Located in the state of Negeri Sembilan, Rembau consists of seventeen subdistricts (mukim) and 204 villages (kampung). Most Rembau residents work as farmers, government employees or industrial workers (Rembau District Council 2013). The majority of voters in Rembau are rural Malays, followed by Indian and Chinese voters.

Rembau has one parliamentary seat and four state seats: Paroi, Chembong, Rantau and Kota. In the 2008 12th general election (GE12), Barisan Nasional (BN) won the parliamentary seat and the Chembong, Rantau and Kota state seats against opponents from the People's Justice Party (PKR) and Pan-Malaysian Islamic Party (PAS), which have now joined with the Democratic Action Party (DAP) in Pakatan Rakyat (Pakatan). Losing Paroi in the 2008 election came as a surprise for the BN as the coalition has always considered Rembau as their solid base and voters there as strongly loyal. Hence, the BN was determined to win back the Paroi seat, and retain the others in Rembau, in the 13th general election (GE13) in 2013. The coalition succeeded in that goal. Both sides' campaign strategies in Rembau in GE13 illustrate the advantages that the BN has over Pakatan in terms of candidates' incumbency and, hence, claims to experience, but especially the particular benefit of efficient political machinery and a developmentalist focus.

Progress of the campaign

The BN campaign

All the BN's candidates in GE13 were from UMNO and four out of five were incumbents defending the seats they had won in GE12. A distinguishing feature of the BN's campaign here was the extent to which the campaign as a whole centred around the district's two most prominent candidates, Khairy Jamaluddin Abu Bakar, who was seeking his second term in the Rembau parliamentary seat, and Mohamad Hasan, the incumbent Chief Minister of Negeri Sembilan, who was defending his state seat in Rantau.

Introduction

The semi-urban parliamentary constituency of Lumut comprises the Malay-majority state seats of Pangkor and Pasir Panjang as well as Chinesemajority Sitiawan. It is the site of electoral contests involving such major Perakian politicians as the state's United Malays National Organisation (UMNO) Chief Minister Zambry bin Abdul Kadir; Perak Democratic Action Party (DAP) chairman Ngeh Koo Ham; and Kong Cho Ha of the Malaysian Chinese Association (MCA), who served as Minister of Transport from 2010–13 and is the party's secretary-general. In addition, the outgoing state assemblyman for Pasir Panjang is Mohammad Nizar Jamaluddin, from Parti Islam SeMalaysia (PAS), who served as the state's Chief Minister for several months in 2009 before Zambry replaced him in what is commonly referred to as the ‘Perak coup’.

This coastal district's economic activities include tourism, fishing and agriculture. Levels of urbanisation and wealth are spread unevenly across subdistricts and ethnic groups. In addition, Lumut is home to a large naval base that hosts over 6,000 Royal Malaysian Navy personnel. More controversially, Brazilian mining giant Vale International SA's recent hefty investment in a jetty at Lumut Port has generated some backlash over the jetty's potentially harmful effects on the fisheries sector and on the environment.

The campaign in Lumut illustrates the nexus between the Barisan Nasional (BN) and government machinery, including the parallels between an election-triggered controversy over the naval base and the legal tussles following the 2009 Perak coup. Despite the BN's indisputable advantage, the campaign strategies of both coalitions converge insofar as they both fundamentally operate within and depend on a de facto legal framework that does not require the accountable use of state infrastructure and campaign funds. Still, the campaign in Lumut seemed to prompt a slight shift from ethnic-based to ‘economic’ mobilisation of votes.

Progress of the campaign

Campaign overview

Over the course of the campaign, the BN capitalised on state resources, expansive party machinery paid for by the central party organisation, a flood of mainstream advertisements and BR1M (Bantuan Rakyat 1Malaysia, 1Malaysia People's Aid) cash handouts to mobilise votes.

Compared with the robust field of studies of electoral politics in neighbouring democracies such as the Philippines or Indonesia, the state of this field in Malaysia is weak at best. A handful of exemplary works (most recently, the massive Puthucheary and Norani 2005) detail and assess the workings of the electoral system, and each general election (GE) unleashes a flurry of analyses of who voted how, why and with what significance for the polity. Most of these studies rely on aggregate, often quantitative data – primarily polling results – or trace developments in a single constituency or state (for instance, Welsh 2004; Brown 2005; Loh 2003). Surveying across such works, the consensus seems to be that electoral dynamics have changed in Malaysia since at least the late 1990s: that old patterns of communal (ethnic) voting have given way to developmentalist, Islamist or other priorities; that the rise of new media have altered processes of voter mobilisation; and that the perennially dominant Barisan Nasional (National Front, BN) coalition faces stiffer opposition than ever before. The explanations for these shifts vary, but centre usually around either the character or concerns of specific ethnic communities (e.g., the rise of ‘modern’, aware ‘new Malays’ or Chinese and Indian resentment against pro-Malay preferential policies and Islamisation); economic downturns or manifest corruption and inefficiencies; a generational shift as ‘wired’ youths, unaware or unappreciative of the BN's past achievements, flock to the polls; or less readily explicable patterns, such as an apparent urban–rural divide. And yet, generalisations are difficult.

This book charts new ground by presenting qualitative, constituency-level data, allowing not just nuanced explanation, but comparison across Malaysian states and regions. As such, the work offers evidence with which to weigh the merits of conflicting theories of Malaysian political behaviour: of whether communalism still determines political preferences, of how much the BN relies upon targeted developmental spending or discretionary payments, of whether urban and rural or young and old voters value different attributes in their representatives, of whether appeals to good governance win votes. Most common explanations prove too simplistic.

Malaysia's 13th general elections took place the same year that the country celebrated its 50th anniversary as a confederation formed through the combining of the Federation of Malaya with Sabah, Sarawak and Singapore (Singapore left after two years). This is significant for several reasons.

The election results saw the long-term ruling coalition, Barisan Nasional, staying in power thanks to the support it received from the largely rural East Malaysian states. This increased reliance by the federal government on Sabah and Sarawak had been obvious already in the 2008 elections, but this time around it avoided an excruciating loss of power thanks to them.

The political, demographic, socio-economic and ethnic structure of Sabah and Sarawak is extremely different from that found in Peninsular Malaysia. Thus, the new balance of power forces the central government to give increasing consideration – and respect – to the East Malaysians and the special conditions they live under. Their representation in Cabinet is higher than ever before, and their ability to raise demands on the federal budget is also greatly increased.

That is one significant and rather obvious change. Another is the fact that their raised status in the power calculus of the country will over time have great impact on the basic and greatly simplified concepts concerning ethnicity and religion, which have defined political discourses for decades.

This is borne out by the realization among opposition parties – which won the popular vote but failed to take power due to the distorted nature of the electoral system – that they cannot really dislodge the BN unless they advance from the comfort of their urban strongholds and seriously restrategise in order to become relevant to rural folk and to voters in Sabah and Sarawak.

To me, this is one of the most important of the new scenarios to consider as Malaysian politics struggles to make the two-party system that has recently come into being in the country credible and sustainable.

Introduction

Pandan is a parliamentary constituency in the state of Selangor which comprises two state seats, Chempaka and Teratai, Malay-majority and Chinese-majority areas respectively; therefore Pandan is considered a mixed seat. During the 13th general election (GE13), all three seats were contested by the two main coalitions in Malaysia, Barisan Nasional (BN) and Pakatan Rakyat (Pakatan).

Pandan saw Mohd Rafizi bin Ramli from Parti Keadilan Rakyat (PKR) pitted against Gary Lim Chin Yee from the Malaysian Chinese Association (MCA), with Allan Tan Yew Leng contesting as an independent candidate. There was a straight fight in Chempaka between Iskandar bin Abdul Samad from Parti Islam SeMalaysia (PAS) and Muhammad Faizal bin Sufar from the United Malays National Organisation (UMNO). Teratai was contested by Tiew Way Keng from the Democratic Action Party (DAP), Ben Liew Pok Boon from Parti Gerakan Rakyat Malaysia (Gerakan) and three independents – Jenice Lee Ying Ha, Chin Kok Keong and Lim Ah Chai. PKR, PAS and DAP make up Pakatan, while MCA, UMNO and Gerakan are from BN.

The electoral campaigns in Pandan suggest a new dynamic emerging, in which candidates and voters alike favour policy-based campaigns as opposed to campaigns run on racial or patronage platforms. The next section describes how party structure, candidate selection and campaign machinery influenced the mobilisation of voters, as well as how campaigns were financed. The following section then explores trends which indicate the democratisation of electoral dynamics in Pandan. A closer examination, however, reveals that campaign funding remains highly confidential for both Pakatan and BN.

Progress of the campaign

The Pandan parliamentary constituency straddles the boundary of Kuala Lumpur (a federal territory) and the state of Selangor. Despite its proximity to the Kuala Lumpur city centre, Pandan has a large population of urban poor, although the majority of its residents are from the middle-income working class (Chooi 2013c). Development here mainly consists of sprawling residential terrace housing, apartments and fairly large areas of commercial shoplots. Chempaka has relatively more low-cost flats than Teratai, as well as pockets of semi-rural Malay villages or squatters. Overall, Pandan is considered an urban and semi-urban seat.

Introduction

Kuala Nerus was once a rural area, of which only a small part could be considered semi-urban. Now, however, due to its proximity to the city centre of Kuala Terengganu, Kuala Nerus is predominantly semi-urban. The constituency has undergone massive development and urbanisation, with several key dimensions. First, the federal government has awarded billions of ringgit in development projects since the Barisan Nasional (BN) wrested the state from Parti Islam SeMalaysia (PAS) in the 2004 general election (Elmi Rizal and Tuan Azam 2008). Since 2004, the federal government has built two universities – Universiti Sultan Zainal Abidin (UniSZA) and Universiti Malaysia Terengganu (UMT) – and upgraded a teaching institute in Kuala Nerus, as well as constructing a RM300 million sports complex in Gong Badak.

Second, development has brought an increased population and new demographic patterns. As a result, Kuala Nerus now has a tremendously high percentage of both young and first-time voters: 30 per cent of the total number of voters are under thirty years old and 32.4 per cent are first-time voters. Therefore, the new voters in Kuala Nerus in this election consisted not only of the young generation of local people, but also of new professionals and members of organisations recently established in this area, such as universities and other institutions. At the same time, 10 per cent of the voters in Seberang Takir are military and police personnel, which invariably gives an advantage to the incumbent ruling party.

The fact that the majority of Pakatan Rakyat's victories nationwide were in urban areas makes Kuala Nerus a very interesting constituency to analyse. Close observation of the electoral process in this constituency, including the relative salience of local politics, voters' behaviour and key strategies of the political parties, helps to illustrate the ways in which both the BN and its opponents navigate a new urban developmentalism in a rapidly changing political landscape.

Introduction

With the 13th general election looming, Democratic Action Party (DAP) supremo and former opposition leader Lim Kit Siang announced as early as mid-March 2013 that he was leaving his seat in Perak to contest in Gelang Patah, Johor, a Barisan Nasional (BN) parliamentary safe seat for the past few elections located right in the strategic heartland of the United Malays National Organisation (UMNO). In the last two elections, Parti Keadilan Rakyat (PKR) had tried to crack the seat, but failed. With this move, Kit Siang hoped he could breach BN's ‘fortress’ Johor, paving the way for Pakatan Rakyat (Pakatan) to take over Putrajaya. The stakes were high: Former Prime Minister Tun Dr Mahathir Mohamad exhorted, ‘Johoreans must crush him [Kit Siang] to the end … to ensure it is his last day in politics’ (Mohd Farhan 2013). In turn, Kit Siang upped Mahathir's ante by promising to retire permanently from politics if he lost (Chua 2013).

The BN responded by pitting heavyweight against heavyweight: Kit Siang would face outgoing Mentri Besar (Chief Minister) Dato’ Haji Abdul Ghani Othman, known for his relatively clean reputation, modest personality and eighteen-year record heading the state government. Against the odds, Kit Siang was not ‘crushed’ at Gelang Patah, but won with a convincing 15,000- vote majority against Abdul Ghani. In addition, DAP Johor leader and party stalwart Dr Boo Cheng Hau retained the state seat of Skudai against a Malaysian Chinese Association (MCA) challenger, Liang Ah Chye.

At a glance, the overall results appear to signify a rejection of BN-style politics and policies. However, the BN underdog in the rural Nusajaya state legislature (DUN) seat, rookie candidate Dr Haji Zaini Haji Abu Bakar, managed to prevail against Parti Islam SeMalaysia (PAS) vice-president Salahuddin Ayub, the opposition's prime candidate for Johor chief minister. One would have expected the BN to nominate a stronger, proven candidate against Salahuddin if Nusajaya were truly a critical seat to win.

The contrast in these outcomes suggests that while clientelistic networks remain relevant in Gelang Patah, they are no panacea.

The signing of the Plaza Accord on currency alignment in the mid-1980s marked the beginning of substantial progress toward genuine economic integration in East Asia in the decade that followed. Multinational companies became established in the region and new business clusters were formed. Progress was also made in terms of systems and policy: efforts were made to liberalize trade and put in place a set of rules that would encourage regional economic integration. A number of Free Trade Agreements (FTA) and Economic Partnership Agreements (EPA) have been signed, and we can be optimistic that economic integration on the systems front will continue in the years to come.

This chapter discusses the game-changing effects of China's increased involvement in the East Asian economic integration process since it joined the World Trade Organization (WTO). We look at how the Association of Southeast Asian Nations (ASEAN) and Japan have responded to date, and consider how they ought to respond in the future.

WTO MEMBERSHIP PROMPTS GREATER CHINESE INVOLVEMENT

How and when did China become fully integrated into the East Asian regional economy, involved diplomatically not just in bilateral but also multilateral efforts? For many years, Japan and ASEAN were the main drivers of de facto economic integration in East Asia. This began to change after China joined the WTO in 2001. China opened FTA negotiations with ASEAN soon after, and became much more directly involved in the regional economic integration process, calling for preliminary studies on an FTA involving ASEAN+3 (Japan, China, and South Korea).

Until the Asian currency crisis of the late 1990s, the main hubs for regionalization in East Asia were Japan and ASEAN. After World War II, the countries that would later form ASEAN passed tough laws regulating foreign investment and attempted to achieve import substitution through steep tariffs. When this approach reached a dead end, the ASEAN countries shifted to an export-driven model of industrialization. It was around this time, with the value of the yen soaring following the Plaza Accord in 1985, that Japanese companies, particularly in the electronics sector, began to make serious investments in ASEAN in order to maintain their international competitiveness.

In a speech that was due to be delivered in Jakarta on 18 January 2013 — but postponed due to the hostage crisis in Algeria — Japanese Prime Minister Shinzo Abe stressed the vital importance of Asia's maritime domain to Japan:

That Abe chose to focus on maritime security during his first overseas trip since assuming office on 26 December 2012 was unsurprising for two reasons. First, as an island nation largely bereft of natural resources, Japan depends for its economic prosperity on the free flow of maritime trade. Japan relies on Asia's sea lines of communication (SLOCs) for the transportation of its manufactured goods to world markets and for the importation of natural resources, including more than 90 per cent of its imported energy supplies. SLOC security has been, and remains, a critical national security concern for Japan's leaders, strategic thinkers, and security planners. The SLOCs that thread through the maritime chokepoints of Southeast Asia (including the Malacca-Singapore Straits, Sunda Straits, and Lombok-Makassar Straits) and the South China Sea link the Indian and Pacific Oceans and are therefore of singular importance to Japan's economic well-being and national security. In 2010 Japan's two-way trade with the ten members of the Association of Southeast Asian Nations (ASEAN) amounted to US$214 billion, with South Asia (India, Pakistan, and Bangladesh) to US$17.8 billion, and with the European Union (EU) to US$147 billion — the bulk of this trade being borne along Southeast Asia's sea lanes. Regional sea lanes are routinely utilized also by the Japan Maritime Self Defense Force (JMSDF), including by warships operating in the Indian Ocean as part of international efforts to counter pirates off the coast of Somalia and in the Gulf of Aden.

DEVELOPMENT OF REGIONAL FINANCIAL COOPERATION IN EAST ASIA

East Asian Miracle and Asian Financial Crisis of 1997–98

In the late 20th century East Asian economies achieved rapid economic growth, a phenomenon that is often called the “East Asian Miracle”. According to the World Bank (1993), from 1965 to 1990 East Asian economies grew faster than economies in any other region of the world. Eight high-performing Asian economies — Japan, the Four Tigers (Hong Kong, South Korea, Taiwan, and Singapore), Indonesia, Malaysia, and Thailand — grew roughly three times as fast as Latin American and South Asian economies, and five times faster than Sub-Saharan African economies. An export-oriented policy and a strategy to attract foreign direct investment, accompanied by high savings and investment in physical and human capital, contributed to the development of export-oriented manufacturing industries that drove growth in these economies.

Under the sustained high growth, the financial sector liberalization of the 1990s, and a de facto U.S. dollar-pegged foreign exchange rate regime, the East Asian economies attracted large cross-border capital inflow. As nominal domestic interest rates were significantly higher than interest rates on the U.S. dollar, local banks (including non-banking financial institutions) and local corporates sought to take advantage of lower interest rates by taking U.S. dollar loans from foreign lenders. The foreign lenders viewed such lending as lucrative investment opportunities as they placed high confidence in these economies owing to their sustained growth.

But these economies were also subject to the accumulated risks emanating from the capital inflow, that is, heightened vulnerability to external shocks. First, such capital inflow took the form of short-term, unhedged U.S.-dollar-denominated bank loans to local banks, non-banking financial institutions, and corporates. Second, the borrowers were not only in export industries — which could generate foreign exchange income — but also in non-tradable sectors, even channeling those funds into asset markets such as equity and real estate. Third, the capital inflow took place against a background of a market infrastructure that had weak banking supervision and legal systems (e.g., bankruptcy laws), and there were concerns about the robustness of their statistics and transparency.

INTRODUCTION

Japan has been promoting bilateral economic cooperation with the Association of Southeast Asian Nations (ASEAN) member countries (ASEAN countries) since the 1960s, using development assistance as a major tool. In recent years, Japan has also enhanced regional cooperation with ASEAN. Shimomura (2013) noted that Japan's economic cooperation with East Asia, including ASEAN countries, produces “synergy effects of trade, investment and aid” and considered that this approach is common in the economic cooperation of other Asian countries such as China. This paper provides an overview of Japan's development assistance to ASEAN countries, its relationship with Japan's foreign direct investment (FDI), and other characteristics of Japan's development assistance, such as supporting a balanced urban and rural development. Lastly, recent developments in Japan's regional cooperation with ASEAN are outlined. As a reference, China's external economic cooperation is also described briefly in the footnotes.

IMPACTS OF DEVELOPMENT ASSISTANCE TO ASEAN COUNTRIES

This paper begins with an introduction to some of the previous studies on the impact of Japan's development assistance to ASEAN countries. Kawai (2005), in his report on a coherent policy for development, states that “the economic development of developing countries in East Asia since the 1980s was made possible by the inflow of FDI from developed countries and the subsequent activation of regional specialization and trade.” He points out that “there are links between the development of infrastructure in Asian developing countries supported by Japan's development assistance, the increase in Japanese FDI as a result of Japanese manufacturing companies entering those countries, the increase in exports of industrial products by those countries due to the increase in the intra-company division of labor and transactions, and the increase in household income in those countries.” He concluded that “Japan's development assistance policy, which focused on infrastructure development, was coherent with the strategies of the developing countries in the region, which had promoted export-oriented and industrialization policies.”

Meanwhile, Kimura and Todo (2010) scrutinized the role played by development assistance in inducing FDI. They classified the FDI-inducing effects of the cumulative amount of development assistance of the five main OECD countries4 from 1990 to 2002 into three types — “positive infrastructure effect”, “negative rent-seeking effect”, and “positive vanguard effect” — and performed an empirical analysis using the Gravity Model.

Introduction

Explaining the development of the electronics sector in Singapore inevitably involves a discussion of the country's economic history. In many aspects, the country's industrialization experience highlights the sector's role in creating national economic growth. Two themes underscore the evolution of the electronics sector in Singapore. First, the industry was transformed over a relatively short period of 40 years. Secondly, the government has played a major role in fostering this change.

Unlike the experience of developed economies, where industrialization originated with textiles and apparels, Singapore's development was driven by more capital-intensive industries such as electronics. Its concerted effort in development coincided with the period where multinational corporations (MNCs) from developed economies were seeking production bases abroad to lower costs. This timing was fortuitous, as the microelectronic revolution had just begun. Hence, the manufacturing of a whole stream of electronic products, from simpler peripherals such as diskettes to more sophisticated items like disk drives, provided opportunities for local enterprises to flourish. Singapore rode on this “electronic wave” to nurture and develop a strong base for the electronics sector.

Today, the electronics sector remains a major pillar of Singapore's growth. The country houses 14 silicon wafer fabrication plants, 20 semiconductor assembly and test operations, 40 integrated circuit (IC) design centres, and the world's top three wafer foundries. Furthermore, about 80 per cent of the world's enterprise hard disk drives and 40 per cent of the world's hard disk media volume is produced in Singapore.

Many of the investments described above are the result of a series of policies implemented from 1965 to 2010. Pragmatic management of the economy by the state has kept the electronics sector relevant through encouraging higher use of capital and technology. Throughout Singapore's development, government policies have been characterized by their coherence and consistency towards the single objective of promoting economic growth; and responsiveness towards changing business conditions. Today, the government's plans for the sector include transforming the industry into an innovation-driven electronics hub providing technological, manufacturing and business solutions. This will develop new growth areas essential for the industry's future prospects.

The following section provides an overview of the performance of the electronics sector in Singapore. The subsequent section sets out the state's role in fostering growth within the sector over the past four decades. A final section concludes the chapter.