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What can we expect for Indonesia, Southeast Asia and the world in 2012?

Crystal-ball gazing is always risky, but that shouldn’t excuse one from offering some thoughts on where we’re headed. So let this storyteller put on his contrarian cap and make some calls.

First, 2012 could be the year that the United States finally manages a turnaround, thereby ensuring that President Barack Obama will be re-elected with a resounding mandate. Of course, Obama’s campaign will be assisted by the fracturing of the Republican Party as Tea Party candidates tear the GOP apart with their polarizing rhetoric.

Mitt Romney, the front-runner and winner of the New Hampshire primary, is too tepid to rally the Republican cause. Moreover his aristocratic mien, not to mention his swashbuckling days in private equity, will come back to haunt him as Americans turn on their moneyed elite.

If re-elected, Obama’s authority will be strengthened, a la Ronald Reagan’s second term. He will then have a free hand to renew his long-stymied progressive program.

Turning eastward, in 2012 China and India will continue to grow, but struggle with the consequences therein.

For China, the demonstrations in Wukan, Guangdong, could be the beginning of more unrest over rising injustice in the People’s Republic.

Furthermore, its property bubble may finally burst. All those empty tower blocks in China’s cities will finally have to be accounted for, but the worry is that the deflation will also hurt housing equity. The Communist Party of China will therefore have to work extra hard to stem the socioeconomic dislocations on the horizon.

For India, the administrative inertia caused by its raucous politics will slow growth rates considerably. Prime Minister Manmohan Singh has been undermined by Anna Hazare’s anti-corruption campaign and the abortive attempt to reform the retail sector. This will hasten the long-awaited “coronation” of Nehru dynasty scion Rahul Gandhi.

Closer to home, Thailand’s economy is estimated to have grown by only 1.1 percent in 2011 due to that year’s floods. A massive rebuilding program by Yingluck Shinwarta’s government, however, will boost 2012’s performance to 4.5-5.5 percent. The kingdom may also find a modicum of peace if Yingluck’s brother Thaksin extends his wealthy exile abroad rather than returns as a royalist bogeyman.

While the Philippines also had a dramatic 2011 with a combination of natural disasters and political conflict, the Asian Development Bank has forecast the Philippine economy to grow by 4.8 percent. The business process outsourcing boom, tourism and strong domestic consumption will see Manila’s hotels filling up as swiftly as Jakarta’s did in 2008 and 2009.

As for Malaysia, the acquittal of Anwar Ibrahim has altered its political landscape. Snap elections expected this year will be fiercely contested between Anwar and his nemesis, Prime Minister Najib Razak. I anticipate, however, a Najib victory, albeit with the narrowest of margins, thereby heightening Malaysia’s political temperature.

This brings me to Indonesia, whose economic miracle will most likely continue in 2012, although growth may slow from 6.5 percent to “only” 5.8 percent. Still, questions will remain about how Indonesia’s economy can move up the value chain and away from volatile natural resources.

President Susilo Bambang Yudhoyono will continue to manage his fractious coalition government (particularly the restive Golkar Party) as he struggles to define his legacy as his presidency enters its lame duck phase.

This may be challenged by up-and-coming politicians seeking to burnish their populist credentials via economic nationalism. Also, the back room deals going into the 2014 elections to replace him will probably grow. But two years is an eternity in politics. Trends or momentum, however strong this year, will inevitably change down the line.

In the provinces, incidents like the violent Bima crackdown highlight increasing conflicts over natural resources and human rights. As interest in the regions grows, so will the need to manage stakeholders on the ground. This is all the more important as distrust of political and business elites grows worldwide.

Anger over corruption and inequality is potent both in Indonesia and neighboring Malaysia. Social justice will be the order of the day if their governments wish to avoid a repeat of the Arab Spring.

This year, therefore, will be a lively one the world over. We’ll find out in 12 months just how on or off the mark I was.
 
Karim Raslan is a columnist who divides his time between Malaysia and Indonesia.