The year 2015 marked the eighty-fifth anniversary of the Communist Party of Vietnam (CPV) and the fortieth anniversary of Vietnam's reunification under its rule. After almost thirty years of economic transformation, Vietnam has achieved considerable progress in terms of socio-economic development, but challenges to the country remain substantial as the economy has not regained full steam since the 2008–9 slowdown. Politically, the CPV has also been faced with a testing period. Its performance-based legitimacy has been undermined, while popular support declined due to widespread corruption as well as various socio-economic problems that cast doubts on the efficiency and accountability of the state and party systems. In terms of foreign policy, Beijing's increasing assertiveness in the South China Sea presents a major challenge for the party. While seeking to maintain a peaceful relationship with its northern neighbour, Vietnam also needs to look into new options to deal with the rising China threat.

Developments in Vietnam in 2015 show that the CPV was struggling to overcome these challenges while probing for changes to strengthen its political legitimacy, to improve the country's economic performance and to navigate through complex foreign policy issues. Preparations for the CPV's Twelfth National Congress obviously topped the country's domestic agenda in 2015, but other economic and foreign policy developments were also noteworthy as they may indicate how Vietnam in general and the CPV in particular will perform in 2016 and the years to come.

Politics: Preparations for the CPV's Twelfth National Congress

The CPV's quinquennial national congresses are always important events for the country's political system. Each congress not only elects the country's top leadership, but also reviews its past performance and sets out a framework for future socio-economic, political and foreign policies. Although policy orientation is generally considered the most important task of the congresses, the election of the party's top leadership attracts the most attention from the public, party members and Vietnam watchers around the world. The party's Twelfth National Congress, planned for January 2016, has been no exception.

To prepare for the congress, in September 2015 the party released a draft political report for public comment. After reviewing the achievements and shortcomings for the past thirty years of doi moi, as well as since the last congress, the report outlines objectives and solutions for the next five years.

The year 2015 in Timor-Leste was marked first and foremost by the withdrawal of Xanana Gusmão from the Prime Minister position he had held since 2007, and the gradual beginning of a long called for leadership transition. His resignation has not, as some had thought, signalled his complete withdrawal from political life. Instead, his stepping down was accompanied by the restructuring of the Timorese government, with Gusmão now serving as Minister for Planning and Strategic Investment, a role in which he is expected to continue the focus on infrastructural development advanced during his time as Prime Minister.

The security situation remains one of overall stability, in spite of relatively contained security incidents, which this year culminated with the death of rebel leader “Mauk Moruk” in a clash with Timorese security forces. In the coming years, Timor-Leste and its new government faces the challenge of how to diversify its economy away from its current heavy dependence on the Petroleum Fund to finance its national development. This requires balancing popular demands and governmental preference for fast-paced “big development” infrastructure projects with more long-term and sustainable initiatives less dependent on the petroleum industry and targeted more at creating viable employment opportunities for the country's youth.

Leadership Transition

Since the beginning of his political reign, former resistance leader, later President and lastly Prime Minister Xanana Gusmão more frequently expressed his intention to withdraw from formal Timorese politics. By early 2015, however, amidst growing critcism of his leadership style both internationally and locally, coupled with domestic calls for a leadership transition, he regularly aired the idea of his impending resignation. On 6 February 2015, Gusmão formally handed in his resignation as Prime Minister, a role he had held since parliamentary elections in 2007. The 2007 elections had signalled Gusmão's real entry into party politics, when he resigned from the Presidential position he had held since independence and launched a new political party, Conselho Nacional de Reconstrução de Timor (CNRT). Since then, he served as Prime Minister in two governments, first between 2007 and 2012, and again between 2012 and up until his resignation in early 2015.

His oft-repeated intention to resign had long prompted speculation about possible successors to Gusmão, with international commentators expecting that his replacement would come from within his own party. However, Timorese politics is rarely predictable.

Malaysia aims to transform itself into a technologically sophisticated, export driven, high-income and developed nation by 2020. Foreign and domestic private investment and high-quality human capital have been targeted as the pivotal drivers of Malaysia's economic growth. They are expected to propel the country from its position as an upper-middle-income country to high-income and developed nation status. To accelerate the growth of a talented, entrepreneurial and balanced human capital, Prime Minister Najib Razak announced a new motto of “Soaring Upwards” for the Malaysian higher education system to quicken the pace of creating a firstrate educated workforce. The recently launched Malaysia Education Blueprint 2015–2025 (Higher Education) has targeted that by 2025 at least one Malaysian university should be ranked among the top twenty-five in Asia, two universities in the global top hundred, and four universities in the global two hundred. In The Times Higher Education's World University Ranking for 2015–16, one Malaysian university achieved a place in the 401–500 rank, while another four are in the lower 601–800 band. The government estimated that Malaysia would need about 500,000 highly skilled and talented science, technology, engineering and mathematics (STEM) oriented workers, a large pool of trained graduates, and a great number of skilled and semi-skilled workers. It is envisaged that skilled and semi-skilled personnel will be provided through technical and vocational educational training institutions.

This chapter examines the role of high-quality education and discusses issues related to the Malaysian vision. Equal opportunities to pursue an all-round excellent education to accomplish the objectives are of paramount importance. The focus of the chapter is on current educational provisions and what is needed to secure well-equipped, creative and innovative high-quality human capital to become a developed nation by 2020.

Inclusive and Quality Education Drives “Holistic” Talent

To produce the critical number of graduates and skilled employable workforce, a country requires an inclusive, high-quality and equitable education system. Such standards should be ensured both at school and tertiary levels. This is Malaysia's core challenge and dilemma. The country's present centrally controlled and managed public higher education system is based on a politically resolute, racebased affirmative action strategy and managed by a rather insular bureaucratic system. Parallel to this public provision, there is a sizeable profit-based private sector delivery system. Can the country under such constrained supply conditions generate the critical mass of high-quality and skilled employable workforce?

The year 2015 was an intriguing one for Laos. It was a year of taking stock of the country's socio-economic and political developments following Laos’ reform efforts and economic integration. Laos’ accession to the World Trade Organization (WTO) in 2013 was the latest in a series of steps towards such integration, and the next milestone is joining the ASEAN Economic Community (AEC) in January 2016. The AEC presents ample opportunities for Laos, yet the accompanying challenges are not to be underestimated. Laos will also assume ASEAN chairmanship in 2016, a role that is expected to be positive for the country's international reputation and its commitment to further assimilate into the region, although the real impact will only be evident in the medium to longer term.

The year 2015 was also a time for reflection as Laos observed its fortieth year of state building since its independence in 1975. Even though Laos has sustained relatively high economic growth, the country has faced challenges in managing its fiscal deficit amidst the slow recovery of the global economy. Its exports continue to be skewed towards resource-based products, and in the medium term exports and investment inflows to non-resource sectors are not expected to rise much due to supply-side constraints and a lack of private sector competitiveness. This is largely attributed to a shortage of skilled labour and the high costs of doing business. In terms of politics, Laos will see a power transition in 2016, but that is not expected to significantly change the governance landscape.

As Laos is a small, rural, landlocked country surrounded by much larger ones, economic and development challenges and ambitions are the most important domestic factors shaping Laos’ future.

Economy and Emerging Challenges

The economic growth of Laos was moderate in 2015, with the gross domestic product (GDP) estimated to expand by 6.4 per cent according to the World Bank, and predicted to pick up to 7 per cent in 2016. However, the figures estimated by the Asian Development Bank are somewhat higher, at 7 per cent for 2015 and 7.2 per cent for 2016. These estimates are based on strong investment in the energy sector, particularly the authorization of one segment of the Hongsa lignite power plant, and the higher production output of copper and gold.

Prime Minister Shinzo Abe has highlighted Japan's commitment to Southeast Asia since his inauguration for his second term as Prime Minister in December 2012. His first year in office, 2013, represented a search for new initiatives to determine his administration's strategic objectives towards Southeast Asia under the fortieth anniversary of the ASEAN–Japan Friendship and Cooperation rubric. Unlike many of his predecessors, Abe visited all ten Southeast Asian states, and this diplomatic approach culminated in the “Vision Statement on ASEAN–Japan Friendship and Cooperation: Shared Vision, Shared Identity, Shared Future” and the Joint Statement, “Hand in Hand, Facing Regional and Global Challenges”, which endorsed comprehensive cooperation between ASEAN and Japan.

In 2014 Japan's efforts focused on the implementation of the 2013 Vision Statement, promoting cooperation on the four pillars — security, economics, sociocultural ties, and people-to-people interaction. In the face of increasing terrorist threats, Japan emphasized non-traditional security cooperation through the “ASEAN–Japan Joint Declaration for Cooperation to Combat Terrorism and Transnational Crime”.

Abe also constantly reassured Southeast Asia about Japan's changing security policy. Indeed, Abe aimed to relax constitutional and political constraints on Japan's security policy under the “Proactive Contribution to Peace” policy — such as its constitutional reinterpretation to enable Japan to exercise the right to collective self-defence — and Japan began to have more domestic political room to strengthen security cooperation with Southeast Asia. At the same time, Japan attempted to reassure ASEAN member states that it would maintain the line of the 1977 Fukuda Doctrine, comprising three principles — never becoming a military power, forging ties with ASEAN based on “heart to heart” understanding, and cooperating with ASEAN member states as equal partners. In this context, Japan's policy towards Southeast Asia in 2015 was characterized by “strategic coordination”, which focused on policy implementation with several new diplomatic initiatives.

ASEAN Policy

The objective of strategic coordination is not only to continuously deepen Japan's comprehensive ties of friendship with Southeast Asian states and ASEAN, but also to shape China's behaviour in Southeast Asia and beyond through ASEANled institutions and Japan's bilateral ties with individual Southeast Asian states.

How should a review of Singapore in 2015 be best framed? By an acronym and a number: SG50. This was the year Singapore celebrated its fiftieth year of independence, with the ubiquitous SG50 logo embossed on and attached to almost anything. Much like an individual turning middle-aged, the year was one where the nation experienced loss, made decisions about its future, reflected on and celebrated its past with pride, and tried to become comfortable with its own skin.

Domestic Political Developments

National Loss: The Passing of Lee Kuan Yew

Loss in 2015 for the nation came in the form of the death of former Prime Minister Lee Kuan Yew on 23 March at the age of ninety-one — just under five months before the city-state was to celebrate fifty years of independence. Lee passed away after being hospitalized for severe pneumonia on 5 February. Lee's elder son, Prime Minister Lee Hsien Loong, declared a week-long period of national mourning and all national flags were flown at half mast during that period. After a private wake, his body was moved to the Parliament House of Singapore on 25 March where he lay in state for four days before his cremation on 29 March.

Lee's death has undoubtedly closed a chapter in Singapore's history, as he is widely regarded as the key founding father of modern Singapore. Co-founder of the People's Action Party (PAP), the political party that has governed Singapore uninterrupted since home rule in 1959, Lee was Singapore's first and longest-serving Prime Minister. He oversaw the rapid development of the nation in one generation from underdeveloped to developed status. In a televised address to the nation on the day of his father's death, Prime Minister Lee maintained “[t]o many Singaporeans, and indeed others too, Lee Kuan Yew was Singapore”. The immense measure of the man and the intimacy of the ties between him and the nation may be found in the tributes paid from abroad, the number of people who queued for hours to pay their respects when he lay in state and the numbers who lined the roads to see the cortege travel to the funeral service and the crematorium.

The twenty-three chapters in Southeast Asian Affairs 2016 address a vast range of pressures and opportunities for the peoples of the region, from the political impact of spreading social media, to economic and political models showing signs of atrophy, to the large and turbulent regional ripples of economic transformations and policy adjustments around the world. States of Southeast Asia in 2015 faced bottom-up pressures for political and economic change, a tough global economic environment, and more major-power involvement, and even contestation, in the region. Times were very interesting. All of these pressures are likely to persist and potentially intensify in 2016 and beyond. Political and policy changes to address these structural continuities will be paramount.

External Forces

Global and wider regional forces — most, negative — had greater impact in Southeast Asia in 2015. Cassey Lee's regional economic outlook chapter analyses how the fall in commodity prices, slowing growth in China and tightening U.S. monetary policy affected Southeast Asian economies. None were spared, but the effects were very varied. Brunei was the hardest hit and remained in recession given its undiversified economy heavily dependent on oil export revenue. The most open economies in the region as measured by trade flows — Singapore and Malaysia — also suffered from these external headwinds. The headwinds are expected to continue throughout 2016, suggesting politically difficult reforms will be necessary across the region to maintain growth and development.

Carlyle Thayer's regional security outlook chapter focuses on challenges to ASEAN's goals of regional autonomy, centrality and community building. China's rapid construction of artificial islands on seven disputed land features in the South China Sea stoked the strongest ASEAN language on the disputes and more intense U.S.–China rivalry. Movement on the long-discussed ASEAN–China Code of Conduct in the South China Sea progressed at a much slower pace. In 2015 the threat of regional spillover from the Islamic State's rise in Syria and Iraq and the growing number of Southeast Asians joining those conflicts and returning home became imminent and then, in January 2016 in Jakarta, realized.

The Major Powers

While the domestic political developments of Southeast Asian countries in 2015 strongly reflected the diversity and fluidity of the region as a whole, the strategic policy settings with relation to Southeast Asia of the four most important extraregional major powers — the United States, China, Japan and India — had two powerful commonalities.

The Indian Prime Minister Narendra Modi announced the upgrading of India's erstwhile “Look East Policy” (LEP) to a more action-oriented “Act East” strategy at the India–ASEAN summit in Myanmar in November 2014. Since then, much debate and discussion has taken place on the nature and content of the strategy. A large part of the debate has been speculative, since India is yet to come out with an official vision statement for it. However, various pronouncements by India, as well as the shifting pattern of its engagement with countries to its East, are beginning to throw greater light on the strategy. This chapter discusses the features of the strategy as discernible till now and emphasizes its geographic scope and strategic depth. It discusses the specific relevance and implications of the Act East strategy for Southeast Asia. While India's engagement with ASEAN is likely to become more comprehensive and strategic over time, the region would need to be prepared for the implications of India playing a more active role in regional affairs.

Act East: What it Means

One of the noticeable aspects of the Act East strategy has been the lack of any specific articulation about it from the Indian establishment. This could well be due to the strategy being an evolving one. Apart from its own evolution through the Indian strategic prism, Act East, clearly, is trying to take note of the rapid and complex developments in the region, particularly changes in the economic and security dynamics.

An analytical understanding of Act East, since its announcement a year ago, has been largely gleaned from a number of official statements emphasizing India's eagerness to play a proactive role to its East. Most of these statements are attributable to Prime Minister Modi, who has contextually alluded to Act East on several occasions. As mentioned earlier, the first of these was at the ASEAN Summit in November 2014 in Myanmar, when he announced the upgrading of the LEP to the action-oriented Act East policy. He mentioned Act East again during his visit to South Korea in May 2014, emphasizing the country's importance as a partner in the policy. Soon after, External Affairs Minister Sushma Swaraj underlined India's efforts to engage more deeply with Southeast Asia through the Act East policy and described Thailand as a significant partner in this respect during her visit to Bangkok in June 2015.

In Thailand, 2015 was a tough year for the impatient. Politics and economic development came to a near standstill in the expectation of the imminent death of King Bhumibol. Prime Minister General Prayuth Chan-o-cha and his men want to be in charge when the life of the world's richest and longest-reigning monarch comes to an end. But the King kept breathing on the sixteenth floor of Siriraj Hospital on the banks of the ever-winding Chao Phraya River, while unaccountable elites positioned themselves for the post-Bhumibol era. The generals continued to play the waiting game and held the country hostage. A process to write a new constitution, the twentieth since the end of the absolute monarchy in 1932, was exposed as a sham when an admittedly flawed draft was rejected, only to set in motion another cycle of consultations, writing and, presumably, rejection to keep the junta in power indefinitely.

Meanwhile, the features of the next reign began to take shape. As Crown Prince Vajiralongkorn reached for the crown, some of his former confidants dropped like flies, allegedly aided by Thailand's generals. If the purge and death of would-be allies is anything to go by, the rule of Rama X will be marked by insecurity and instability. King Bhumibol had allowed people to use his royal charisma to legitimize their own agendas as long as these did not threaten the monarchy's interests and exalted position. While Thais were “working towards the monarchy” in that way, the stability of the crown seemed fairly secure. The recent alleged murders of individuals who attached themselves to the Crown Prince, such as Major General Phisitsak Seniwong Na Ayutthaya, the Prince's main bodyguard, however, intensified fears that anyone who got close to Vajiralongkorn would get burned like Icarus, who sought proximity to the sun, only to fall to his death. Hence, the generals might find it difficult to keep a lid on the country's boiling pot.

But even without a vengeful royal hothead, the country's simmering tensions brought about by grave structural changes in the social makeup of Thailand over the past decades are bound to transform the country sooner or later. The suppression of democracy that continued in 2015 with the arrests of academics, students, journalists and critics of the junta and the monarchy has to be seen in this light.

Introduction

Islamist activism in the politics of the Malayan peninsula began during the early post-Second World War years, and was dominated until the early 1970s by the Pan-Malayan Islamic Party (PMIP). PMIP was the chosen outfit for political Islamists previously associated with such fiercely anti-colonial movements as the Malay Nationalist Party (MNP, or Pertubuhan Kebangsaan Melayu Malaya), Party of Muslims (Hizbul Muslimin [HM]) and Defenders of the Motherland (Pembela Tanahair [PETA]) (Ahmad Fauzi 2007a, pp. 387–91; Liow 2009, p. 21). By the time the National Front (Barisan Nasional [BN]) was founded in 1974 to succeed the Alliance (Perikatan) coalition, PMIP had morphed into the Islamic Party of Malaysia (Parti Islam SeMalaysia [PAS]), which is still a major actor in Malaysia's Islamist scene today.

Following the May 1969 racial troubles that engulfed the capital city of Kuala Lumpur, the Malaysian state embarked on a series of reconstruction policies, chief of which was the New Economic Policy (NEP, 1971–90). The affirmative action policies of the NEP laid the first seeds of a new wave of Islamic revival in Malaysia, as state-provided educational opportunities exposed new cohorts of Malay-Muslim youths to political socialization in university campuses both at home and abroad. A significant portion of these new experiences, taking place far away from their traditional village ambience, took on religious colouring as they mixed with international Muslim students and academics through whom they were introduced to the writings of Islamic resurgence ideologues such as Hassan al-Banna (1906–49), Sayyid Qutb (1906–66), Abul A'la Maududi (1903–79), Fathi Yakan (1933–2009), Sa'id Hawwa (1935–89), Said Ramadan (1926–95), Abdul Karim Zaidan (1917–2014), Said Ramadan al-Bouti (1929–2013) and Yusuf al-Qaradawi (1926–). Except for Maududi who was Indo-Pakistani, all the other major influences on post-1969 Islamic revivalist thought in Malaysia were Middle Eastern thinkers, whose original works were written in Arabic. This meant that their books and treatises reached their Malaysian audience mainly through translations, either into Malay or English. Apart from the Middle Eastern figures, two other scholars whose writings made a discursive impact on Malaysia's Islamist scene, although to a lesser extent than the others listed earlier, were the Indian Abul Hasan Ali Nadwi (1914–99), and Said Nursi (1877–1960), a Turk of Kurdish descent (Kamal Hassan 2003, pp. 430–40; Lemiere 2009, pp. 66–67, 71, 78, 83; Zulkifli Hassan 2013).

EXECUTIVE SUMMARY