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Asean-5 survey shows little faith in political leaders

FTCR's Political Sentiment Index suggests last year's optimism is fading

Citizens across the Asean region see little cause for confidence in their governments, according to FTCR's Asean Political Sentiment Indices for the second quarter of this year.

The index fell in three of the five countries surveyed, with only the Philippines showing signs of rising optimism, though much less so than a year ago. A pick-up in the economy raised spirits in Malaysia, though the country remains by far the most pessimistic in the region. Thailand's index fell close to the 50-point mark that separates optimism from pessimism following another decline, while corruption and governance issues in Indonesia and Vietnam led to a dip in their indices.

The index tracks the six-month political outlook of 5,000 respondents across the Asean-5 countries. In Thailand, the index fell 3.9 points to 51.1, showing ambivalence about the political outlook. The score is the lowest since the military took power in May 2014. Prolonged military rule and continued uncertainty over the timing of the next elections and a return to civilian government are sapping optimism. The Indonesia index fell 3.9 points to 59.6.

We believe two factors caused the drop: a showdown between the government and Islamist groups as police investigate several religious leaders for various offences; and a tussle between the Corruption Eradication Commission and the House of Representatives. The commission is investigating a number of lawmakers for bribery while the House attempts to curb its powers.

In Vietnam, the index weakened by a point to 57.2. We attribute this to the highly unusual dismissal of Dinh La Thang from the Communist party politburo in May over financial losses and misconduct at PetroVietnam, a state-owned oil and gas enterprise where he was the chairman from 2009-11.

The mood continues to lighten in Malaysia as its index rose 1.5 points to 31.8 after the economy picked up from the middle of last year. Nevertheless, the below 50 reading shows respondents expect political conditions to worsen in the next six months. Elections due by August 2018 hold little hope of improvement in the political climate, currently marred by corruption allegations at the state fund 1MDB and mismanagement at state-linked plantation company, Felda Global Ventures.

Despite the Isis-linked insurgency in Mindanao, the index in the Philippines rose 2.1 points to 55.5. This is the first improvement since President Rodrigo Duterte took office on June 30 2016. We think the rise reflects stability in the government.

In May, lawmakers threw out an impeachment complaint against Mr Duterte over his aggressive anti-drug policy, which has involved extrajudicial killings of thousands of poor Filipinos.

The FTCR Asean Political Sentiment survey is based on interviews with 5,000 consumers in Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

This article was first published on July 12 by FT Confidential Research.

FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and Southeast Asia. A team of researchers in these key markets combine findings from proprietary surveys with on-the-ground research to provide predictive analysis for investors.

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