that has ever ruled Singapore since independence.

Fresh polls do not have to be held in Malaysia or Thailand until 2023, but they might be called early, possibly even in 2022.
Malaysia’s current government was formed only because the ruling monarch was able to hold the feet of the leaders of all major parties to the fire to get them to cooperate while the country fights the pandemic, but is already this arrangement showing signs of falling apart as the confidence of some groups have been enhanced by recent state election results.

It is possible that these groups In the case of might push for early elections.
Thailand, the current coalition running the country is increasingly unpopular.

In addition to the possibility is temporary and of early elections being called, yet another coup attempt cannot be ruled out.
That leaves only Vietnam of all the places covered by this newsletter where no major political events are scheduled, the current political status quo is likely to be preserved throughout 2022, and there will not be any more than usual jockeying of rival political leaders with promotion aspirations for the future.

However, even in Vietnam there could be a forced leadership change if the health of Communist Party chief Nguyen Phu Trong fails to hold up.
This possibility is not necessarily remote considering that Mr. Trong is 77 years old and reportedly suffered a stroke in April 2019. care most about matters One theme that is common for all of the above countries and territories is that the main political issues are domestic.

In those countries where elections of one form or another are due, their voters government’s handling of COVID, jobs for young people, environmental threats, housing availability, and inflation.
External themes frequently figure prominently in the speeches of politicians, but they are usually much less of a motivating factor than domestic issues that voters relate to personally.

like force issues and from domestic However, external developments could still divert the attention of most governments in Asia away these governments to adopt policies that ultimately shape political stability.

China is perhaps the best example here.


As noted in the China entry below, China’s leadership would probably prefer not having to respond to possible changes in Taiwan’s status, or the Ukraine-Russia conflict, or North Korea’s missile program, or, perhaps most importantly, changes in US foreign policy that are at odds with Beijing’s agenda, but it will have to respond to some of these developments if it is to achieve its domestic policy priorities.

Other countries are similarly exposed.


Philippine politicians aspiring to succeed President Duterte will have to respond one way or another to further encroachment by the Chinese military into waters also claimed by the Philippines.

South Korean politicians will have to respond to more missile tests by the North.
Taiwan politicians will have to balance Page 2 ASIAN INTELLIGENCE February 9, 2022 Issue #1,085 Political & Economic Risk Consultancy, Ltd. to enhance the concern of the local population for health issues like importing pork treated with certain additives with the desire to cultivate closer relations with and support from the US.
And Singapore and Hong Kong their credentials as might want international business centers by adopting strategies to emerge from the COVID crisis and positioning for a post-COVID world that are consistent with this status, but the success of any such strategy depends on acceptance by companies and governments from other countries.
It is entirely possible that there will be major national differences in post-COVID standards, monitoring procedures, and practices by different countries that are important to Singapore and Hong Kong (such as China and the US).

These external differences could force the governments of Singapore and Hong Kong to adopt strategies that are in line with some foreign governments but not with others.

Hong Kong doesn’t really have a choice in this.


It will have to weigh China most heavily in any decisions it makes.

In contrast, Singapore has more leeway, but it too might be forced to make choices that narrow its international appeal.

In one sense, external developments are wild cards that will prevent local governments in Asia from realizing their aspirations without making adjustments.

Some of those adjustments could be radical and have major domestic implications.
It is also a reminder of why the best-laid plans of mice and men often go awry, as well as why the one view of the future that is almost always going to be wrong in some ways and, therefore, subject to revision, is the current consensus view.

CHINA Comments This will be a full year for China politically – so full with domestic events, in fact, that one of the major questions is the extent that external developments could shape or divert the attention of China’s leaders from domestic matters.
Those external issues include the Ukraine-Russia showdown, Taiwan’s coming elections and push for greater autonomy, North Korea’s nuclear weapons and missile tests, and Washington’s attempts to influence global developments.

China’s President Xi Jinping wants to focus on strengthening the Chinese Communist Party (CCP) and its ability to lead China in the future.

All else needs to be seen against this backdrop.


China’s reaction to external developments will be shaped by how Xi sees their potential to threaten or promote his domestic political agenda.

When Xi was first elected President of the People's Republic of China on 14 March 2013, he viewed the Party as in being in deep trouble.
Xi had concluded that China suffered from pervasive corruption throughout the Party, State, military, and society; an economic reform process that was increasingly out of control of the Party State; factionalism at the top of the system; and no adherence to binding ideology.

From his perspective, the Party was exhibiting many of the same characteristics that the CCP found present in their own exhaustive analysis of the Soviet Communist Party and the USSR prior to their collapse.
If China was to avoid this same fate, Xi concluded that the CCP needed stronger leadership than the USSR had.

He was also convinced the US system of democracy is inappropriate for China, and he might even be more convinced now than before that the US system is doomed to fail in the US too.

Xi is a firm believer in a system in which China is headed by the CCP, but that system had defects that needed to be fixed.
Xi has spent his first two terms in office addressing what he considered to be the biggest domestic shortcomings.

He has a clear and broad vision of the future and knows where he wants to take China.

His strategy includes enforcing very strict top-down internal discipline; strict control over the military and internal security services; reinvigorating local Party cells and committees; reinforcing ideology and the study of Marxism; and cracking down on what Xi regularly calls western hostile forces.
He has broken with previous Chinese governments by mounting an anti-corruption campaign that has reached the highest levels of the Party, the State, the military, corporate world, and society.

This policy has also deterred factualism and purged those not loyal to Xi personally.
He has used the Party’s 100th anniversary to redefine the Party’s history and roles; and most February 9, 2022 ASIAN INTELLIGENCE Page 3 Political & Economic Risk Consultancy, Ltd. Issue #1,085 recently he has been cracking down on private enterprise and big tech, reversing a policy of the previous government headed by Jiang Zemin to embrace the private sector while reducing the role of SOEs.

While much has already been done, re-setting the CCP leadership role is still a work in progress.
Xi is a person who thinks China’s internal challenges require a strong, unified CPP that can only function with a single, strong core, and such a core requires a single, strong leader, which Xi sees as himself.

This is what the political events in 2022 will be leading up to when the CCP holds its 20th Party Congress late this year.

This event will appoint Xi as the country’s leader for a third term and consolidate power in the hands of a small group of people around him.
Before then there will be a series of Party Congresses at the provincial and municipal levels, while the 2022 political schedule will kick off with China's 13th gatherings of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC), which will commence on March 5 and March 4, respectively, in Beijing.

Among other things, these initial meetings will review the central and local budgets for 2021 and the draft central and local budgets for 2022.
President Xi and most other Chinese leaders are driven much more by concerns about domestic political challenges than they are by foreign challenges.

Indeed, most foreign developments need to be seen through the prism of China’s domestic political concerns and priorities.

For example, the issue of regaining sovereignty over Taiwan is not Xi’s top priority.
He is prepared to be patient and deal with this issue in the medium term, but he cannot be seen as being China’s top leader at a time when Taiwan makes a successful bid for independence or even much greater autonomy.

If he were to lose Taiwan, any domestic claim he could make for being the only person currently capable of providing China with the necessary strong leadership would be completely undermined.
This is why he does not have any room in which to show weakness on Taiwan, including being seen as doing nothing if the US were to force the issue of Taiwan’s autonomy.

Xi would almost certainly prefer that Taiwan simply not be an issue this year and let things ride as they are, but if the status quo is threatened by the US or Taiwan, he will have to be seen as reacting strongly to protect China’s interests on this issue.
It is the same with all the other external issues noted in the first paragraph of this country entry.

China would like nothing better than to have the status quo continue.

But if an outside power like Russia, the US, Japan, North Korea, India, or Vietnam does force a change in the status quo in a way that touches on China, Xi will have to react in ways that protect China’s interests.

To do otherwise would weaken him domestically and perhaps cause a political crisis at home.
The nature and degree of reaction would therefore be at least proportional to the perceived impact of that development on China’s internal political priorities -- and on Xi’s leadership capabilities.
HONG KONG Comments China’s crackdown on Hong Kong’s democratic movement and the independence of institutions like the media, political parties, human rights organizations, labor unions, and civil society groups have reduced the public’s willingness to risk demonstrations and to participate in the token political exercises that are allowed.

Back in 2019, 71.2% of the total electorate turned out for the district council poll at the height of the anti- government protests that year.
In last December’s Legislative Council elections, only 30.2% of the total electorate cast ballots in the geographical constituencies, the lowest since Hong Kong’s return to Chinese sovereignty in 1997.

The overhaul of Hong Kong’s political system, which is still ongoing, has eliminated any meaningful political opposition and left key decisions regarding the SAR’s scheduled political developments in 2022 firmly in the hands of China’s leadership in Beijing.
The December exercise selecting the Legislative Council was far less an election in which average residents had a say than a process by which Beijing’s hand-picked candidates took Page 4 ASIAN INTELLIGENCE February 9, 2022 Issue #1,085 Political & Economic Risk Consultancy, Ltd. almost all legislative positions.

The number of directly elected lawmakers returned in geographical constituencies was slashed from 35 to 20.

All of these seats were won by pro-establishment candidates.
At the same time, the total size of the Legislative Council was expanded from 70 to 90 seats, with the non-geographic seats consisting of 40 seats going to the Election Committee constituency and 30 to the functional constituencies.

All were candidates were pre-vetted by officials on the basis of their “patriotism.” There will be much less debate in the new Legislative Council than in the old one.

What now remains to be seen is just how much of a “rubber stamp” it will be.
This is not yet a foregone conclusion.

To be sure, the new Legislature will pass bills submitted by the Executive Branch quite quickly, including calls for future local political reform and the new Budget that will be announced shortly.

However, it is possible that some lawmakers might vote to punish certain officials in the Executive Branch if they refuse to accept accountability for mistakes they have clearly made or will make in the future.
For example, the government is still not out of the woods for the way it has dealt with officials who attended a January 3 birthday party of National People's Congress delegate Witman Hung, after which two party guests tested positive for COVID.

Chief Executive Carrie Lam did demand the resignation of Secretary for Home Affairs Caspar Tsui Ying-wai for violating strict Hong Kong Omicron rules.

However, it would reflect badly on Hong Kong leadership if Mr. Tsui were the only person punished.
No fewer than 13 senior government officials attended the January party, including Director of Immigration Au Ka-wang, police commissioner Raymond Siu and the head of the city's Independent Commission against Corruption, Simon Peh.

All of these people of made public apologies, but that is not enough to restore their or the government’s credibility .
If future Hong Kong government policy toward COVID does not spark considerable debate in the Legislature, it would be an indication that the lawmakers’ “rubber stamp” reputation would be fully justified.

On the one hand, there is widespread agreement that Hong Kong’s COVID policy when it comes to opening up Hong Kong’s borders to Mainland travelers and visitors needs to be closely coordinated with China’s policy.

In this sense, Beijing will dictate policy to Hong Kong.
On the other hand, there are businesses in Hong Kong that are not dependent on Mainland China business alone, and the more companies that complain about the need for policy modifications, the more the Hong Kong government will be under pressure to explore ways that it might be able to address those complaints and still be in line with China’s zero-policy COVID policy.
When major banks like Bank of America admit publicly that they are reviewing their Hong Kong business to identify what might be relocated to Singapore or elsewhere, Hong Kong cannot simply ignore that this is happening.

Hong Kong might not be in danger of losing its status as a business center because of recent political system changes, but that status could be hurt if the government’s COVID policy interferes with that role for too long.
The US Postal Service, along with those of several other countries, recently suspended accepting mail to Hong Kong, because of the SAR’s COVID policy.

This suspension was partially lifted last week, but this is the type of forced interruption to normal business operations that could have a hugely negative impact on the kinds of roles Hong Kong could play for individuals, banks, and multinationals if they are repeated frequently or were enforced for extended periods.
There will be at least two more political developments of note in 2022.

They are important as far as they could mean major leadership changes and reforms to the structure of government.

However, they are not really contributing to higher risks because the results are predictable.

The structural change will involve certain government bureaus.
The Chief Executive has proposed to separate the home affairs bureau into the home and youth affairs bureau and the culture, sports, and tourism bureau, while the transport and housing bureau will be divided into the transport and logistics bureau and the housing bureau.

Ms. Lam wants to turn the environment bureau into the environment and ecology bureau, while the food and health bureau will become just the health bureau and will focus solely on medical and health priorities.
All these changes will also involve a reshuffling of positions within the bureaus.

February 9, 2022 ASIAN INTELLIGENCE Page 5 Political & Economic Risk Consultancy, Ltd. Issue #1,085 However, the key leadership question for 2022 is whether Beijing will reappoint Carrie Lam to a second term as Hong Kong’s Chief Executive or if China will want someone else to takeover.
The main difference between this leadership choice and previous ones is that no candidates, including Ms. Lam, will want to show their desire to be Chief Executive until Beijing has made its decision.

So far, it has not.

Unlike previous selections, this time China’s leaders might not even want to go through the motions of a contest and, instead, might simply instruct the 1,463-member Election Committee stacked with Beijing loyalists to pick one particular person.
Other aspiring candidates who throw their hat in the ring will need Beijing’s blessing to do so if they are to get any votes.

But Beijing will not allow a real contest to take place.

The “winner” will be Beijing’s first choice, and that person will have to follow Beijing’s policy agenda.
INDIA Comments India’s is entering a sensitive period of its political calendar, as it prepares for local election in five states, including the two big farming states of Uttar Pradesh and Punjab, that could be a bellwether for national polls due by 2024.

Mr. Modi’s ruling Bharatiya Janata Party (BJP) controls four of the five states.

Until recently, the BJP government headed by Mr. Modi was pressing its agenda to overhaul the economy by implementing some major market-oriented changes.
However, now that important local elections are approaching, the government has responded to pressure by repealing controversial agricultural laws it passed in September 2020, and there are growing doubts that Mr. Modi will have the appetite to push for more reforms this year that might face stiff popular opposition .

Mr. Modi’s retreat was clearly motivated by concern that angry farmers will endanger the BJP in the coming local elections.
It very much wants a victory in the agricultural states, especially Uttar Pradesh, the country’s most populous state.

Given that Uttar Pradesh enjoys the largest number of seats in both houses of India’s national parliament and that lawmakers in the Upper House are elected by state legislatures, maintaining control over the state’s legislature is a critical imperative for Prime Minister Modi’s BJP Hindu nationalist government.
Consequently, rather than risking their wrath by easing rules around the sale, pricing and storage of farm crops, Mr. Modi relented to the protesters and moved to repeal the laws.

Farmers are still unhappy and have vowed to keep protesting until the government also guarantees a minimum price on all agriculture products, instead of just a few as is currently the case.
Opposition parties believe that two of Mr. Modi’s biggest vulnerabilities in the run-up to the 2024 elections could be his government’s record on dealing with inflation as well as with the growing security threat posed by China.

However, it remains to be seen if they can use these issues to turn voters against Mr. Modi and the BJP.
His caving in to the year-long protests by farmers shows he is vulnerable, and his image for effectiveness has been further hurt by the government’s handling of the COVID pandemic.

However, he remains very popular and maintains an image of a person his voter base can trust.

Aside from repealing the farming laws, as many as 26 other bills are currently listed for introduction in this session of parliament.
One of the bills is a proposal to prohibit all private cryptocurrencies and to help the Central Bank create an official digital currency.

Another is to streamline the laws to make bankruptcy resolution more efficient.

There is also a proposal to treat social media platforms like Twitter and Facebook as publishers and set up a regulatory body to oversee them.
This is part of a review of a personal data protection bill that is being represented as an attempt to protect users’ privacy, but many suspect it is really an attempt to give the government more control over digital content and how companies such as Google and Amazon collect, process and store data.

Page 6 ASIAN INTELLIGENCE February 9, 2022 Issue #1,085 Political & Economic Risk Consultancy, Ltd.

This data bill could be where some of the most heated debate takes place.
With physical gatherings curtailed by COVID-19, a lot of campaigning in the coming local elections has moved online, and Mr. Modi wants to control these channels as much as possible.

In turn, the Opposition will oppose any such moves since they want the maximum freedom to attract followers by using online platforms too.
Mr. Modi’s position in parliament and electorally is still strong due in large part to his pandering to Hindu nationalists, but these policies are also divisive socially and Mr. Modi’s vulnerability has been exposed by his caving in to farmers.

In the months ahead, therefore, it is very likely that the fight for policy could move more from parliament to the streets, since this is where special interest groups seem to be having more success lately.
INDONESIA Comments Presidential and parliamentary elections in Indonesia are not scheduled until 2024, but those seeking to succeed Joko Widodo as president or the power brokers who are working to have their hand-picked candidates chosen are already busy positioning.

Although President Widodo still has two years left in his second and final term, 2022 could be when his powers are at a peak.
If he can get COVID under control enough so world leaders will feel comfortable traveling to Indonesia again (that is still a big “if”), the spotlight will be shining on him in the fourth quarter of 2022 when the Group of 20 (G20) is scheduled to meet in Bali.

This is also likely to be the time when people aspiring to succeed him as president try to raise their own profile in a big way.
While Indonesia has become more democratic since the fall of the Suharto regime, politics is still dominated by a small group of elites.

The list of candidates who are presidential contenders has remained remarkably unchanged over the past decade, which is a good indication of how political power is concentrated in the hands of a small number of people.
The main contenders include Prabowo Subianto (who has been trying to get elected for years), Puan Maharani (the daughter of former President Megawati Soekarnoputri), Agus Harimurti Yudhoyono (the son of former President Susilo Bambang Yudhoyono), Anies Baswedan (the governor of Jakarta), Ganjar Pranowo (the governor of Central Java), and Airlangga Hartarto (the current Coordinating Minister for Economic Affairs and chairman of Golkar who is the son of a person who served as a minister in various portfolios during the Suharto regime).
Indonesian political parties are remarkably homogenous in their outlook on social, economic and political issues, as is reflected in the lack of sharp controversy in the current parliament on any major issue.

In the coming elections, all candidates are likely to try to appeal to voters by promising to fight corruption.
However, none of these candidates are actually likely to repeal the law passed earlier in Mr. Widodo’s term weakening the Corruption Eradication Commission (KPK) even though that is what the public is pushing for.

Competition between the existing parties is more about personal rivalries and access to resources than anything related to policies.
A major question is whether some of the individuals involved will set their differences aside and form alliances that raise their chances of winning in 2024 and then holding onto power after that.

Currently, most speculation is surrounding the possibility of a joint ticket between Prabowo and Puan.
However, that some see Puan running as president with Prabowo as her vice-president, while others see Prabowo going for the presidency, with Puan as his vice-president is a good indication that massive personal egos could prevent either ticket from materializing.

While Indonesia’s political elite has not really changed dramatically over the years, the psychology of the voting public has.
Faced with a choice of personalities rather than policy options, the trust in and loyalty toward political parties has deteriorated dramatically.

This has fed the push toward populism even more.

Some studies February 9, 2022 ASIAN INTELLIGENCE Page 7 Political & Economic Risk Consultancy, Ltd. Issue #1,085 suggest that as Indonesians have become more religious, they have also become more socially conservative.
On the other hand, the expanding reach of Islamist organizations and ideologies has also heightened fears among pluralist Indonesian constituencies.

Consequently, Indonesia in many ways is more polarized today than in previous election periods.
Mr. Widodo’s truce with Prabowo has done little so far to ease divisions between the country’s Islamist and pluralist camps, while the president’s response to COVID intensified this polarization by restricting free speech in ways that seemed to single out several prominent Muslim opposition figures.

It is this polarization in the electorate around religious-pluralist differences that could distinguish the 2024 elections from previous ones.

This difference has long existed, but it is become more distinct.
JAPAN Comments Prime Minister Fumio Kishida passed his first and most important political test last October when he led the ruling Liberal Democratic Party (LDP) to a big victory in general elections.

The LDP lost some seats, but not nearly as many as most observers were predicting.

The party still won 261 seats (down from 276), enough to maintain control of the 465-seat lower house without its coalition partner, Komeito.

The general election results underscored the main political trends in Japan today.
The population is not happy with the way the government has managed the economy or dealt with the COVID pandemic, but they want stability, and are convinced that the LDP is in a better position to provide that than is the main opposition Constitutional Democratic Party, which lost 13 seats in the elections.

It was unable to inspire Japan’s unaffiliated floating voters, who represent over 40% of the electorate, to turn up and vote in sufficient numbers.
The big gainer was the center-right Japan Innovation Party, which nearly quadrupled its representation to 41 seats, becoming the country’s third-largest political party.

Perhaps more telling than the LDP’s ability to hold its own in the general election is that voter turnout was the third lowest in postwar history.
Many Japanese are turned off by politics right now, but they have little confidence in the Opposition’s ability to do any better than the LDP when it comes to dealing with the country’s most pressing problems.

Some analysts read the election results as a sign of Mr. Kishida’s weakness.

They question whether he will be able to purse an independent agenda in the face of interference of LDP party veterans such as former prime minister Shinzo Abe.
This caused some analysts to conclude that Mr. Kishida might be yet another short- term prime minister.

However, this pessimism might not be warranted.

In a very real sense, veteran politicians like former prime minister Abe are giving the LDP more strength.

When he was prime minister, Mr. Abe was subject to the same diplomatic straightjacket that Mr. Kishida has to wear.
Now, however, Mr. Abe has the freedom to speak more frankly, giving Mr. Kishida an avenue or surrogate to weigh Japan in on issues that he cannot do directly.

Mr. Abe may have played such a role recently when he warned that any use by China of military force involving Taiwan would constitute an emergency for Japan and permit Tokyo to exercise the right to collective self-defense under the constitution.
Of course, Beijing protested this statement, even though it reflected a blunt truth, but because it came from a former prime minister and not the sitting one, the LDP got away with it, helping to appeal to the same audience that voted for the Japan Innovation Party in the general election.

Mr. Kishida faces his next big election test in July when Japan will be holding elections for the Upper House.
A legal revision is adding three seats to the house, bringing the total to 248; half of these, 124, will be up for election this time.

As of January 1, the LDP and Komeito hold 68 of the uncontested seats, meaning that the coalition partners will be aiming to secure 57 of the seats in play, ensuring a majority of 125 in the Upper Page 8 ASIAN INTELLIGENCE February 9, 2022 Issue #1,085 Political & Economic Risk Consultancy, Ltd. House.
While voters tend to see general elections as a way to choose who will run the country, contests for the House of Councilors, frequently positioned as “midterm elections,” give voters a means of chastising the parties in power.

A solid result could mean a clear run of more than two years with no need to go to the polls, but a weak LDP showing could mean that Mr. Kishida’s days as prime minister will not last long.
If the elections were held today, he might be in trouble, considering that consumer confidence is falling, and the Omicron strain of COVID is taking a new toll.

However, if the Omicron strain peaks fast and falls off sharply as it is doing in the US (a good leading indicator), it is very likely that COVID will be much less of a problem come this July, improving the mood of average Japanese.
The country’s exports and overall economy could also receive a boost by this July from the recent weakness of the Japanese yen.

This should help Mr. Kishida and the LDP.

MALAYSIA Comments Malaysia is still in search of a new political equilibrium.

Nothing is likely to be settled in 2022.


Rather, this will be part of an interim period during which politial parties (particularly rival Malay groups) can sort out their differences enough to provide more effective leadership, while key institutions can try to rebuild credibily.

If all goes well, this institutional rejuvenation will result in a new, more effective system of checks and balances, the absence of which led to major abuses of power in the past that have hurt the country badly.
However, if all does not go well, Malaysia might not be significantly better off than it was during days when UMNO ruled supreme.

So far, the only national institution that has come through the political crisis stronger than it entered it is the monarchy.

The most notable political development in 2021 was the way the country’s monarchy reasserted its powers to force compromise among groups that previously could not agree.
This has enabled Malaysians to gain a new respect for their constitutional monarchy, but right now the monarchy is about the only institution promoting better governance, and if those independent civil institutions do not develop relatively quickly, Malaysia, will be vulnerable to the same weaknesses as many other constitutional monarchies, namely, inconsistency in the quality and priorities of individual monarchs from reign to reign, which in the case of Malaysia’s rotational system is every five years.
The current government, a coalition headed by Prime Minister Ismail Sabri Yaakob, was able to take shape only after Sultan Abdullah of Pahang, the current king or Yang di-Pertuan Agong, forced the previous prime minister to resign and personally mediated a deal agreed to by all major political players, including the main opposition parties.

Ismail Sabri can govern until July 2023, when the current electoral term ends.
During this period, the political parties have agreed to cooperate on various matters, including the fight against COVID-19 and steps to revive the battered economy.

The King required Ismail Sabri to hold a confidence vote to demonstrate he has a parliamentary majority.

In order to get this majority, Prime Minister Ismail had to reach an agreement with the main opposition bloc.

Under this agreement, the government will not hold an election before July 2022.
The bipartisan pact covers six areas including strengthening a COVID-19 plan, transformation in governance, parliamentary reforms, and freedom of the judiciary.

All this sounds very positive, but it might not happen.

Political infighting within major parties like UMNO remains unresolved, but state elections held since Ismail Sabri became prime minister (in Sarawak and Malacca) have strengthened the Prime Minister’s alliance and exposed the opposition’s weaknesses.
Johor state dissolved its assembly on January 22.

The Election Commission will set a date for the Johor state polls, which must be held within 60 days after the assembly’s dissolution.

A victory for Ismail’s UMNO could embolden the pro-Malay February 9, 2022 ASIAN INTELLIGENCE Page 9 Political & Economic Risk Consultancy, Ltd. Issue #1,085 party to bring forward a general election to this year (anytime after July 30).
Ismail might retain power after an early election, but there is also a chance that a more senior leader in UMNO would try to take over, leaving the system very much where it was back before the former Barisan Nasional coalition collapsed in 2018.

At this point, there is no reason to expect new elections to produce a stable government with staying power.
The country’s other institutions like the judiciary, anti-corruption agency, and regulatory bodies would not have enough time to develop the independence required to be effective checks and balances in the system in which a handful of elites call the shots.

What is perhaps most worrying, if elections were held too early, the monarchy might not be able to act as effectively as a stabilizing force as it has in the current crisis.
Most of the credit for forcing political rivals to cooperate temporarily is not due to the power of the monarchy as an institution but to the personal credibility of a single person, Sultan Abdullah.

Under Malaysia’s rotational monarchy system, Sultan Abdullah’s terms ends in 2024.

His successor is expected to be Sultan Ibrahim Ismail of Johor.
Some Malaysian monarchs in the past have been known more for the way they pursued their self-interests than for their commitment to the protection of public interests.

In the absences of other checks and balances being in place, which is not the case at the present time, this risk continues.

PHILIPPINES Comments The Philippines will elect not only a new president in May, but also positions for more than 18,000 posts, from town councilors to the senate.
Rodrigo Duterte has to step down when his six-year term ends this June.

He initially indicated he would run for the senate, but he pulled out of that race in December, leaving his daughter, Sara Duterte-Carpio, to run as a candidate for the vice presidency and his son, Sebastian, to contest the mayoral race in the family’s support base of Davao City.

Recent polls indicate the current leader in the presidential race is Ferdinand Marcos, Jr., the son of the late president.
He has filed as a candidate under Patido Federal Pilipinas, a party founded by a former Duterte ally, Pantaleon Alvarez.

However, because of his connection to the late dictator, local feelings against his becoming president are also stronger than for any of the other candidates.

The Marcos name is still very popular in the family stronghold of Ilocos Norte in northern Luzon island, but in other parts of the country the name is associated more with corruption and the plundering of state assets.
This means he could have a polarizing impact on society if he were to win the presidency.

Still, his running mate is President Duterte’s daughter, and this will be a tough combination to beat, especially considering, first, Mr. Duterte remains popular among many Filipinos and, second, the rest of the field of presidential candidates is relatively weak.

However, it is possible that support for Ms. Duterte-Carpio will not translate into votes for Mr. Marcos too.
The offices of the president and vice president are elected separately; hence a voter may split his or her vote.

Other candidates running for the presidency include the current vice-president, Leni Robredo.

She is a human rights lawyer and economist, but her power base is relatively narrow.

She lies on the center-left of the political spectrum.

She is lagging in pre-election polls and the fragmented opposition could hurt her campaign.

Manny Pacquiao is another contender.


His main strength is his national name recognition, which he has thanks to his fame as a successful international boxer.

He is also one of the wealthiest candidates and has shown his voter appeal by winning his current post of senator in the 2016 election.
Mr. Pacquiao’s lack of formal education and his limited experience as a politician are probably less significant than his ability to gain the active support of power brokers who think he would be a good agent for protecting and promoting their interests.

Page 10 ASIAN INTELLIGENCE February 9, 2022 Issue #1,085 Political & Economic Risk Consultancy, Ltd. Another candidate with national name recognition is Manila Mayor Francisco Moreno Domagoso, also known by his stage name as Isko Moreno.
His fame stems less from his role as mayor of the Philippines’ largest city than as an actor, but, unlike Manny Pacquiao, he does have a relatively successful political track record to which he can point.

The Manila mayor is running on a centrist campaign that can supposedly appeal to voters disillusioned with the illiberalism and pandemic mismanagement of the Duterte administration and the elitism and unpopularity of the opposition.
Longer-shot candidates include Senator Panfilo Lacson, former presidential spokesman Ernesto Abella, labor leader Leodigario de Guzman, and former defense chief Norberto Gonzales.

The remaining candidates who have filed are such outsiders that they have little chance.

They include businessman Faisal Mangondato and cardiologist Dr. Jose Montemayor.

Elections in the Philippines focus on personalities rather than ideologies or platforms.
The candidates have little to differentiate themselves on foreign policies.

All want to stay engaged with China, but they also say they will defend Philippine interests in the South China Sea.

Of course, they all say they want to reduce corruption, create jobs, get rid of COVID, and fight crime.

However, there are no specific ideas of how any of these goals would be accomplished.

The election campaign period could be more violent than usual.
President Duterte’s high-profile vigilante attacks on drugs and crime have increased rather than descreased the psychology of violence.

Recent reforms have increased automation in the election process, but that is not really a protection against violence, especially at the very local level of politics where some of the worst violence has historically taken place.

SINGAPORE Comments Although general elections in Singapore are not due until 2025, this does not mean 2022 will be uneventful politically.
Most attention will be on the question of who the People’s Action Party (PAP), which is the only government Singapore has known since independence, will pick to succeed Lee Hsien Loong as prime minister.

This is not an issue that will be left up to the general public.

It will be an internal matter for PAP.

Senior leaders like Mr. Lee will probably have some input, but the official position is that younger ministers from the next generation (the 4G) must select someone from among themselves.
The older generation is trying to frame this selection process not as a contest in which someone will “win” but as a 4G decision to pick the person from among their own ranks who will be most effective in promoting teamwork in a way that will bring out the best from every member of the team.

The process has a lot to be said for it, but it also entails risks.
If it were easy to reach such a decision and have confidence in this person’s capability to fulfil such a role, the first choice that the group made to be Mr. Lee’s successor, Deputy Prime Minister Heng Swee Keat, would not have bowed out in April 2021.

It is unclear exactly why he did so, but what is clear is that there are enough differences within the group making the decision on succession to have prevented a new consensus figure to emerge yet.
The three top candidates are Finance Minister Lawrence Wong, Education Minister Chan Chun Sing, and Health Minister Ong Ye Kung.

Moreover, Prime Minister Lee has said he is confident the decision on who will be the next PM will be announced well before the next elections.

Since elections must be held by November 2025, the timeline for selecting a successor is growing short.

It probably has to be made before the end of 2023.


Any longer than this would create the impression that there are serious divisions within PAP either along personality or policy lines.

February 9, 2022 ASIAN INTELLIGENCE Page 11 Political & Economic Risk Consultancy, Ltd. Issue #1,085 On the other hand, Mr. Lee has also said he intends to stay on as PM through the COVID crisis.

That implies there will be not be early elections called for this year, since COVID is still far from over in Singapore.
It is possible that the younger ministers will be able to settle on someone as late as 2024, but the generation of retiring ministers would probably prefer to have more time to introduce the person selected to the general public in order to get the public’s buy-in to the 4G choice.
This will be important, since the successor is being chosen based on his leadership capabilities rather than his popularity, since he is expected to be someone who can do what is best for Singapore, even if the policy is controversial, rather than what is popular.

In the meantime, other than managing the health crisis, the PAP government under PM Lee is likely to do what it can to prevent opposition groups from capitalizing on questions surrounding the succession.
PAP will do this by keeping the opposition on the defensive, which should not be too difficult considering that the Workers’ Party has been caught up in a scandal that will tie up its own leadership for months to come.

It will therefore be difficult for the opposition to gain any traction in 2022.

Next year could be a different matter.

PAP’s next generation of leaders still have to show they can submerge their individual egos for the sake of the team’s unity and effectiveness.
Until now, few doubted such internal divisions could exist, but in the wake of the false step in naming an heir apparent the first time and because the time it is taking to decide on a new person, confidence is not as high as before.

There are few, if any, doubts about PAP’s ability to win the next elections and stay in power, but faith in the 4G’s ability to keep making the right decisions in the medium-term has weakened.

In part, this is Prime Minister Lee’s fault.


His decision to remain as prime minister until the pandemic is over has created the impression that he has more faith in his own capabilities than in any of the 4G leaders see Singapore through the crisis.

It is also beause of the 4G’s failure to select a new “first among equals” faster than it has.

This indicates there is no internal consensus on this important matter.
SOUTH KOREA Comments South Koreans will go to the polls on March 9 to elect a new president to succeed incumbent Moon Jae- in.

The two leading candidates, Lee Jae-myung of the ruling Democratic Party and Yoon Seok-youl of the opposition People Power Party, are neck-and-neck according to the latest polls.

Sim Sang-Jeong of the Justice Party and Ahn Cheol-Soo of the People’s Party are also vying for the presidency, but the election is really between Lee and Yoon.
If Lee wins, he will have a majority in the national legislature, which should support his policy agenda for at least the next two years, when new elections for the National Assembly will have to be held.

If Yoon wins, he will have to work with a legislature in which the opposition holds a majority.

Although this would complicate the job of getting new bills passed, the differences between the policies of the two leading candidates are quite subtle.
The election campaign is currently being fought more by mudslinging in which each party attacks the personal character of the rival party’s flag bearer, family and friends rather than on really major policy differences.
Both candidates are trying to appeal to populist issues, knowing that the public wants someone who can be a unifying figure for the country and be effective in dealing with what the population cares most about, which means mainly domestic problems like soaring education and housing costs, mounting household debt, rising youth unemployment, and widening income inequality.
This means the People Power Party has had to move away from its traditional conservative platform and market-based tendencies to favor more aggressive government support to ensure housing prices fall for young Koreans and income inequality is addressed better.

Page 12 ASIAN INTELLIGENCE February 9, 2022 Issue #1,085 Political & Economic Risk Consultancy, Ltd.
Meanwhile, Candidate Lee of the ruling Democratic Party has moved further to the left, promising cash handouts in the form of a universal basic income that will start with one million won to all citizens in his first year of office, followed by another one million won to people aged 19-29 every year after he takes office.
Mr. Lee is also promising to boost housing supply by building more than 2.4 million homes, including one million to be distributed under a “basic home” scheme, aimed at allowing non-homeowners to live in high-quality public housing at low prices for up to 30 years.

Differences in foreign policy between the two leading presidential candidates are important.

What they have in common is that neither Mr. Lee nor Mr. Yoon want to be put in a position where they have to choose between the US and China.
They both consider China to be extremely important to South Korea economically and the US to be critically important as the South’s military ally.

They both admit that the boundary between economics and security is increasingly blurred and complicated and that the South needs to strike the right balance.

They also agree that this balance includes no further deployment of the THAAD missile defense network in the South.
What remains to be seen is whether it is possible to maintain this balance, especially if external developments like a possible invasion by Russia of Ukraine leads China not only to support Russia’s actions but also to push its own agenda of forcing reunification with Taiwan harder.

In such a scenario, the US will be calling on its allies to support it in its attempts to penalize Russia and, perhaps, China, and it would be extremely hard for South Korea to ignore this pressure from Washington.
Where candidates Lee and Yoon do differ significantly in foreign policy is with respect to North Korea.

Mr. Lee and his Democratic Party would follow the policy of the current administration and try to negotiate a step-by-step defusing of tensions with the North, which could include easing certain sanctions against the North in exchange for certain commitments by Pyongyang.

In contrast, Mr. Yoon opposes any “swap-back” approach and would, instead, adopt a harder line against the North.
He would be opposed to any lifting of sanctions until the North has actually delivered on its promises.

He would also be more open in his criticism of the North’s record on human rights abuses than would Mr. Lee, who, like the current president, would want to avoid aggravating the North in this way in order to keep the channels for dialogue open.
On the other hand, while Mr. Yoon would probably stay cool in his approach to South Korean-Japan relations, he would probably not go so far as to pull South Korea out of a formal trilateral military alliance with the US and Japan.

In contrast, Mr. Lee is likely to be more openly hostile toward Japan and less willing to work within the framework of a formal trilateral alliance, preferring instead to focus on the South’s bilateral strategic alliance with the US.
Again, however, it remains to be seen if Mr. Lee would actually be able to follow through with this kind of decoupling from Japan if Washington were really opposed to this kind division.

One positive force that could help protect South Korea’s relations with the US is that an estimated 70% of South Koreans consider that relationship to be extremely important.

They do not share the same strong feelings toward Japan, but they do consider China to be a threat.
If current global tensions continue to evolve in ways that turn the US relationship with China and Russia much more confrontational, the leadership in Seoul is likely to be under strong pressure from its own population as well as from the US to act as a united front even if it means angering Beijing.
TAIWAN Comments February 9, 2022 ASIAN INTELLIGENCE Page 13 Political & Economic Risk Consultancy, Ltd. Issue #1,085 This year will be a test for whether or not the new Kuomintang (KMT) leader Eric Chu will head the main opposition party in the 2024 elections.

It could also be a time when it becomes clearer who the ruling DPP will select to be its standard bearer in those elections, succeeding the incumbent, President Dr. Tsai Ing-wen, who is finishing her second term in office.
However, it is more likely that this person will emerge in 2023 so that Dr. Tsai does not have to share the center stage too early in her final term.

Current indications are that Mr. Chu will not succeed and that the KMT will pick a different person to head their party.

Although he was only recently selected to be KMT chairman, he failed in his first real test, namely, four referendums held late last year.
Voters rejected the KMT’s proposal to reinstate a ban imports of US pork treated with the food additive ractopamine.

They also rejected the KMT’s proposal to hold future referendums only concurrently with general elections.

Two proposals put up by civic groups that were supported by the KMT were also defeated.

One of those proposals was to reactivate an unfinished nuclear power plant to resolve Taiwan’s power shortage problems.
The other proposal was to ban the DPP government from building a liquefied natural gas plant at an algal reef for the protection of aquatic wildlife and the environment.

Mr. Chu and the KMT had hoped to use these referendums are a rejection of the DPP government and to give the KMT a boost ahead of local elections scheduled for November 2022, when voters are due to select city mayors, county commissioners, city councils, and county councils nationwide.
The local elections are seen as the key indicator for the 2024 presidential and legislative elections.

In the 2018 local elections, the DPP won six cities and counties, while the KMT gained control over 15 cities and counties, and Mr. Chu wants to build on this lead.

Doubts have now grown in his ability to do so.

Attention in November will be focused on the battle for the leadership of the capital, Taipei City, where Mayor Ko Wen-je reaches the end of his second and final term.
Ko, who was first elected in 2014 as an independent backed by the DPP, chairs the Taiwan People’s Party (TPP), but both the DPP and the KMT are expected to try and wrest control back.

Another mayor who will have to leave office is Taoyuan City’s Cheng Wen-tsan, who has sometimes been tipped as a DPP presidential candidate for 2024.

The four referendums did indicate that the DPP currently enjoys a larger core base of supporters than the KMT.
However, it did not indicate that the DPP will have clear sailing in either the local or general elections, since the majority of registered voters are not showing a clear preference for either party.

Despite the forceful campaigning by both parties in the run-up to the referendums, only 41% of the registered voters turned out, which leaves an extremely large swing vote.

The KMT knows it will have to broaden its appeal and therefore is likely to select a new leader well before the 2024 elections.
It might also have made a mistake by proposing to reinstate the ban on US pork imports containing the additive, since Washington had campaigned for the removal of the ban for years.

With the US moving to take a more confrontational approach vs. Mainland China, the KMT’s policy of engagement is not as closely aligned to the US position as it once was, and now its position on pork imports could have hurt this relationship further.
It is with this in mind that the KMT is rushing ahead with plans to reopen its liaison office in Washington and repair relations with US congressional leaders.

Meanwhile, the DPP has led Taiwan during a period of closer US relations.

Dr. Tsai might not succeed in getting Washington to agree to a bilateral trade pact, but she has gotten more military aid from the US and verbal support from political leaders not only in the US but also in Japan.
Meanwhile, the KMT’s policy of doing more to engage with China seems to be increasingly unattractive to neutral voters in Taiwan.

The challenge facing both parties between now and the 2024 elections is to do a better job of appealing to these voters, and the KMT currently faces a bigger uphill struggle than the DPP in achieving this considering that its base of core supporters is smaller than the DPP’s and the party is suffering from weak leadership.
Page 14 ASIAN INTELLIGENCE February 9, 2022 Issue #1,085 Political & Economic Risk Consultancy, Ltd. China will remain a hot button going into the 2024 elections, and it could be the deciding issue.

Looking forward, Beijing is not going to soften its line toward Taiwan reunification over the next two years, especially if developments in Ukraine keep deteriorating.

This would push China-US into an even more confrontational relationship.
Popular opinion in Taiwan would almost certainly move even more against engaging with China than is currently the case, forcing the KMT to modify further its position.

However, the DPP would probably stay on its present policy course vis-à-vis China, rather than harden its line.

It would be too dangerous and quite possibly self-defeating to suggest anything that comes across as a call for independence.
But the DPP is trying to raise Taiwan’s international profile by seeking to participate in bilateral and multilateral trade deals.

This difference between the KMT and DPP over China might be enough to win over more of the voters who are currently not committed to either party.

However, it will be in the KMT’s interest to play up domestic concerns more if it can.
Those concerns currently include the government budget; maintaining economic competitiveness; ensuring good jobs and housing for young people; energy security, preserving the environment, and food safety; the generosity of retiree pensions; marriage equality; judicial reform; and, last but definitely not least, dealing with COVID risks and positioning Taiwan for the post-COVID world.
An alternative scenario could see additional, small parties set up between now and 2024 that put forward alternative agendas centering on issues not being emphasized by either major party at the present time.

Just because the majority of registered voters did not vote on the recent referendums at all does not mean they are apolitical.
There are still activist elements in the public who do not feel the DPP, in its current majority role, is addressing their concerns effectively, and they also have doubts that the KMT would do so if it were to regain power.

As elections approach, activist groups might mount large protests to publicize their concerns in the name of the higher good.
Their aim would be either to get one of the main parties to incorporate their issues as part of their campaign platforms or to win enough seats as third parties to be sought by one of the bigger parties as a partner in exchange for pressing the swing parties’ main issue.
A major problem with this type of special-interest politics is that it can create the impression of social instability that makes democracy look sloppy and vulnerable to populism, an image Beijing would no doubt try to play up as evidence of the failure of Taiwan’s political system and as a reason for reasserting its sovereignty over the island.
If Beijing cannot have a party in power in Taiwan that is willing to engage with it in talks that could eventually result in reunification, it would probably prefer to have Taiwan’s system look so dysfunctional that it is holding the island back from stability and development.

That is not a condition that exists today, but it is a future that Beijing would love to see materialize and would no doubt encourage if it could.
THAILAND Comments Cracks are emerging in the ruling coalition headed by Prime Minister Prayuth Chan-ocha.

Thailand’s system has shifted from a democracy (that many in the country considered to be seriously flawed) back in 2014 to a military dictatorship that took over in a coup that year, to a hybrid creation designed by the coup-leaders that exists today.
The current system includes a constitutional monarchy with strengthened powers, a government that is partially elected and partially appointed, and one in which power is shared by the military and a local group of elite.

It is not stable, nor does it enjoy wide popularity.

Although it had until recently 267 seats in the parliament, compared with the opposition bloc’s 208, this majority was divided among an 18-party coalition.
At the end of January, one of those coalition factions split from the coalition, taking with it 21 February 9, 2022 ASIAN INTELLIGENCE Page 15 Political & Economic Risk Consultancy, Ltd. Issue #1,085 lawmakers.

It remains to be seen if those lawmakers will keep voting with the coalition, but they will not be working from within the administration.

Fresh polls will be due in 2023, but the election calendar could be sped up.
Speculation is growing that Prime Minister Prayuth might call for new elections around October or November of this year, although it is doubtful that would really result in a more stable, effective government.

Both government and opposition ranks are deeply divided with disputes and power struggles, few of which would be resolved through elections.
In any event, the government is now weaker than it was – less because of its hold on political power than because it is extremely disunited and has shown itself to be weak in managing Thailand’s most pressing problems.

The biggest complaints are about the government’s handling of the COVID-19 crisis.
It has also lost the support of farmers and other rural people for the way it has moved to convert agricultural land into industrial zones for projects that will benefit big companies at the expense of local villagers.
Now it is likely to be blamed for failing to deal effectively with the Kingdom’s latest disaster – an oil spill in the Gulf of Thailand that is polluting the country’s beaches at a time when resorts and other tourism-related industries were just launching a new drive to attract foreign tourists back to the country.

The oil spill is a serious setback that could contribute to the economy slowing again; tourists staying away, and inflation accelerating.
If Thailand had an truly elected government, this would be a time when coup risks would be rising sharply, but since the government is still in the hands of military leaders who staged the 2014 coup, another putsch at this time would merely reveal divisions within the military with little prospect of an improvement in actual governance.
Still, pressures for political change are building, and as they do, speculation is likely to grow, first, about the durability of many constitutional changes and other institutional reforms initiated by the coup leaders since they grabbed power, and second, about the possibility that political groups currently on the outside of power might try to stage a comeback.

In addition to possible rebel factions in the military, eyes are on the largest opposition party, the Pheu Thai.
Last October, it named Paetongtarn Shinawatra, the 35-year-old daughter of exiled former Thai Prime Minister Thaksin Shinawatra as chief of its Inclusion and Innovation Advisory Committee.
Although Thaksin’s youngest daughter insists she is not ready to become a politician, her acceptance of a position as adviser has sparked speculation that Thaksin Shinawatra might be anticipating a political change in Thailand that would enable him to return to the country from his base of exile in Dubai without having to fear being jailed or punished.

However, that is not going to happen as long as the current political leadership has its say.
In the absence of national elections, attention this year will focus on local elections, including races for the governor of Bangkok, elections for Bangkok Metropolitan Council, and the race of mayor in Pattaya.

The Bangkok governor’s race will be a major struggle between core political parties.

Losing the election will represent a major setback for any party, while victory for a party’s candidate will potentially signal the results of the national polls.
Chadchart Sittipunt, a former transport minister in the Yingluck Shinawatra administration, is currently leading over other possible candidates in popularity polls.

Chadchart worked closely with Thaksin Shinawatra in the past, and he joined the Pheu Thai Party in 2012, but he is running in the Bangkok mayoral election as an independent.

It is the prospect of Thaksin still acting as a political force that future court rulings deserve attention.
Both the Pheu Thai and Move Forward parties face possible court cases that could force their dissolution.

Should one or both of the parties be dissolved, the opposition’s strength in parliament would once again diminish.

It is the risk that Pheu Thai might be declared illegal that is prompting Chadchart to run as an independent, but his election would still be seen as a sign that Thaksin cannot be discounted as an important influence on Thai politics in the future.
Page 16 ASIAN INTELLIGENCE February 9, 2022 Issue #1,085 VIETNAM Political & Economic Risk Consultancy, Ltd.

Comments Last year was a big one for Vietnam’s political calendar.

In January 2021, the Communist Party of Vietnam (CPV) held its 13th Congress, during which it selected the country’s new politburo.

In May, the country held a tightly controlled and scripted national election in which all candidates had to be approved by the Communist Party.
Therefore, the pieces on the chessboard are now in place to deal with 2022.

There are unlikely to be any sharp changes in domestic policy.

The emphasis will be on tightening the CPV’s controls over information flows, officially taking an aggressive stance against corruption, trying to attract more foreign direct investment, making state-owned companies more efficient (and selling down government stakes in some), and keeping real GDP growth above 6%.
Last year saw reigning Communist Party chief Nguyen Phu Trong chosen for an unprecedented third term.

This will ensure policy continuity and rule out major political reform for the next few years (his new term is not due to end until 2026).

However, depending on developments in Ukraine and the fallout this has on China-US relations, Vietnam’s leaders could find their domestic concerns overtaken by foreign policy complications.
They will not openly take sides between the US and China, but it will still be difficult balancing its relations with both these Powers simultaneously.

It does not trust either but wants to stay engaged with both.

What would make the situation especially complex for Hanoi would be if a Russian invasion of Ukraine were supported by Beijing (which is likely) and then China uses this logic to justify being more assertive over its territorial claims in the South China Sea also claimed by Vietnam.
The main domestic political wild card is Mr. Trung’s health.

He is 77 years old and reportedly suffered a stroke in April 2019.

In subsequent appearances he seemed frail, and there was speculation that he would retire last year.

However, this turned out to be mistaken.


The fact that Trong was given special considerations twice -- in 2006 for age exception and in 2021 for term limit -- proves that he is the most powerful person in the country and, at the present time, the only person the Central Committee can agree on as Vietnam’s top leader.

He is still the main driver of the party’s decision- making process.
Some observers believe Trong had favored fellow Politburo member Tran Quoc Vuong to succeed him, but then sought to stay on when his pick could not attract sufficient support from the rest of the Central Committee.

It is conceivable Trong could step down part way through his third term if a suitable consensus candidate is found.

This raises the question of whether Trong will have enough time to groom and successfully pass the mantle of leadership to a chosen successor.
It is possible that those on the Central Committee who have opposed candidates so for put up by Mr. Trong might have decided that it is preferable to avoid wrestling with this question while Mr. Trong is there and would rather wait until he is gone so that he cannot use his influence to weigh on the succession issue.

If that is the case, it would indicate that there are powerful factions that are biding their time.
Nguyen Xuan Phuc, who became president last year, is one candidate, but he is already 67 years old, and the longer that Mr. Trong stays on, the less likely it is that Mr. Phuc would be chosen to succeed him.

Next in line on the new Politburo would be Pham Minh Chinh, who is 64 and currently serving as prime minister.

Chinh previously served as head of the Central Organization Commission, where he was in charge of party personnel and earned the support of many Central Committee members.
However, it is unclear what Mr. Trong thinks of him as a successor.

February 9, 2022 ASIAN INTELLIGENCE Page 17 Political & Economic Risk Consultancy, Ltd. Issue #1,085 Younger Politburo members who might have their eye on the top job include Vo Van Thuong and Tran Tuan Anh.

At 52, Thuong is the youngest member of the Politburo and is currently serving as Executive Secretary of the Central Committee’s Secretariat.

Anh is 58 years old and is currently serving as the Minister of Trade and Industry.
What makes him someone to watch is that he is the son of former state president Tran Duc Luong.

What is unclear is whether this bloodline would help or hurt him get the support he needs to ascend to the top job.

This could be a strike against him, while another could be his diplomatic background.
EXCHANGE RATES Currency Chinese renminbi Hong Kong dollar 2/04/22 6.3610 7.7885 Indian rupee 74.64245 Indonesia rupiah Japanese yen Malaysian ringgit Philippine peso Singapore dollar South Korean won Taiwan dollar Thai baht Vietnamese dong 14,380 115.20 4.1795 51.2770 1.3455 1,198.39 27.81 32.970 22,650 Commercial middle rate expressed in terms of US$1.

Published by: Political & Economic Risk Consultancy, Ltd. 20th Floor, Central Tower 28 Queen’s Road, Central, Hong Kong Mailing address: G.P.O.
Box 1342, Hong Kong Tel: (852) 2541-4088 Fax: (852) 2815-5032 E-Mail: info@asiarisk.com Web site: http://www.asiarisk.com The material in this report may not be reproduced in whole or in part without permission in writing from the publisher.

While every effort has been made to collate, check and present without ambiguity all data contained herein, the variety of sources from which they have been assembled and differing methods of reporting render verification oftentimes impossible.
Thus, they are published without warranty.