Fuelled by the scalding heat of Vietnam's “blazing furnace” (đốt lò) anti-corruption campaign, the year 2023 roared both in and out. In January, an investigation into bribery and overcharging for Covid-19 test kits and evacuation flights led to the dismissal of three prominent Vietnamese technocrats, including then president Nguyen Xuan Phuc. In December, an ongoing investigation into Truong My Lan—chairwoman of the Van Thinh Phat (VTP) group and one of Vietnam's highest-profile and richest tycoons—revealed a staggering graft scheme, estimated to encompass over US$44 billion and involving dozens of accomplices in the business sector, bureaucracy and government. The implications of the “blazing furnace”, however, are far greater than the counting of punished officials and vast sums of corruption money. The effort to root out corruption at the core of the Vietnamese regime is fundamentally altering the country's political economy. The changes that are unfolding have the potential to dramatically influence Vietnam's economic and political development trajectory in both positive and negative ways.

At the elite level, political analysts have observed that the Vietnamese leadership is more consolidated under the general secretary of the Vietnamese Communist Party (VCP), Nguyen Phu Trong, than at any time since the dawn of the Renovation (Đổi mới) era in 1986. A key feature of Vietnam's renovation-era polity has been the implicit division of powers between the country's top leaders (general secretary, prime minister, president and national assembly speaker). The distribution of authority among these “four pillars” enabled greater diversity of opinions in the collective leadership. This structure generated veto points that facilitated thoughtful deliberation and slowed policy change. It also incentivized the redistribution of resources from regions benefitting from globalization to the more disadvantaged ones.

The downstream effects of elite consolidation are also tangible, as the press, social media and civil society, especially environmental NGOs, have come under greater scrutiny and constraints, leading to what some analysts have called a “chilling effect” on public discourse. This effect was amplified on 15 November when Lưu Binh Nhuong, deputy head of the National Assembly Commission for Public Petitions, a high-profile commentator on public affairs, was arrested on confusing charges of embezzlement. At the bureaucratic level, fears about being targeted by the “blazing furnace” have slowed government procurement as both officials and businesses remain uncertain of the new rules of engagement. Numerous provinces were slow to spend public money on official projects, including the country's economic capital, Ho Chi Minh City, which had only spent twenty-three per cent of its planned budget by the year's midpoint.

The difficulties are likely to remain until new systems are put in place that give local officials confidence that procurement can take place in a lawful and transparent manner. In terms of foreign policy, the campaign provided an important backdrop in shaping the terms of Vietnam's major foreign policy achievements, including joining the Just Energy Transition Partnership (JETP) and establishing the Comprehensive Strategic Partnership with the United States.

After seizing state power on 1 February 2021, coup leader and commander-in-chief of the Myanmar military, Senior General Min Aung Hlaing, assumed the position of chairman of the State Administration Council (SAC) military regime the next day. He made his first public statement only a week later, on 8 February 2021, stating that the SAC would not change the country's foreign and economic policies, and offering assurances that Myanmar's economy would remain open to foreign investment. This was echoed by the SAC's minister for investment, U Aung Naing Oo, who highlighted on 16 February that the SAC would prioritize economic recovery from the pandemic. These pronouncements were indicative of the SAC's aspiration to legitimize its seizure of power by presiding over an economic performance better than that achieved under the National League for Democracy (NLD) during its first term in office over 2016–21.

The statements by Min Aung Hlaing and Aung Naing Oo were elaborations on the commitment to “recover the businesses caused [sic] by [the] Covid-19 pandemic as quickly as possible” that formed part of the six-point statement announcing the military's reasons for the coup. Despite these stated commitments, Myanmar's economic performance has steadily declined, as have domestic and external trust in the SAC's capacity to achieve the recovery—and attendant stability—it had promised when taking over state power in 2021. Interestingly, the SAC adapted the NLD's Myanmar Economic Recovery and Reform Plan (MERRP) as its Covid-19 response. The MERRP had been developed by the NLD as an update to and an extension of the longer-term Myanmar Sustainable Development Plan (MSDP), with a specific aim to respond to the Covid-19 pandemic. The pandemic had presented the NLD government with an opportunity to push through “radical” liberalization reforms with the MERRP, such as public finance reforms and liberalization of interest rates and the export sector. The SAC, however, dropped the “reform” element of the MERRP, and unveiled it instead as the Myanmar Economic Recovery Plan, or MERP, in August 2021.

Indonesia has made considerable progress in reducing poverty over the past decade. In 2006 the poverty rate was still 17.8 per cent of the total population, meaning around 40 million people were classified as poor. Gradually the poverty rate was reduced to 9.4 per cent, or around 25 million people, by 2019, before the Covid-19 pandemic (Figure 1).

There are many factors contributing to Indonesia's success in reducing its poverty. Its stable political situation is arguably the most critical factor. With political stability, Indonesia has sustained its robust economic growth above five per cent annually since 2005, until the Covid-19 pandemic hit. The pandemic has reversed some of the progress made in poverty reduction. The poverty rate increased to 9.8 per cent and 10.1 per cent in 2020 and 2021, respectively. The pandemic has led to widespread unemployment and rising poverty levels, especially among women and young workers. Nonetheless, thanks to various policy mitigation measures and economic stimulus, Indonesia managed to lower its poverty rate again after the pandemic (Figure 1).

During the era of President Joko “Jokowi” Widodo, there has been a strong political commitment to address poverty. The administration has implemented social assistance programmes and safety nets to support the poor and vulnerable groups, including cash transfer programmes, health insurance schemes, and subsidies for basic needs. Nonetheless, poverty remains one of Indonesia's main development challenges, and better policies are required to address this social problem fully. According to the latest survey by the Central Statistics Agency (BPS) in March 2023, the poverty rate in Indonesia was 9.36 per cent, which means around 26 million people were still classified as poor.

In the 2020–2024 National Medium-Term Development Plan (RPJMN), the government has targeted bringing down the poverty rate to below 7 per cent and achieving zero extreme poverty by 2024.

Perhaps what is more important than setting such an ambitious target is to ensure sustained poverty reduction continues from Jokowi to the new government.

This essay examines key programmes related to Indonesia's poverty reduction strategy during the Jokowi era. It also discusses the challenges of implementing the programmes effectively and in achieving poverty eradication targets. Finally, it examines the prospects of Indonesia's goal to eradicate extreme poverty.

The year 2023 saw Laos drifting through its most severe economic and fiscal crisis since the late 1970s. According to recent estimates, public debt has reached a staggering 123 per cent of GDP. Ongoing currency depreciation and rampant inflation plagued the population. This crisis laid bare the country's macroeconomic vulnerabilities and had negative impacts on already pressing problems such as environmental degradation, economic and legal inequalities, and precarious labour migration. To mitigate the economic woes, the ruling Lao People's Revolutionary Party (LPRP) has initiated a number of fiscal measures, the effectiveness of which remains to be seen.

On the surface, everyday life in the cities appears like business as usual. Construction projects fuelled by Chinese or Vietnamese investment keep operating. But in conversations with local people, the foreign observer can sense disillusionment and uncertainty. In the capital city Vientiane, civil servants and skilled workers look for second jobs to cope with the price hikes of key commodities such as food and petrol. Petty corruption is on the rise again despite attempts by state authorities to enforce anti-corruption laws. Luang Prabang is experiencing a fresh tourism boom, which indeed nurtures hopes for new economic opportunities. The rural population, meanwhile, faces precariousness and insecurity because of inflation, land acquisition and environmental risks.

On the positive side, the Laos–China Railway (LCR) performed well and raised hope for new commercial dynamics (while the social and environmental costs of large-scale infrastructure construction also became evident). With the Covid-19 crisis having petered out, the tourism sector has gained momentum this year, seeing an estimated three million visitors. Chinese tourists and businesspeople were crossing the border again, embodying the ambiguous nature of Chinese influence in Laos, which is perceived both as a catalyst of economic development and as a domineering force. At the same time, the spectre of the Chinese “debt trap” was looming large, dominating international media coverage. As in the previous year, Laos in 2023 was still far removed from any “post-pandemic bounce”.

Little will be remembered in the future—with perhaps the exceptions of intense Nay Pyi Taw political manoeuvring in January and the ramping up of deliberate mass attacks on civilians around the year—about the first ten months of 2023 in Myanmar. Instead, beginning on 27 October 2023, a shockingly successful anti-military operation launched by three much underestimated ethnic armed organizations (EAOs) in northern Myanmar led immediately to the fall of some of the most economically strategic towns, and over the next few weeks, the EAOs overran dozens of military commands, outposts and garrisons. Called “1027”, the unforeseen weakness of Myanmar's Defence Services breathed life into hundreds, perhaps thousands, of cells of resistance fighters across the country. By 31 December 2023, thirty-four towns (mostly not townships) were emptied of officials associated with the State Administrative Council (SAC) and the military. On social media and even in junta-backed mainstream media, unprecedented expressions of humiliation and anger were aired by formerly pro-SAC channels on Telegram and other fora, but also from well-known retired military officers who have supported military rule since 2021. Indeed, for the first time in seventy years, the never-questioned idea held by members of the armed forces that the military was the only national institution that could hold the country together—an idea not shared by the opposition or much of the population anymore—came into question with exactly the constituency of military officers past and present who had never doubted it. Although the military is not on the verge of implosion, its “perpetual” institutional and political power is no longer a given among the officer corps.

When Bad News Got to the “King”

In January 2023, there was considerable speculation among diplomats and some activists in the lead-up to the expiration of two years of emergency rule (as constitutionally stipulated) that the military junta would begin the process of establishing an interim authority to take power and hold elections in the coming year or in 2024. On 9 January, the Ministry of Immigration and Population kicked off a “census”, in which it claimed it would send enumerators door to door nationwide to update the voter list and ensure the list used for its election is based on “correct data” (in the words of the SAC leader, Senior General Min Aung Hlaing). It is unclear why the SAC called a voter list update a “census” except that the information being collected goes beyond what the 2015 and 2020 voter lists contained. Questions included Citizenship Scrutiny Card (CSC) status, which is consistent with Min Aung Hlaing's position that the CSC is necessary to be a legal voter, although there is no constitutional or legal requirement as yet for CSCs. Resistance and ethnic armed groups had already come out against a SAC election, and the National Unity Government (NUG), on 5 January, specifically urged the public not to cooperate with the data collection process. In many village tracts and wards, the SAC-appointed administrators could not convince any social groups to take the forms house to house. Instead, the initiative spurred widespread local resistance, with many of the SAC administrative offices in the countryside that had survived 2021–22 burned to the ground or blown up. Those authorities who did not abandon their posts were assassinated by underground groups. By the last week of January, the entire operation was called off (with a “census” eventually postponed to October 2024).

The Malaysian economy has made a steady recovery from the 2020–21 pandemic. As a trade-dependent country, Malaysia has benefited but also suffered from the vagaries of the global economy. The surge in demand for electrical and electronic exports cushioned the adverse shocks during the Covid-19 pandemic. But adverse global headwinds in the post-pandemic period constrained Malaysia's economic performance in 2023. The economic environment for the past year has been a fairly uncertain one with the export sector remaining relatively weak and food inflation continuing to linger.

Anwar Ibrahim, who became Malaysia's prime minister and finance minister in November 2022, has had a year to steer the Malaysian economy amidst the evolving economic uncertainties. Under his leadership, the “Unity Government”, which is made up of a coalition of diverse political parties, has introduced and launched a number of economic initiatives and policies to enhance the country's economic performance. This includes the Madani Economy, a broad policy framework that encapsulates Anwar's economic aspirations and vision for the country. As the Anwar administration has only been in power for a year, a number of the economic policies that were launched during this period were initiated under previous administrations but finalized under the current government.

This essay provides an analysis of Malaysia's economic performance and the government policy responses during the first year of the Anwar administration. It will assess the government's economic initiatives and policies, which include macroeconomic stabilization policies for the short to medium term as well as longer-term economic policies.

The outline of this essay is as follows. The next section will examine Malaysia's macroeconomic performance and the government's stabilization policies. Some of the long-term challenges facing the economy and the government's policy initiatives to address them are discussed after that. The final section concludes.

The year 2023 saw Malaysia return to political stability after five years of dramatic changes of government and a general election in 2022 that produced a hung parliament and the Pakatan Harapan–led Unity Government. National politics was dominated by new prime minister Anwar Ibrahim and partisan skirmishes over race and religion. On its one-year anniversary in November, the government faced criticism for having made little progress to reform Malaysia's governance and socio-economic system, and for failing to deliver a strong economy.

Pakatan Harapan is a multiracial coalition comprising Anwar's Parti Keadilan Rakyat (PKR), the Democratic Action Party (DAP), Amanah and Pertubuhan Kinabalu Progresif Bersatu (UPKO). It was joined by three main coalitions—Barisan Nasional led by the United Malays National Organisation (UMNO), Gabungan Parti Sarawak (GPS) and Gabungan Rakyat Sabah (GRS)—and smaller parties to form the governing coalition after the 15th general election (GE15) in 2022. The opposition, Perikatan Nasional, is a Malay-centric coalition formed by Parti Islam Se-Malaysia (PAS) and Parti Pribumi Bersatu Malaysia (Bersatu), with token representation by the multiracial Parti Gerakan Rakyat Malaysia (Gerakan).

Anwar spent much of his first year in office campaigning for the six-state elections in August. The ruling coalition gained breathing space as it successfully defended the states under its rule and the three parliamentary and state seats it had controlled in by-elections this year, but it lost ground with Malay voters. With five Bersatu parliamentarians expressing support for Anwar as prime minister in November, the government enjoyed the support of 152 parliamentarians out of 222 seats.

After the state elections, the government stepped up with a series of medium-term plans on the economy and tabled the 2024 Budget in October, but Anwar then turned to the Israel-Palestine conflict and vigorously pressed the issue both domestically and internationally in October and November. The issue resonated with the Muslim-Malay population but overshadowed the government's messaging on the economy. Its approaches to money politics, religion and human rights, reminiscent of previous Barisan administrations that Harapan had criticized when in the opposition, also disappointed its base.

Internationally, Malaysia was well represented by Anwar. He sought to engage key partners in Asia, the Middle East and the West to promote investments and bolster his political legitimacy domestically.

This chapter provides a review of macroeconomic trends among the member countries of ASEAN in 2023. It first examines how the global environment affected regional economies, assessing the effects of a difficult world economy marked by the adverse effects of monetary tightening, a sluggish Chinese economy, further fragmentations of global supply chains, and the onset of the Israel-Hamas War when the Ukraine War was showing no signs of abating. It then examines why ASEAN economies demonstrated an encouraging degree of resilience in the face of these global headwinds. All the countries studied recorded positive, albeit slowing, growth rates. The reasons for this resilience include sound fiscal and monetary policies from policymakers as well as structural advantages. Finally, the chapter concludes with the cyclical prospects of the region in 2024. The positive outlook is underpinned by a robust trade rebound, supply chain reconfigurations into the region, and increased infrastructure spending.

An Extraordinarily Challenging 2023 for Southeast Asia

A confluence of disturbances hurt the global economy in 2023. Rising inflation that warranted hawkish monetary tightening from central banks, coupled with China's domestic woes, contributed to weak global demand. As a result, global economic growth eased, from 3.5 per cent in 2022 to 3.0 per cent in 2023, according to the International Monetary Fund. In parallel, the world economy saw a pronounced slowing in export demand. Reflecting the difficulties in 2023 to date, the World Trade Organization (WTO) has slashed its forecast for world merchandise trade volume growth to 0.8, less than half of its April forecast of 1.7 per cent. It further concluded that the risks were to the downside given the headwinds created by a sharper-than-expected slowdown in China and the re-emergence of inflation in advanced economies that would warrant keeping interest rates higher for a longer period.

The 2023 parliamentary election in Timor-Leste saw voters return to the “old firm” of Xanana Gusmão and Jose Ramos-Horta, reminiscent of the 2007 elections, which took place in the wake of the 2006–7 political-military crisis. Given the advancing age of these historical leaders, however, there are expectations that overdue political transitions to a younger generation of leaders would likely unfold during the current parliamentary term. As the new government took office in July 2023, Timor-Leste embarked on a crucial decade for its future amid the looming threat of a “fiscal cliff”. The country is entering what could prove the final decade of the solvency of its oil and gas sovereign wealth fund unless new revenues flow from the Greater Sunrise fields. As a result, the nation must intensify efforts to diversify its economy further and reduce excessive dependence on the oil and gas sector. At the same time, it is faced with various policy challenges arising from a major demographic “youth bulge”.

The Political-Economic Context of the 2023 Elections

In the second-round presidential election that took place in 2022, Jose Ramos- Horta won a comfortable victory over the incumbent president, Francisco ‘Lu Olo’ Guterres from the Revolutionary Front for an Independent East Timor (FRETILIN), by a margin of 62 per cent to 38 per cent. The support of Xanana Gusmão, the leader of the National Congress for Timorese Reconstruction (CNRT), played a significant role in securing Ramos-Horta's election, marking a pivotal step for Gusmão's return to power. Ramos-Horta's CNRT backers advocated for an early parliamentary election in 2022 as they believed that Ramos-Horta's presidential win signalled a potential surge in votes for CNRT. However, Ramos-Horta chose not to dissolve the incumbent parliament, which completed its five-year term in May 2023. Throughout 2022, President Ramos-Horta demonstrated his ability to moderate previously heated political tensions between the FRETILIN-dominated government and Gusmão's CNRT. His middle-of-the-road leadership style and general inclination towards consensus solutions have helped alleviate the intensity of political standoffs. In the first year of Ramos-Horta's second tenure as president, the efforts to open the doors of the presidency to the wider public were even more pronounced than in his first term. His personal touch and direct approach demonstrably endear him to the people. With an ally in the presidency, the parliamentary election of 2023 provided the opportunity for Xanana Gusmão's CNRT party to make a comeback to government.

The next election in the Philippines is scheduled for May 2025 and won't even involve the often fiercely contested positions of president and vice president. But the interval between elections so far remains fraught with disinformation, which has plagued the Philippine political landscape and exacerbated the polarization of society.

Referred to as “patient zero” and the “petri dish” in the global disinformation epidemic, the Philippines persistently serves as a prime example of a country where government, politicians and their allies employ disinformation both online and offline to manipulate public opinion, suppress critics, advance controversial policies and consolidate power.

Truth under Siege

The Philippines caught global attention in 2016 when the elderly Rodrigo Duterte, a longtime local politico with a minimal national political base at the time, successfully deployed a highly coordinated army of mostly paid “keyboard warriors” on social media. This strategy amplified his populist appeal and undermined his rivals during his presidential run. The disinformation machinery would stay intact throughout his six-year presidency, helping him justify his brutal war on drugs, vitriolic attacks on the media and opponents, unequivocal defence of the late Ferdinand Marcos Sr. and his authoritarian rule, and contentious “pivot” away from the United States towards China, among others. The 2019 midterm election serves as a further reminder of the Duterte camp's effective social media playbook. A vicious volley of false or misleading narratives primarily targeted the eight-member senatorial slate of the opposition coalition Otso Diretso. All of its candidates—even Manuel Roxas II and Paolo Benigno Aquino IV, who had the biggest chances of winning according to pre-election surveys—lost their bids. Conversely, nine bets of the administration electoral alliance Hugpong ng Pagbabago, managed by Duterte's daughter Sara, made it. They included Marcos's eldest daughter, Imee, whom Duterte previously admitted helped bankroll his 2016 campaign.

Electoral disinformation reached a new level of sophistication in the 2022 poll, which saw a rematch between Ferdinand Marcos Jr., the late dictator's son and namesake, and Leni Robredo, to whom he lost the 2016 vice presidential race.

If 2022 marked the path away from the Covid-19 pandemic, then 2023 provided a glimpse of the contours of a more contentious and uncertain world marked by major power competition. Southeast Asia's integration with the world economy and its location along key access routes between the Indian and Pacific Oceans provided distinct advantages at moments when major power interests converged around a commitment to economic liberalization. Much of the region's economic growth and prosperity over the past three decades lay in accessing capital and technology from North America, Europe and Japan to produce components for export to China or assemble parts from China for the world market. With a focus on economic gains from globalization, territorial disputes could recede into the background while a robust forward US military presence in Asia could coexist with an expanding and modernizing People's Liberation Army (PLA). But given the intensifying friction among major powers and their rethinking of globalization, Southeast Asia's position in the global value chains and the mutual accommodation among major powers in the region are under stress.

Southeast Asia very much felt on edge over the course of 2023. Much of the pressure comes from the fact that the region is a locus of competition between the United States and China, given both geography and its embeddedness in the global supply chains. Persistent pursuit of “internal circulation” by China on the one hand and “on-shoring” and “friend-shoring” among the United States, its allies and close friends on the other meant that plugging into key production chains may become more challenging for much of Southeast Asia. This is despite some Southeast Asian states benefitting somewhat from a general diversification away from China among developed economies. Beijing's increasing resolve in establishing a veto over access to maritime East Asia and the desire by the United States, its allies and close friends to prevent such a situation places Southeast Asia in the crosshairs and further complicates the region's fraught politics.

That Southeast Asian states collectively and individually appear generally under-prepared to deal with a more contested and uncertain environment throws a shadow over the region. Claims about “ASEAN centrality” and its supposed importance ring hollow when the grouping and most of its members seem unable to propose a clear plan for navigating the more difficult waters churned up by rising major power competition and global as well as regional instability. The continuing civil war in Myanmar perpetuates a humanitarian crisis and criminality, whereas Russian aggression in Ukraine, conflict in the Middle East and contestation over the maritime space in East Asia potentially place global supply chains at risk. Such conditions exemplify the world to which Southeast Asia must now adapt and where declarations about “not choosing sides” no longer appear to be adequate. Without a clearer sense of direction, Southeast Asia is more dependent on the vagaries of Beijing and Washington's ability and willingness to manage tensions and avoid escalation between them.

In 2023, Cambodia's ruling party managed to hand over political power without sparking an intra-regime conflict, something many other authoritarian governments have failed to achieve. It did so via a vast and meticulously planned “generational succession” that saw the ageing grandees of the Cambodian People's Party (CPP) and of state institutions transfer power to their children or younger political elites. Hun Sen, 71, Cambodia's prime minister since 1985, resigned on 26 July, three days after the CPP won by a landslide in general elections. Hun Manet, 45, his eldest son, was officially anointed prime minister on 22 August. Meanwhile, the Council of Ministers, which is the Cambodian cabinet, underwent a significant reshuffling to make way for a hereditary succession of younger leaders—the so-called “second generation” of the CPP, most of whom are in their forties. For instance, Tea Banh, 78, the defence minister since 1987, resigned and gave power to his son Tea Seiha, 43. Sar Kheng, 72, the interior minister since 1992, handed his son Sar Sokha, 42, the ministerial reins. The same process was replicated throughout the bureaucratic apparatus, as a younger generation progressed through the ranks of secretaries and under-secretaries of state.

For more than a decade, Hun Sen has been non-committal over when he would step down. In 2013, he said he would be in power until at least 2025; in 2020, he said for another decade. But the die was cast in December 2021 when the ruling CPP unanimously voted Hun Manet, then the army chief, as its future prime ministerial candidate. Still, analysts were not sure whether Hun Sen would step down immediately after the July 2023 general elections or sometime closer to the subsequent national ballots in 2028. Events in early 2023, however, indicated the process would be fast-tracked. The groundwork was laid via three elements: (1) crushing dissent within society, (2) uniting the CPP behind a vast generational succession, and (3) forcing its opponents to defect. According to Mun Vong, “Regime stability, achieved through the ruthless repression and co-optation of political opposition, gave Hun Sen and the CPP the confidence that a transfer of power could finally occur.”