The last 12 months will go down in history as a time of change, unrest, death and rebirth. It is a year that will be remembered, a year that many will happily cheer out the door come December 31, and a year that has changed all of our lives.
By Holly Reeves
Join us as we count down the movers, shakers, change-makers and failures that have rocked and rewritten our world in 2016.
Politics top performers
1. Lee Hsien Loong
The Prime Minister of Singapore has kicked off his third term with a strong performance in 2016. He made his first visit to Washington, where outgoing President Obama reaffirmed the relationship between the two countries as “rock solid.” That is a coup in itself, but his true success is in managing the difficult balance between this US support and relations with China for another year. Add to this getting agreement on his proposals for the reform of the country’s presidential system and the signing of a deal for a high-speed rail link between his country and Malaysia, and the achievements begin to add up. On a lighter note, he got the photo every Singaporean wanted this year; a selfie with the national hero and Olympic gold winner, Joseph Schooling whose success has buoyed the entire country – to Lee’s benefit. His challenges in 2017 will be maintaining his careful diplomatic dance with China and a tightening in capital outflow into the finance-heavy Singapore economy from other countries in the region.
2. Nguyễn Xuân Phúc
Having taken the reins of Vietnam’s leadership earlier this year, Nguyễn Xuân Phúc has continued to steer the country to remarkable rates of growth. Despite the many fluctuations of the world stock market, it has consistently remained in positive figures and should post a year-end GDP of 6.3%, and push even higher next year. He also inked new deals with local giant India to bring the two countries closer together and has already begun to build bridges with America’s new president. However, his next moves will need to dig further into restructuring the economy and creating a more transparent environment for much-needed innovation and foreign direct investment.
3. Prayut Chan-o-cha
The “reluctant” Prime Minister of Thailand is seeing out another year as leader of his military junta, having navigated a remarkable set of hurdles which could have brought significant instability. Not only has he won the referendum on a draft constitution which may well legitimise his rule long-term, but managed the impacts of successive terrorist attacks. He has also overseen the biggest social change in the country in decades with the sad passing of the country’s long-serving King. His constant critic and predecessor, Yingluck Shinawatra, was found guilty of mismanagement of her rice subsidy scheme and the upcoming implementation of a controversial cyber-security act will further strangle voices of dissent against the strong arm approach of his regime. However, his big problem remains the economy where industrial production sits at zero and exports are in freefall. New economic policies will almost certainly be a 2017 priority.
4. Donald Trump
He was the American presidential candidate that the institution ignored but the voting public took nothing but seriously. The polls said he would never win but he has, and convincingly so. Currently working on his transition plans and building a team around him, Trump has already announced policies which will significantly change the landscape of the Asia-Pacific region. Gone is the American commitment to the Trans-Pacific Partnership and his provocative stance to relations with China is already creating waves among diplomatic circles. Expect to see less focus on globalised trade patterns, changes to tariffs and decreasing levels of military support for causes close to the heart of America’s southeast Asian partners.
5. Xi Jinping
Looking back into the ASEAN Today archive for 2016, many of the year’s big stories have had China’s interests, and its leader’s smooth political moves, at their core. Mr. Xi has managed a variety of both internal and external pressures with apparent ease, purging corruption within his own party and using his nation’s power, influence and cash to make a huge imprint on the politics of his neighbours. Highlights for the formidable leader have included joining Mao Zedong and Deng Xiaoping in being named”core leader,” and making big money investment deals that should quieten neighbour’s claims to the South China Sea. He reaches the end of his first term in 2017 and a party congress must meet to decide a new team for him. Watch out for some big promotions as his potential heirs emerge.
Politics worst performers
1. Rodrigo Duterte
Considering his huge popular support and ballot-box success Duterte seems an odd choice for the failing leaders pile. Yes, he may be riding the wave of huge approval ratings, but that sea of support is flooded with the blood of thousands of Filipinos. His shoot-to-kill policy for eradicating the drugs trade has brought howls of disapproval from key players, both nationally and internationally, and suffering to the lives of many poor and vulnerable members of society. Meanwhile, his political platform is largely non-existent, with economic policy recycled from the last administration, foreign capital increasingly fleeing the country’s markets and a diplomatic approach that varies by the day. He has sold-out his country’s claim to the South China Sea in return for Beijing’s money, and his challenge now is to deliver on the big-ticket infrastructure projects the nation so desperately needs.
2. Najib Razak
Prime Minister Najib has had a terrible year. The allegations and controversy around the collapse of 1MDB, and related gossip about huge amounts of money found in his personal bank account, has haunted him at every turn. With his old foe, Mahathir Mohamad, happily pulling the strings in the middle of this whirling pool of distrust and unrest, people have taken to the streets to call for his arrest and removal from office. His former ally Muhyiddin Yassin left their political party just to lead a movement against him, his latest budget has had to bring to an end to vital subsidies for everyday citizens, and the Proton car maker – once a national jewel – has been brought to its knees. Najib, however, remains in power and now faces the prospect of announcing an early general election in 2017. Whether he will win, or even stand, is a matter of significant national discussion.
3. Aung San Suu Kyi
Myanmar’s once-worshipped lady leader finishes 2016 with huge stains upon her reputation as a reformer and advocate for peace as yet more outbreaks of violence in Rakhine State attract international condemnation. Leaders from across the ASEAN region, pressure groups and international organisations are losing patience with her attempts to appease the situation, but her lack of clout with the military has left her powerless to take action. Where she has succeeded this year, in having international trade barriers removed and warming relationships with potential investors, may yet prove in vain as sanctions loom over the alleged genocide of the so-called Rohingya. She needs to take action for the sake of her country, and fast.
4. David Cameron
Britain’s former Prime Minister gambled his entire political career on a win in this year’s crucial Brexit vote. He lost. The surprise knife-edge win for the campaign to leave the European Union has thrown his country into chaos and created a wave of uncertainty among the UK’s ASEAN trade partners. Six months after the result there is still no certainty about the leaving process, and Europe’s leaders are unlikely to give Britain a good deal at the negotiating table. Southeast Asian leaders have been cautious in their reactions, suggesting more detail is needed on what their country’s future relationships with the UK, and Europe, might look like.
5. Hun Sen
In years to come Cambodians may look back on 2016 as the year things changed. The murder of activist Kem Ley has awoken the spirit of unrest among activists and the strongman leader has had to resort to an aggressive crackdown in order to get a grip on growing public dissent. Meanwhile, a leading rights group released their evidence of widespread corruption in many national sectors that lead right back to Sen’s own family. And despite this increasingly hostile environment, he must use the year ahead to prepare for the 2018 elections. His party barely won last time around, could 2017 signal the beginning of the end of his decades in power?
ASEAN’s movers and shakers
Southeast Asia’s largest e-commerce site changed hands this year for a cool US$1 billion, joining the holdings of Chinese giant Alibaba. This huge deal reaffirms it as one of the strongest business prospects in the region thanks to its network of distribution centres and customer service ethos. In fact, the company finishes the year with an impressive Morgan Stanley price target that signals upside of more than 40% for the stock, on top of its almost 14% rise this year. Its challenges for 2017 will be the long-awaited arrival of Amazon in the region and Lazada’s plans to expand its offer into fresh groceries with the acquisition of Singaporean online grocery start-up, Redmart.
Garena finishes 2016 as the most valuable tech startup in southeast Asia, with a valuation of more than US$3.75 billion and plans for a public offering on the American stock exchange imminent. The venture, which offers a messaging app, gaming, a payment system and opportunities for online shopping the venture has quickly grown to be the region’s largest web and mobile platform. And its potential is well-recognised, earlier this year it easily raised US$ 170 million from a single round of funding with Bloomberg suggesting an impressive compounded annual growth rate of 95%. Its upcoming challenges will be the mechanics of an IPO, its wealth of competitors and the lack of proper logistics and banking infrastructure in parts of the southeast Asia region.
China’s massive online marketplace, Alibaba, has delivered solid performance across all of its trading areas in 2016, supported by a 41% surge in its core e-commerce offering. Overall this part of the company brought in US$4.27 billion, against an overall revenue of US$7.3 billion, in turn pushing shares up at least 7%. However, despite this strong performance 2017 may not prove as simple. The U.S. Office of the Trade Representative has put its outlet Taobao back onto its blacklist of notorious fake goods outlets and the company is reported to have had similar attention from Chinese authorities. However, the latest reports suggest it is areas other than its traditional business that may prove strong performers in the months to come. Its Koubei services subsidiary just attracted US$1.2 billion in funding.
For a project that began as Indonesia’s first Internet shopping hub, Tokopedia has mushroomed to the country’s first unicorn, predicted to soon be worth over US$1 billion. Built on a similar model to Alibaba, instead of selling products from its own shelves the site matches customers with merchants of electronics, clothing and healthcare items. Other parts of the business offer customers the chance to buy train tickets and mobile phone calling credit. This model decreases the cost and investment needed to scale and Tokopedia, although highly private about its exact valuation and revenue, has increased its customer base quickly and significantly. And with US$147 million of funding secured this year, the company plans to continue its focus on local interests by growing its domestic operation and exploring payments technology as incomes rise.
5. Lippo Group
The Indonesian family-run property development group has performed well in 2016, despite slowing property sales in its core offering. Based on the Western model of family homes laid out in neat rows close to custom-built facilities, its Lippo Village just 25km outside of Jakarta, blazes a trail for other developers working in the southeast Asia region. The business has very sensibly played the long game in 2016 by deferring new launches and should benefit from cash flowing back into the country in 2017 thanks to the government’s tax amnesty. Expect to see more being done to target the millions of young families in need of affordable housing.
The year ahead
And so, as the year closes and the turbulence of the last 12 months subsides, both the politics and business world has been reshaped and revitalised by the surprises and successes of 2016. As we head into the new year, effective solutions must now begin to emerge about the region’s big priorities of raising standards of living, promoting investment, and improving infrastructure.
The core issues at play will be managing the very different levels of development between partner countries, and the need for core improvements in basic facilities and services in countries such as Laos, Cambodia and Myanmar. Some of these challenges can be addressed through public-private partnerships, and new streams of foreign investment, but the problem of bureaucracy and strong governance will probably continue to hold many successful projects back.
On a similar note, national leaders will continue to face the glare of a revitalised and restless public. While long-standing players like Najib and Hun Sen will need to quell dissent, new faces such as Duterte and Jokowi will need to consolidate their power bases as all four struggle with populist surges among their population.
Regionally, the issues are even more pressing. The ASEAN bloc must decide not only its collective position on the heavily divisive situation in Rakhine, but also how to manage the fallout from the territorial dispute in the South China Sea. If, and how, this is addressed will have economic implications for the success of the bloc as a whole, particularly as formerly leading economies begin to slow and look to ASEAN partners for new opportunities and trade linkages.
And as the US takes a step back from international politics, governments will need to decide their approach to China’s emergence as the region’s key development partner. After all, this support will certainly come at a price.