Singapore's Prime Minister Lee Hsien Loong arrives at an international conference on the future of Asia in Tokyo in May 2022. EPA
Singapore's Prime Minister Lee Hsien Loong arrives at an international conference on the future of Asia in Tokyo in May 2022. EPA
Singapore's Prime Minister Lee Hsien Loong arrives at an international conference on the future of Asia in Tokyo in May 2022. EPA
Singapore's Prime Minister Lee Hsien Loong arrives at an international conference on the future of Asia in Tokyo in May 2022. EPA


Will political succession in South-East Asia always hinge on race?


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July 05, 2023

When Singaporeans cast their votes to elect their next president, at some point before mid-September, the result appears to be a foregone conclusion.

Tharman Shanmugaratnam, the former senior minister and deputy prime minister in the ruling People's Action Party government and one of the most popular politicians in the country (even the opposition like him), is expected to win the largely ceremonial position of head of state very comfortably.

Capping his 22-year career as an MP and minister with the presidency may well be an honour. But it raises one question for many. Why couldn’t Mr Tharman have succeeded the current prime minister, Lee Hsien Loong, when he decides to step down?

The man himself has long batted away such suggestions, telling the media “I’m good at policymaking, I’m good at advising my younger colleagues, and at supporting the PM – not at being the PM. That’s not me.”

Mr Tharman was speaking in 2016, when the subject was a hot topic because a Yahoo poll had put support for him to be premier at 55 per cent – with the next contender on 17 per cent.

Former Singapore's Deputy Prime Minister Tharman Shanmugaratnam at a high-level independent panel during the G20 Finance Ministers' and Central Bank Governors' meeting in Venice on July 9, 2021. AFP
Former Singapore's Deputy Prime Minister Tharman Shanmugaratnam at a high-level independent panel during the G20 Finance Ministers' and Central Bank Governors' meeting in Venice on July 9, 2021. AFP

His popularity hasn’t waned. In the 2020 general election Mr Tharman led his team in his multi-member constituency to victory with an impressive 75 per cent of the vote. So why shouldn’t he be a candidate for the premiership? The incumbent, Mr Lee, gave the answer in 2019.

“I think that ethnic considerations are never absent when voters vote,” he told an interviewer. Asked specifically whether Singapore – whose main ethnic groups are Chinese at 74 per cent, Malays at 13 per cent and Indians at 9 per cent – was ready for a non-Chinese leader, he said: “If you ask whether it will happen tomorrow, I do not think so.”

In neighbouring Malaysia and Indonesia, on the other hand, it is inconceivable that an ethnic Chinese person or any non-Muslim could become the country’s leader. The percentage of minorities is different in the two countries – Chinese make up 23 per cent of the population in Malaysia, with Indians at seven per cent, whereas in Indonesia the Chinese are only reckoned to constitute just over one per cent, albeit of a much larger population of 282 million, as opposed to 33 million in Malaysia.

This view, that only a member of the country’s majority ethnic group and religion should be the leader, goes further. When an ethnic Chinese was appointed Malaysia’s finance minister and an ethnic Indian attorney general in 2018, it was highly controversial.

And having been President Joko Widodo’s deputy when he was governor of Jakarta didn’t protect Basuki Tjahaja Purnama, an ethnic Chinese Christian who had succeeded his former boss as governor, from what many thought were dubious blasphemy charges in 2017, when he was sentenced to two years in jail.

There might also be some who say that throughout history, it has been the natural order of things for a leader to be from a majority or dominant ethnic group

But outsiders who view all this over-simplistically should take a pause. They should remember that it is only very recently that people of colour have attained the highest office in Europe and North America. The nonchalance with which Britons greeted Rishi Sunak as their first non-white prime minister was remarkable, but relatively new. There might also be some who say that throughout history, it has been the natural order of things for a leader to be from a majority or dominant ethnic group.

But there are other reasons for South-East Asian countries to take such a view. The history of communal tensions spilling over into rioting is so seared into the national consciousnesses that anything that could possibly upset inter-ethnic relations is ultra-sensitive, if not to be avoided at all costs.

Having been ruled by the British and the Dutch for centuries, local populations may have a degree of paranoia about post-colonial interference. Certainly, in Malaysia there was a fear among the majority Malays of “not being masters in the only country they can call their own”.

It may not be justified today, but it was in 1970 when Malays and other indigenous peoples owned a mere four per cent of the country’s wealth.

What may look like rigidity about race relations to some is particularly strictly followed in Singapore, where housing is deliberately mixed so one-racial enclaves don’t develop, and where the Home Affairs minister K Shanmugam has recently said the government is "publicly committed to keeping our percentages [of race] more or less constant".

But it is all done in the pursuit of harmony. And in countries where, first, the community comes before the individual, and second, history has shown them that care needs to be taken, it has, to a large degree succeeded. There may be a glass ceiling in politics, but in other areas of life, particularly in business, ethnic minorities have excelled.

Comparing this to France, where the frustration and anger of youths of North African and Arab descent was one of the main causes of the recent riots, a Malaysian friend returning from Europe said to me: “Thank goodness we live in Kuala Lumpur!” Such scenes are unthinkable here (as are activists gluing themselves to whatever immovable objects they can find, which she also mentioned).

It would be fair to acknowledge that race-based stereotyping is common in South-East Asia. Sometimes that is harmless.

Every time I’ve gone to a stand-up comedy set in Kuala Lumpur, there have been jokes based on caricatures – which everyone laughs at, regardless of ethnicity. Sometimes less so, as in former premier Dr Mahathir Mohamad’s bizarre and divisive claim this week that promoting a multi-ethnic country was against the Malaysian constitution.

But understandable though it may be for historical reasons, if the idea that only members of one ethnicity or religion can occupy the highest office prevents the greatest talents from realising their potential, that is only going to hinder those countries. Future generations will benefit if they can be open to any of their countrymen and women becoming their leaders. On this, I concur with Singapore’s Mr Lee. “It is not impossible,” he has said, “and I hope one day it will happen."

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

Rating: 2/5

The specs

The specs: 2019 Audi Q8
Price, base: Dh315,000
Engine: 3.0-litre turbocharged V6
Gearbox: Eight-speed automatic
Power: 340hp @ 3,500rpm
Torque: 500Nm @ 2,250rpm
Fuel economy, combined: 6.7L / 100km
 

Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

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The specs
  • Engine: 3.9-litre twin-turbo V8
  • Power: 640hp
  • Torque: 760nm
  • On sale: 2026
  • Price: Not announced yet
Bundesliga fixtures

Saturday, May 16 (kick-offs UAE time)

Borussia Dortmund v Schalke (4.30pm) 

RB Leipzig v Freiburg (4.30pm) 

Hoffenheim v Hertha Berlin (4.30pm) 

Fortuna Dusseldorf v Paderborn  (4.30pm) 

Augsburg v Wolfsburg (4.30pm) 

Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)

Sunday, May 17

Cologne v Mainz (4.30pm),

Union Berlin v Bayern Munich (7pm)

Monday, May 18

Werder Bremen v Bayer Leverkusen (9.30pm)

Updated: July 05, 2023, 8:20 AM