IN ASIA

Weekly Insights and Analysis

Asia’s Biggest Issues in 2017: Experts Weigh In

January 4, 2017

In 2016, Asia was rocked by major events that tested the region’s perseverance and proved its strength. While many countries in the region proved to be economically resilient and politically stable, others were challenged by shifting alliances and leadership change, including the passing of a beloved monarch, and threats of regional security and resource shortfalls. To find out just what to expect in 2017, I asked Asia Foundation experts to share what they view will be the pivotal issue in their respective countries this year. Here are perspectives from 18 countries. — In Asia editor, Alma Freeman

Afghanistan

Afghanistan will continue to face challenges in 2017 to provide adequate employment opportunities for its youth. Besides the problem of “brain drain” that persisted in 2016, an inevitable and significant increase in the number of Afghan returnees from Pakistan and Iran will need to be addressed through a comprehensive employment and reintegration program. Prolonged and inconclusive peace negotiations with the Taliban, coupled with delays in conducting parliamentary elections, could further damage the National Unity Government’s legitimacy in 2017. — Abdullah Ahmadzai, country representative

Bangladesh

2016 will be remembered as a turbulent year for Bangladesh, rocked by major security incidents involving deadly terrorist attacks on foreigners and minorities. The security situation was exacerbated by violence in Myanmar’s Rakhine State, forcing thousands of Rohingyas to flee into Bangladesh. In the face of growing conflict and rising religious intolerance, can the Bangladeshi people continue to demonstrate resilience to such security threats and ensure peaceful coexistence and continued economic prosperity in 2017 and beyond?  This will no doubt be the most pressing issue for 2017. — Hasan Mazumdar, country representative

Cambodia

Cambodia’s local elections on June 4, 2017, will be the biggest event of the year. Should the opposition—chiefly the Cambodian National Rescue Party—win the popular vote, Prime Minister Hun Sen and his ruling Cambodian People’s Party will have hard calculations to make regarding the national elections slated for 2018. If this scenario unfolds, will the regime seek a peaceful transition of power through compromise and dialogue or will they double down against the opposition? We are likely to see a combination of both, perhaps maintaining political order while widening fractures within the opposition. — Silas Everett, country representative

Cambodia protests

Protesters march in Cambodia’s capital, Phnom Penh. Photo/Véronique Salze-Lozac’h

China

It will be a pivotal year for China’s landmark Charity Law, which came into effect in September 2016. The law is an important step toward strengthening China’s philanthropic sector at a time when new private foundations set up by businesses and high net-worth individuals are emerging rapidly as a new force in the sector. The law, a constitution of sorts for the sector, is meant to clarify rights and responsibilities of domestic NGOs and ease approval for public fundraising. Potential risks include over-regulation of the sector, while foreign NGOs face an uncertain operating environment as they navigate a new registration process. — Ji Hongbo, country representative

India

India’s demonetization drive—the banning of higher denomination currency notes to curb illegal earnings—is likely to backfire in 2017 in unexpected ways. While most economists agree that India’s growth rates will suffer for a couple of quarters, it is very likely that the impact on India’s poor and rural economy will drag on for at least a year. The Indian economy will probably spend all of 2017 recovering from a self-inflicted wound. — Sagar Prasai, country representative

Indonesia

2017 will set the tone on how Indonesia settles the challenging relationship between religion and the state. Populism and electoral politics, coupled with rising identity politics and the usage of social media in overstating differences, have posed real challenges to the country’s foundation. Acceptance of diversity in this unitary state is a fundamental social construct, protected by the constitution. Addressing the open challenge to the pluralistic nature of the country, the government and the police have recently shown their unwavering support to safeguard the idea of an inclusive Indonesia. With local elections set to take place in 100 districts and cities throughout the country in 2017, the importance of this high-level support cannot be overstated. — Sandra Hamid, country representative

Korea

In 2017, we’re anticipating a tumultuous Constitutional Court decision over whether to remove or reinstate President Park Geun-hye over charges brought against her by the National Assembly. Either way, the country will elect a new leader in 2017, and the new administration will face a number of domestic challenges, including the highest household debt level in recorded history, high youth unemployment, a rapidly aging society, and an alarmingly low birthrate. These challenges, coupled with declining trade with China and a nuclear North Korea, are immense. Though promising, it is too early to tell whether the recently passed 2017 budget, the largest ever, can help tackle some of these issues. — Dylan Davis, country representative

Laos

Laos’ economic outlook is broadly positive in 2017, with the country on track to remain one of the fastest growing economies in Asia. While the massive 70 percent increase in foreign direct investment in the lead-up to the 2016 launch of the ASEAN Economic Community is unlikely to be matched, Laos will likely continue to attract FDI from throughout Asia, as well as a new Trade and Investment Framework Agreement with the U.S. Laos is in a strong position to foster more inclusive, broad-based economic development, and in 2017 we should see the country’s new leadership reflect on domestic priorities and reinforce its commitment to the social and economic well-being of its citizens. — Nancy Kim, country coordinator

A new shopping mall under construction in Vientiane, the capital of Laos. The country is poised to remain on track as one of the fastest growing economies in Asia. Photo/Conor Ashleigh

A new shopping mall under construction in Vientiane, the capital of Laos. The country is poised to remain on track as one of the fastest growing economies in Asia. Photo/Conor Ashleigh

Malaysia

2017 will likely show moderate economic growth for Malaysia, with the Ringgit possibly bouncing back from its poor performance in 2016. On the political front, the parliament is expected to be dissolved in the third quarter to make way for the 14th general elections. Against this backdrop, Malaysia must show stronger will in its battle against corruption, engaging its youth against elements of racial and religious extremism, and promoting women’s participation in politics and the economy in its pursuit to achieving high-income nation status. In 2017, the promotion of greater democracy and economic recovery will take center stage in Malaysia. — Herizal Hazri, country representative

Mongolia

Five years ago, Mongolia was growing at a rate of 17 percent and exploiting its vast coal and copper resources. Today, deterioration of the country’s economy has escalated to the point of requesting a bailout from the International Monetary Fund. Frustrated voters swept the Democratic Party from power in June, giving the Mongolian People’s Party an overwhelming mandate. The new administration’s biggest challenge now is to stop the free-fall of the national currency, fix the budget, and manage repayments of massive foreign debts to ensure the country is not falling prey to the “resource curse.” — Meloney Lindberg, country representative

Myanmar

The lack of governing experience and clear policy priorities of the new government led by Aung san Suu Kyi’s National League for Democracy sorely tested public hopes and expectations in 2016 for further political and economic reforms and progress in the peace process. In the current context, the task of resolving issues big and small have come to rest mostly with Aung San Suu Kyi, a situation that helped hold the NLD together when it was a political movement under a repressive regime, but is untenable for the complex operations of a government. A broadened base of decision-making is critical in 2017 to enable the government to be more dynamic in establishing and implementing reforms that can deliver timely results for what is becoming an increasingly frustrated public. — Kim Ninh, country representative

Nepal

Nepal’s incapability in responding to the devastating earthquakes of 2015 has highlighted the historical gap between the people and the state. Local elections have not been held in Nepal since 1997, and political representation at the local level is critical to closing this gap. A failure to trigger real change in the system through local elections is likely to perpetuate the same inequalities that gave rise to conflict in Nepal and continue the current levels of corruption and ineffective governance. Abiding by the constitutional requirement to hold local elections in 2017, therefore, is Nepal’s litmus test for future stability. — George Varughese, country representative

Pakistan

The critical challenge for Pakistan in 2017 will be to manage the social, political, and environmental expectations as a result of operationalizing the China-Pakistan Economic Corridor (CPEC). Under China’s “One Belt, One Road” regional initiative, Pakistan is implementing a $46 billion infrastructure upgrade program, including building new highways, overhauling railways, and building new new infrastructure to support 10,000 MW of additional power. While this is intended to bring new jobs, Pakistan’s leadership needs to manage expectations at the provincial level to avoid potential inter-provincial conflicts, as well as be cognizant of the possibility of environmental threats an initiative of this scale presents to a country already vulnerable to the negative impacts of climate change. — Ameena Ilahi, deputy country representative

Philippines

Despite all the sturm und drang in Philippine domestic affairs, the main issues facing the Philippines in 2017 will be in international relations. As ASEAN chair for 2017, the Philippines will be much in the international spotlight. Will the closeness of President Rodrigo Roa Duterte to China shuffle the internal politics of ASEAN?  Will Duterte’s oft repeated intention to “separate from America” be softened by the election of President-elect Donald Trump? Crafting and maintaining an “independent foreign policy” will definitely be a challenge for the Philippines in the shadow of these two giants. — Steven Rood, country representative

Sri Lanka

The Sirisena-Wickremasinghe good governance coalition is showing visible cracks amid growing public frustration in Sri Lanka with the slow pace of change and disturbing accounts of religious intolerance and hate speech. The time has come to engage more definitively with the public to ensure that the clever rhetoric and nationalist politics of the former president do not create an anti-incumbency surge as the country gears up for a national referendum on constitutional reform and long-delayed local government elections in 2017. — Dinesha de Silva, country representative

Thailand

Thailand plunged into mourning with the death of revered King Bhumiphol Adulyadej. For generations of Thais, the late King was a constant—their moral compass in the face of sweeping societal change and an arbiter of political tensions through his active years. As the military government and successor King Maha Vajiralongkorn define their respective roles in filling a vacuum of uncertainty in 2017, Thais will be watching for signs of the political and economic implications of this milestone transition, including those of a controversial new constitution for the future of Thai democracy. — Kim McQuay, country representative

Crowds mourn the death of King Bhumiphol Adulyadej. Photo/Flickr user Pablo Andrés Rivero

Crowds mourn the death of Thailand’s King Bhumiphol Adulyadej. Photo/Flickr user Pablo Andrés Rivero

Timor-Leste

In 2017, Timor-Leste will have its first national presidential and parliamentary elections since the UN Mission departed in 2012. Unfortunately, optimism for change is low, as despite political inroads, power is expected to remain firmly consolidated among former resistance leaders, rather than a growing cadre of younger, technically-qualified and reform-minded leaders. Without real change, Timor-Leste’s fascination with mega-projects in lieu of sustainable human development, including economic diversification, is bound to continue, to the detriment of its people. — Susan Marx, country representative

Vietnam

Following the U.S. presidential election in November, Vietnam finds itself wondering what the new political landscape of 2017 will bring. Vietnam and the U.S. had greatly strengthened diplomatic ties in recent years, but the Trans Pacific Partnership and the Paris Climate Agreement—both central to the U.S.-Vietnam relationship—are now looking uncertain with the new U.S. administration. While U.S. commitments to regional security are not in doubt, the benefits to Vietnam, in terms of trade and investment, and the requirements, in terms of institutional reforms, will need to be reassessed over the next few months in light of other regional relationships and opportunities. — Michael DiGregorio, country representative

The views and opinions expressed here are of the experts, not those of The Asia Foundation or its funders.

2 Comments

  1. This is an excellent roundup of issues around the region. A summary collection of comments like this once a quarter — a quick survey of the top events happening around Asia — would be very useful.

    Reply
  2. Seems as if most of the above countries are as uncertain as many Americans are about what the near future will bring. interesting blog. Hopefully we will all have a stable new year if not a happy one!

    Reply

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About our blog, In Asia

In Asia is a weekly in-depth, in-country resource for readers who want to stay abreast of significant events and issues shaping Asia\’s development, hosted by The Asia Foundation. Drawing on the first-hand insight of over 70 renowned experts in over 20 countries, In Asia delivers concentrated analysis on issues affecting each region of Asia, as well as Foundation-produced reports and polls.

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