Tag Archive for: Southeast Asia

The geopolitics of the energy transition in the Indo-Pacific

This is the third in a series of edited extracts from a new ASPI publication, The geopolitics of climate and security in the Indo-Pacific, released today. The first article presented a 2035 climate security scenario, which is the reference point for subsequent articles, including this one.

While the forces shaping the Indo-Pacific’s energy transition out to 2035 are complex, some macro trends are clear. Energy demand in the region is projected to grow drastically and remain concentrated in urban areas, and power infrastructure will remain highly vulnerable to climate impacts. The uneven availability of finance to countries attempting to make the transition from fossil fuels to renewable-based energy systems is perhaps the most significant risk. Without major policy shifts, these trends prefigure widespread energy insecurity in 2035, with far-reaching implications for regional security, as the following projection to 2035 illustrates.

* * *

It is the year 2035. The global transformation of energy systems is well underway, yet only the most mature markets in Asia and the Pacific are able to use the ongoing shifts to their economic and (geo)political benefit. Continued reductions in the levelised cost of electricity generated from solar and wind power spur a rapid shift of finance flows into clean energy. Approximately US$1.2 trillion was invested annually in clean electricity supply between 2023 and 2026, yet it was disproportionately focused on OECD countries. In Asia and the Pacific, China and India are large centres of investment, boasting both rapid deployment of renewable-based generation and manufacturing capacity.

Already struggling players are losing out. A lack of finance means Cambodia, Laos, Myanmar and Thailand have been unable to significantly ramp up clean power generation capacities. The logic that stymies the transition in vulnerable countries is also often perverse. For example, power-supply disruptions to major Asian markets, most notably China, simultaneously deliver short-term boosts to the fossil-fuel markets of several Southeast Asian producers, most notably gas exporters Indonesia, Malaysia, Myanmar and Brunei. Faced with a lack of private- and public-sector finance to pursue alternative—and more resilient paths—these countries opt for boosting domestic oil, coal and gas production.

By 2035, energy systems across the whole region are under extreme physical and economic strain due to the severe and intensifying impacts of global warming, which has now reached 1.5°C above pre-industrial levels. The largest energy demand centres (Bangkok, Jakarta, Ho Chi Minh, Yangon) and other coastal cities are in the middle of a massive relocation inland, as neither the centralised power-supply systems nor cooling and heating appliances can withstand the pressure of repeated floods. This trend dramatically accelerated after the sequential El Niño – La Niña events in 2022–23.

Southeast Asia is transforming from a ‘maritime periphery’ for the major regional powers to a place of great-power competition on energy standards, finance and political influence. China, which has been historically dominant in Southeast Asia’s energy system planning through close links to regional governments and energy companies, has managed to establish itself as the standard-bearer in the increasingly decarbonised energy sector. The successful energy transition and climate resilience of its southern region is one of China’s security priorities, as climate migration leads to tensions at its southern borders. Moreover, its major low-carbon technology production centres are increasingly exposed to climate impacts, threatening Chinese companies with supply disruptions and loss of capital.

India’s presence in the region has grown considerably over the past decade, particularly within the India–ASEAN Power Grid connectivity initiative and within various power-grid cooperative initiatives. The third-largest manufacturing centre for photovoltaic cells and producer of over one-quarter of solar panels globally, India has become the primary supplier of solar-power equipment to OECD countries that are looking to diversify away from Chinese products and is in a fierce competition for dominance with Chinese equipment providers in Southeast Asia’s renewable-power markets.

The region’s dependency on China’s supply of raw materials remains extremely high, however, as demand for lithium, silicon, nickel, copper and rare metals is on a rapid and steady rise. Other parts of the renewables supply chains have been redistributed, and Malaysia, India and Vietnam have joined the regional market as major solar-power equipment suppliers.

The region has thus seen several geopolitical shifts as China cements its energy dominance, India rises as a major regional energy player and a handful of smaller powers manage to carve out renewable production niches.

There remains a relative lack of major support from OECD countries and international finance institutions. This absence is being filled by China, using its historically established cooperation ties and its mature domestic renewables market. Japan, by contrast, remains a prominent regional provider of fossil-fuel finance, locking many countries in the region into several decades of growing gas and oil consumption. Much of this finance will eventually translate into stranded assets.

* * *

The scenario just outlined is among the most probable outcomes unless decisive policy shifts take place in the countries of Southeast Asia and sufficient financial support from developed countries is granted. Sticking to a ‘business as usual’ scenario won’t be possible in years to come. The extreme weather events, unchecked loss and damage, and increased vulnerability of energy systems to the impacts of climate change no longer leave any room for status quo assumptions.

Measures that can help to rapidly boost the resilience of the region’s energy systems to climate impacts, and alleviate the impact of market shocks and energy supply crunches, already exist in 2022. Regional cooperation in risk-sharing and risk-management mechanisms and disaster preparedness, which is embedded in a broader international cooperation framework, is key.

We also know that a massive shift of finance flows will need to take place to unlock access to low-carbon growth for the developing economies of Southeast Asia, with public finance playing a key role in support of regulatory and policy action. And, globally, it’s critical for policymakers to ensure that the geopolitical shifts result in a race to the top rather than a clash of standards on a range of critical topics, including the diversification and resilience of low-carbon supply chains and the parallel critical-materials markets.

The policy challenges involved in managing the regional energy transition are complex and defy traditional policy silos, but governments must start acting now to avoid the worst outcomes that are possible as soon as 2035.

Australia’s ASEAN worker scheme and Southeast Asia’s migrant labour dilemma

Covid-19 has disrupted labour markets around the world, causing a global manpower shortage. Lockdowns in the early months of the pandemic triggered an exodus of millions of rural migrant workers from booming megacities like New Delhi and Dhaka. In the global north, the United Kingdom has experienced the largest decline in its foreign-born labour force since World War II. ASEAN countries have also been affected: Vietnam’s labour shortage recently worsened after the easing of travel restrictions in Ho Chi Minh City led to a large outflow of migrant workers.

Some high-income countries are trying to lure back foreign workers from emerging Asia as part of their national recovery plans, creating new challenges for the global governance of labour migration. In particular, ASEAN economies like Singapore and Malaysia that have large migrant labour flows now face a tricky choice: should they curb outward migration or encourage greater labour mobility?

This dilemma has come to the fore in Malaysia following the Australian government’s recent announcement of a visa scheme for ASEAN agricultural workers. Under this program—a response to Australia’s own shortage of farm labour—employers will sponsor farm workers from ASEAN countries, subject to a formal employment contract that complies with specified standards and obligations. In contrast to Australia’s earlier Seasonal Worker Programme, the new initiative allows Australian farms to employ skilled, semi-skilled and unskilled ASEAN farm workers on a longer-term basis. The first cohort is expected to arrive in Australia next month and then in March 2022.

But Malaysia’s recently elected government initially ruled out the country’s participation in the Australian scheme, causing an uproar in the local media. After opposition MPs demanded that the decision be reversed, the senior human resources minister issued a statement saying that the government has no plans to restrict overseas migration by Malaysians for employment purposes.

The government’s initial opposition to Australia’s visa program reflected at least three considerations. First, policymakers fear a large-scale brain drain. An estimated two million Malaysians currently are living abroad, many of them in neighbouring Singapore. And because the Australian program offers a possible route for ASEAN nationals to secure permanent residency and citizenship, the government is worried about losing key agricultural workers.

Second, political pressure to reduce the country’s dependence on foreign unskilled labour has increased significantly as a result of the Covid-19 pandemic, and the Australian scheme competes with the Malaysian government’s plans to replace foreign plantation workers with local labour. Lastly, Malaysia’s farmers are ageing rapidly, creating an agricultural workforce crisis similar to that in Australia, but young Malaysians are reluctant to work in the sector owing to its unattractive pay and conditions.

Whether developing countries like Malaysia benefit or lose out from labour migration to advanced economies depends on the institutional arrangements governing labour mobility. Work-related migration from ASEAN countries to Australia is not a new phenomenon. But in the past, many migrant workers—especially from Malaysia—lived in the country illegally, making them vulnerable to exploitation and abuse by employers. Australian’s new program will ensure that foreign nationals have full labour rights and access to social-protection provisions. Malaysian MP William Leong therefore warned that the government’s opposition to the scheme would leave Malaysians working in slave-like conditions in Australia.

For ASEAN source countries, the Australian program will also increase the potential for brain gain, provided that it contains the right mechanisms to ensure reverse migration. Building a critical mass of Malaysian farmers with overseas experience and technological know-how in areas such as precision agriculture can be crucial to ongoing efforts to boost productivity in the country’s farm sector.

The Malaysian government’s recent flip-flop on migration-control policy also highlights a deeper structural challenge: the lack of a political consensus regarding the country’s own large population of migrant workers. Malaysia is a major destination for migrants in Southeast Asia, and millions of undocumented foreign workers are thought to be in the country.

Yet, soon after declaring its opposition to the Australian visa scheme, the government announced that thousands of low-skilled workers from Indonesia and Bangladesh would soon arrive in Malaysia to take up plantation jobs. Senior officials justified the decision on the grounds that Malaysians are unwilling to enter the sector because of its unfavourable working conditions. The US government late last year banned imports from Malaysia’s Sime Darby Plantation, one of the world’s largest palm-oil producers, citing concerns about the use of forced labour.

Malaysian policymakers therefore need to shift from short-term coercive measures such as migration controls to long-term remedies for the country’s poor labour standards and low agricultural productivity.

Globally, cross-country differences in wages and working conditions remain the two most reliable predictors of international migration. Average wages in Malaysia are relatively low and declined by nearly 10% in 2020 as a result of the Covid-19 crisis. Most of the country’s farmers are in the bottom 40% of the income distribution, and many live in poverty. On top of this, a significant share of employers are not complying with the country’s minimum-wage legislation.

Scaling up technology adoption in agriculture should be another long-term priority. Taiwan’s early investment in precision agriculture, for example, reduced its farm sector’s dependence on labour. While the introduction of commercial drones by some of Malaysia’s palm oil plantations has already yielded positive results, adoption of such technologies is far from universal.

Addressing these wage and productivity issues will go a long way towards stemming Malaysia’s brain drain and encouraging skilled Malaysians working overseas to return home. Malaysia has just taken up a seat on the United Nations Human Rights Council. Instead of curbing citizens’ freedom to work abroad, the government should focus on improving labour standards at home.

Has the Taliban’s victory heightened the terrorism threat in Southeast Asia?

The return to power of the Taliban in Afghanistan has triggered worldwide concerns that its close relationship with al-Qaeda could bring a new wave of terrorism, including in Southeast Asia. The fears for Indonesia, Malaysia and the Philippines in particular are understandable, given recent history, but they need a reality check.

The concerns include whether al-Qaeda’s close relationship with the Taliban will allow it to grow, encouraging the development of new territorially based franchises and possibly opening up training camps for local and foreign fighters. Could Southeast Asia be a new target for expansion, and if new camps were established, would Southeast Asians stream into them?

Might al-Qaeda make a push for allies in areas beyond its bases in Afghanistan–Pakistan, Central Asia, the Islamic Maghreb, Yemen and Syria–Iraq? Southeast Asia was on its agenda in 2010, when a senior al-Qaeda official went to Bangkok to meet the head of intelligence for Jemaah Islamiyah (JI), the group that carried out the 2002 Bali bombings. The official tried to persuade JI to join forces, but it wasn’t interested. A decade later, with JI temporarily out of commission, are any other organisations potentially interested in a partnership?

The chances of al-Qaeda building a Southeast Asian franchise aren’t high. It has no well-structured allies in Indonesia, Malaysia or Singapore on which it can draw. JI, an ally through about 2004, is drastically weakened as a result of arrests over the past two years. Most of its key strategists are in prison and those on the outside are lying low, waiting for an opportunity to rebuild. The older generation of JI members, who trained on the Afghan–Pakistan border between 1985 and 1994, aren’t interested in violence, however chuffed they may be that their old friends have returned to power. Many are actively cooperating with the government in various deradicalisation programs.

The wild card is the Philippines, where al-Qaeda has a history going back to the early 1990s, most famously for providing a safe haven for Ramzi Yousef, the perpetrator of the first World Trade Centre bombing in 1993. He ended up in Manila, trying to plan a coordinated bombing attack against 11 US-bound airliners, but an accidental explosion in a Manila apartment led to the foiling of the plot and Yousef’s eventual arrest. Would other al-Qaeda notables, under Taliban protection, seek to use the Philippines again as a launchpad for a major terrorist attack? Nothing is impossible, but al-Qaeda has many more accessible options, including in South Asia, the Middle East, Africa and Europe. Southeast Asia would be far down the list of options.

It’s also worth remembering that the Philippine police, army, intelligence and immigration are far better trained and more vigilant on the counterterrorism front than they were 25 years ago. A few operatives might slip through, and the personal rivalries among local extremists, particularly within the Abu Sayyaf Group, might lead to some trying to cut a deal with al-Qaeda as a way of challenging local Islamic State–linked clans. The likelihood of setting up a new Mindanao-based franchise, however, is low.

Another concern is what happens if the Taliban struggle to maintain control. Could the possible eruption of micro-conflicts be exploited by Islamic State Khorasan (IS-K), which sees the Taliban as idolatrous rivals promoting nationalism instead of a universal caliphate? Is there potential for IS to expand, and if so, would its supporters, including from Southeast Asia, flock to the cause, especially since a small number of them are already there?

Many Islamist and mainstream Muslim organisations in Southeast Asia greeted the Taliban victory with euphoria, as a victory of Islam over the West, or over neoliberalism, or over secular democracy—the enemy had many different guises. The main takeaway was that all that was needed was patience, so the organisations that played the long game in their advocacy of an Islamic state should feel vindicated.

Another concern is what happens if IS-K grows stronger or expands its territorial control. As the Kabul airport attack of 26 August demonstrated, this is indeed a danger. Attacks by IS-K could inspire a new wave of attempts by IS supporters in Indonesia and the Philippines, although in the former, terrorist capacity remains low and police capacity to interdict plots relatively high.

IS-K could be a draw for fighters who want to emigrate—make the hijrah—to a land where Islamic law is fully applied. It has all the end-of-time associations that made Syria such a draw for Indonesian families; a famous hadith, or tradition of the Prophet, notes that the Islamic redeemer’s forces will assemble under the ‘black banners of Khorasan’ and march to Jerusalem as the end of the time approaches.

Moreover, by mid-2019, some two dozen Indonesians were already in Afghanistan, having joined or tried to join IS-K. Eight were arrested, of whom one, a woman named Wardini, died of illness in June 2021. The others were released by the Taliban in the final days of the capture of Kabul; the whereabouts of six out of the remaining seven, mostly women and children, are known. One adult male disappeared after release and his whereabouts remain unclear.

In addition to this group, other Indonesian nationals had succeeded in reaching Afghanistan over the border from Iran after the fall of Raqqa, the IS capital in Syria, in October 2017. It’s possible that a few pro-IS Indonesians are in a position to try to recruit more fighters, but would-be mujahideen will have a difficult time trying to get there. Not only are immigration authorities in Jakarta, Bangkok, Kuala Lumpur and elsewhere alert to the possibility that attempts will be made, but the Taliban also have no interest in seeing IS reinforcements arrive.

Logistical support will also be more difficult. In the past, when there were significant flows of jihadists abroad, it was with a system of services set up to facilitate their travel. Al-Qaeda provided a services centre on the Pakistani border for mujahideen fighting the Soviet Union. The group that in 1993 became JI had a channel for funding and travel assistance that made going to and from its military academy relatively easy. Indonesian IS supporters arranged funding and safehouses in Turkey for those wishing to cross over. Without such a system, it will be hard for any but a few determined individuals to get to IS-K.

It’s also worth noting that those who emigrate to IS territories generally have no plans to return. It’s not like JI’s training program, which was always designed to be short term, so the skills could be deployed in Indonesia. Thus, even if a dozen more Indonesians were to reach Khorasan, that wouldn’t necessarily indicate that the risk of violence would rise concomitantly at home.

Those worried that JI and al-Qaeda could realign, even in JI’s current state, should take a close look at that training program. If JI had been interested in an al-Qaeda affiliation, it would have sent its cadres to train exclusively with Jabhat al-Nusra.

From 2012 onwards, however, JI sent 87 men to train with a variety of militias as a way of expanding international contacts and learning as much as it could from different militias, including IS, whose teachings it rejected. That so many men were trained and returned to Indonesia is of course cause for concern, as is JI’s long-term plan of waiting for an opportunity to exploit political chaos in the interest of forming an Islamic state. At that point, JI would be prepared to use violence against designated enemies to achieve its aim. Such chaos is what al-Qaeda thrives on, but as of mid-2021, Indonesia seemed an unlikely site.

That leaves the glee expressed by many sources over the Taliban victory. Euphoria over a conservative Islamic group taking power is not the same as support for terrorism. The people relishing an Islamist victory include those who would like to see a more Islamist agenda in Indonesia but also those who welcome the political and military humiliation of the United States.

None of this is to downplay the very real threat of terrorism that Southeast Asia still faces. Autonomous pro-IS cells are still numerous, and one might manage to pull off a lethal attack. JI may be dormant for the next few years, but it always comes back, and no one should count it out. Indonesian extremists also have a history of producing militant splinter groups of disgruntled and frustrated would-be fighters who chafe at restrictions imposed on them by their leaders.

The problem is not going away, but there’s no need to use the Taliban victory to overdramatise the danger.

Australia should bet on digital engagement with Southeast Asia

As competition between the United States and China intensifies, Southeast Asia is becoming the key competitive arena. Australia’s engagement with the region is not only a matter of being a good neighbour; it’s a strategic imperative.

In November 2020, the government announced more than $500 million to support Australia’s Southeast Asian neighbours in a wide range of development goals, including in infrastructure, maritime resources and public health. While the commitment is welcome, it’s designed to provide immediate assistance—within a three- to four-year timeframe—and is far from meeting the long-term needs of this complex region of more than 670 million people.

Canberra intends to ‘compete constructively’ with other powers in the region, the foreign minister, Marise Payne, declared in December 2020. But dollar-for-dollar competition is neither feasible nor desirable. Current spending in Southeast Asia is a drop in the ocean compared with the $1.4 billion promised for the much smaller region of the Pacific islands for 2019–2021. Limits to aid resources are likely to continue, at least in the near term, due to the economic fallout from the Covid-19 pandemic.

Despite a shrinking aid budget, Australia can still make a valuable contribution if it invests smartly and generously in Southeast Asia’s future and focuses on areas in which it has expertise and experience. The best way to offset the asymmetry is for Australia to bet on digital and tech diplomacy.

Australia’s Southeast Asian engagement should focus on building the region’s digital capacity. Australia has already begun to do this through various agencies, but its support is delivered mainly through aid. With the trend of cuts to aid budgets, it will be a challenge for Australia to make an impact through aid alone.

Instead, Australia should adopt a comprehensive and long-term strategy that would modernise its traditional diplomacy and would effectively support the region’s resilience to cyberattacks, address its immediate needs and invest in its growing potential. This should be a whole-of-government commitment, similar to the Pacific step-up.

The pandemic has accelerated the digital transformation across the globe. But digital capability and cyber maturity across Southeast Asia is very uneven. Singapore, for example, is one of the world’s most technologically advanced countries, while Laos and Myanmar lag far behind. At the same time, Southeast Asia is one of the most dynamic regions in the world when it comes to adapting to technological change.

Indonesia, Vietnam and Thailand are developing e-commerce markets and homes for some of the world’s most energetic innovation hubs. This should inform and shape Canberra’s strategic and commercial engagement with the region, and its approach to development aid. Australia can make a significant contribution in bridging gaps between different countries’ digital capabilities. Its cyber capacity and resilience are among the world’s top 10, according to Harvard University’s 2020 National Cyber Power Index.

But the pandemic has further exposed and deepened digital divides within individual countries. For example, when schools closed, online teaching was only an option for those with access to computers and the internet. Children in rural, poorer or less connected places missed out on education—the very means to overcome poverty and limited opportunities. If not addressed, this has the potential to create a ‘Covid generation’ that will have lost key educational opportunities.

Similarly, occupations were disrupted to varying degrees by the pandemic. Southeast Asia has a strong informal service-based economy. The national lockdowns, and the tourism and business travel freezes, took away the livelihoods of many, particularly in the hospitality and services sectors. Australia could help to support efforts to retrain workers and teach them digital skills.

Digital, tech and science capabilities are critical for the longer-term post-Covid recovery. In helping to fund initiatives across Southeast Asia, Australia will forge durable economic ties with its partners in the region—including countries such as Indonesia, Thailand and Vietnam, which are expected to surpass Australia’s GDP in a couple of decades. Australia’s support should be considered an investment in future two-way development, rather than just one-way aid.

The strategy should include supplying computers and hardware, improving skills, and retraining and assisting the region’s workforce to adapt to the technological revolution. Some action is already underway. For example, Australia’s CSIRO, in partnership with the Department of Foreign Affairs and Trade, operates in Singapore, Vietnam and Indonesia to support training in science, biosecurity, technology and the digital economy. But this work needs to be increased and should form part of an overarching policy.

The Australian government has already pursued a cyber engagement strategy that seeks to support an open, free and secure internet globally. As part of that, it has assisted the ASEAN states to familiarise themselves with the United Nations’ cyber norms and conducted cyber capacity-building workshops in Southeast Asia.

But these initiatives remain small, are not specifically designed to target Southeast Asia, and involve only a limited group of policy elites. The government also introduced a cyber cooperation program, which will provide $34 million in grants over seven years to help countries with cybersecurity, and promote online human rights, democracy and gender equality. It’s a great start—but if Australia has ambitions to play a substantive role and provide viable options throughout the Pacific, South Asia and Southeast Asia, more resources will be needed.

In particular, initiatives should be significantly expanded to encompass grassroots training across all levels of education, including early digital education for young students, cyber literacy programs in rural and remote areas, and retraining the workforce to adapt to new job demands.

Australia was one of the first nations to appoint an ambassador for cyber affairs and support the UN to develop universal cyber norms. But Australia should further support Southeast Asian partners to improve their security standards and cyber norms and bridge the region’s digital gap.

And if the Australian government is interested in regional partners sharing its views on security and on decisions such as its ban on Chinese firm Huawei from participating in its 5G rollout, there needs to be a much more equal level of cyberawareness among Southeast Asian governments and societies.

Earlier this year, the government launched Australia’s international cyber and critical tech engagement strategy, which rests on similar principles and norms to its general foreign policy. The strategy is an extension of existing commitments to the issues and shows Canberra’s recognition of the value of highlighting cyber cooperation with India and other regional partners, including ASEAN. It is a solid step in the right direction and would be a good starting point to build a fully Southeast Asia–centered digital engagement strategy.

The government has also allocated 1.5 million to support ASPI to host the Sydney Dialogue in 2021, a new annual international summit focused on issues related to cyber and critical technology.

By marrying traditional aid with modern digital diplomacy, Australia can mitigate some of the effects of its development budget cuts. A tailored strategy would harness the talents of the next generations of Southeast Asians and extend the reach of Australian dollars by allocating them in an area where a true difference can be made. Australia could provide the region with what it really needs and ensure long-term change. Early investment and involvement in Southeast Asian digital growth is not charity; it is investing in Australia’s own economic future.

Southeast Asia will take a major economic hit if shipping is blocked in the South China Sea

A military conflict in the South China Sea would force most shipping from Europe, the Middle East and Africa destined for Asia and the US west coast to be diverted around the south of Australia.

The additional shipping cost would bring reductions in economic activity around the world, but with dire effects on countries at the epicentre, according to a study published by the US National Bureau of Economic Research.

The study shows that the countries most exposed to economic loss from a regional maritime conflict are already spending more on their militaries.

The authors, Kerem Cosar and Benjamin Thomas from the University of Virginia, comment that the findings are ‘consistent with the idea that these perceived threats could set in motion a rapid arms race for the countries involved’.

About 80% of global trade is carried by sea, and estimates of the volume carried through the South China Sea range from 20% to 33%.

The area is subject of numerous overlapping territorial disputes involving China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei, while China’s construction of artificial islands with military installations has made it a focus of tension with the United States.

The study assumes that a conflict would close the Malacca Strait between Malaysia and Indonesia and would stop all east–west passage between the Pacific and Indian Oceans through the South China Sea.

It would not be practicable to reroute shipping through the Torres Strait to the north of Australia because coral reefs and shallow depths make it too hazardous for large vessels.

Facing a total freeze on international shipping, Taiwan’s economy would contract by a third, while Singapore’s economy would fall by 22%, according to the baseline estimate. Hong Kong, Vietnam, the Philippines and Malaysia would suffer falls of between 10% and 15%.

The modelling shows the economic impact would be lowest for countries with shorter trade routes and those best able to offset the loss of international trade with domestic spending.

China’s economy would only face a loss of 0.7% because it has huge domestic markets and ports outside the potential conflict zone.

While the authors comment that conflict would carry real costs for China, they note that the much larger burden on others in the region demonstrates ‘the possibility of a large country maintaining control over the region by imposing substantial costs on smaller countries’.

The modelling exercise shows Australia would suffer a drop of between 1.9% and 3.1%. The economies of Japan and South Korea would fall by between 2% and 3%.

The economists emphasise that their exercise looks only at the impact of raised shipping costs for the total trade of each country and is a simplified model. The real consequences of interruptions to trade in some essential goods and services could be much greater.

‘Trade in certain goods and commodities is harder to substitute for some importing countries, especially when it involves energy imports.’

A conflict would have a significant impact on some countries outside the region. For example, the United Arab Emirates would face a 5% fall and Saudi Arabia a 3% fall in response to the loss of trade.

The study looked at the bilateral trade between 51 economies accounting for 92% of world GDP, of which 19 economies were in the East Asia, Southeast Asia and Pacific regions. It calculated the reduction in trade between 61 ports as a result of the increased cost of shipping.

Although, in theory, some countries could gain from the diversion of shipping away from the Asian region, the only country in the study not affected by the trade downturn was Ireland.

The study took account of land-based trade with immediate neighbours but did not make allowance for switching sea freight to land or air freight alternatives. It did not take account of the broader impact of a military conflict and the probability that embargoes and blockades would be imposed by adversary nations. Australia would not ship iron ore and other resources to China even if the longer trade route to its northern ports were possible.

Despite these limitations, the study highlights the dependence of many economies in the region on the free flow of goods through the South China Sea and the Malacca Strait.

It shows there is a relationship between exposure to economic loss through a conflict in the region and military spending.

A one standard deviation (roughly 32%) increase in the size of the likely economic loss translates to an increase in military spending of 0.3% of GDP above the 2% regional average.

‘Higher predicted GDP reductions are associated with higher military expenditures, and more so for countries that are closer to the Malacca Strait, the epicenter of a potential conflict’, the study says.

‘Despite the limitations, our results show that there are large and economically important gains from maritime trade through the Southeast Asian waterways. Geopolitical events that increase insecurity in critical maritime regions could have substantial welfare effects.’

Violence in southern Philippines highlights resilience of militant networks

On 24 August, two explosions in Jolo, a city in Sulu province in the southern Philippines, killed 15 and injured 74—a chilling case of déjà vu in a region that has suffered repeated attacks in recent years. The incident set alarm bells ringing in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) about the resurgence of violence. The explosions also reheated familiar media tropes of Islamic State’s perseverance amid the coronavirus pandemic and seemingly ceaseless lawlessness. But it’s important to move beyond this narrative to grasp the structural foundations of the turmoil Sulu finds itself in.

While some details remain murky, initial information put forward by authorities suggests that the perpetrators may be linked to Hatib Hajan Sawadjaan, a key figure in the Abu Sayyaf Group (ASG)—a loose collection of small networks in the Sulu archipelago. Sawadjaan’s group was most likely behind the Jolo cathedral bombing in early 2019 and has a history of harbouring foreign fighters. Sawadjaan himself, whom Philippine security forces might have killed  in an operation some weeks back, was allegedly proclaimed as the new emir of IS’s East Asia province in 2019.

His group, increasingly backed by another ASG commander, Radullan Sahiron, has also been the most lethal challenge to government forces in Sulu in recent years. Small kinship-based cells rooted in local communities make up the ASG. Some are primarily operating as kidnap-for-ransom outfits, others as militant groups opposing Manila’s authority and military presence in the majority-Muslim area. A few fulfil both roles.

At the BARMM’s fringe, Sulu has been a traditional bastion of the Moro National Liberation Front (MNLF), the first ethno-nationalist resistance movement in Muslim Mindanao, founded by Nur Misuari in 1972.

Over the decades, the MNLF splintered several times and entered politics at the provincial and municipal levels. It is currently divided into two factions: Misuari’s wing and forces loyal to Yusoph Jikiri, a rival leader. Both are political–military organisations with hundreds of men still under arms. A majority of local elites who dominate various Sulu towns are ex-MNLF commanders who have been co-opted by the state from the late 1970s onwards, and who themselves control private armies.

Because the ASG was established by disgruntled MNLF commanders, its resilience until now has been fostered by blood ties with MNLF personalities and politicians. This intricate web allows room for cooperation while facing a common enemy, such as the military, and while pursuing economic benefits, such as revenue generated by kidnappings.

Sulu mayors publicly denounce the ASG, but they often lack incentives to counteract its presence because of kinship ties or don’t have the capabilities to do so because of weak governance. This in turn gives ASG commanders such as Sawadjaan ample opportunity to draw on a base of young and deprived individuals for new recruits. The governance vacuum also allows the ASG to promote its ideology unimpeded, even if it’s directed at an external audience.

At the outer edges of the Sulu archipelago, violence has declined in recent years. But the largest island in the chain, Jolo, has remained the centre of gravity for continued conflict.

Since late 2018, Sulu has hosted an infantry division of the Philippine army with over 10 battalions that bear responsibility for a population of around half a million. Yet, despite the heavy military presence, the ASG, after several presidential announcements of operations and deadlines to eliminate it, hasn’t been defeated and continues operating from the mountainous town of Patikul and environs. Moreover, bad blood between the military and police has recently contributed to a schism within the local security apparatus, lowering trust in the national government.

In recent peace processes in the southern Philippines, Sulu was more of a bystander than a key participant. The Moro Islamic Liberation Front (MILF), an MNLF splinter that emerged as the main guerrilla force in Bangsamoro after the MNLF entered politics, signed a peace deal with Manila in 2014. That process culminated in the creation of the BARMM in 2019.

The MILF has been leading the Bangsamoro Transition Authority since March 2019 but has only a miniscule presence in Sulu and limited soft power to shape governance. Sulu’s governor, Abdusakur Tan, the province’s kingpin who controls most local elites, initially opposed the province joining the BARMM but has since adapted to the new situation.

Still, a year and a half into the transition, the cooperation could be smoother. Historic competition for political dominance of Muslim Mindanao between Maguindanaons (those hailing from Maguindanao province who lead MILF and dominate the Bangsamoro Transition Authority) and Tausug (who hold sway in Sulu and command the MNLF) still lingers.

Moreover, various political dynasties that control Sulu’s municipalities are deeply entrenched, and it will take time for the transition authority to navigate the tensions between instituting necessary governance reforms and accommodating Tan’s leadership.

The Philippine army initially proposed imposing martial law in response to the bombings, but locals in Jolo—traditionally wary of the military—were sceptical about that option and army chiefs withdrew the proposal. Governor Tan also rejected martial law, yet he didn’t offer concrete proposals of his own for how to prevent further violence.

Sulu is facing one of two likely scenarios in the aftermath of the bombing: a more intensified campaign by government forces against militants, or a business-as-usual, short-term security response without strategic vision. Either response, however, will need to supplement possible military or police action with measures outside the security toolbox, such as working with local governments and creating economic opportunities.

A comprehensive approach to tackling the complex nature of militancy in Sulu would require patching up strained police–military relations as well as complementary efforts in intelligence sharing between the two services. The Philippines, Malaysia and Indonesia should also foster stronger cooperation to tackle cross-border flows of militants that feed into the ASG’s networks and to prevent its maritime renaissance.

Security institutions would need to distinguish between the objective of merely dismantling insurgent cells and the broader goal of curbing the power of clan-based networks that fuel the resilience of the ASG. Stronger political engagement by Manila with both MNLF factions could help enlist their support in that task. In addition, leaders in Sulu and the BARMM should increase their cooperation.

Sulu could also learn from the experience in neighbouring Basilan, where provincial elites and government security forces changed the status quo over the years by building a broad coalition against the ASG network. For now, it is unclear whether the fresh violence in Jolo will drive change in a similar direction.

Resilient social networks: Southeast Asia’s enduring terrorist threat

This post was adapted by the author from his chapter in ASPI’s Counterterrorism yearbook 2020. The full text of the yearbook, which includes notes and sources for each chapter, is available on ASPI’s website.

The threat of terrorism in Southeast Asia remains high, but, as in Australia, it’s neither an existential threat nor even one of the more significant dangers most people face.

It is, however, resilient.

While the long-running, largely low-level, insurgencies of the southern Philippines and the deep south of Thailand fuel a steady stream of violence, jihadi networks and small groups inspired, directly or indirectly, by Islamic State (IS) and al-Qaeda are the greatest immediate threat, particularly in Malaysia, the Philippines and Indonesia.

The drivers remain local grievances, but individuals and groups tend to become more brazen and less inhibited in using extreme violence when they see themselves as part of a cosmic struggle and their actions are praised by a global insurgent movement.

Many attacks have been inspired by the rise of IS in Syria and Iraq. Some have involved returnees from the fighting in the Middle East, but most have involved people who were inspired to act at home. This IS-inspired terrorism is built on a foundation of earlier extremist networks, the most important of which is the Jemaah Islamiyah (JI) network. Militant splinter elements of this network were responsible for the bomb attacks in Bali on 12 October 2002, and the series of terrorist attacks that followed over the course of the decade.

The JI network as a whole became involved in outbreaks of communal violence in eastern Indonesian in Ambon, Maluku, and in Poso, Central Sulawesi. Since the defeat of its insurgency in Poso in 2007, JI has been quietly and carefully rebuilding while largely avoiding provocative violence. This network was the product of Indonesian, Malaysian and Filipino fighters travelling to join the conflict in Afghanistan in the 1980s. Those ‘Afghani alumni’ formed the leadership and core of JI.

The territorial defeat of IS and the interrupted flow of foreign fighters and supporters have brought some respite but by no means a cessation of the threat. The lessons from Afghanistan and the rise of al-Qaeda in the 1980s are that a relatively small number of foreign fighters travelling to a conflict zone can have a disproportionate influence and that the impact at home might be felt only many years later.

The experience of Indonesia, and to some extent the Philippines and Malaysia, is that violent extremism is highly social and prone to being intergenerational. JI has its origins in Indonesia’s Darul Islam movement that began in the 1950s and was injected with fresh life in the 1970s and 1980s, partly because of political oppression and a crackdown on militants. The leaders of JI were inspired by the experience of fighting in Afghanistan in association with al-Qaeda and, while they formally broke with Darul Islam in 1993, the family and social connections woven through the fabric of the JI network draw upon decades of conflict, local grievance, increasing radicalisation and the rise of transnational terrorist networks.

Neither the end of the IS caliphate nor the arrest and sentencing of thousands of militants and supporters will end the threat or dissipate the social movements involved.

Without relentless intelligence work and regular arrests, the threat of terrorism would quickly worsen. But policing, prosecution and detention by themselves won’t eliminate or even greatly diminish the resilient threat posed by violent extremist networks. Real advances will begin only when the cycle of recruitment and radicalisation is interrupted by disengagement from malign networks, followed by individual and collective rehabilitation and re-engagement of former militants with mainstream society.

The specialist counterterrorism unit of the Indonesian National Police, Detachment 88, has become enormously effective at detecting and disrupting terrorist plots. Its work has led to the arrest of more than 1,400 suspected terrorists since its formation 15 years ago. Around 808 were arrested between 2015 and 2018, and 376 arrests were made in 2018 alone. Most of those arrested were prosecuted and sentenced.

This success has generated its own problems. Indonesia has more than 250,000 detainees in almost 500 jails, housing more than twice the number of inmates they were designed for. It has resulted in a prisoner-to-guard ratio of around 55 to 1.

Indonesian counterterrorism is better resourced and led than ever, and the important work of rehabilitation has finally commenced in earnest, but the threat remains resilient and shows no signs of abating.

Malaysia, one-tenth the size of Indonesia, has so far suffered no significant international terrorist attacks but nevertheless faces a terrorist threat that’s proportionally every bit as great as that facing Indonesia. Since 2013, Malaysian authorities, led by the very experienced Special Branch intelligence agency/counterterrorism division of the Royal Malaysian Police, have foiled at least 26 attacks and arrested more than 520 suspects. A surprisingly large number, more than 130, were foreigners from 21 countries, mostly Indonesia and the Philippines. Arrests continue.

Authorities worry about not just those who have returned from Syria, but also those who aspired to join the caliphate and are frustrated that they were left behind. Malaysia, even more than Indonesia, struggles with a febrile environment of sectarian sentiment, much of it openly propagated through religious lectures and training activities. In this context, the IS takfiri judgemental narrative of anti-Shia, anti-Christian and anti-mainstream-Muslim sentiment remains an ever-present facilitator of radicalisation, even though, so far, Special Branch has prevented successful attacks.

Of major concern in Malaysia are militants travelling between its eastern state of Sabah, on the island of Borneo, and the adjacent Sulu archipelago in the Philippines, home territory of the IS-aligned Abu Sayyaf Group (ASG).

The activities of foreign fighters in the Philippines remain an ongoing concern amid fears that the collapse of the IS caliphate could put even more focus on less well-governed parts of western Mindanao as safe havens for IS supporters. Terrorism in the Philippines is largely homegrown, with long-running violence in western Mindanao and the Sulu archipelago. The presence of a relatively small number of foreign fighters, however, has been an important element in helping connect local grievances with global struggles, first with al-Qaeda and now with IS. Groups such as the ASG were formed by Filipinos returning from fighting with al-Qaeda in Afghanistan in the 1980s and early 1990s.

When four major jihadi groups, including the notoriously ill-disciplined piracy–cum–kidnapping-for-ransom gang, ASG, declared their allegiance to IS in mid-2014, it was seen to be more a branding exercise than a significant strategic realignment. The five-month siege of Marawi that erupted in May 2017 and resulted in the deaths of at least 980 militants (including at least 44 foreigners), 165 security personnel and 87 civilians, made it clear that the IS connection had, in fact, substantially changed the nature of the insurgent conflict.

When the siege began, the Armed Forces of the Philippines confidently declared that the conflict would be over within days. But it was concluded only after the nearly total destruction of the Philippines’ largest Muslim-majority city. Months of artillery barrages and aerial bombardment left the city centre looking like post-IS Mosul. More than 350,000 inhabitants were forced out and most still live in squalid camps. The army declared IS comprehensively beaten, but the structural damage, physical and social, inflicted on Marawi seems certain to sow a bitter harvest of intergenerational radicalisation.

The threat of terrorism in Southeast Asia lies in resilient social networks that have adapted to survive and regenerate in the face of counterterrorism efforts that focus on the tactical and neglect the strategic.

Malaysia’s great political experiment

Southeast Asia is a wondrous experiment in comparative politics.

Perhaps a galactic professor peers down, testing a spectrum of political systems, from the Malay Muslim monarchy of Brunei to the world’s largest Muslim democracy in Indonesia.

The universe uni professor mixes in variations on monopoly themes, from one-party communist (Vietnam, Laos) to one-party democracy (Singapore).

Intrigued by the intimate dance between democracy and authoritarianism, the professor pushes to see whether regimes can become more responsive and more repressive at the same time.

The variations produced by a system combining soft authoritarianism and electoral authoritarianism make Malaysia a special study: an electoral revolution two years ago was overturned a month ago by an old-politics counter-revolution.

A simple lesson—taught again by Malaysia—is that ballot-box revolts can change governments, but regime change is a tough task needing much time. Kleptocracy takes a lot of killing.

As seen in the distinctly different cases across Southeast Asia, powerful elites have many ways to play elections. Add in the combustibles of individual ego and ambition to produce the drama that has just remade Malaysia’s government.

Before dwelling on the disappointments, underline the achievement of that seminal election of May 2018, when Malaysia ceased to be a one-party democracy. After having won 13 elections in 61 years, Pertubuhan Kebangsaan Melayu Bersatu (United Malays National Organisation, or UNMO) and its Barisan Nasional (National Front) coalition were cast out by the people.

The 2018 revolution was morality play as Shakespearean drama, with tragedy lurking just offstage.

Surely only a great bard or a bizarre galactic professor would dare to create a character like Mahathir Mohamad, a 94-year-old who puts the noise into being a nonagenarian.

The man who made and remade UMNO during his 22 years as prime minister returned to cast it from the citadel at the head of the Pakatan Harapan (PH) coalition, the ‘Alliance of Hope’.  The alliance joined Mahathir with politicians he’d previously jailed. Then Dr M brought the alliance crashing down in February.

Mahathir, the master manipulator, masterminded his own downfall. He played many Shakespearean roles: Caesar, Brutus and Cassius, and several of the ghosts. Finally, he was Falstaff.

To understand these tumultuous years, turn to Kean Wong, a fine journalist and editor who can be claimed by both Malaysia and Australia. Kean qualifies at all levels for an honoured title of Oz hackdom: an old Asia hand.

As contributing editor for the Australian National University’s web journal on Southeast Asian politics and society, New Mandala, Kean brought together a range of writers to describe the 2018 revolution. That coverage is now published in a book, Rebirth: reformasi, resistance, and hope on the road to new Malaysia.

The book poses a poignant question: ‘Was Malaysia saved from kleptocracy by the world’s oldest prime minister, and does it finally transform itself into a sustainable democracy with another longstanding putative leader? Is there a younger generation of Malaysians with the gumption to make that difference?’

The unfortunate answer arrived quickly: not yet, professor, not yet.

Editors have many nightmares. One is publishing a book overtaken by events—bringing out a tome on a revolution as the counter-revolution arrives.

Kean’s response is to do what hacks always do. When the facts change, they file anew. So the book now has updates, carried by Melbourne University’s Asialink.

The book captures the excitement of the new Malaysia. The updates describe problems confronting its birth.

In his introduction to the updates, Kean comments: ‘[O]rdinary Malaysians did the extraordinary thing in Asia of using the ballot box and voting out a government in power since 1957, only to see a return in 2020 of its modern cabal, many of its current leaders still facing the courts for grand corruption charges.’

The book carries excellent on-the-ground descriptions of that ballot-box moment. Among the gems, see Dina Zaman’s piece, published just before the 2018 election, on life in one kampong in Sabah—a village facing the push and pull of modernity and the stricter teachings of freshly minted Islamic scholars.

Greg Lopez sets the scene for the cabal comeback by arguing that the 2018 result didn’t amount to regime change. The rules of the game for Malaysia’s competitive authoritarian regime haven’t altered, he writes, because there were ‘no fundamental alterations in the institutions that constitute the regime’, nor was there ‘substantial movement to establish free and fair elections and broaden civil liberties’.

Another gem is a chapter by Clive Kessler (a grand Oz warhorse who has spent more than 50 years studying Malaysia) pondering why he got the 2018 election wrong. As he wrote before it happened: ‘Democratic transition under electoral democracy is not easily achieved in Malaysia. The bar is set very high. Inordinately high. The bottom line here is that, while it is not easy for an opposition to win an election in Malaysia, it is far harder for them, even having done so, to assume power and rule.’

The month-old Perikatan Nasional (PN) government, Kean writes, ‘is widely cast as a dubious coalition of parties mostly underpinned by a politics of race and religion, untested in and perhaps saved from parliamentary legitimacy thanks to the postponement for a few months of parliament amid the pandemic’.

Hew Wai Heng writes that the PH government was partly undone by ‘Muslim majoritarianism’, the always potent claim that ‘Islam is under the threat’ and ‘Malays are being side-lined’.

In an update essay on politics in a parlous time, Meredith Weiss notes that Malaysia’s political system sets it apart from the rest of Southeast Asia because the parties are ‘coherent, enduring, distinct, and allowed to contest’. Yet the parties are also prone to fracture under the weight of heavy egos.

The short-term costs of Mahathir’s debacle and the rise of the PN government, Weiss judges, will be ‘institutional reforms and political house-cleaning foregone, likely investments diverted, and general frustration’, while the long-term costs ‘could be citizen disillusionment and disengagement, should votes seem not to matter and other institutional checks to be ineffective’.

Galactic professors and venerable warhorses understand that winning elections in Southeast Asia is tough. Then, to actually get the power and to govern …

Resolute and determined: Vietnam’s new defence white paper

Vietnam has just released its new defence white paper, 10 years after the last one was issued in 2009. The 2019 document isn’t fundamentally different from the earlier one—there are limits on the extent of declaratory policy from Hanoi—but it does acknowledge that the global situation is evolving rapidly in a multipolar direction and countries need to ‘adjust [their] strategies to prioritise their national interests above all values’.

The Asia–Pacific region, including Southeast Asia, ‘continues to be a centre for dynamic development and occupies an increasingly important geo-economic, geo-political, and geo-strategic location’. But it’s also the major ground for great-power competition. Some of that is manifested in policies and programs, including the US-led free and open Indo-Pacific strategy, China’s Belt and Road Initiative and India’s ‘Act East’ policy.

The white paper provides little detail about the defence budget beyond acknowledging in a footnote that defence spending amounted to 2.36% of GDP in 2018. It says that Vietnam is ‘determined to develop its defence industry to meet national defence requirements’, including by making ‘selective investment in several advanced defence industrial establishments to move toward the formation of self-control, high-tech, and dual-use defence industrial groups or complexes’.

While it doesn’t offer in-depth updates on the force structure and organisation of the defence force, the 2019 paper does elaborate on the strategic context and espouse the national strategy for protecting the homeland. Its strategic doctrine is based on the core pillars of self-reliance and resilience, emphasising that the national defence struggle aims to settle all disputes peacefully.

Among the elements that threaten regional stability and prosperity are the disputes in the South China Sea, referred to in the white paper as the ‘East Sea’. The 2019 document uses strong language to characterise a deteriorating strategic environment but stops short of naming the challenger:

New developments in the East Sea, including unilateral actions, power-based coercion, violations of international law, militarisation, change in the status quo, and infringement upon Viet Nam’s sovereignty, sovereign rights, and jurisdiction as provided in international law, have undermined the interests of nations concerned and threatened peace, stability, security, safety, and freedom of navigation and overflight in the region.

This statement captures recent developments in the South China Sea, particularly apparent since the arbitral tribunal ruling in 2016, which have seriously undermined the rules-based order in the region. More than anyone else, Vietnam has been at the forefront of those challenges, ranging from the threat posed by China’s militarisation of artificial islands and naval build-up, to more targeted provocations like repeated incursions into Vietnam’s exclusive economic zone.

As a self-described maritime nation, Vietnam pays special attention to the safety and protection of the seas, committing to freedom of navigation and overflight, free trade and peaceful economic activities at sea—all in accordance with international law. The new white paper not only clearly spells out Hanoi’s position, but also endeavours to distinguish Vietnam from those who don’t contribute to the preservation of peace.

The document elucidates Hanoi’s threat perceptions and serves as a declaration of Vietnam’s commitment to peaceful cooperation and its readiness to expand defence relations regardless of political differences or economic disparities. Importantly, it rejects any notion of acceding to defence cooperation measures under coercive conditions.

Vietnam seeks to widen the scope of its international cooperation, declaring a willingness to cooperate in border protection, both land and maritime, including joint patrols and exchanges. The paper explicitly supports the right of innocent passage, as well as the security and safety of navigation and overflight in the South China Sea.

In particular, the paper declares that Vietnam ‘is willing to welcome vessels of navies, coast guards, border guards and international organisations to make courtesy or ordinary port visits or stop over in its ports to repair, replenish logistics and technical supplies or take refuges from national disasters’.

This stands as a direct rejection of measures aimed at limiting regional actors’ defence cooperation with external powers—something that China has suggested should be included in ASEAN’s code of conduct for the South China Sea.

Hanoi’s defence posture is well expressed in this concise document. It clearly conveys Vietnam’s awareness of the growing external threats to its national sovereignty as well as its determination to promote a peaceful international environment.

Southeast Asian narratives about US–China competition (part 2): You’ve got to be in it to win it

In part 1 of this series, I considered two of the narratives about great-power competition that have gained currency in Southeast Asia: that states are being pushed to make a choice between Washington and Beijing, and that they don’t really have a choice—destiny draws them to China. But that’s not the whole story. Two other narratives are gaining strength in the region, both of which bear a striking resemblance to the official narratives being broadcast from Beijing.

There’s an increasing effort to present China’s activities in Southeast Asia as collaborative, cooperative and well intentioned. Despite what’s happening in the South China Sea, the emphasis is on the positive strides that have been made in negotiating a mechanism for managing disputes, the elusive code of conduct. And notwithstanding the widespread backlash against the ‘debt-trap diplomacy’ of the China’s Belt and Road Initiative after Sri Lanka’s experience with the port of Hambantota, most countries in the region remain open to Chinese investment, albeit with a heightened degree of caution.

China’s performance at the second Belt and Road Forum in April 2019 was an attempt to rebrand the BRI. It has been painted widely as demonstrating that Beijing is able to accept criticism and is committed to modifying and reforming its financing practices and allocating resources to more sustainable and green projects.

There have been some significant shifts. The public position of Malaysian Prime Minister Mahathir Mohammad on the BRI moved from his strongly stated concerns about ‘unequal treaties’ before the forum to a ‘can’t get enough of the BRI’ position after it. The BRI is also portrayed as an exemplar of how China transforms into a public-good provider when details of its financing and debt liquidation aren’t discussed.

Tensions in the disputed areas of the South China Sea are being downplayed by claimants (with the exception of Vietnam). Last year, Malaysian and Indonesian diplomats warned that US freedom-of-navigation operations close to China’s artificial structures were exacerbating tensions. After a near collision between US and Chinese warships, they raised concerns about the presence of large US naval vessels. However, they didn’t refer publicly to the Chinese naval vessels that have persistently maintained, and even strengthened, their presence in the region.

Aside from Vietnam during the recent standoff at Vanguard Bank, none of the Southeast Asian claimants seem to have raised concerns about China’s increasingly bold and frequent incursions into their exclusive economic zones—including Malaysia in the case of Luconia Shoals. The Philippines and Brunei have worked out with Beijing schemes of joint exploration for natural resources in disputed maritime areas and are negotiating ways to work with China in their own EEZs. Malaysia has established a working group to examine the same issue. Hanoi remains the sole outlier in this collective narrative about a cooperative China that is seeking win–win outcomes with its neighbours.

But ‘cooperative China’ is a strategically dangerous and misleading narrative intended to neutralise the perception that China is a threat. It may cost ASEAN its most valued and desired asset—strategic centrality.

To make things worse, the narrative that the US is withdrawing from the region has taken hold strongly. Some 68% of Southeast Asian respondents to a regional survey conducted by the ISEAS-Yusof Ishak Institute said they believed that US engagement in Southeast Asia had decreased under the Trump administration.

One of most popular adjectives to describe the Trump administration overall was ‘unpredictable’. Whether that is reality or a consequence of tweets and slogans is another story, but the view has taken hold that the US lacks commitment to the region and that its level of engagement depends on the mood of the president.

Beijing, meanwhile, continues to reassure its neighbours that China and Southeast Asia are bound by ties of history and geography. Trump’s conspicuous and repeated absences from regional summits bolster that argument.

The level of US representation at two key meetings in Bangkok in October, downgraded to Secretary of Commerce Wilbur Ross, was arguably at its lowest in a long time. Neither the vice president nor the secretary of state turned up. Decisions like this are undermining Washington’s Indo-Pacific rhetoric, which stresses the region’s strategic priority. Only three out of 10 ASEAN heads of state attended the ASEAN–US summit, a clear sign of US diplomatic underperformance in the region.

This narrative ignores the fact that under the Trump administration US engagement with Southeast Asia hasn’t diminished significantly. In some areas, it has actually increased, including the new initiative for US–ASEAN smart cities and collaboration in space, cyberspace and energy and reviving the Lower Mekong Initiative.

There are strong views on President Donald Trump’s trade policies, which are generally seen as jeopardising the economic interests of all Southeast Asian nations—even though some Southeast Asian markets have benefited from American companies relocating out of China.

Defence cooperation, on the other hand, looks solid. The US completed the first joint maritime exercises with ASEAN (AUMX) in September, has renewed its agreement on military facilities with Singapore, and has increased its activity with Vietnam. Yet diplomatic absences from the region, and potentially damaging trade policies, appear to overshadow that progress.

The tendency to talk up Beijing’s good sides while talking down Washington’s contributions is increasing. Any counternarratives stand little chance of being heard, let alone of proving popular, especially when the nation that needs to press its case isn’t present. As the saying goes, ‘You’ve got to be in it to win it.’

The danger in the Trump’s administration’s policies towards Asia is that its own narrative and its actions are too often contradictory. All too easily the US can be portrayed as an unreliable ally and partner. More importantly, narratives are not a substitute for a real and coherent strategy.

China is slowly but surely winning the contest of perceptions. But it’s going to be a long game in Southeast Asia.