Traders stand near a screen showing the Indonesia Stock Exchange Composite Index during the first day of trading for 2012 in Jakarta January 2, 2012. Courtesy Reuters/Stringer.

It’s been a fascinating year for Asia. The region has continued to consolidate its role as the essential player driving global recovery. Developing Asia, including China, India, and the major ASEAN economies, maintained robust growth, in contrast to the advanced economies’ collective anemic growth over the same period.

But 2012 promises to be more fraught as domestic politics take command amid new challenges to growth.

Here are twelve trends I see coming for Asia in 2012—risks, opportunities, and emerging patterns that will shape Asia during the next twelve months, and beyond.

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Women use sparklers to draw "2012" for photographers as they celebrate New Years Eve in Manila December 31, 2011 (Romeo Ranoco/Courtesy Reuters).

The year 2011 saw some of the biggest political developments in Southeast Asia in decades. Burma finally seemed poised for real change, while Thailand continued to move closer to the brink of self-immolation, as political in-fighting worsened. The United States, China, and ASEAN nations continued to raise the stakes in the South China Sea, to a point where, now, it seems unlikely anyone can back off their claims and truly sit down at the table to negotiate some kind of agreement. Singapore had its most competitive election in generations, while in Malaysia massive street protests clearly have rattled the government. Even smaller states faced political turmoil: Papua New Guinea went for weeks with two prime ministers and the potential for civil strife, before the situation was resolved.

What, then, should we expect for an encore? Here are several trends to watch:

1. China will bring back the charm. Over the past two years, Beijing has cost itself much of the gains it made in Southeast Asia in the late 1990s and early 2000s, when it appeared to be a good neighbor, trading partner, and investor. Through its belligerent approach to the South China Sea and, to some extent, the Mekong River, Beijing has scared many Southeast Asian nations enough that they have welcomed back a greater role for the United States in the region, even though their populations have not exactly become pro-American. Read more »

Malaysia's opposition leader Anwar Ibrahim smiles as he arrives at courthouse for his sodomy trial in Kuala Lumpur (Bazuki Muhammad/Courtesy Reuters).

Much has changed in Southeast Asia over the past decade. But travel to downtown Kuala Lumpur today, and walk along the Moorish-influenced public greens, and suddenly the Malaysian capital seems trapped in the 1990s.

At that time, the Asian financial crisis was battering the country’s economy, and urbanites hit by the downturn and frustrated by the country’s tightly controlled political system, had taken to the streets, where they were met by riot control troops, who battered them on a daily basis until the government’s long-ruling coalition put Anwar Ibrahim, the country’s popular opposition leader, on trial. The charge: Sodomy, a serious crime in a predominantly Muslim nation.

Though the trial was a farce—accusers later recanted their statements, and Anwar appeared in court with what the government called a “self-inflicted” black eye—he was convicted, and ultimately served six years in prison. Read more »

Pro-democracy protesters scuffle with police during a protest march to demand universal suffrage and against rising property prices in Hong Kong July 1, 2011. (Tyrone Siu/Courtesy Reuters)

The recent uprisings in Malaysia and Thailand, following on the heels of the Arab Spring, which has turned into the Arab Summer, have emboldened democracy advocates around the world. Some see the wave even reaching China, where in recent days there have been fresh protests in Inner Mongolia, southern China, and other regions of the country.

But in reality the forecast for democratization is not so sanguine. Already, the revolts in places like Tunisia and Egypt are turning sourer, with the military and other elite actors reasserting their powerful position in society. Meanwhile, in other parts of the developing world, democratization actually has gone backwards over the past decade.

In a piece in The National, I chronicle the decline of democracy in recent years, and argue that, Arab Spring and Summer notwithstanding, the future for democracy in the developing world is not bright.

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Supporters of the "Bersih" (Clean) electoral reform coalition shout slogans during clashes with police in downtown Kuala Lumpur July 9, 2011. (Damir Sagolj/Courtesy Reuters)

Last weekend, Malaysia’s Bersih (clean elections) movement drew tens of thousands of protestors to the streets of Kuala Lumpur, demanding reform of the electoral system, which is weighted in numerous ways to protect the ruling coalition. Though the protest was largely peaceful, the government met the demonstration with massive force, arresting thousands of protestors. The police used clubs, water cannons, and tear gas to crush the protests. (New Mandala has fine coverage of the Bersih protests.)

As in Thailand, where the red shirt movement started largely as a pro-Thaksin protest and developed into a larger force, the Bersih movement, which began as just a call for electoral reform, also may be developing into something larger. Read more »

A view from upstream of Malaysia's Bakun dam, in the inland of the eastern state of Sarawak on Borneo island, December 11, 2003. (Bazuki Muhammad/Courtesy Reuters)

This is a guest post by Prashanth Parameswaran, a former researcher at the Project 2049 Institute, who is currently conducting research on dam projects in Southeast Asia.

These past few weeks have not been good ones for large dam projects in Southeast Asia. Big hydropower projects have been caught in a web of unsafe corporate practices, fierce political violence and simmering regional tensions.

On June 9, another round of fighting erupted in Burma’s northern Kachin state, where Chinese companies are building a series of dams to power southern China. Dozens were killed, hundreds of Chinese workers were evacuated, and thousands of civilians fled the affected area. The political wing of the Kachin Independence Army (KIA), an ethnic minority armed group in Burma which has clashed repeatedly with the government, has also fiercely opposed the construction of a large dam in Myistone, a culturally and ecologically sensitive area. In fact, the group sent an open letter to the Chinese government in March to stop the dam’s construction, warning of the risk of civil war.

It is not clear what exactly prompted this latest outbreak of fighting. Some claim that the Burmese government wants to ensure that the project is built so it will receive hundreds of millions in annual power sales, while others contend that the military is using it as a pretext to exert control in the northern areas which have resisted its control. What is clear is that the dam projects are exacerbating internal conflict due to concerns regarding the distribution of benefits, damage to the environment and displacement of local populations.

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People use computers at an internet cafe in Wuhan, Hubei province, January 23, 2010. (Stringer Shanghai/Courtesy Reuters)

Freedom House this week released its annual report on Freedom on the Net . Overall, despite the buzz about the ways in which social media, VOIPs, and other Internet-related tools have helped facilitate the Arab protests of 2010-2011, the report makes for pretty grim reading, including growing controls on online discourse even in free and developed nations like South Korea, as well as increasingly effective tools of repression deployed by autocratic regimes.

Southeast Asia does very poorly on the report. Some countries should not be a surprise: Burma, one of the most repressive nations in the world, comes out badly. But even some of the freer nations in Southeast Asia, like Thailand, rank very poorly: Thailand is rated as “not free” in terms of the Internet, which is the lowest ranking a country can receive. And Malaysia, which has had a vibrant blogosphere even as its print media remained controlled and stodgy, also has begun to turn. Some of Malaysia’s most prominent online writers have grown increasingly scared of government intimidation, and there is fear that the online media will become as constrained as the print and television media.

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Members of an Indonesian military honour guard participating in a state dinner are pictured in Jakarta. (Jason Reed/Courtesy Reuters)

Over the past two weeks, several interesting articles have emerged on politics in Indonesia and Malaysia, which are supposedly two of the more democratic nations in Southeast Asia. In one Asia Sentinel piece that also has been discussed endlessly in Jakarta circles, the author speculates that the wife of current president Susilo Bambang Yudhoyono (SBY) may well run for the presidency in the next election. In a well-drawn New York Times profile, the paper chronicles the rise of Nurul Izzah Anwar, the daughter of opposition leader Anwar Ibrahim. She has recently been elected to the leadership of Anwar’s party, despite the fact that she is extremely young and politically inexperienced.

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