Southeast Asia – Guidelines for the New Administration

Southeast Asia is an increasingly important region, encompassing some of the most dynamic economies in the world and located at the crossroads between East and South Asia, and the Pacific and Indian Oceans. The 10 Southeast Asian countries that make up the Association of Southeast Asian Nations (ASEAN)—which serves as the convening power in the region—have emerged as the lynchpin of economic integration efforts in Asia, as well as the arena in which geopolitical rivalries between China, the United States, Japan, and India play out.

Effective engagement with Southeast Asia remains important for the advancement of U.S. economic and strategic interests, but cooperation with the region is becoming more complicated. The rejection of elites and the rise of populist governments in recent elections have led to increasingly insular and in some cases nondemocratic governance in Southeast Asia. The past two U.S. administrations have made real strides in strengthening ties with this vital region, and maintaining focus on Southeast Asia, despite growing difficulties, is key to broader U.S. strategy in Asia going forward.

Southeast Asia is being confronted by growing external challenges—the rise of China in particular—at the same time that the effectiveness of local governments is being weakened by the same antiestablishment trends that are fraying the post-Cold War order in many parts of the world. The populist uprising against elites is already well under way in Southeast Asia, which also has to contend with the security challenges posed by the rise of China to great power status and the spillover effects chaos in the Middle East is having on the broader Islamic world.

  • Populist and inward-looking leaders control the presidencies in both Indonesia and the Philippines after the unexpected rise of local mayors Joko “Jokowi” Widodo and Rodrigo Duterte. Seemingly unassailable elite institutions like the ruling coalition in Malaysia are having to make unprecedented efforts to hold on to power. Meanwhile, Thailand is once again under military rule after toppling a second democratically elected government led by the populist Shinawatra family.
  • While local elites are busy fending off or succumbing to populist challenges to their rule, the rise of China is rapidly changing the strategic realities in the region. Southeast Asian countries want to continue to enjoy strategic autonomy while relying on China’s economic engine for growth, but growing Chinese ambitions are making that balance more difficult to maintain. China is steadily building the economic and military wherewithal to pose the first real challenge to U.S. dominance in the Western Pacific since the end of World War II. China under Xi Jinping has not been shy about throwing its growing weight around, particularly in the South China Sea, and is unlikely to become more accommodating as the regional balance of power shifts in its favor.
  • Meanwhile, the spread of Islamic extremism and threat of terrorism in Southeast Asia continues to be a major worry, exacerbated by the ongoing chaos in the Middle East. Propaganda from the Islamic State and other terrorist groups is spurring radicalization among local Muslim populations, and there is concern that fighters returning from the war in Syria will bring back skills that will boost the capability of Southeast Asia terrorist groups.

Due to several recent political transitions, governments in Southeast Asia are focused on domestic politics and narrow self-interest, making them less willing and able to work with other Southeast Asian states and outside partners to address the growing external challenges that are facing the region. The rise of populism in the region has led to a greater inward focus and prickly nationalism in Indonesia and the Philippines, and rising authoritarianism in Malaysia and Thailand.

  • Indonesia’s step back under Jokowi from its traditional leadership role in Southeast Asia has been particularly consequential and has left ASEAN without the guidance of Southeast Asia’s largest country at an inopportune time. At the same time, Washington’s fraying ties with its allies in Bangkok and Manila are undermining the U.S. security bulwark in Southeast Asia when it is in need of being bolstered, and emerging U.S. partners like Malaysia are too focused on domestic political scandals to help fill the gap.
  • China is exploiting the vacuum of leadership in the region to its own advantage, dividing ASEAN to prevent challenges to its expansive claims and military construction efforts in the South China Sea. China’s efforts to dominate the South China Sea are steadily raising tensions with the United States, increasing the risks of a military confrontation that would force Southeast Asian states to choose sides between the competing powers.
  • While regional governments remain stalwart on countering terrorist threats, there has been a growing willingness to accommodate rising religious intolerance for political gain. This not only complicates deradicalization efforts by mainstreaming the views of extremist groups, but also negatively impacts social stability by politicizing race and religion.

Guidelines for Engaging Southeast Asia

To successfully navigate a more complicated operating environment in Southeast Asia, the new administration should approach the region with the following guidelines in mind:

  • Make the Case for Engagement

Southeast Asia remains especially important to U.S. interests, in spite of a more difficult working environment. The ASEAN countries are in a prime geostrategic location, are home to a young and growing population of 630 million, and make up the third-largest economy in Asia after China and Japan. Southeast Asia offers strong economic opportunities for U.S. companies, with ASEAN being the United States’ fourth-largest global trading partner and supporting about half a million jobs in the United States. The stock of U.S. direct investment in ASEAN totaled $250 billion at the end of 2015, more than all U.S. investment in China, India, South Korea, Hong Kong, Taiwan, and New Zealand combined.

The case for continued high-level and intensive engagement with Southeast Asia is compelling, and the administration should make that case to the American people. An early speech by a senior administration official laying out the importance of Asia—including Southeast Asia—to U.S. interests and reiterating U.S. commitment to remain engaged and active in the region would go a long way toward building goodwill with allies and partners in the region.

  • Prioritize Economic Cooperation

Southeast Asian countries view security through the lens of economic growth and integration, and they place a high priority on their economic relationship with the United States. This focus remains even under more populist and nationalistic leadership. The United States cannot effectively work with the region without an equally strong focus on economic engagement, and it is imperative that the administration continue to exercise economic leadership in the region.

Modifying as needed and completing the Trans-Pacific Partnership (TPP) is the best way to advance U.S. economic interests in Southeast Asia, but Washington should devise and promote other ideas and vehicles for economic engagement in the region whether or not the TPP is ultimately ratified. In particular, Washington should work with major non-TPP ASEAN economies Indonesia, Thailand, and the Philippines to strengthen trade and investment ties and improve economic governance. In Indonesia, which makes up almost half of Southeast Asia’s economy, Washington should explore strengthening dialogue on trade and investment to reduce red tape, simplify regulations, and ease restrictions against investors.

The United States should also do more to support ASEAN’s internal efforts at economic integration through the Single Window and other trade facilitation initiatives. The Asia-Pacific Economic Cooperation (APEC) forum, hosted by Vietnam this year, offers an opportunity for a bold and creative approach to signal continued U.S. commitment to economic leadership in the Asia Pacific. If the new administration plans to focus on bilateral rather than multilateral trade agreements, Vietnam and Malaysia are two strong candidates. Vietnam’s imports from the United States are among the fastest growing in the world.

  • Maintain High-level Participation in Regional Diplomacy

For Southeast Asians, showing up is vitally important as a sign of commitment, and there is no substitute for high-level participation at regional meetings. For this reason, President Donald Trump should attend the East Asia Summit and APEC meetings, and should also invite his Southeast Asian counterparts to another U.S.-ASEAN leaders’ summit in the United States during his first year, to build on the gains made since the 2016 Sunnylands summit and send a strong signal to the region about its importance to U.S. leadership.

The secretaries of State and Defense should continue to attend the ASEAN Regional Forum, the ASEAN Defense Ministers Meeting-Plus, and other regional forums. Failure to show up at these events would be interpreted by Southeast Asian countries as a signal of declining U.S. commitment and would damage the United States’ ability to effectively engage with the region. While many Southeast Asian countries are inwardly focused, Washington should look to Vietnam and Singapore as key partners to guide U.S. engagement with ASEAN and in responding to tensions in the South China Sea.

  • Reinvigorate U.S. Alliances

The administration will need to work to manage strained alliances with the Philippines and Thailand. In the Philippines, Washington should strive to preserve the alliance to the greatest extent possible while taking a firm position on the human rights excesses of the Duterte administration. Given the difficulties in working with Duterte, Washington should consider shifting the spotlight in the bilateral relationship from hard alliance issues to build on the already strong institutional, economic, and people-to-people ties between the United States and the Philippines. For example, events highlighting the Philippine diaspora in the United States would serve as an effective reminder of strong bilateral economic and people-to-people ties.

In Thailand, Washington should explore whether popular endorsement of a new draft constitution and the tentative preparation for elections in the wake of the royal transition provide an opportunity to begin resetting ties without rewarding the military government. Washington should also immediately resume dialogues with Thailand on issues of mutual strategic interest, such as maritime security and counterterrorism. Following the Thai elections, the United States should move quickly to restore fuller relations assuming that acceptable standards of democratic governance and human rights have been met.

  • Cultivate Key Regional Partners

While the United States’ formal treaty alliances in Southeast Asia remain important, many of the best opportunities for positive U.S. engagement in the region lie with other partners. Singapore is arguably the United States’ most important partner in the region, providing consistent cooperation on a wide variety of economic, diplomatic, and security issues. Engagement with Jakarta remains key because of Indonesia’s size, strategic location, and ability to play a leadership role within ASEAN.

Malaysia and Vietnam are important emerging partners with shared interests in cooperating with the United States on economic issues—both are TPP-signatories—and security challenges in the South China Sea. The United States should seek to deepen these key partnerships and encourage greater cooperation between them and U.S. allies in Southeast Asia. The United States should continue to support Myanmar in its ongoing bumpy transition toward democracy, including by encouraging the peace process with the armed ethnic groups in the north, addressing the plight of the Rakhine Muslim population in the west, and making military-to-military engagement contingent on the transition to civilian control of the military. In the meantime, U.S. officials should be given more leeway to discuss these key issues with the military.

  • Focus Security Engagement on Core Challenges

The size and diversity of ASEAN make it difficult to identify areas of cooperation that interest all members, but cooperation on core challenges like maritime security and counterterrorism appeals to most members, and to key U.S. partners in particular. Maritime security engagement is welcomed not only by South China Sea claimants, but also by ASEAN states concerned with piracy, illegal fishing, and energy security in their waters. U.S. security cooperation programs—such as the Foreign Military Financing program and the Pentagon’s new Southeast Asia Maritime Security Initiative—should continue to respond to this demand signal from the region. The administration should consider expanding these maritime security capacity-building initiatives and coordinating these efforts more closely with key allies like Japan and Australia.

Counterterrorism cooperation with Southeast Asia will also remain in demand. Engagement in this area is already robust after years of cooperation following 9/11, but the shifting nature of the extremist threat in Southeast Asia provides an impetus to refine existing cooperation and refocus efforts toward problem areas like deradicalization and the tracking of fighters returning from conflicts in the Middle East.

(This Commentary originally appeared in the February 9, 2017, issue of Southeast Asia from Scott Circle.)

Dr. Amy Searight is a senior adviser and director of the Southeast Asia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Murray Hiebert is senior adviser and deputy director of the CSIS Southeast Asia Program. Geoffrey Hartman is a fellow with the CSIS Southeast Asia Program.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2017 by the Center for Strategic and International Studies. All rights reserved.

Photo credit: HOANG DINH NAM/AFP/Getty Images
Murray Hiebert
Senior Associate (Non-resident), Southeast Asia Program

Geoffrey Hartman

Amy Searight