Anti-corruption Revolutions Taunt Southeast Asia’s leaders

Across Southeast Asia, leaders of all stripes are keeping a close watch on the rapidly growing discontent of the region’s population. Autocrats, the democratically elected, and one-party states all have good reason to fear this discontent, following the ousting of another government, this time in Nepal.

The burning of parliament and humiliation of cabinet ministers came shortly after deadly protests in Indonesia and demonstrations in Thailand and Malaysia. The Philippines is next as anti-corruption protestors take to the streets, whom President Ferdinand Marcos Jr. says he supports.

“If it can happen there it can happen here,” is the mantra that is spreading out of the revolutions in Nepal, Bangladesh last year, and Sri Lanka in 2022. Such rebellions are also reminiscent of the Arab Spring and “color revolutions” that swept the Middle East and Asia in the 2000s and 2010s.

Revolutions of a decade ago were underpinned by a desire for democratic reform and largely failed, but the state of the economy – while less glamorous than the pro-democracy protests – is far more potent as a force and on this account, the anti-corruption protestors have scored success.

Asians may have a high tolerance level for corruption, but there are limits that are sorely tested when economies fall flat. The sight of Nepalese finance minister Bishnu Prasad Paudel stripped to his underpants and tossed into a river was a vibrant reminder of what people really think.

Anticipated annual growth for most ASEAN countries is between two and five percent. There are those who think this is sufficient and like to compare their countries with the struggling economies of the advanced West, where the numbers are even lower.

But the figures in the least developed and developing countries are meaningless. Many economists argue that reasonable growth begins at around seven percent for countries where monthly minimum wages start at about $250. This paltry sum is worth even less when inflation bites.

It’s all about the lack of money in the broader economies, part of a strategy deployed by central bankers the world over, to rein in inflation and stave off bankruptcies by keeping interest rates low. This is achieved by restricting the amount of cash circulating in the economy, or liquidity.

This mantra was the result of the massive cash injections used to kick-start economies after the COVID-19 pandemic. Costs of living soared across the region, and ASEAN countries are now rapidly catching up with developed economies. Wages have not kept pace. South and Southeast Asia are not that cheap.

Indonesia’s answer to riots in late August was to scrap a whopping $3,000 monthly housing allowance that politicians had voted for themselves, helping to calm the rioters, and a $1 billion economic stimulus, which sounds big on paper but in fact amounts to less than $4 per head.

In July, Malaysia was confronted by its first protests since Anwar Ibrahim was swept into power on an anti-corruption ticket. But the demands for his resignation were based on the rising cost of living and his failure to attract promised investment dollars.

Thailand’s economy has not fared any better. The equities market and the baht are weak after foreign investors pulled $2.3 billion out of the Thai stock market this year amid discontent with another government that was not of the electorate’s choosing, which fed into protests in June.

The economy continues to falter, but a change in government, an undeclared border war with Cambodia, an unrelenting civil war in Myanmar, and a crackdown on criminal syndicates have empowered the Thai military.

That and another election slated to take place by April have taken some of the heat out of public discontent.

Economies in Cambodia and Laos are in worse shape. Both are now dependent on Chinese largess, which has fallen far short of expectations in a post-COVID-19 world.

In Cambodia, Hun Sen, who has retained his influence since handing the job of prime minister to his son Hun Manet in 2023, has masterfully spun the conflict with Thailand as a source of national pride, rallying support for his son’s government.

But the economy is taking an enormous hit. According to the government’s own numbers, of the 750,000 people who fled Thailand ahead of the conflict, just 21 percent have found work despite promises of jobs. That’s left another 500,000 people unemployed.

Communists in Vietnam are also riding a high tide of nationalism, using the 50th anniversary of the fall of South Vietnam in April and the 80th anniversary of Ho Chi Minh’s independence declaration a few weeks back as an altar to count their blessings upon.

“Bread and circuses,” as the Roman poet Juvenal once quipped, might work for now but it is a band-aid solution, masking the reality that ASEAN countries are on their own and lumbered with conflict, criminal syndicates, protests, rising costs of living, and corruption.

The optics are dreadful.

Chinese spending on the Belt and Road is long over and tariffs imposed by U.S. President Donald Trump are misguided and a recipe for economic decline. Corruption is excessive and has proved difficult to weed out of developing countries because it’s the leaders who benefit most.

But at the end of the day, it’s the lack of money in people’s pockets that has made corruption intolerable and therein lies the source of the current unrest.

There’s been no shortage of attempts to find alternative sources of funding and Trump’s tariffs have added a sense of urgency for the conclusion of free trade agreements already on the table.

Indonesia has just signed off on an FTA with the European Union. An EU FTA with Thailand should be next. Vietnam is focusing on Latin America.

But the problem remains. Foreign investors are stymied by the same issues confronting the leaders of Asia – a lack of cash – and like the Western tourists who once made annual pilgrimages to Southeast Asia, there are other places they can go.

Unless that void can be filled, the anger and the protests will continue, and if that hits a critical mass, as it did in Sri Lanka, Bangladesh, and Nepal, the military and police must then decide whose side they’re on, a reality that will tilt the power equation.

Leaders, along with their extended families, must then decide whether to stay or leave. ASEAN countries haven’t seen that yet but it is a scenario leaders fear and might well be in the offing. It ultimately all depends on how much cash people have in their back pockets.