Thayer Consultancy

ABN # 65 648 097 123

Background Briefing:
Southeast Asia: 2016 in Review
and 2017 Forecast
Carlyle A. Thayer
December 29, 2016

[client name deleted]

1. What has had the greatest impact on the Association of Southeast Asian Nations.
(ASEAN) in 2016: the ruling by the Arbitral Tribunal hearing the claims by the
Philippines against China, President Dutertes policy towards China, the four-point
agreement by Laos, Cambodia and Brunei and China on the South China Sea, the
election of Donald Trump as the next U.S. president?
ANSWER: The election of Rodrigo Duterte as President of the Philippines was the most
important event to impact on ASEAN in 2016. President Duterte ended a two-year
hiatus in relations between Manila and Beijing and opened the possibility that the two
sides could negotiate a new modus vivendi in the South China Sea. President Dutertes
decision not to push the Award on the South China Sea by the Arbitral Tribunal, along
with muted reactions by other claimant states, means that the major irritant in ASEANChina relations has been removed. China has promised to reach agreement on the
framework to the Code of Conduct for the South China Sea by the middle of 2017.
China now has every incentive to use diplomatic measures rather than unilateral
actions to increase its influence in the Philippines and other ASEAN states.
2. How do continuing political tensions - including over territory such as the South
China Sea - affect the idea of one ASEAN Community composed of ten sovereign
states? Has China used its influence to split ASEAN unity?
ANSWER: Six out of ASEANs ten members will be heavily focused on domestic issues,
including political stability, in 2017 Myanmar, Cambodia, Thailand, Malaysia,
Indonesia and the Philippines. This means that the majority of ASEAN members will
want the South China Sea issue to recede as an irritant in relations with China. ASEAN
will continue to consult with China on implementing the Declaration on Conduct of
Parties in the South China Sea and discussing the content of the Code of Conduct.
Progress will be very slow. This means that the claimant states, including Vietnam, will
have to continue direct discussions with China on territorial disputes. Because of the
salience of domestic political issues ASEAN as a whole will be reluctant to back any
individual member on territorial disputes with China.

2
3. What is the biggest challenge facing ASEAN in 2017?
ANSWER: The biggest challenge for ASEAN in 2017 will be managing its relations with
the new Trump Administration in Washington. There are two aspects of this. The first
is dealing with Trumps unpredictability. The second aspect is to keep the United
States engaged in Southeast Asia to balance China at a time when the Duterte
government is moving in the opposite direction.
4. What can ASEAN countries do in order to balance their national interests (by dealing
with China and others) and efforts to keep ASEAN a united organization?
ANSWER: As a practical matter ASEAN will continue to operate on the basis of
consensus or the least common denominator. In other words, ASEAN will move
forward only to the extent that all members are in agreement. This means that little
or no progress will be made on contentious issues. ASEAN is likely to move forward on
two if its three pillars economic and socio-cultural cooperation and only move
forward on non-traditional security issues under the political-security pillar. ASEAN
could consider changing its consensus decision-making to a contingent majority
system at working level (but not at summit level)
5. Philippines will become Chair of ASEAN in 2017. What do you think about the
prospect of ASEANs policies next year?
ANSWER: The Philippines, as ASEAN Chair, will have to reflect ASEAN consensus. If
bilateral relations between the Philippines and China improve under the Duterte
Administration, ASEAN as a whole will benefit. Dutertes objective of reducing illegal
drugs but not his extra judicial methods will find support among ASEAN members.
For ASEAN to advance in 2017 Duterte needs to establish rapport with the other
ASEAN leaders. So far he has visited Vietnam, Singapore and Cambodia.
6. What do you think about Vietnams past role in the ASEAN and tits likely role in
2017?
ANSWER: Vietnam has emerged as one of the central players in ASEAN, eclipsing
several of ASEANs founding members, such as Thailand. Vietnams support of ASEAN
as a regional organization is strengthened by its policy of diversifying and
multilateralizing its bilateral relations, particularly among the major powers. Because
Vietnam is politically stable it can devote greater resources to initiatives that
strengthen ASEAN. Vietnam is leveraging its role in ASEAN by offering to act as a bridge
to external powers such as Russia, France and the United Kingdom.
7. What role can ASEAN play with the emergence of a new type of great power
relations as well as tensions among the major powers?
ANSWER: Xi Jinpings call for a new type of great power relations was initially
considered by the Obama Administration. This proposal failed to gain traction,
however, because the Obama Administration became suspicious that China was
manipulating bilateral relations. If President Xi makes the same proposal to President
Trump there is the possibility that the two big powers could do a deal without
consulting ASEAN. In this case, China would have more influence in Southeast Asia
because Trump is motivated to improve U.S. trade relations with China. If Xi and
Trump cannot come to a deal and tensions rise, ASEAN will be caught in the middle

3
because it does not want to take sides.

Suggested citation: Carlyle A. Thayer, Southeast Asia: 2016 in Review and 2017
Forecast, Thayer Consultancy Background Brief, December 29, 2016. All background
briefs are posted on Scribd.com (search for Thayer). To remove yourself from the
mailing list type, UNSUBSCRIBE in the Subject heading and hit the Reply key.
Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.