South-east Asia could lose some appeal as political risks resurface

SOUTH-EAST Asia has been the focus of investors’ attention in Asia as they seek manufacturing alternatives to China during the pandemic years. The free-trade area of Asean, as well as the bloc’s centrality in various mega-regional free trade agreements, has helped to smooth supply-chain linkages when China was shut. Yet while the region will remain attractive, it could lose some of its appeal in 2023 as political risks resurface.

Thailand is due to hold an unpredictable general election by May. Splits within the ruling military-aligned political bloc are giving opposition forces loyal to exiled former prime minister, Thaksin Shinawatra, an opportunity to return. Paetongtarn Shinawatra, Thaksin’s 36-year-old daughter, has declared her readiness to run for prime minister, following the footsteps of her father and aunt, Yingluck Shinawatra. She will head the Pheu Thai Party, the largest party in Thailand’s parliament and the avatar of the populist Thai Rak Thai party that her father, a billionaire telecoms mogul, rode to victory in 2001. A recent survey conducted by the National Institute of Development Administration found she was Thailand’s top choice as the country’s next leader.

In Malaysia, the political instability that has come to characterise the country may see some respite with Anwar Ibrahim sworn in as its fourth leader in the space of just four years. But there is much repair work to be done. The constant changing of the guard, coupled with the coronavirus pandemic, not only affected Malaysia’s economy greatly but also slowed down its pace of progress with neighbours, including Singapore.