The year 2003 began with Vietnamese leaders taking decisive steps to combat corruption by censuring two members of the all-powerful Politburo of the Communist Party of Vietnam (CPV) for being implicated in a corruption case. It ended with a nine-day whirlwind tour of the United States by Vietnam's Deputy Prime Minister Vu Khoan to promote trade with “the largest market in the world” and “Vietnam's largest trade partner”, and frantic efforts to seek integration into the world's economy through the seventh round of negotiations in Geneva on Vietnam's application to join the World Trade Organization (WTO).

Combating Corruption

Since the mid-term congress of the CPV in 1994, Vietnamese leaders have identified corruption as one of the four dangers facing Vietnam. It continues to be a major problem that deters foreign investments and undermines the people's trust in the party and government. Phan Dien, Politburo member and permanent secretary of the Central Committee of the CPV, told a meeting in March that “widespread corruption, red tape and the poor knowledge of Party members and Government officials are the main reasons for the people's distrust of the Party's ruling role”.

Very early in 2003, the government had taken steps to move against this social ill. In a meeting with the country's leaders on 29 January to welcome the Lunar New Year, General Secretary Nong Duc Manh pledged, among other things, to “rigorously combat corruption”. The 7th Plenum of the Central Committee (CC) of the CPV which ended a week earlier had taken an unprecedented step by relieving Le Hong Anh, Politburo member and minister of public security, of his post as director of the CC's Inspection Commission, and reprimanding another Politburo member and director of the party's Economic Commission, Truong Tan Sang.

The following month, the long-awaited trial of Nam Cam, Vietnam's most powerful organized crime boss, opened in Ho Chi Minh City.

Amidst tears and apprehension about a future without a man who became synonymous with Malaysia for over a generation, Malaysia's fourth and longest-serving prime minister stepped down after a sixteen-month transition on 31 October 2003, making way for the tenure of his appointed deputy, Abdullah Ahmad Badawi. Malaysia's new prime minister faces an extraordinary set of challenges, many of which were the direct result of his predecessor's twenty-two-year premiership that ended on a high note of international stature and strong domestic support, especially among non-Malays. Mahathir's last year in office was indeed a tribute to his service to Malaysia, yet it was riddled with controversy at home and abroad as his style of rule and views provoked strong criticism. Abdullah's first few months in office sent a signal that his leadership differed both in style and substance. However, he needs to obtain a strong political mandate in the general election and party elections in 2004, before he can effectively implement reforms and initiate policies that address some of the problems Tun Mahathir left behind.

Grand and Controversial International Exit

Over the course of his twenty-two years in office, Mahathir propelled Malaysia onto the international stage, citing its success in managing ethnic tensions, promoting economic development and projecting an anti-Western stance as a calling card for the developing world and Muslim nations. While the merits of Mahathir's record in these areas remain contentious, 2003 was used to solidify his role as an international spokesman on issues of co-operation and social justice in the international community. The year saw the culmination of a gradual progression of a foreign policy over the last third of his years in office involving extensive overseas travel and the systematic expansion of his exposure in Africa, the Middle East, and Latin America. At its core Mahathir projected himself as one of the leading critics of the United States, whose policy in Iraq isolated itself from the international community.

In Cambodia 2003 was an election year in which the results of the ballot were apparently not accepted by those who lost the election. The incumbent Prime Minister Hun Sen (the strongman), the opposition leader Sam Rainsy (the terrible man), and the National Assembly president Prince Ranariddh (the invisible man) could not agree upon a satisfactory power-sharing formula, with the latter two joining up in an attempt to deny the former of the country's premiership despite a convincing victory by Hun Sen's Cambodian Peoples' Party (CPP) in the July election. The outcome was the dissolution of the ruling coalition, a hung (suspended) government, and an uncertain political climate that prevailed throughout the second half of the year.

The Political Scene

Pre-Election Politics

The year started rather inauspiciously with anti-Thai riots in Phnom Penh in late January (see below), just two weeks after the start of the voter registration period for the July election. The edict issued by the Mohanikaya Buddhist Sect leader that urged monks to refrain from voting in the upcoming general election also resulted in expressions of unhappiness and concern amongst pro-democracy groups and human rights organizations during January. With political parties jostling to capitalize on the nationalistic fervour aroused by that unfortunate event involving Thailand, the gradual build-up of political tensions in the run-up to the general election was further aggravated. The murder of a senior monk on 6 February and the killing of Om Radsady, adviser to Prince Ranariddh, on 18 February further raised the political temperature despite government claims that the latter was the outcome of a botched robbery attempt. In the same month, the visiting U.S. Deputy Assistant Secretary of State Matthew Daley, after meeting with the FUNCINPEC (National United Front for an Independent, Neutral, Peaceful and Co-operative Cambodia) and SRP (Sam Rainsy Party) leaders, revealed that he had expressed to them his serious concerns about the rising level of intimidation and violence in the country and publicly urged the government to reverse the trend.

Megawati Soekarnoputri assumed the presidency on 23 July 2001. This article examines Indonesia under Megawati in the year 2003, with special reference to the political situation, economic performance, and foreign policy. It also addresses the problems and prospects faced by Megawati.

The Political Situation

The political situation in Indonesia in 2003 can be described as stable despite the terrorist attack in Jakarta, sectarian conflict in Poso, and the Indonesian military operation in Aceh. The year was overshadowed by the impending 2004 election as most political parties were making preparations for this important occasion.

Marriott Hotel Bombing and Radical Islam

The Bali bomb blast on 12 October 2002 shocked the world. The Indonesian government, which had continued to deny that there was a terrorist network in Indonesia, now had to openly admit its existence. This led to an antiterrorist law being issued, known as Perpu No. 1/2002, giving the police more power to detain terrorist suspects. In 2003 this law was replaced by Undang-Undang No. 15/2003 tentang Pemberantasan Tindak Pidana Terrorisme [Law No. 15/2003 on the Elimination of Terrorism]. Nevertheless, the new anti-terrorist law did not stop another terrorist attack on the JW Marriott Hotel in Jakarta on 5 October 2003.

This bombing was the largest since the Bali bomb blast, which resulted in twelve people dead and 147 wounded. Like the Bali bombing last year, the attack was carried out by Jemaah Islamiyah (JI), a terrorist organization using Islam as its “ideology”. Many believe that the JI is not only a regional organization but is linked to Al-Qaeda of Osama bin Laden. Unlike the Bali bomb blast in which the majority of the victims were foreigners, especially Australians, the majority of the Jakarta victims were Indonesians. The Jakarta bombing had two consequences: on the one hand, it instilled fear among Indonesians that the JI would be able to strike any time; on the other hand, it strengthened the military/police grip over the security situation.

Introduction

On 4 December 2002 hundreds of demonstrators rampaged through Dili targeting “foreign” properties, including a supermarket and two hotels, and the homes of the Prime Minister, Marí Alkatiri, and his immediate family. Rioters also attacked Dili's An Mur Mosque, which some saw as an anti-Islamic or anti-Indonesian action, but may well have been aimed at the Mosque's most well-known member, Alkatiri himself. The crowd also chanted anti-police slogans. The government of Timor Leste is yet to release a full report on the reasons for the riot, which left two protesters dead and others injured, most likely related to the decision of the police to use live rounds to control the crowd. Rumours have abounded as to who the crowd were and what they wanted. Variously they are described as students, the unemployed, former militia men and policemen from Indonesian times, or even a rival group from Alkatiri's own party, Fretilin (and various combinations of all these groupings). While it was popular to speak of agitators, the fact that a crowd was so easy to mobilize was worrying and indicative of underlying tensions towards the government, the police, and foreign businesses.

Dire predictions of widespread chaos did not, however, eventuate. Instead, the security threat to Timor Leste continues to remain a latent, but very real, threat. Pro-Indonesian militia elements still present an irritant to the border security of Timor Leste, causing concerns about the ability of Timor Leste to control its own security with the winding down of the United Nations mission. Yet a threat from within Timor Leste caused a great deal of concern within government circles, namely, the difficulties from ex-Falintil guerrilla fighters who were left out of government hiring after independence. A war of words continues with a hardcore of radical veterans insisting on a return to the 1975 Constitution, a suspension of the current government and a complete withdrawal of the United Nations. Security forces have also struggled to control criminal elements that have emerged throughout the province.

After President Gloria Macapagal-Arroyo's surprise announcement that she would not run for re-election so she could remove herself from the distraction of politics and be better able to build her “Strong Republic”, the first months of 2003 seemed to pass in relative calm. There was a significant problem with a growing budget deficit, but the government soon initiated a programme that eased pressure there. More importantly, the political opposition was not united while favourable legal decisions paved the way for the long-delayed return of ill-gotten Marcos loot and for the eventual conviction of former president Estrada. Meanwhile, the decades-old insurgency by the Communist Party of the Philippines (CPP) lost additional credibility with the senseless murder of former New People's Army (NPA) chief Romulo Kintanar, and a February offensive against the Muslim Islamic Liberation Front (MILF) dealt that armed rebellion another significant blow.

This relatively upbeat scenario changed in late July when an otherwise inept rebellion by a few hundred soldiers revealed much deeper problems in the country's military and the link of some disgruntled junior officers with prominent members of the political opposition. Suddenly, the government was on the defensive. Then, in August a number of sensational charges were made against the President's husband, Jose Miguel “Mike” Arroyo, in a series of Senate speeches by a leading member of the opposition. In response, and in the face of declining popularity ratings, the President announced that she would run for re-election after all. By year's end, candidates had been sorted out, alliances shifted, and the stage was set for an election year showdown between a reformist president and a new movie actor–led coalition of Marcos and Estrada administration stalwarts.

The Oakwood Mutiny Shock

The Oakwood Premier Suites is a high-end hotel/apartment facility in the heart of the commercial district of Makati, a Manila suburb that services the Filipino élite, international business, and diplomatic communities.

1. Introduction

With the World Trade Organization's (WTO) Cancun ministerial meeting of September 2003 failing as an interim stocktaking for the Doha round scheduled for completion by January 2005, it can be expected that the momentum for “new regionalism” will grow. Distinguished from “old regionalism” as economic regionalization, the political economy of the new regionalism since the 1980s is driven by globalization, information technology, knowledge-based economy, deregulation, and strategic/security interests. More unilateral, bilateral, trilateral, “pluri-lateral”, and cross-regional free trade agreements (FTAs) and regional trade agreements (RTAs) have been notified to the WTO as a response to mismanaged multilateralism, perceived or otherwise.

The new regionalism seems like a realignment of the traditional triad, made up of the European Union (EU), the North American Free Trade Area (NAFTA), and the emerging East Asian regionalism. In East Asia, a burgeoning China within the ASEAN Plus Three (APT) co-operative framework is altering the dynamics of ASEAN as well as the old Japanese-led flying-geese pattern of trade and foreign direct investment (FDI). Even the Asia-Pacific Economic Cooperation (APEC) forum seems “lost” given the new regionalism and intramural APEC difficulties. Non-completion of the ASEAN Free Trade Area by 2002 and synchrony with the new regionalism as WTO wanes have prompted individual ASEAN countries to enter into bilateral FTAs.

An ASEAN Economic Community (AEC) by 2020 — proposed by Singapore at the 2002 ASEAN summit — as an FTA-plus but not quite a customs union, albeit with some common market features, may muddle through much like the ASEAN 2020 vision enunciated at the 1998 ASEAN summit, in the absence of resolute political will. ASEAN's geographic and buffer value between a rising China and an eclipsing Japan has nonetheless attracted FTA offers from Australia and New Zealand (which constitute a Common Economic Relations, or CER, partnership between themselves), Japan, India, and the United States.

For Southeast Asia, 2003 was a roller coaster year. The early expectations of a gradual economic recovery were badly jolted when the outbreak of the Severe Acute Respiratory Syndrome (SARS) in the first quarter of the year dented several economies and saw a plummeting of confidence and growth rates. But SARS was brought under control within a few months and then petered out. Growth rates and confidence started to recover, helped also by signs of a pickup in the American economy. For the year, most regional economies expanded by an average of 4.5 per cent. Singapore's real GDP growth of 1.1 per cent was an exception and reflected the devastating impact of SARS on the most open and globalized economy in the region. By the end of the year the American economy seemed to be entering a period of cyclical recovery while Japan's economic performance also improved, generating prospects for a much better year ahead for the region. But concerns about decline in foreign direct investments, in part because of competition from China, continued to be a worrying reality for countries like Indonesia, Malaysia, the Philippines, and Singapore.

The external security environment of the region remained relatively benign, given reasonably good relations between the major powers in Asia, especially U.S.-China relations. However, the American-led war in Iraq, which broke out in March and the deterioration of the situation in that country following the initially easy American invasion and occupation, posed some troubling uncertainties for the region. Iraq was becoming a magnet for radicals and terrorists. If the situation is not stabilized it could give a boost to international terrorism. It has already resulted in an increase in anti-Americanism in Muslim countries, including in Southeast Asia where efforts to come up with a more coherent and co-ordinated response proved to be quite challenging.

Despite regional vicissitudes and sluggish economic performance in the first half of 2003, the Association of Southeast Asian Nations (ASEAN) derived some good dividends from the generally benign atmosphere among the major external powers.

Since the military took power in September 1988, Myanmar has been under sustained domestic and international pressure to carry out sweeping political changes which would result in the establishment of an elected civilian government. This has been the price for any substantial foreign economic co-operation and assistance. As no substantial moves have been made in that direction by the ruling State Peace and Development Council (SPDC) government, known previously as the State Law and Order Restoration Council (SLORC), Western governments, led by the United States, have seen fit progressively to increase the levels of economic sanctions applied to the country in the apparent belief that this will result in international isolation, economic collapse, and eventual fall of the regime. This strategy for creating political change in Myanmar has been strongly encouraged by the Myanmar exile community which fled the country in the late 1980s and early 1990s following the bankruptcy of the previous Burma Socialist Programme Party (BSPP) regime. Now largely residing in the United States, Europe, and Australia, this small but vocal band of advocates for change, along with their supporters in the media of their new lands of residence, have often argued that just one more turn of the sanctions screw and the military regime in Yangon would collapse and then power and authority would quickly flow to National League for Democracy (NLD) under its secretary general, Daw Aung San Suu Kyi, and perhaps some of them.

This strategy, now pursued for more than a decade and a half, failed once more in 2003. Given the level of U.S. sanctions now applied, with a complete ban on trade, new investments, and all commercial transactions since the end of July 2003, and similar though slightly less draconian sanctions brought forward by the member states of the European Union, as well as a longstanding ban on assistance to Myanmar from the World Bank, International Monetary Fund (IMF), and Asian Development Bank (ADB), there seems little more the Western governments can do to force political change in Myanmar short of violating the civil liberties of their own citizens by barring travel by individual tourists to Myanmar.