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3 February 2021

With Greg Earl

Coup in Myanmar

On Monday, armed forces seized control of Myanmar. Declaring a one-year state of emergency, the military detained the leader of the ruling National League for Democracy party, Aung San Suu Kyi, along with other civilian politicians. It alleges that the NLD fraudulently won the November 2020 election against the military-aligned opposition.

The coup marks a major reversal of the optimism that greeted the NLD’s first election win in 2015, which ended half a century of mostly military rule.

Australia has played a relatively middle-of-the-road role in encouraging political reform in Myanmar. It generally favours continued engagement rather than the sanctions imposed by some Western countries, and it has urged more developed South-East Asian countries to take the lead in promoting Myanmar’s democratisation.

Political stability in South-East Asia is important to Australia. South-East Asia provides a diplomatic gateway to the broader region, and its fast-growing economies are important markets, especially as Australia tries to reduce its dependence on China.

But democracy in South-East Asia is increasingly under pressure. The seizure of power by the Myanmar military underlined the downturn in democracy in the region, as did – to a lesser extent – the recent actions of the Malaysian government, which effectively avoided a parliamentary vote of no confidence during the holiday season by declaring a state of emergency in response to COVID-19.

The Morrison government now faces a sensitive choice: it can join calls led by the United States to impose possible new sanctions on Myanmar, or it can work more closely with neighbours, such as Singapore and Indonesia, which are delicately pressing the military to back off.


Asia’s COVID risks

Asian countries are now experiencing second or third waves of COVID outbreaks, confounding the hopes of late last year that they had beaten the pandemic.

The early success of nations as diverse as South Korea and Thailand in containing the virus was attributed to a loosely shared culture of civic responsibility – demonstrated by a ready acceptance of masks – and a soft authoritarianism, which enabled efficient lockdowns and contact tracing.

The expectation that this success would continue has been reflected in economic forecasts suggesting Asia will recover faster than other parts of the world.

But, as Vietnam faces a new outbreak and Japan endures persistently high cases, the Asian model is now looking less convincing.

The Morrison government has counted on Asia’s swift economic recovery to underpin its budget forecasts, and late last year it even touted some form of Asian travel bubble. But the new waves of infection threaten these plans.

While Australians are focused on the domestic distribution of the vaccine, the situation in Asia makes Australia’s regional immunisation and recovery aid programs much more important.

In 2020, the government commendably reversed six years of aid cuts, mainly in response to the pandemic. That was a prescient move amid domestic lockdown tensions, but now the aid needs to be delivered adroitly, especially to the poorer regional countries in Asia that are facing a challenge that even Japan is struggling to control.


UK voyages to Pacific

British prime minister Boris Johnson often talked up how nimbly his government would seize trade opportunities once the United Kingdom had exited the European Union.

Since Brexit has come to pass, the Johnson government has been quick to strike deals with a number of countries, including Japan and Mexico, by essentially rebadging existing EU agreements.

Now it has proposed a more audacious bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade deal explicitly based in the Pacific.

The revamped TPP is open to new members, which reflects its liberal market philosophy but also its struggle for relevance following the Trump administration’s withdrawal in 2017 and the rise of the larger Regional Comprehensive Economic Partnership in 2020.

The United Kingdom’s application to join the CPTPP – and the Morrison government’s support for it – is consistent with the current trend for pro-trade countries to opportunistically form new trade alliances. Of course, politicians try to collect diplomatic wins wherever they can, but the trend is also part of an emerging coalition-of-the-willing approach to trade reform, which intends to counter new protectionist headwinds.

The old TPP was once seen as a stepping stone to creating the Free Trade Area of the Asia-Pacific, building on the Asia-Pacific Economic Cooperation, a forum that was co-founded by Australia.

Australia and other CPTPP members should consider the best strategy for pursuing the grander vision behind the old TPP before they simply go along with a UK effort to recover from a poorly executed departure from the European Union.


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